版权所有 - 中国日报�(ChinaDaily) China Daily <![CDATA[Need for stable land, home prices stressed]]> http://www.chinadaily.com.cn/kindle/2019-12/15/content_37529151.htm The annual Central Economic Work Conference, which ended on Thursday, has set the tone for the real estate market for the coming year, stressing the need to stabilize land and home prices as well as market expectations to ensure the steady and healthy development of the property market, which analysts see as a signal that China's economy will further trim its heavy reliance on property.

"To make sure the property market develops steadily and healthily, we must uphold the principle that 'housing is for living in, not speculation', and implement policies in accordance with each city's requirements whilst the long-term mechanism for stabilizing land prices, home prices and market expectations is being created," noted the Central Economic Work Conference.

Despite slower economic growth, the central authorities reaffirmed that property speculation will be strictly controlled, leaving little room to maneuver for local policies to make any adjustment in this regard, said Yan Yuejin, research director at the EHouse China R&D Institute.

Since the Central Economic Work Conference held in 2016 raised the principle that housing is for living in, not speculation, the country has reiterated the principle, especially during the second half of this year, when several local governments relaxed their restrictions on home purchases.

More than 20 cities announced measures to attract talents in November alone, including Foshan and Zhongshan in Guangdong province, Nanjing in Jiangsu province, Chengdu in Sichuan province, and Shanghai, which have all lowered requirements for talents buying homes, with some of them even offering special subsidies, according to a research report by Centaline Property.

The ban on property speculation has signaled that home prices will remain stable, and measures will be rolled out to address market fluctuations.

The relaxations on first-time buyers and high-end talents purchasing homes are only allowed within particular regions, as the country has no intention of comprehensively relaxing property policies, said Wang Tao, chief China economist with UBS AG.

"Compared to statements from previous years, this year's meeting made it clear that stable home prices will be a priority of any local measures. As such, we will not see continuous house price rises in a single market in the future," said Zhang Bo, chief analyst of Anjuke.

The respective property measures of Chinese cities will further promote stability in the property market, according to a report by the China Real Estate Chamber of Commerce.

"Along with the rising contribution of consumption and emerging economies to GDP, China's economy will hopefully overcome its heavy reliance on real estate and infrastructure for good, which will make the nation's growth and development more resilient," Bian Quanshui, an analyst with Sinolink Securities, wrote in a report.

The Central Economic Work Conference made it clear that work will be focused on increasing supply of homes for low-income workers through renewal and regeneration of existing residential projects and urban communities, and significantly increasing rental housing, according to Xinhua News Agency.

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2019-12-15 14:17:34
<![CDATA[Greater emphasis likely on capital market reforms]]> http://www.chinadaily.com.cn/kindle/2019-12/14/content_37529140.htm China is expected to attach greater importance to capital market reforms next year and focus on improving institutional arrangements to boost the quality of listed firms as a key part of its pursuit of high-quality development, officials and analysts said.

Their comments came after the tone-setting annual Central Economic Work Conference concluded on Thursday and the meeting prioritized capital markets in financial system reform. This signaled the critical role of capital markets in serving the nation's real economy.

The meeting outlined specific reform measures, including refining fundamental institutions of capital markets, improving listed firm quality, and completing delisting mechanisms, according to Xinhua News Agency.

These requirements are reflected in the recently introduced action plan to improve the quality of listed firms, the top securities watchdog said.

"We will promote the improvement in listed firm quality to lay the foundation for elevating the adaptability, competitiveness and inclusiveness of capital markets," Yan Qingmin, vice-chairman of the China Securities Regulatory Commission, said at a forum on Friday.

By improving market rules, the plan aims to attract more industry leaders to go public, to get companies with low efficiency out of the market, and to encourage listed firms to upgrade themselves through mergers and acquisitions, Yan said.

The high-level meeting also pledged to steadily push ahead with reforms of the ChiNext as well as the National Equities Exchange and Quotations system-which are submarkets established for the financing of innovative enterprises and small-and medium-sized enterprises, respectively.

Yan said securities regulators will learn from the experience of the scitech innovation board, which piloted registration-based reform, and pushed through reforms of the two submarkets. The reforms will help make financing more inclusive to small businesses and high-tech companies as capital markets could satisfy their financing needs more efficiently than the banking system.

The stock market leaped on Friday after the meeting further endorsed the role of capital markets in high-quality development and after investors become more optimistic about Sino-US trade talks. The benchmark Shanghai Composite Index went up by 1.78 percent to close at 2967.68 points, recording its biggest gain in almost four months.

Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, said as the capital markets become inclusive to a wider range of companies, it is important to strengthen oversight over information disclosure and crack down on fraudulent floats to protect the legitimate rights of investors.

]]> 2019-12-14 00:00:00 <![CDATA[High-quality to be new growth focus]]> http://www.chinadaily.com.cn/kindle/2019-12/14/content_37529121.htm Steps to support strategic industries, the creation of several advanced manufacturing clusters with international competitiveness and measures to support the growth of digital economy will be the key objectives in China's ongoing efforts to bolster high-quality development, according to a statement issued after the annual Central Economic Work Conference.

Analysts said China is now transforming from the phase of rapid development to a new stage of high-quality development and shifting its focus to nurturing technological innovation and further opening up its economy.

More efforts should be made to increase investment in equipment upgrading and technical reform, reinforce the optimization and upgrading of traditional manufacturing industry, with a focus on promoting the modernization level of the industrial chain, the statement said.

The conference also underscored vigorous efforts in accelerating transformation of scientific and technological achievements, enhancing enterprises' technological innovation capacities, and improving the mechanism of discovering, cultivating and motivating technology talent.

Wang Yuanhong, an economist at the State Information Center, a government think tank, said it is a long-term key task to boost high-quality development. "It is more necessary to rely on such a development approach to transform the growth pattern, optimize the economic structure and address deep-seated structural problems in economic growth, as the country is facing downward economic pressure," Wang said.

Wang said the high-quality development path is beneficial for continuously improving the share of scientific and technological innovation in overall economic growth.

"After years of high-speed development, China is now following a medium to high growth track, paying more attention to the quality and benefits of development," said Tang Jianwei, chief researcher at the Bank of Communications' Financial Research Center. "During this process, there is no need to focus on headlong pursuit of quantity growth, which may bring uncertainties such as an increase in leverage and high risks."

Looking forward, China should continue to follow the new development approach and the strategy of innovation-driven development, Tang said.

"As China's old growth models gradually slow down, we should gradually reduce reliance on old growth drivers like investment, exports and consumption. Instead, we need to develop high-tech and emerging sectors, such as digital economy and advanced manufacturing, to inject fresh impetus into economic development," Tang said.

China's economy has maintained overall stability. The country'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.

]]> 2019-12-14 00:00:00 <![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528974.htm GOVT AND POLICIES

Digital economy to be half of GDP by 2023

About 51.3 percent of China's GDP would be digitalization-related by 2023 as the country's enterprises step up digitalizing their businesses, global market intelligence firm IDC predicted. The research firm estimated that by 2025, at least 80 percent of China's new corporate applications would use artificial intelligence technologies. Chief information officers would play bigger roles within companies by planning for innovative development, while there would be rising demand for professionals in ensuring digital security and compliance, IDC said. China is on fast track for digitalization, while firms should take future-oriented strategies to prepare for related changes, said Kitty Fok, IDC China's managing director.

China takes green path in power generation

China took a green path in power generation during the 2014-18 period, with the continuous expansion of clean energy production, the fourth national economic census showed. In 2018, the country's power generation hit 7.1 trillion kilowatt-hours (kWh), up 31.3 percent from 2013, according to a report on the fourth economic census released by the National Bureau of Statistics. The growth of power generation in China's western region led all regions in the five-year period, increasing 42.3 percent from 2013, thanks to the exploitation of clean energy and the construction of power transmission channels, said the report.

COMPANIES AND MARKETS

Volkswagen vehicle deliveries grow by 3.9%

The Volkswagen brand delivered 586,400 vehicles worldwide in November, an increase of 3.9 percent year-on-year, the German carmaker announced on Wednesday. "The Volkswagen brand continues to demonstrate its capabilities even in an overall economic situation that remains challenging," said Juergen Stackmann, Volkswagen sales board member. In Germany, Volkswagen's core brand recorded "significant growth" of more than 20 percent and handed over 54,800 vehicles to customers in November. The brand also increased its market share, according to Volkswagen. "Significant growth" in vehicle deliveries was also recorded in the United States with an increase of 9.1 percent and Brazil with an increase of 12.3 percent, according to Volkswagen.

TUI reports 42.8%drop in group profit

Group profit attributable to shareholders of Europe's largest tourism company TUI declined by 42.8 percent to 416.2 million euros ($461.79 million) in fiscal year 2019, the German company announced on Wednesday. According to Fritz Joussen, chief executive officer of TUI, the company delivered a "successful financial year 2019." At the same time, underlying earnings before interests, taxes and amortization (EBITA) of the company which has registered offices in the German cities of Berlin and Hannover declined by 21.8 percent to 893.3 million euros. The main reason for the "drastic decrease of EBITA" was the grounding of TUI's Boeing 737 MAX fleet. The company's 15 such aircraft were taken out of operation and replacements had to be rented to maintain services.

Boeing 737 Max may not get regulatory clearance

Steve Dickson, chief of the Federal Aviation Administration, said on Wednesday that aviation regulators won't likely clear Boeing's troubled 737 Max airplanes for flight until 2020. "Like I said there are a number of processes, milestones, that have to be completed," Dickson told CNBC, "If you just do the math, it's going to extend into 2020. "Dickson said there is no clear timeline for when the 737 Max will be re-certified and that there are 10 to 11 milestones left to complete before it can be approved. "We're going to follow every step of the process, however long that takes," he said. "I've made it clear that I'm going to support my people and that means they are going to take whatever time it takes to get this process completed and to do it the right way."

AROUND THE WORLD

Consumer prices rise by 0.3% in November

US consumer prices rose moderately in November, which could reinforce the Federal Reserve's intention not to cut interest rates in the near term. The consumer price index (CPI) increased 0.3 percent last month after rising 0.4 percent in October, the US Labor Department said on Wednesday. In the 12 months through November, the CPI rose 2.1 percent. The so-called core CPI, which excludes the volatile food and energy categories, increased 0.2 percent in November and 2.3 percent over the past year, in line with the previous month. The firmer inflation figures would give Fed officials more confidence to keep interest rates unchanged after concluding a two-day policy meeting later on Wednesday, analysts said.

Business sentiment declines in Japan

Business sentiment among large Japanese companies dropped to its lowest level in three years in the October-December quarter, owing largely to a consumption tax hike coming into effect at the beginning of October, the government said in a report on Wednesday. According to a joint survey by the Finance Ministry and Cabinet Office, the confidence index reflecting sentiment at companies capitalized at 1 billion yen ($9 million) or more, stood at minus 6.2 for the reporting period, dropping from 1.1 logged for the previous quarter. The confidence index reflects the percentage of companies surveyed reporting that conditions have worsened subtracted from companies reporting improving conditions.

Brazil cuts benchmark interest rate to 4.5%

Brazil's central bank will cut its benchmark interest rate from 5 percent to a record low of 4.5 percent, the bank's Monetary Policy Committee (Copom) announced on Wednesday. It was the fourth interest cut in a row, after it remained stable from May 2018 to June 2019. With the latest reduction, the rate has accumulated a fall of 2 points this year. The Copom stated that recent economic data indicate that the Brazilian economy is growing, and that they believe this recovery will continue in a gradual pace. Copom put the inflation rate at 4 percent for 2019 and 3.5 percent for 2020.

South Korea banks' bad debt ratio steadies

South Korean banks' bad debt ratio stayed below 1 percent for the fifth straight quarter, financial watchdog data showed on Wednesday. The ratio of bank loans, overdue at least three months, stood at 0.86 percent of the total as of the end of the July-September quarter, down 0.10 percentage point from a year earlier, according to the Financial Supervisory Service. It hovered below 1 percent since the third quarter of last year. From three months ago, the third-quarter ratio fell 0.05 percentage points.

S&P downgrades Romania's outlook

Standard& Poor's has downgraded the outlook for Romania's rating from stable to negative due to rising deficits, local media reported on Wednesday, citing the latest statement released by the rating agency. The agency affirmed the eastern European country's long-term and short-term foreign currency debt rating at "BBB" and that of local currency debt at "A-3". The constraints on ratings include low economic prosperity, relatively poor administrative capacity, unpredictable economic environment, and only medium-level monetary flexibility compared to other countries with similar ratings.

Albania's FDI inflows up in first 9 months

Foreign direct investment (FDI) in Albania increased by 7.3 percent in the first nine months of 2019, compared to the same period last year, Finance and Economy Minister Anila Denaj said on Wednesday in a post on Facebook. According to Denaj, in January-September 2019, FDI in Albania amounted to 810 million euros ($ 898.6 million), reaching the highest historical level of foreign investments for the country. Denaj said this increase in FDI confirms the government's projections that in 2019 FDI will exceed 1 billion euros in total.

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2019-12-13 00:00:00
<![CDATA[Chinese excavator makers build on solid foundations]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528972.htm Chinese excavator makers posted robust year-on-year sales during the first 11 months of the year on the back of growing fixed asset investment and device replacement requirements, experts said.

Twenty-five leading manufacturers in the construction machinery equipment sector sold 215,538 excavators during the period, a year-on-year increase of 15 percent, according to data released by the China Construction Machinery Industry Association.

The figure in the first 11 months has already exceeded the annual sales of 203,420 units in 2018 and the full year numbers will set a record.

Excavator sales are usually seen as an indicator for economic vitality, because demand for the digging machines is associated with property and infrastructure development.

Zhang Dongming, a researcher on the machinery sector with Bohai Securities, said: "There has been steady sales growth of excavators and other construction machinery products since the beginning of this year."

He attributed such a growth to the uptick in investment in fixed assets like real estate and infrastructure, a strong need for replacing old devices, and strong overseas demand thanks to the Belt and Road Initiative.

Zhang Cheng, a researcher at Huatai Securities, said the excavator industry will witness steady expansion, thanks to the modest recovery in infrastructure investment growth and resilient real estate investment.

Leading companies have witnessed improved competitiveness with good long-term development potential, he said.

From 2012 to 2016, the construction machinery manufacturing sector in China saw a recession of sorts as market demand slipped. After a nearly two-year rapid expansion, the segment's growth started to slow last year.

Earlier this year, China rolled out measures to support infrastructure investment. The local governments' special bond issuance helped promote investment in infrastructure and support economic growth.

Zhang from Bohai Securities said the next five years will be a vital period of opportunities for the construction machinery industry to improve its quality and efficiency, and to transform and upgrade its development.

He said the efforts to boost insufficient infrastructure are expected to continuously increase, as the economy is undergoing downward pressure.

At the same time, construction related to the Belt and Road Initiative, rising labor costs and stricter requirements for environmental protection will continue to underpin the steady sales increase of construction machinery such as excavators, Zhang said.

In November, major excavator producers sold 19,316 units, an increase of 21.7 percent year-on-year, according to the industry association. Sales in the domestic market stood at 17,159 units, up 21.2 percent, the association said.

 

A China-made excavator is displayed during an industry expo in Shanghai. LONG WEI/FOR CHINA DAILY

 

 

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2019-12-13 00:00:00
<![CDATA[JPMorgan to increase China investment]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528957.htm JPMorgan Chase & Co is looking to substantially increase investment in the business of securities, asset management, and futures and options in China and hopes to gain full ownership of its joint ventures "when the timing is right" to take advantage of the further opening of the Chinese financial sector, the US bank's China CEO said.

Mark Leung, chief executive officer of JPMorgan China, said he welcomes the opportunity presented by the country's new regulation, which allows for 100 percent foreign ownership and the bank will fully leverage its strength in its global network and resources to operate its onshore and offshore China business.

"We think this is the best time for JPMorgan to involve much deeper and invest much broader across our product and service platforms (in China)," Leung said during an interview with China Daily.

The bank has finished all the preparatory work for its securities JV in China in which it owns a majority stake of 51 percent. It is now waiting for final permission from the China Securities Regulatory Commission to officially launch the business.

It has hired a strong team for its securities JV in China and it will engage in business activities including investment banking, research and securities sales, according to Leung.

JPMorgan is also planning to further invest in the growth of China's asset management industry. Its asset management unit, JPMorgan Asset Management (JPMAM), is poised to become the first foreign asset manager to hold a majority stake in a Chinese mutual fund company, after winning an auction bid of 2 percent stake in its mutual fund JV, China International Fund Management, in August.

The bank's asset management business has also formed a strategic partnership with China Merchants Bank. Under the partnership, JPMAM will serve as a preferred product provider for CMB's asset management subsidiary, offering access to its offshore and onshore solutions that are complementary to CMB's investment capability.

"We complement very well with strong local financial institutions. Actually, JPMorgan has long been known as the bank for other banks. Many Chinese banks and financial institutions are either our clients or our partners and we support them to achieve their domestic and global ambitions," Leung said.

"We have various partnership with local financial institutions including Industrial and Commercial Bank of China on cash management, Bank of China on RMB internationalization, Postal Savings Bank of China and many other banks and securities houses to foster partnership, knowledge and experience sharing," he said.

China will further open the financial industry to foreign companies by removing ownership restrictions in the securities, funds, futures and insurance sectors next year.

Leung said that rules and relations are becoming more favorable for foreign banks in China along with the further opening of the Chinese financial sector including the launch of the stock connect programs between the mainland and Hong Kong, the inclusion of Chinese equities and bonds in global indexes and the increase of foreign ownership of Chinese assets.

"We believe this is a very different backdrop against which foreign players can operate. While it depends on the speed of the opening up, I think the conditions are more mature now," Leung said.

Leung said that the trend of the renminbi internationalization, the development of the Belt and Road Initiative as well as the increasing two-way capital flows will enable JPMorgan to better serve as bridge that helps Chinese firms going abroad and global investors coming into the Chinese market.

Meanwhile, the US bank is also interested in getting licenses for securities financing and derivatives trading in the future as China plans to further open the derivatives market to foreign players and offer more hedging and risk management tools for global investors.

"We are working actively with the local regulators to share our experience ... in enhancing derivatives trading and securities financing to help speed up foreign participation into the local markets and to provide onshore investors with the best derivatives and securities financing capability that JPMorgan has provided offshore," Leung said.

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Mark Leung, chief executive officer of JPMorgan China

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2019-12-13 00:00:00
<![CDATA[Guangdong upgrade gets new impetus]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528949.htm A tramcar using hydrogen energy was finally put into use in Gaoming district of Foshan, Guangdong province, at the end of November, after the local authority announced a plan to develop the hydrogen energy sector in 2014.

"Hydrogen energy will be widely used in buses, trams, trains and ships in the near future, demonstrating the emerging technology development in Foshan," said Mao Zongqiang, a professor at the nuclear energy and new energy research institute of Tsinghua University.

Equipped with six hydrogen tanks, the tram can travel 100 kilometers, with a top speed of 70 kilometers per hour.

Foshan's plan to develop the hydrogen energy industry was part of efforts by cities on the west bank of the Pearl River to facilitate the advanced equipment and manufacturing industry over the past few years.

"We are introducing a number of new industrial leaders to settle down in Gaoming, aiming to develop the district into a world-leading hydrogen energy center in the years ahead," said Xu Dongtao, Party secretary of Gaoming.

As of October, a total of 768 vehicles powered by hydrogen energy had been put into use in Foshan, with six hydrogen energy filling stations already established, according to local government sources.

According to an industrial development plan issued by the local government in 2018, Foshan's industrial output value for the hydrogen energy sector is expected to reach 100 billion yuan ($14.2 billion) by 2030.

In addition to hydrogen energy development, Foshan has also established an intelligent manufacturing technology park in its Shunde district, collaborating with leading robot manufacturer Kuka and Chinese home appliance maker Midea.

With an area of 800,000 square meters, the technology park consists of four areas centered on intelligent manufacturing, logistics, healthcare and smart home.

"The technology park aims to show intelligent technology application scenarios in manufacturing, living, commerce and healthcare," said Fu Shengbin, head of Kuka's operations in Shunde.

The annual output value of the park is expected to reach 240 million yuan by the end of 2019, and 650 million yuan in 2020.

Traveling to the west from Foshan, cities on the west bank of the Pearl River have been also gearing up for development of the advanced equipment and manufacturing industry.

Yunfu, which is about one hour by high-speed train from Guangzhou, the capital of Guangdong, is now home to 24 companies related to the hydrogen energy resources, involving a total investment of more than 5 billion yuan.

Cities on the west bank of the Pearl River include Foshan, Zhuhai, Zhongshan, Jiangmen, Zhaoqing, Yunfu and Shaoguan.

Official statistics showed that the advanced equipment and manufacturing industry grew quickly on the west bank of the Pearl River in the past few years, with the added industrial value growing annually by 11.8 percent from 2015 to 2018 to reach 1.15 trillion yuan.

"There has been an obvious trend of industrial agglomeration on the west bank of the Pearl River, with the strengthening development quality of the advanced equipment and manufacturing industry," said Wu Yuguang, deputy director of the Guangdong Provincial Industry and Information Technology Department.

According to Wu, a total of 345 equipment products reached the provincial-level or above technology standard between 2015 and 2018, after leading companies in the region had been encouraged to facilitate innovation and core technology research and development.

In addition, patents related to advanced equipment and manufacturing industry in the region increased annually by 75.5 percent between 2015 and 2018, according to Wu.

According to an action plan to facilitate the advanced equipment and manufacturing industry on the west bank of the Pearl River, the output value of the industry is expected to reach 2 trillion yuan by 2020.

"The west bank of the Pearl River Delta aims to develop into one of the world's influential and competitive regions in the advanced equipment and manufacturing industry," said Wu.

According to the plan, the region will give priorities to the development of machine tools, robotics, new energy automobiles, advanced ocean engineering and offshore wind power equipment, railway traffic equipment, general aviation and satellite application.

 

An industrial robot is displayed at the fourth China (Guangdong) International Internet Plus Expo in Foshan, Guangdong province. XINHUA

 

 

 

 

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2019-12-13 00:00:00
<![CDATA[Lendlease eyes senior living market opportunities]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528987.htm China's efforts to further open up the senior living market in the country for foreign investment has attracted attention from Lendlease, Australia's largest operator of retirement living communities.

Last month, the National Development and Reform Commission (NDRC) and the Ministry of Commerce jointly published the latest shortened negative list for foreign investment, in which the investment is given access to more new items compared to the version of the list in 2018.

According to Xinhua News Agency, the list permits the establishment of senior living organizations and social welfare institutions.

"We applaud the government really setting positive policies, and giving us certainty around the direction so that is helping our investment confidence in investing here in China," said Tony Lombardo, chief executive officer of Asia with Lendlease.

David Hutton, the managing director of development in Asia for Lendlease, added the policy is terrific because it really improves the living options for senior people in the country.

Chinese culture respects senior people, but modern couples have little time to take care of their family elders, Hutton added.

Given this background, Lendlease is going to welcome the first batch of clients in its first senior living project in China in the suburban Qingpu district of Shanghai in 2021.

About 10 years ago, Lendlease made the decision to be an investor in China for the long term. After years of market research and study, communications with local Chinese real estate developers, along with witnessing policy changes by the government, the company finally decided to focus on the area where it has an advantage and expertise, senior living.

"(It is) the Chinese government's pro-active policy that gives us the confidence to make the investment," Lombardo said, adding the shorter negative list will create more development opportunities for investors from all over the world.

The World Health Organization said the proportion of people over the age of 60 in China will increase to 28 percent of its total population by 2040 from 12.4 percent of the total in 2010.

The Chinese Academy of Social Sciences (CASS) also forecast that the Chinese population aged 60 years old and above will reach 483 million by 2050.

The grey boom has created a problem for the country on how to take care of older people, while at the same time the senior living business is showing huge potential.

With the nation's first batch of middle-income people about to reach retirement age, China's senior living industry is projected to grow sharply in the coming years.

By 2020, China's senior living sector is about to reach a market scale worth 7.7 trillion yuan ($1 trillion), and further balloon to 22.3 trillion yuan by 2030, a report published by CPIC Allianz Health Insurance Co Ltd said.

"The government policy reflects there is an aging demographic, which is important. We feel we could make a contribution and create a differentiated and special product here," said Hutton, who explained how Lendlease decided to expand its presence in the China market by combining its international experience with oriental business practices.

After securing its first project, Lombardo said Lendlease wants to accelerate its growth in China as the company expects to complete and operate several projects in the years ahead.

"The importance for China being in our business is long term," said Lombardo. "Hopefully in the future we can manage and complete five projects. That's our strategy."

He explained that the company will focus on the Yangtze River Delta region, especially Shanghai.

The first project, named Ardor Gardens, looks to provide quality resort-like services and a healthy lifestyle for 1,300 residents in over 850 apartments. The community will include a complete range of facilities and recreational areas, health and wellness facilities such as a spa, swimming pool, restaurant and a large community clubhouse.

 

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2019-12-13 00:00:00
<![CDATA[Embraer hopes smaller cities can drive its China expansion]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528988.htm Brazilian aircraft manufacturer Embraer SA, one of the largest plane makers in the world, is eyeing the fast-developing regional aviation market in China's smaller cities to further drive its growth.

The plane maker, which produces commercial aircraft with fewer than 150 seats, plans to introduce its latest and largest-ever jet, the single-aisle E195-E2, to China, its second-largest market after the United States.

By early next year, the aircraft model is expected to receive certification from the Civil Aviation Administration of China. In April, it received airworthiness certificates from the Brazilian Civil Aviation Agency, the US Federal Aviation Administration and the European Aviation Safety Agency.

Embraer is now in discussions with major domestic carriers, including State-owned and private airlines, about potential purchases of its latest E195-E2 aircraft.

Guo Qing, vice-president of sales and marketing at Embraer China, said Embraer attaches great importance to the China market. The regional aviation market is a short board in China. It will have a significant increment of regional aircraft in the next few years, faster than the United States, and the company is confident in the growth potential.

"Many domestic airlines now use mainline aircraft to operate regional flights, which may cause a waste of resources. With the high capacity of mainline planes, airlines prefer to offer fewer flights, which restrains the development of regional aviation markets," Guo said.

"Right-sized jets allow airlines to offer cheaper flight tickets to small market routes with smaller passenger flows. Carriers will become more profitable compared with using mainline aircraft. Domestic airlines should make use of the rich flying rights and time slot resources on regional routes, and launch more such flights," he said.

In October, the E195-E2 conducted its first commercial flight in Brazil operated by Azul Brazilian Airlines. Embraer said the aircraft model, with fewer seats, is suitable to complete trunk line fleets in slack seasons. It is also good for regional flights that connect second-, third-and fourth-tier cities in China.

Currently, Embraer accounts for more than 70 percent share of the regional aviation market in China. Bombardier Inc from Canada, and China's first homebuilt regional passenger jetliner ARJ21 produced by Commercial Aircraft Corp of China account for the remainder.

Last year, China had 169 regional airports, accounting for 72 percent of the total number of airports nationwide. Yet, the number of regional flights available is small. For instance, Guangzhou-based China Southern Airlines owns 852 aircraft, while the number of planes that fly regional routes account for just 2.58 percent of the total.

By Sept 30, airlines on the Chinese mainland operated 3,583 aircraft, including 189 regional aircraft, which made up for 5.27 percent. Now, there are a total of 10 carriers including Xiamen Airlines, Tianjin Airlines, Chengdu Airlines, China Express, Colorful Guizhou Airlines, and Guangxi Beibu Gulf Airlines that operate regional aircraft, according to aviation industry reports.

In comparison, major US carriers serve 37 percent of US airports and regional airlines reach 93 percent of the airports, according to the Regional Airline Association. Meanwhile in the US, the passenger fleet will maintain modest growth in the long term, according to the FAA.

"Carriers must connect as many small cities as possible to their hub airports to remain competitive. The sustainable growth of regional aviation is the core competitiveness of the Chinese airline industry," said Li Guijin, a professor at the Civil Aviation Management Institute of China in Beijing.

"The central and western areas of China have the largest number of high-altitude airports, and it is an area with rich opportunities to develop regional aviation. There should be more types of aircraft that are suitable to fly in high-altitude regions," he said.

 

A visitor takes a photo of an Embraer E195-E2 Jet during the 53rd International Paris Air Show at Le Bourget Airport near Paris, France. GETTY IMAGES

 

 

 

 

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2019-12-13 00:00:00
<![CDATA[Telefonica brings in Huawei for 5G edge]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528931.htm Huawei Technologies Co has secured an important vote of trust, with one of Germany's biggest telecom companies selecting the Chinese company as a key telecom equipment supplier for its 5G network.

Telefonica Deutschland, which operates Germany's second-largest wireless network, has chosen Huawei alongside Finland's Nokia Oyj for supplying equipment to its 5G network.

The move came as French and German officials have said publicly that the two countries would not follow the United States in excluding Huawei from its 5G network rollout.

Telefonica Deutschland's decision showcases that mutually-beneficial business partnerships would not be derailed by political interference, and Washington's intensified efforts to ban Huawei on groundless accusations will fail ultimately, analysts said.

A part of the Spanish Telefonica group, Telefonica Deutschland said in a statement that the deal has to be approved by German authorities, who are currently finalizing the security rules for telecom equipment suppliers.

Telefonica Deutschland said it is taking into account the ongoing political process of establishing these security guidelines, but does not want to delay the start of the 5G expansion.

The company has followed in the footsteps of Switzerland's Sunrise which has launched its Huawei-powered 5G network. Sunrise has so far rolled out 5G services in more than 262 Swiss towns and cities, and over 50 percent of telecom equipment in its 5G core and radio networks is provided by Huawei.

On Thursday, Chinese foreign ministry spokeswoman Hua Chunying denied media reports that the Chinese government threatened to cancel a trade deal with the Faeroe Islands if it does not agree to use Huawei's equipment

Hua said the claims "are completely false and have ulterior motives". Huawei, the world's biggest maker of mobile network gear, said it "was not aware of any meeting between the Chinese ambassador and Faeroese politicians in November as reported".

Bai Ming, a senior research fellow with the Chinese Academy of International Trade and Economic Cooperation, said the growing list of Huawei's 5G contracts shows that the US efforts to mix politics with normal business cooperation would fail ultimately, as facts would speak louder than Washington's groundless accusations.

An increasing number of European countries are taking an unbiased approach toward the use of Huawei equipment in their 5G network rollout. French Junior Economy Minister Agnes Pannier-Runacher recently said in an interview with local media that France will not exclude Huawei in 5G.

Germany also said that it would not single out any telecom player, including Huawei, in its 5G build-out.

In late November, German Chancellor Angela Merkel called on European countries to agree to a common approach toward China and Huawei in the rollout of the superfast wireless technology.

Jeremy Ghez, an affiliate professor of economics and international affairs at HEC Paris, a French international business school, said a common attitude toward Huawei is in the common interests of European countries.

All the comments came as the US government has been accusing Huawei of posing security risks but so far it has failed to provide any factual evidences. Washington has sought to ban federal agencies and US rural telecom carriers from buying Huawei's equipment and services.

Huawei CFO Meng Wanzhou is currently detained in Canada following a request by the US. She was arrested at Vancouver International Airport by Canadian authorities at the request of the US on Dec 1, 2018, and has been held under house arrest since then.

Recently, more detailed evidence about Meng's case has emerged, and many media outlets pointed out that the case is driven by political forces.

Canadian newspaper The Globe and Mail revealed in a recent article that "When Washington needed Canada's help to apprehend a top Huawei executive, officials in the White House, Congress and diplomatic corps were informed of what would happen hours before politicians in Ottawa."

Simon Tisdall, columnist for The Guardian, said geopolitical and economic rivalry between China and the US is what's really behind Meng's arrest.

Meng's arrest is not an isolated incident, but one of many actions taken as part of the US government's systematic campaign against Huawei, said Xiang Ligang, CEO of telecom industry website Cctime.

Huawei said in an earlier statement that the company has confidence in Meng's innocence, and it believes that her arrest was an unlawful abuse of process-one guided by political considerations and tactics, not by the rule of law.

 

Visitors test devices at the booth of Huawei at the IFA consumer tech fair in Berlin, Germany, in September. REUTERS

 

 

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2019-12-13 00:00:00
<![CDATA[Carlsberg banks on Anhui craft beer plant for bigger presence]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528943.htm Carlsberg China's first craft beer production center started operations on Wednesday in Anhui province in East China as part of the Danish brewery's plan to further invest in the country's high-end beer market, given the sharp increase in consumption of the beverage here during the past few years.

Carlsberg has invested 110 million yuan ($15.6 million) for the Craft and Specialty project in Tianchang city, Anhui. The hub has an accumulated investment of 187 million yuan, with production lines for its Draught Master products, craft brewing and packaging.

The brewing and fermentation capacity of the brewery is 100,000 hectoliters. The center is designed to produce products including Draught Master beer, the 1664 series and Tuborg.

The craft beer produced from the hub in Anhui will also be sold to markets in Southeast Asia.

Carlsberg China has grown 6 percent in terms of volume in the third quarter and 20 percent in net revenue, its third quarter report said.

In China, the revenue for its premium products increased 8 percent, driven by expansion in big cities and the successful premium development of local brands.

Globally, the brewery's organic revenue growth is 3.1 percent year-on-year. Its operating profit growth is around 10 percent.

"We're pleased that we've been able to deliver solid revenue growth for the quarter despite tough comparables from last year. In particular, the Asia region continued its very good performance," Carlsberg CEO Cees't Hart said in a statement.

He added: "The top line in Western Europe was solid in spite of challenging comparables from the very warm and dry summer last year, while we had difficult comparables in Russia and faced challenges that negatively impacted our market share year-over-year."

The CEO said the company's earnings upgrade earlier this week is further proof of its improved geographical footprint, "as solid earnings performance in China and Western Europe more than offset the challenges in Russia."

The National Bureau of Statistics said beer production volumes in the country in the past five years since 2014 have declined. Beer imports though have risen to 821,141 kiloliters, up 14.7 percent, according to Qianzhan.com.

Though craft beer only takes up about 1 percent of the consumption volumes in China in 2018, its annual growth has reached 40 percent. It is estimated there are nearly 800 craft beer brands nationwide.

Zhu Danpeng, a food and beverage analyst, said the rising incomes in China encouraged the development of a big market for craft beer in the country.

"Craft beer is expected to see fast growth at 40 percent at least in the next five years," said Zhu. Therefore, it is crucial for Carlsberg to get into the craft beer category in China and expand its high-end beer presence, he said.

Carlsberg's high-end product 1664 Blanc and medium range beer brand Tuborg have posted quick growth in China in the past few years.

Zhu said: "The new investment in production capacity has shown Carlsberg's confidence in speeding up its presence and penetration in the medium and high-end beer sector in the country."

 

A Carlsberg employee works at the company's production facility in Hanoi, Vietnam. REUTERS

 

 

 

 

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2019-12-13 00:00:00
<![CDATA[Steel output to taper off in 2020]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528932.htm China's steel consumption is expected to hit a record in 2019, and this would then be followed by a slight decline in demand in 2020, a new report by the China Metallurgical Industry Planning and Research Institute released on Thursday said. The report added that the country's crude steel output is also expected to fall in 2020 from 2019.

The country's steel consumption is estimated to hit 886 million metric tons this year, higher by 7.3 percent year-on-year, while demand is forecast for 2020 is seen at 881 million tons, down 0.6 percent from the level in 2019.

Crude steel output in 2019 and 2020 are expected to reach 988 million tons and 981 million tons, respectively.

"The unexpected steel consumption growth in 2019 is mainly due to an increase in real estate and infrastructure investments, while downstream industries such as machinery, energy, and home appliance also contributed to the growth under the background of a stable growing domestic economy," said Li Xinchuang, president of the institute.

In 2020, demand from some downstream industries including construction, automobile and shipbuilding is seen to likely fall. Demand from the machinery sector is likely to remain stable, while demand from the energy and home appliance sectors is seen rising, he said.

The report predicted steel consumption in the construction industry would be 475 million tons in 2020, down 0.6 percent from this year. The figure for 2019 is seen hitting 478 million tons, up 11.2 percent year-on-year.

The automobile industry is expected to consume 50 million tons of steel in 2019, down 7.4 percent from 2018. Demand in 2020 is seen slipping further to 48.2 million tons, down 3.6 percent year-on-year.

Demand from the shipbuilding sector is expected to see the sharpest year-on-year decline of 11.5 percent. The industry is expected to consume 11.3 million tons of steel this year, up 3.7 from last year, but the figure is expected to slide to 10 million tons in the following year due to the impact of trade disputes and geopolitical uncertainty.

The machinery industry is estimated to consume 142 million tons of steel in 2019, an increase of 1.4 percent year-on-year, and is forecast to maintain that demand in 2020.

The home appliance sector's demand for steel, however, is estimated to climb 3.7 percent year-on-year to reach 14 million tons next year. Consumption this year is estimated to increase 8 percent from last year to stand at 13.5 million tons.

Demand from the energy industry is also forecast to grow about 1.5 percent year-on-year to reach 34.5 million tons in 2020. The estimated consumption of the sector in 2019 is 34 million tons, higher by 3 percent year-on-year.

The report predicted iron ore demand in China at 1.225 billion tons in 2020, compared to 1.264 billion tons in 2019. Pig iron output in 2020 and 2019 is seen at 775 million tons and 800 million tons, respectively.

Qu Xiuli, deputy head of the China Iron and Steel Association, said at an industry forum in November that China will continue to rein in unwanted steel capacity, especially metal that is substandard and contributes to pollution.

 

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2019-12-13 00:00:00
<![CDATA[Citi sees ample room for growth in nation]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528933.htm Further opening-up of the financial market in China will create opportunities for US-based Citigroup Inc or Citi to garner new business and profits in the country, according to Christine Lam, chief executive officer of Citi China.

"We are definitely looking forward to obtaining new business licenses," said Lam during an interview in Beijing on Wednesday.

The bank is interested in many areas including custody and futures businesses, she said.

Citigroup Inc has agreed to sell its 33.33 percent stake in Citi Orient Securities Co Ltd to Orient Securities Co Ltd for 476 million yuan ($68 million). The securities joint venture will be wholly owned by Orient Securities after the transaction is completed.

"It was one of the most successful JVs. The two parties agreed amicably for Orient Securities to take the full ownership. We are actively evaluating how we could best take advantage of the new rules which allow majority or even 100 percent foreign ownership of a securities entity," Lam said.

The China Banking and Insurance Regulatory Commission issued 19 measures this year to further open up China's banking and insurance industries, following announcements of 15 measures in 2018. The policies created sound institutions and a market foundation for the financial sector to improve international competitiveness and its capacity to serve the real economy, the regulator said in a post on its website on Monday.

These efforts are bringing both direct and indirect benefits to foreign banks, Lam said.

"The opening-up of China's capital market is attractive to foreign institutional investors. As the custodian bank and cash management bank for these clients, we have seen increasing flows of capital into China's interbank bond market, and this trend is obvious," she said.

Citi China received the Type-A license to act as a bond settlement agent in China's interbank bond market in 2017. The industry-wide ranking of its business in this segment improved from 17th back then to seventh this year, showing significant progress.

On July 20, the Office of the Financial Stability and Development Committee under the State Council issued a set of measures to further open up the financial industry, including a measure to lift the foreign ownership limits on securities, fund management and futures companies by 2020, a year ahead of schedule.

"With the announcement of these measures, many international companies accelerated their steps to participate in the China market and enlarged the size of their business in the country, which in turn increased the volume of our business with them as a global bank," Lam said.

"The external environment in China has been more challenging this year. The transformation of the Chinese economy and China-US trade friction did impact business sentiment to a certain extent. But we are prepared for these challenges and have adjusted accordingly to actively managing risks and assisting our clients to navigate through the environment."

Over the last three years, Citi China achieved double-digit growth in its new economy and private companies related business. The bank has set up a team dedicated to the new economy segment and targeted niche clients including online travel agencies, and e-commerce, new energy and healthcare companies.

It has also made full use of its global network to offer banking services to new economy companies that are interested in doing business overseas. Citi provides financial services in more than 160 markets, holding a local banking license in 98 of them.

With a network covering over 90 percent of the markets related to the Belt and Road Initiative, the relevant business of Citi grew by more than 20 percent this year, Lam said.

 

Christine Lam, chief executive officer of Citi China

 

 

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2019-12-13 00:00:00
<![CDATA[Growth trends offer fresh chances for LatAm]]> http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528941.htm BUENOS AIRES-Trends in China's development offer rising opportunities to Latin American countries with ties to the Asian country, said Argentine-Brazilian academic Santiago Bustelo.

To make the most of bilateral ties, regional governments need "to understand the current stage of China's development process", said Bustelo, a research professor at the Argentina-China Studies Center of the University of Buenos Aires.

Today, China's development is marked by urbanization, middle-income group expansion, rising consumption, and trends that could potentially boost cooperation and trade through economic complementarity, especially between China and Argentina, Bustelo said in a recent interview with Xinhua News Agency.

"China's process of urbanization will continue to demand natural resources and promote the integration of the two economies," he said.

"In addition to the growth of major cities, internal migration from the countryside will spark the growth of medium-sized cities," said Bustelo, noting that Argentina could "take advantage of the huge opportunities that will arise in terms of extracting minerals, such as copper and lithium."

Given the right conditions between the two countries for exploring these ongoing changes, Argentina could not only continue to grow its exports to China, "but also diversify them", said Bustelo.

"In the food sector, we hope that the emergence of a new Chinese middle-income group generates opportunities for agricultural exports," he said.

China's growth coupled with a policy of further opening up its market to foreign goods generates concrete opportunities for countries like Argentina, Bustelo said, citing the recent second China International Import Expo held in Shanghai in November.

Looking ahead, "the Chinese people's expected rise in income will open up a series of opportunities in niche markets" for a range of Argentine products with high degrees of differentiation, including wine, sustainable goods, fashion, design and audiovisual production, said Bustelo.

"However, to spur this potential, Argentina needs a clear strategy for inserting itself" into the international market, Bustelo said.

While underscoring the strong cooperation that already exists between China and Argentina through numerous joint infrastructure projects, Bustelo said "it's true that in Argentina there is still a lot of ignorance about China, which sometimes leads to a lack of understanding of the opportunities and potential of having China as a strategic partner".

"I think both countries can work together to improve mutual understanding and create chances for dialogue, greater knowledge and cultural exchange," he added.

 

 

 

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2019-12-13 00:00:00
<![CDATA[Belt and Road helps build lasting economic and trade relations]]> http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528816.htm Economic and trade cooperation between China and related economies under the Belt and Road Initiative has flourished over the past six years, boosting China's highlevel opening-up and further opening up of the global economy, according to senior commerce ministry officials.

Qian Keming, vice-minister of commerce, said the BRI has made significant contributions to the global economy and humanity development, and has been receiving positive responses from an increasing number of countries and international organizations.

"Based on the principle of achieving shared growth through dialogue and collaboration, BRI upholds the 'Silk Road spirit' of peace, cooperation, openness, inclusiveness, mutual learning and mutual benefit," Qian said.

"It has created a new space for the world economy, built a new platform for international trade and investment, raised up new practices in global economic governance, made new contributions to the well-being of people in the world, and contributed China's wisdom for building a community with a shared future for humanity."

Chu Shijia, director-general of the comprehensive department at the commerce ministry, said trade between China and the BRI economies has been expanding, with two-way investments increasing and key projects progressing. And establishment of overseas economic and trade cooperation zones have accelerated, and cooperation mechanism enhanced.

Currently, China has inked 198 cooperation documents with 167 countries and international organizations under the BRI and established working relations with seven countries on unimpeded trade and with 44 countries on bilateral investment cooperation, to quickly resolve the problems in bilateral economic and trade cooperation.

The country has also established e-commerce cooperation mechanisms with 22 countries and signed third-party market cooperation agreements with multiple countries.

Economic and trade cooperation has been a cornerstone of the BRI with data from the past six years proving the success of the mechanism, said Chu.

Latest data from the General Administration of Customs showed that the growth in China's trade with the BRI economies was higher than the overall growth during the first 11 months this year, as imports and exports with the BRI-related economies reached 8.35 trillion yuan ($1.19 trillion), up 9.9 percent year-on-year, and accounting for 29.3 percent of China's total foreign trade.

The cumulative trade volume between China and BRI economies has exceeded $7.5 trillion and China is the largest trading partner for 25 of these economies, Chu said.

The accumulated investment of Chinese enterprises in BRI-related areas stood at $110 billion, with the value of newly signed overseas contracted projects exceeding $750 billion.

During the first 10 months, China's nonfinancial direct investment in BRI economies surpassed $11 billion, and the value of newly signed overseas contracted projects amounted to more than $110 billion.

Direct investment into China from BRI-related countries and regions stood at $50 billion, with more than 21,000 foreign enterprises being set up. In the first 10 months of this year, BRI-related countries directly invested $6.1 billion into China and established nearly 4,500 foreign enterprises.

Chinese companies have invested $34 billion in overseas economic and trade cooperation zones in related countries, and about 4,500 Chinese companies have established operations in the cooperation zones. They have paid $2.8 billion as taxes and fees to local governments and created more than 300,000 jobs for local people.

Key projects involving construction and operation of ports, railways, highways, and bridges among many other projects along the Belt and Road area have also been making achievements as expected.

The country also has signed five free trade agreements with 13 BRI economies. This year, China has upgraded free trade agreements with the Association of Southeast Asian Nations, Singapore and Chile, signed an FTA with Mauritius and concluded negotiations with New Zealand for an upgrade of the FTA between the two countries.

The protocol of the second phase of China-Pakistan Free Trade Agreement also came into effect this year, and 15 member countries of the Regional Comprehensive Economic Partnership also have accomplished conclusion of negotiations as a whole.

Both of the officials made the remarks at a book release function in Beijing last week. The book-A Bright Shared Future ... Stories Along the Belt and Road-is the first in a series of stories related to the Belt and Road Initiative. The book has been compiled by the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce and a second volume will be launched soon.

 

Chinese construction workers perform soldering operations at a construction site of China-Laos railway project. XINHUA

 

 

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2019-12-12 00:00:00
<![CDATA[Airbnb eyes expansion in China]]> http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528861.htm Airbnb is expanding its services to more second-and third-tier cities in China as the US-based firm that provides online bookings for homestay services looks to step up its localization efforts and attract a growing number of Chinese millennial tourists aspiring for high-quality travel and value accommodation.

Peng Tao, president of Airbnb China, said the company has sped up its expansion in China this year. "The Chinese business witnessed steady and rapid growth, and in terms of average monthly active users, we were the leader during the Jan-Oct period among all online vacation rental services platforms."

The company is extremely bullish on the Chinese market and will launch tailor-made and high-quality homes, products that conform with the usage patterns of Chinese consumers, said Peng.

Last year, Airbnb launched Airbnb Plus in China-a new selection of high-quality homes with hosts having great reviews and paying minute attention to detail. Peng said the number of Airbnb Plus hosts surged ninefold in the country and were spread across 24 cities.

According to Peng, China's robust vacation rental market will help boost the local employment rate and drive economic growth. In addition, the nine-year partnership between the International Olympic Committee and Airbnb, especially for the 2022 Winter Olympics in Beijing, is expected to open up new growth vistas for Chinese house owners.

According to a new report released by the company, the proportion of Airbnb's Chinese hosts is rising in second-and third-tier cities and holiday destinations, such as Chongqing, Xi'an and Chengdu.

The average age of Chinese Airbnb hosts is 33 years, with nearly 70 percent of them born in the post-1980s and post-1990s. Significantly, the number of female hosts on Airbnb is as high as 62 percent in China.

Furthermore, about 90 percent of these hosts have another occupation, and 87 percent have bachelor degrees and above. It is noteworthy that one-fifth of the Chinese house owners come from creative industries, higher than the rest of the world.

China currently has more than 50 million vacant homes, and 67 percent of the Airbnb users chose to become hosts to gain extra income, the report said. Airbnb China's rural listing supply covers more than 1,400 county-level administrative regions in the country.

Last year, the State Council released an action plan for 2018-20 to further stimulate domestic consumption. The plan emphasized that market access should be relaxed in several service-related fields like tourism, and efforts be made to boost the development of short-term rental services like rental apartments and guesthouses.

Statistics from the State Information Center, the market for home-sharing services is expanding rapidly in the country, with the sector's revenue expected to reach 50 billion yuan ($7.1 billion) by 2020. It forecast that by 2020, the number of tenants is likely to exceed 100 million and the number of shared homes will exceed 6 million.

Jiang Xiwei, an analyst with market consultancy Analysys, said there is huge room for growth of the vacation rental market as travelers are willing to try something different, like homestays during a trip as online services are offering several diverse experiences.

"The short-term home rental and homestay services are wide-ranging, to satisfy the needs of various kinds of tourists. Typically, customers hire such services for get-togethers, reunions, team-building activities and to improve parent-child bonding and communication," said Lai Zhen, an analyst at market research firm iResearch.

 

An Airbnb employee talks on the phone at the company's headquarters in San Francisco, the United States. REUTERS

 

 

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2019-12-12 00:00:00
<![CDATA[UBTech set to ramp up overseas presence]]> http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528851.htm Chinese artificial intelligence pioneer UBTech Robotics said it will step up efforts to further expand its overseas presence. The company is backed by internet heavyweight Tencent Holdings Ltd.

The plan came about after the Shenzhen-based company inked a deal worth $362.4 million to increase the number of AI teaching labs for students in the United Arab Emirates.

Zhong Yong, senior vice-president of UBTech, said the company now operates services in about 40 countries and regions. Its services and education philosophy are recognized by foreign companies and governments.

"The lack of talents is a big challenge for the development of AI and robotics, so we devote tons of resources to developing a complete AI education system to nurture talents," Zhong said.

The company said it has already established an AI curriculum system covering the primary, junior and high schools, as well as colleges. It held a string of robotics competitions to cultivate the competence and team-building capabilities of students.

Some of the company's curriculum and robots programming learning equipment have been purchased by the United Arab Emirates.

In November, UBTech announced the $362.4 million deal with Royal Strategic Partners, a unit of Abu Dhabi Capital Group. ADCG is a large-scale investment company that manages assets of around $20 billion.

UBTech said it will build AI teaching labs for 1,310 primary and secondary schools in the seven emirates of the UAE over the next four years.

The Shenzhen-based company said in the future, it will work together with the UAE to further promote the localization and development of AI education solutions.

The related courses in primary and secondary schools and universities will provide a steady stream of fresh blood for the AI industry.

Before the deal, UBTech signed agreements on AI education with companies, organizations and government agencies in Russia, Indonesia and Uzbekistan.

It recently reached a strategic cooperation deal with the UNESCO Higher Education Innovation Center on nurturing AI talents and promoting high-quality education.

UBTech said it will step up efforts to tap into overseas opportunities and explore ways to better offer localized products and services in each market.

The company's services are increasingly popular in China, with local students showing mounting enthusiasm toward programming and robotics technology.

Liu Yunjia, a mother of a primary school student, said her son was attracted a few years ago by an advertisement for programming learning at a shopping mall and bought a learning package immediately. Since then, her son has devoted most of his time to learning programming skills.

The coding industry for Chinese children is a market worth up to 4 billion yuan ($558 million) and is forecast to increase about tenfold in the next five years, according to market research and consulting group iResearch.

 

 

 

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2019-12-12 00:00:00
<![CDATA[Swiss firm sets up center for special medical foods]]> http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528819.htm Nestle Health Science has invested in a product innovation center in Taizhou, Jiangsu province, as it joined several nutrition health brands in tapping the country's growing demand for clinical nutrition.

The center will operate in parallel with Nestle Health Science's product innovation centers in the United States and in Switzerland, sharing global advanced core R&D technologies, localized innovations for China's national standards and consumer needs, and enriching the firm's product systems of Foods for Special Medical Purpose (FSMP) in China.

Nestle Health Science is a subsidiary of Nestle, the biggest food company in the world whose headquarters is in Switzerland.

Having been in the Chinese market for the last three years, Nestle Health Science has posted double-digit in the country, with its products being locally manufactured. It has 11 approved formula products in China, including five for babies and infants and six for FSMP.

The center being built in China reflects the firm's confidence and commitment to the Chinese market but will also serve the Asia-Pacific region.

Products manufactured in its factory in Taizhou serve consumers on the Chinese mainland, Hong Kong and Taiwan, said Cecily Gu, regional business head of Nestle Health Science China.

The first liquid whole protein nutrition formula developed by the Product Innovation Center of Nestle Health Science China called Nutren Novasource GI has successfully obtained registration as a food for special medical purpose in July 2019.

"This innovation will trigger a new era of high-quality FSMP in China and lead the Chinese clinical nutrition to a new level," Gu said.

"Nestle Health Sciences will provide cutting-edge technical support and experience for developing high quality FSMP suitable to Chinese consumers," said Gregory Behar, the global CEO of Nestle Health Science Group.

The Nestle Health Science Taizhou Factory is the first approved liquid full-nutrition FSMP factory in China. It will introduce internationally advanced production technologies and formulas, such as Nutren Novasource GI, into China and has greatly promoted the process of localized production in the Chinese FSMP market.

Gu said: "I believe that FSMP will release great vitality and bring more opportunities for enterprises and consumers in China. The Product Innovation Center will continue to carry out localized innovations, develop formulas according to Chinese tastes and nutritional diet characteristics, and enable more patients to receive nutritional treatment. It also helps to further narrow the gap in clinical nutrition treatment."

She said the factory and innovation center will consider adding more locally adapted flavors for recovering Chinese patients such as dates.

An aging society and the steady improvement of consumption levels meant awareness of nutrition and health practices by the Chinese people has constantly risen.

Michel Gardet, the global business head for Medical Nutrition of Nestle Health Science, believes that "China's FSMP market may face a long-term incubation period. For NHS, we not only must meet the production thresholds required by regulatory authorities, but also understand the health of different consumers through a large amount of research and develop the corresponding formula."

In the future, Nestle Health Science will continue to deepen its presence in the Chinese market. The future of China's FSMP industry is seen as particularly promising.

Another company in Illinois-based Abbott is looking at more market opportunities in the special medical purpose food sector in China.

Its nutrition product Ensure 3 is part of the firm's first batch of products that are registered as food for special medical purpose in China in June this year.

Abbott said it can meet the nutritional demands of people over the age of 10 who suffer from diseases including food intake disorder, digestion and absorption obstacles, and metabolic disorders. Abbott also has special medical nutrition products for patients with diabetes.

Abbott's third quarter report in 2019 showed its worldwide adult nutrition sales increased 3.8 percent to $1.87 billion. The sales performance in the quarter was led by the strong growth of its Ensure nutrition brand, and Glucerna, its diabetes-specific nutrition brand.

The Healthy China Initiative (2019-30) said national nutrition has been raised as an issue to be a part of the national strategy. Chinese consumers have great demand potential for quality FSMP.

The plan pointed out there has been a rise of nutrition-related diseases in recent years, while the Health Promotion For the Elderly will be carried out soon.

China is home to the largest number of senior residents in the world. By the end of 2018, the number of people aged 50 and above reached 249 million, accounting for 17.9 percent of China's population.

Nearly 180 million elderly people in China suffer from chronic diseases, data provided by Abbott showed. The proportion that suffer from one or more chronic diseases is as high as 75 percent.

At the same time, the life span of aging people has grown rapidly, with the expected life time per capita expected to reach 79 by the year 2030.

In its 2018 report of healthcare statistics, China's top health authority revealed that the number of in-hospital patients reached 250 million last year. It will become necessary to provide effective and quality medical nutrition support to this group of patients along with old people as a whole going forward.

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2019-12-12 00:00:00
<![CDATA[Innovation zone in Dubai eyes Chinese companies]]> http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528834.htm Dubai wants Chinese companies to explore opportunities in a dedicated innovation zone in the city that is positioned to be a "powerful enabler" of the Belt and Road Initiative.

District 2020, the legacy site of the six-month Expo 2020 Dubai, is looking to attract Chinese enterprises that fit into its technology-driven innovation system and leverage the cosmopolitan Middle Eastern city as a springboard for international push, said Nadimeh Mehra, vice-president of Legacy Development and Impact at District 2020.

"China and the United Arab Emirates share a long and fruitful history of economic collaboration that we are eager to help continue through the platform of growth that District 2020 will provide," she said.

District 2020's vision is to support the continued development of the UAE's knowledge and innovation economy, with a focus on key growth industries of technology, travel and tourism, logistics and transport, education and construction.

Mehra said Chinese companies are already leaders in a lot of different technologies like blockchain, artificial intelligence to the internet of things, all of which fit into the agenda of District 2020.

And potential investees are not just confined to the technology circle but a broader portfolio of companies in the hospitality, tourism and real estate sectors.

"Because the zone is not only a technology hub but … where technology collaborates with enterprise," she said. "So if a typical tourism company benefits from the technology, it allows the technology to scale much faster."

Apart from incentives like the provision of digital infrastructure and preferential policies like zero corporate and personal tax, District 2020 has an entrepreneur program dubbed Scale2Dubai, aiming to draw startups and small-and medium-sized enterprises to upscale and enter the Middle East and North Africa markets.

"Successful applicants of the program will benefit from free business setup, two years subsidized urban living, a two-year entrepreneur visa, and two years free workspace," she said.

Earlier this year, Sheikh Mohammed Bin Rashid Al Maktoum, vice-president and prime minister of the UAE, reiterated the country's support for Belt and Road Initiative with the announcement of a $3.4 billion Chinese investment in Dubai.

Some Chinese technology powerhouses have entered the nation. For instance, Huawei Technologies has launched over 100 initiatives and deployed over 1,000 smart devices in less than three years to facilitate the Smart Dubai 2021 initiative.

Fliggy, the tourism arm of Alibaba, signed a memorandum of understanding with Dubai's tourism agency to enhance travel experiences for Chinese travelers, while gaming giant Tencent chose Dubai Internet City as its regional headquarters in June.

The Belt and Road Initiative guarantees further access to what is now the world's second-largest economy. In return, Chinese businesses in the UAE gain an important platform from which they can access vast emerging markets in the Gulf region, according to Simon Pluckrose, a Dubai-based director at consultancy firm Brunswick.

 

 

 

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2019-12-12 00:00:00
<![CDATA[Tencent Cloud ramps up AI efforts with slew of new products]]> http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528849.htm Tencent Cloud, the cloud computing arm of internet giant Tencent, is stepping up its artificial intelligence focus with an eye on the burgeoning growth, profit opportunities for the sector in China.

The cloud computing service provider on Wednesday launched a series of new AI products that seek to lower the skill barriers for enterprise customers.

"The blossoming AI, big data and other digital technologies over recent years strongly point toward an inevitable trend of intelligent upgrade of industries," said Wang Long, vice-president of Tencent Cloud. "Companies yearn for more sophisticated AI application scenarios to generate new momentum for industrial development."

Wang said against this backdrop, companies need to offer end-to-end comprehensive AI solutions that can truly generate value and help clients embrace digital transformation.

Tencent Cloud's new products include technologies to identify fake facial images, a language model self-learning tool, graph computing engine as well as a big data platform to help enterprises fend off risks.

The cloud service provider also announced on Wednesday that it has upgraded all its AI and big data products, as part of the larger efforts to reinforce its leading position in the market.

Currently, Tencent Cloud serves data scientists, application developers and business managers, offering big data and machine learning tools and services to help lower the skill barriers. It has also worked with partners to offer digital solutions for various industries such as retail and finance.

With the booming new technologies and supportive government policies, China is fast becoming a fertile market for the development of AI technologies and the applications, powered by leading tech giants such as Alibaba, Tencent and Baidu.

By the end of last year, China had 3,341 AI companies and was ranking second behind the United States, said an AI development report released in May by the Ministry of Science and Technology.

The report said the US, China and the United Kingdom are at the forefront in AI. From 2013 to 2018, global scientists published more than 300,000 papers in AI research, with China leading in the number of published papers at 74,408, followed by the US at 51,766.

According to a national plan released in 2017, China is set to become the world leader in AI by 2030. By 2020, China's AI industry is expected to be worth 150 billion yuan ($21 billion).

"Both AI adoption and spending are picking up fast," Andrea Minonne, a senior research analyst with International Data Corp, said in a recent report. "AI is the game changer in a highly competitive environment, especially across customer-facing industries such as retail and finance, where AI has the power to push customer experiences to the next level with virtual assistants, product recommendations, or visual searches," said Minonne.

 

The booth of Tencent Cloud during an industry expo in Hong Kong. ZHANG WEI/CHINA NEWS SERVICE

 

 

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2019-12-12 00:00:00
<![CDATA[Tech shares set to steal the thunder]]> http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528818.htm Chinese technology shares may continue to offer considerable upside potential next year, on the back of profit gains from 5G commercialization and deepening capital market reforms, analysts said.

"We expect policy support for technological industries will only strengthen next year. Technology sectors should still be a key focus for next year's A-share investment," said Zhang Xia, chief strategist with Shenzhen-based China Merchants Securities.

This policy stance was signaled by a recent high-profile meeting that stressed the need to improve scientific and technological capabilities and innovation capacity in 2020, Zhang said.

In terms of company fundamentals, the communications technologies sector has entered a new uptrend of its business cycle after China had granted 5G licenses to telecom carriers in June, according to Zhang.

The same may be the case for semiconductor and other tech sectors as 5G commercialization is fueling various new technologies and applications, he said.

Tech shares have been in the limelight recently on expectations of stronger profitability, better investor sentiment and accelerating capital market reforms, analysts said.

"This year marks an inflection point in China's capital market reforms, which had pressed the accelerator of fundamental reforms aimed at quality market development, instead of scale expansion," said Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology.

Last month, the top securities regulator assigned an action plan to improve the fundamentals of listed firms, after allowing reverse mergers on the ChiNext board in October, which could encourage mergers and acquisitions involving listed firms in the innovative enterprise-heavy board.

This followed the debut of the sci-tech innovation board in July, which shows greater inclusiveness to tech firms than older peers and pilots the registration-based new share sales system.

The ChiNext index went up by 5.57 percent as of Wednesday since the beginning of the fourth quarter, outperforming a 0.66 percent increase in the benchmark Shanghai Composite Index over the same period.

On Wednesday, the ChiNext index went down by 0.91 percent to close at 1718.26 points, after ending at an eight-month high in the previous session, according to market tracker Wind Info.

Looking ahead, China's capital markets will become more supportive for tech firms to raise funds, as part of the nation's efforts to boost high-quality capital market development, Dong said.

One major goal of improving listed firm quality-the key to quality market development-is to enhance their research and development capacities and ensure that they are the cutting-edge players in their respective industries, he said.

Cheng Shi, managing director and chief economist at ICBC International Holdings, said sectors that lie on the intersection of advanced technology and consumption upgrade would rank among the most valuable investment opportunities in 2020.

"With the basis of 5G communications equipment, a new series of consumption scenarios and niche markets may emerge and focus on the areas of culture and entertainment, medical care, education, and housekeeping services," Cheng said.

Zhang said that virtual reality, augmented reality, as well as cloud gaming, computer and smartphones, may be the tech segments that have the highest possibility of strong market performance, given their shorter timeline to realize higher margins.

 

 

 

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2019-12-12 00:00:00
<![CDATA[Oppo to invest $7.1b for sharper research, development prowess]]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528551.htm Chinese smartphone vendor Oppo said on Tuesday that it will invest 50 billion yuan ($7.1 billion) over the next three years on research and development, as it aims to boost its technological prowess amid fierce competition in the 5G-enabled internet of things era.

Chen Mingyong, CEO of Oppo, said the spending will focus on research of 5G, 6G, artificial intelligence, augmented reality, and other emerging technologies. Also, it will be used to finance more efforts to develop core fundamental architecture for hardware, and boost software capabilities.

"We have the faith of sharpening a sword in 10 years and we will ramp up the push to build our own technical moat," Chen said.

Oppo has established itself as a globally competitive smartphone vendor partly via its strong offline retail channels and smartphones that boast strong camera capabilities and other cutting-edge technologies. Currently, it has about 320 million active users of its Color OS smartphone system.

Liu Chang, president of Oppo's research institute, said in the next decade, a complete and underlying technical system is needed to help integrate data, computing capabilities, industrial know-how, and application scenarios.

"Separate innovation is not enough to cope with the IoT era. Integrated innovation will be the key for Oppo," Liu said.

According to him, the 50-billion-yuan budget will be partly used to recruit more talents and to boost cooperation with premier global universities. The company has doubled its R&D head count to more than 10,000 in 2019, with its R&D spending for this year topping 10 billion yuan.

Oppo said the company will unveil smartwatches, smart earphones, AR glasses, even smart robots in the future to better tap into opportunities in the internet of things era. Its rivals including Huawei Technologies Co and Xiaomi Corp are also doubling on IoT.

So far, the company has applied for more than 40,000 patents globally, and more than 88 percent of them are invention patents.

Tom Morrod, research director at market research company IHS Markit, said 5G will inject new vitality to the development of the internet of things devices and usher in an era where infusion will be omnipresent.

As of October, 328 telecom operators in 109 countries are investing in 5G, with 50 of the operators having launched 5G commercial services, data from the IHS Markit show.

While stepping up its R&D push, Oppo is also intensifying efforts to expand presence in overseas markets. The company had been selling 5G smartphone in key European markets since May, with promising sales in Sweden, Italy and the United Kingdom.

The move is part of Oppo's "5G Landing Project", an initiative to drive cooperation with global network operators, promote the implementation of 5G products and services and connect new industries. Oppo's products and services are now available in more than 40 countries and regions.

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A visitor tries Oppo's AR glasses at an industry expo in Shenzhen, Guangdong province. CHINA DAILY

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2019-12-11 00:00:00
<![CDATA[State Grid's EV unit intensifies mixed ownership reform for enhanced vitality]]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528611.htm State Grid Electric Vehicle Service Co has made continued efforts to advance mixed ownership reform at different levels, and stimulate corporate vitality through such efforts, the company's general manager said.

To carry out the reform, the State-owned enterprise has gradually identified key issues such as equity structure, potential investors, corporate governance, and employee shareholding, said Shen Jianxin, general manager of the company.

After research, the SOE formulated a draft plan for implementing mixed ownership reform, and submitted it to its parent company State Grid Corp of China, Shen said.

The company set up an office for leading mixed ownership reform, selected professionals to take charge of investment and financing, risk control, established cooperation with well-known intermediaries, and formed professional working teams, he added.

State Grid Electric Vehicle Service Co was founded in 2015. Its core asset is a connected vehicle platform, and its fixed assets include self-built, self-operated charging piles for electric vehicles and leasing vehicles.

"The new energy vehicle industry has strategic significance, with large market potential and new business models. One of its prominent features is cross-industry collaboration," Shen said.

"The company strengthens cooperation with private enterprises, gives full play to the advantages of mixed ownership, gathers industrial resources, and expands its core business at a fast pace."

After the launch of mixed ownership reform, the construction period of a charging station was shortened from more than one year to four to six months, according to Shen.

The number of charging stations available on the company's connected platform grew from 107,000 in 2016 to 302,400 in 2018.

The company's investment in charging station projects climbed from 2.79 million yuan ($396,000) in 2016 to 280 million yuan in 2018.

In November, State Grid Electric Vehicle Service Co and privately run China Grand Automotive Services Group Co established a joint venture. The new firm plans to build charging piles at more than 840 China Grand Auto dealerships.

The State-owned enterprise also encourages its branches in provincial-level regions and cities to partner with local public transportation firms and related investment companies, in order to reduce carbon emissions.

The central government has urged SOEs to carry out mixed ownership reform in a bid to stimulate their vitality and boost their earning capacity.

Tang Liming, a macroeconomy researcher at Dongxing Securities, said it is expected that more SOEs will introduce social or foreign capital, and focus on improving the operating efficiency while following market-oriented principles.

"Through the mixed ownership reform, SOEs will give play to their own advantages in scale, working together with social capital to promote China's corporate governance model to further integrate with the international ones," Tang said in a research note.

Data showed State Grid Electric Vehicle Service Co achieved sound results in recent years. In 2018, the company's operating income increased to 3.44 billion yuan, compared with 354 million yuan in 2016, according to the company.

Its total profit amounted to 61.06 million yuan last year, an increase of 1.51 times from that of 2016, the company said.

 

An attendant charges an electric bus at a State Grid charging station in Hangzhou, Zhejiang province. XINHUA

 

 

 

 

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2019-12-11 00:00:00
<![CDATA[City offers Tesla 'template for future growth']]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528595.htm Working for a boss as aspiring as Tesla Inc CEO Elon Musk could be one of the most difficult jobs one could ask for, as high turnover at the top at the electric carmaker is no secret.

He has been happy with the China team's work though, in particular at the company's Shanghai factory, the first outside the United States, describing it as a "template for future growth".

This is not surprising. The $2 billion plant broke ground in January and started trial production in October, and Tesla said it was around 65 percent less expensive to build than an equivalent facility in the US.

Tao Lin, vice-president of Tesla, said the company had made a great choice to build the plant in Shanghai.

"Thanks to the outstanding business environment in Shanghai, many of our innovative ideas have become a reality," Tao told reporters in early November.

Tesla is not the only representative of its industry that has been attracted to the city, which is stepping up its efforts to build a world-class industrial cluster of new energy vehicle companies based on its traditional advantages in the automotive industry.

At a promotional meeting in September in Lingang area of Shanghai FTZ (free trade zone), where Tesla's plant is located, agreements for 24 vehicle-related projects with a combined investment of 8 billion yuan ($1.1 billion) were signed, covering manufacturing, applications and service, according to the China News Service.

Zhu Zhisong, a senior official at the area, said the authorities would roll out more competitive policies and favorable financial rules to attract companies that specialize in smart and clean-energy vehicles.

Last year, Lingang's output in terms of vehicles and components totaled 38 billion yuan, said Zhu.

Shanghai's Jiading district, where China's largest carmaker SAIC is based, is equally ambitious.

In a guideline released in April, the district expects to have more than 50,000 automotive engineers and over 50,000 IT professionals by 2035 as vehicles feature more software, according to Xinhua News Agency.

Jiading has been a powerhouse of Shanghai's auto industry, with one highlight being the SAIC Volkswagen joint venture which was established in 1984.

In late November, the Sino-German joint venture launched preproduction of electric models at a new plant in the district.

The factory, with an annual capacity of 300,000 vehicles, is the first designed and built in China for Volkswagen's electric car-only platform, and production is expected to start next year.

Pre-production began just a few days after Volkswagen started manufacturing its first model on the platform in Zwickau, Germany.

Stephan Woellenstein, CEO of Volkswagen Group China, said: "It took only 12 months to see the completion of this innovative factory. We will speed up our new energy vehicle offensive even more, as we expect further e-mobility market growth."

By 2025 the plant will produce up to 15 models on the platform.

"Fully intelligent and digitized, the plant sets a new benchmark for green and smart factories for Volkswagen Group China and the whole Chinese auto industry," Volkswagen said in a statement.

GM has been speeding up its effort in terms of new energy vehicles. Its Chevrolet unveiled the first electric car for the Chinese market in November, which will be produced at its joint venture SAICGM.

GM has established a battery lab in Shanghai's Pudong new area with fully fledged research and development capability and expertise to design, validate and test batteries.

The largest carmaker in the US has localized battery pack assembly at SAIC-GM's battery assembly plant in the city since 2018.

"The facility has adopted a series of world-leading battery assembly processes to ensure the safety, reliability and durability of the batteries powering our electric vehicles built and sold in China," said GM in a statement.

Sean Stein, US consul general in Shanghai, said a lot of international companies, including many from the US, have chosen Shanghai because of the city's business environment.

"The authorities know that it is important to have good relations with companies, which is actually a 'secret weapon' for them to attract international firms," said Stein.

He made the remarks in a speech when US component supplier DRiV opened its Asia-Pacific headquarters in the city's Yangpu district last Friday.

The authorities in Shanghai have also been promoting the development of smart and connected vehicles.

Shanghai issued the country's first permits to conduct operational tests of such vehicles in September, marking China's latest step toward the commercialization of autonomous driving.

And the city opened its first road section for testing smart and connected vehicles in March 2018, and so far the roads have a combined length of 53.6 km, covering 1,580 different scenarios.

"China has the most complicated traffic scenarios in the world, so the BMW Group's automated driving R&D in China has become an important part of autonomous driving development worldwide," said BMW.

BMW was among the first companies to receive the test permits in Shanghai. It has set up autonomous driving R&D teams in Shanghai and Beijing, composed of nearly 100 engineers.

They focus on the development and validation of automated driving function based on typical traffic scenarios in China.

David Nagy, a senior executive at executive search firm DHR International, said Shanghai has a competitive edge over other cities in attracting professionals because of abundant career opportunities.

Besides newcomers like Tesla, a big number of companies have operations in the city ranging from carmakers like GM and Volkswagen to suppliers including Continental, ZF and Bosch.

"Shanghai is a city that is attractive for engineers to come, because if it doesn't work out with this company, there are other companies that I can go to," said Nagy.

"For mid-level individuals starting to have families, it's also a nice place to live. It presents career opportunities as well, and all the cultural activities, schooling and so on."

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An AI-enabled system to identify pedestrians is displayed at the World Intelligent Connected Vehicles Conference in Shanghai. ZHANG HENGWEI/CHINA NEWS SERVICE

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A visitor walks past a Tesla model S sedan at the second China International Import Expo held in Shanghai in November. LI FUSHENG/CHINA DAILY

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2019-12-11 00:00:00
<![CDATA[Nation to set up standard for facial recognition technology]]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528593.htm China has started to compile a national standard for facial recognition technology as its ubiquitous application triggered heated discussions about data security.

"It will be a guidance and foundation for the yardsticks of facial recognition in all fields, including industrial, regional and organizational regulations," said Zhang Wang, vice-president of SenseTime Group, the leading unit of the national team crafting such standards.

The team was formed last month by the National Information Security Standardization Technical Committee. It also involves technology giant Tencent, Ant Financial, the finance arm of Alibaba Group, Pingan Group and other leading firms in the domain of artificial intelligence.

Heading the team, SenseTime in 2014 was founded by Tang Xiao'ou, a well-known AI scientist and professor at the Chinese University of Hong Kong. It has become a leading global AI algorithm provider for more than 700 customers. The customers include Alibaba and smartphone maker Xiaomi.

"Our key work now is to set up a framework of the national standard and a two-year plan for the team," Zhang told China Daily. They are currently collecting and studying issues that need to be addressed.

The move comes given the technology's widespread use in people's lives, from unlocking smartphones to security checks for daily payments. This in turn sparked concerns over personal data security.

For example, a face-swapping app named Zao, which enables users to imitate celebrities through the use of artificial intelligence, requires users to fully authorize the image right on the platform.

Another example is the facial recognition-empowered self-serve package locker Hive Box, which was found to have a bug as some students opened lockers using the printed photos of parents.

Zhang vowed in reaction to those concerns to develop standardized criteria for recognition accuracy, ability to detect attacks, and other issues that are commonly raised by users.

He stressed the first batch of benchmarks will focus on technical requirements, recognition methods and personal data management.

He believes the challenge would be how to guarantee implementation of these standards and one solution is to establish systematic testing methods to check each requirement in an effort to eliminate impractical requirements.

Meanwhile, there is also a need to effectively facilitate the technology's healthy and sustainable development, rather than thwart it by restrictions, he added.

It has become a must to provide practical protection for biological identification technologies, otherwise more problems would emerge, said Zhang Dapeng, a professor at the Chinese University of Hong Kong in Shenzhen.

He pointed out data privacy and security is gaining traction in China and abuse of personal information, as important as one's facial image, is becoming more and more difficult for people to accept.

"It is no longer a technological problem, but an important social issue, which needs government's participation," he said, while emphasizing legislation is crucial to solve the problem.

Several disputes have appeared regarding to the legitimacy and ethics of using personal image data. In October, a park in Zhejiang province was sued for the collection and use of visitors' image details by a consumer, while an application in classroom to supervise the behavior of students also came under fire from parents.

 

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2019-12-11 00:00:00
<![CDATA[Foreign investment efforts need more impetus]]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528572.htm Concrete efforts are needed to further optimize the foreign investment environment in China amid rising global uncertainties, a new report said on Tuesday.

From 2008 to 2018, China's business environment index for foreign investment was in the top 10 among a sample of 30 countries and regions, said the Report on Foreign Investment Development in China 2019 released by the Institute of International Economy at the University of International Business and Economics in Beijing.

"The business environment for foreign investment has continued to improve, but uncertainties have increased," said the ninth edition of the annual academic research.

Li Yumei, a professor at the institute and a major participant of the report, said: "Overall, China's business environment is expected to ensure relatively stable foreign direct investment in the future."

The Sino-US trade friction is hampering the flow of foreign capital into China's high-tech industries. But such an impact is still relatively small, she said.

China needs to carry out more effective policies and measures to cushion the potential impact in the future, she said.

The report comes amid profound changes in both China's domestic and international economic environment. At the international level, there has been a growing anti-globalization sentiment, a clamor in the developed countries for the return of their manufacturing industries, the study said.

To effectively respond to such changes, the report said China needs to actively deepen reforms and opening-up, constantly enhance the business environment for foreign investors, and utilize more foreign investment.

China has been ramping up efforts to improve business environment for foreign investors, such as renewing negative lists, promoting the Foreign Investment Law and setting up more pilot free trade zones.

Data from the Ministry of Commerce showed that FDI into the Chinese mainland reached 752.41 billion yuan ($107.28 billion) in the first 10 months of 2019, up 6.6 percent year-on-year. Foreign investment flowing into China's high-tech industries surged 39.5 percent year-on-year to 222.4 billion yuan in the period, accounting for nearly 30 percent of the total FDI.

Sang Baichuan, director of the institute and leader of the academic research, said the country needs to ensure that the market plays a decisive role in the allocation of resources, which is a "vital foundation" for improving the foreign business environment.

Sang said he hopes clear and effective supportive guidelines for the Foreign Investment Law will be ready in the near term.

Zhang Xiaotao, dean of the School of International Economics and Trade at the Central University of Finance and Economics, said in the new era, there have been fresh challenges for using foreign investment.

Zhang said one structural problem is the relatively great gap among different regions in optimizing the business environment, and called for targeted measures to address the issues.

In early November, the State Council issued a guideline on better using foreign investment, with a focus on safeguarding the national treatment of foreign-funded enterprises.

 

 

 

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2019-12-11 00:00:00
<![CDATA[Postal Savings Bank raises $4.04b from public float on Shanghai bourse]]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528590.htm Postal Savings Bank of China Co Ltd, the country's largest bank by the number of outlets, launched an initial public offering on the A-share market on Tuesday, as commercial lenders are under greater pressure to replenish capital due to regulatory tightening.

The bank raised at least 28.45 billion yuan ($4.04 billion) and could ultimately bring in 32.71 billion yuan if it chooses to exercise a green shoe option of selling 15 percent more shares within 30 days of the start of trade. Its IPO is the largest debut on the A-share market in the past decade.

"The offering will provide another source of capital replenishment for Postal Savings Bank of China, in addition to its existing source from the Hong Kong stock market. This will be of great benefit to its long-term development," said Zeng Gang, deputy director-general of the National Institution for Finance and Development.

By the end of September, the bank's core tier 1 capital adequacy ratio was 9.55 percent, tier 1 capital adequacy ratio was 10.55 percent, and capital adequacy ratio was 13.27 percent, lagging behind most of large State-owned commercial lenders.

PSBC launched its first IPO on the Hong Kong stock exchange in September 2016. Apart from replenishing capital, its listing on the A-share market will also help improve its image and market influence, Zeng said.

"The listing of PSBC, one of the six largest State-owned commercial lenders in China, on the Shanghai Stock Exchange also signifies that the shareholding reform of State-owned commercial banks has completed an important stage and achieved remarkable progress. Next, these banks will further optimize their corporate governance structure and improve operational and management efficiency," he said.

The PSBC stock closed at 5.61 yuan per share in the A-share market on Tuesday, up 2 percent from the IPO price of 5.5 yuan per share.

The relatively stable share price of PSBC is in accordance with market expectations, Zeng said.

"The bank has a strong emphasis on retail banking and a large network of outlets. The majority of its clients are scattered in small cities, so it has great potential for growth," he said.

By the end of September, PSBC had nearly 40,000 outlets that cover 99 percent of cities and counties in China. The number of its individual clients exceeded 600 million, while Its nonperforming loan ratio was 0.83 percent, indicating low potential risks.

A few commercial banks that were listed on the A-share market earlier this year did not perform well after listing. China Zheshang Bank Co Ltd rose by a mere 0.6 percent on its debut on the Shanghai Stock Exchange on Nov 26 after going through ups and downs. Chongqing Rural Commercial Bank Co Ltd closed at 7.19 yuan per share on its 10th day of trading on Nov 11, below its IPO price of 7.36 yuan per share.

Bank valuations have been relatively low despite better results by several Chinese banks this year as against the previous two years. It shows that the stock market is more concerned about the potential financial risks in the next few years, Zeng said.

"As risks started to increase, the risk resistance capacity of banks has become a major pricing indicator. It will widen the gap between the stock performance of large banks and small banks. Besides, small banks are in more urgent need of capital replenishment," said Wu Qing, chief economist of China Orient Asset Management Co Ltd.

 

A visitor passes the booth of Postal Savings Bank of China Co Ltd during a financial expo in Beijing. CHINA DAILY

 

 

 

 

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2019-12-11 00:00:00
<![CDATA[JCC eyes boost from acquisition deal]]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528588.htm The earning strength and capital management ability of Jiangxi Copper Corp is expected to surge once it complete the acquisition of part of shares in Canada-based First Quantum Minerals Ltd in the coming months, analysts said.

Jiangxi Copper is China's largest copper processing manufacturer by sales revenue.

The analyst remarks came after JCC announced late on Monday that its subsidiary Jiangxi Copper (Hong Kong) Investment Co Ltd has entered into an agreement to purchase the entire equity interest in PIM Cupric Holdings Ltd, or PCH, from Pangaea Investment Management Ltd.

According to the company's filing at the Hong Kong stock exchange, PCH has direct ownership of 124.2 million common shares of the Toronto Stock Exchange-listed First Quantum. The firm, which is headquartered in Vancouver, developed and operates nine copper mines in eight countries such as Zambia, Panama and Peru.

The filing said the targeted firm held over 18 percent of First Quantum's issued share capital as of Dec 9. Jiangxi Copper said the deal is in line with its global strategy. The company is engaged mainly in the mining, smelting and copper processing business.

Jiangxi Copper has raised $1.12 billion for the deal, and the transaction is expected to close on or before Dec 31.

The stock purchase could provide Jiangxi Copper more leverage in getting access to the assets of First Quantum and secure quality copper mine resources in overseas markets, especially since the metal is an important ingredient used in low-carbon technologies, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

There has been a growing supply strain involving copper concentrates on the global market in recent years, and this has caused a steady decline in the treatment and refining charges companies can charge for the processing of copper concentrates, he said.

Supported by over 1,800 employees, First Quantum to date controls around 49.25 billion metric tons of copper resources around the world. Its total copper and gold production jumped 27 percent and 56 percent to 192,510 tons and 70,120 ounces, respectively, in the third quarter this year.

Chen Sijie, the chief nonferrous researcher at Tianfeng Future Research Institute, said the acquisition is beneficial for Jiangxi Copper because as the largest copper smelter in China, the company has a large annual demand for copper concentrates.

In recent years there is a growing strain in the global supply chain for copper concentrates. As a result, most of the profits of the copper smelting industry have been stripped away by upstream firms that provide raw materials for the business. Chen noted that the China Smelters Purchase Team (CSPT) formed by most of the country's top smelters has run into difficulties in completing long-term deal negotiations.

The deal ignited a rally in shares of Jiangxi Copper in Shanghai. The company's stock closed on Tuesday at 15.09 yuan ($2.14), up 4.07 percent for the session. It was the highest close for Jiangxi Copper in almost three months, having ended at 15.18 yuan on Sept 16.

 

A Jiangxi Copper employee examines copper panels at the company's production facility in Shangrao, Jiangxi province. CHINA DAILY

 

 

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2019-12-11 00:00:00
<![CDATA[Ministry confirms World Bank's five-year lending plan for China]]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528573.htm The Ministry of Finance confirmed on Tuesday that the World Bank has approved a five-year funding plan for China to support the multilateral lender's engagement in the country's structural and environmental reforms.

The World Bank will lend China $1 billion to $1.5 billion through the International Bank for Reconstruction and Development annually from 2020 to 2025. The International Finance Corporation (IFC) will maintain its financing of $80 million to $1.2 billion annually during the same period, according to a statement on the ministry's website.

"China is still a developing country. Its development needs World Bank support, and the Bank's development also needs China's contribution," the Ministry of Finance said on Tuesday.

After 40 years' cooperation between the Chinese government and the World Bank, especially in areas of loans and knowledge sharing, the two sides have maintained a mutually beneficial relationship, it said.

In the future, China is willing to continually strengthen cooperation with the World Bank, to improve innovation of the loan programs with more added value and promote regional and South-South cooperation. That will contribute to global poverty reduction and sustainable development, according to the ministry.

The loan program, which is known as the Country Partnership Framework, aims to help China address its development challenges, notably the transition to more environmentally sustainable growth, the strengthening of key Chinese institutions engaged in economic and social development, and the reduction of inequality in lagging regions, according to the World Bank.

Some US officials reportedly said that Washington had "objected" to the financial support for China through its representative on the World Bank's board, where the five-year funding plan was discussed on Dec 5.

As a response, Chinese Foreign Ministry spokeswoman Hua Chunying said at a news conference on Dec 6 that China is an important partner of the World Bank, and the two sides have a long-term and good cooperative relationship.

Under the cooperation, China's successful experience of reducing poverty can be shared with other developing countries, to support their sustainable growth, according to Hua.

The Ministry of Finance said the Country Partnership Framework was supported and welcomed by the vast majority of the World Bank's Board of Executive Directors.

"The (program) reflects the evolution of our relationship with China," said Martin Raiser, World Bank Country Director for China. "Our engagement will be increasingly selective. Future World Bank lending will primarily focus on China's remaining gaps in policies and institutions for sustainable graduation."

The program will focus on some key areas, including advancing market and fiscal reforms by improving the environment for competition and private sector development, improving the efficiency of fiscal management and infrastructure financing, promoting greener growth by reducing pollution and increasing access to health and social services, and improving the quality of early childhood development, the World Bank said.

The bank also said it will aim to help share applicable lessons and knowledge from China's poverty reduction efforts with other countries, increase the transparency of China's lending and investment activities, and emphasize the importance of high standards of social and environmental risk management in order to attain sustainable development outcomes.

 

 

 

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2019-12-11 00:00:00
<![CDATA[China, S. Korea steel companies form JV]]> http://www.chinadaily.com.cn/kindle/2019-12/11/content_37528591.htm The HBIS Group Co Ltd said it will partner with South Korea's largest steel company POSCO in setting up a joint venture in China to develop, produce and sell high-end steel products for the automobile industry, aiming to seize opportunities in the country's automobile market.

HBIS Group Co Ltd is one of China's largest steelmakers.

According to the company, location of the joint venture, which is still under discussion, is expected to be in Tangshan, North China's Hebei province, where HBIS's Laoting cold rolling steel project is located.

The two firms recently signed a memorandum of understanding for the project. The detailed investment scale of the venture was not disclosed because related matters remain under discussion, HBIS said.

Xu Xiangchun, information director and analyst with iron and steel industry consultancy mysteel.com, said the cooperation should be a win-win move for both firms.

"By cooperating with Chinese companies, overseas steelmakers can gain more share in the country's steel market, which is the largest in the world," Xu said, adding Chinese companies can cooperate with foreign steel giants on advanced technologies to improve the competitiveness of their products.

Xu explained that Chinese steelmakers have developed rapidly in recent years, especially in producing high-end steel products.

"Many joint-venture carmakers in the country are increasingly using high-end steel products made by Chinese producers, which have gained significant market share in the field," he said.

The cooperation in the auto steel project will allow the two partners to enhance their respective competitiveness and deepen their comprehensive cooperation partnership, HBIS said.

The two partners have conducted multi-level technical and commercial discussions on the auto steel project during the first half of 2019 and reached an intention to cooperate at the capital level, it said.

Under the framework of the memorandum, the two firms will leverage advantages in technology and resources to jointly explore the high-end automobile market.

The two steel giants established a comprehensive cooperation partnership in August 2017, to bolster communication and cooperation in the areas of strategic planning, raw materials, technologies, energy conservation and environmental protection.

A regular communication mechanism has been established and fruitful results have been achieved, HBIS said.

HBIS and POSCO are both leading players in the global steel industry.

As the largest steel company in South Korea, POSCO has been rated as the world's most competitive steel enterprise by industry journal World Steel Dynamic (WSD) for 10 consecutive years.

HBIS Group is one of the most internationalized steel companies in China and has become the second largest steel supplier for the automobile sector in the country. The firm is based in Shijiazhuang, the capital of Hebei province.

In 2018, HBIS produced 7 million metric tons of steel for the automobile sector, covering the full range of steel products for an entire vehicle. Those products include structural steel, steel for auto parts, cold rolling and galvanized cold rolling steel products, HBIS said.

HBIS has done outstanding work in stepping into the overseas market, Xu said. In April 2016, the company bought a steel factory in Serbia and realized a profit in several months.

In addition, the company has also established cooperation with companies from the United States and France in some research and development projects.

Liu Zhihua in Beijing contributed to this story.

 

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2019-12-11 00:00:00
<![CDATA[Demand for English training rises]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528401.htm The number of Chinese State-owned and private enterprises investing in improving employees' English proficiency has been rising sharply over the past five to 10 years as more local companies tap into the global market, according to an international company specializing in language training.

Today, employees from State-owned, private and multinational enterprises each account for a third of its clients, while they were dominantly multinationals when Sweden-based EF Education First started offering corporate solutions in China in 2004, said Jesper Knutell, executive vice-president and general manager of corporate solutions at EF China.

"Fifteen years ago, our clients were multinational companies who required their local employees to improve their English proficiency. But the rise of the other two types of enterprises is obvious as they are going or want to go global with China's increasing presence on the international stage," Knutell said during an interview with China Daily on Friday.

"Many big local companies support the Belt and Road Initiative put forward in 2013, and they have opportunities for development in the countries and regions involved in the initiative. That created a strong need for them to upscale employees' language skills in the past few years," he said.

Knutell said the company cannot provide figures for the speed of growth of corporate solutions due to company policy but it keeps investing in this area, which continues to grow in various industries, including technology and pharmaceuticals.

EF's annual English Proficiency Index report this year showed that China rose seven places to 40th in the rankings among 100 countries and regions and went from a low proficiency to a moderate level for the first time.

Major driving factors came from coastal areas and provinces, which have a relatively larger number of companies that are supporting economic incentives like the country's further opening-up and the BRI, and aiming for international growth, the company explained.

Another reason for the growing demand from local enterprises is that they are beginning to lead in various industries, meaning they have competitors globally and they need to fight for the best talent with strong industry and language skills, and international work experience.

"Also, in order to lead in innovation, companies need to access the latest global resources, and the world's leading scientific journals are mainly in English," said Knutell.

For the first time, the number of Chinese companies-129 on this year's Fortune Global 500 list of top companies-surpassed those of the United States on the list.

Knutell mentioned two clients-BOE, a Beijing-based technology company specializing in screen manufacturing, and Hengtong Group based in Suzhou, Jiangsu province, which produces fiber optic and electric power networks. Both enterprises have performed well at home and abroad in recent years and have continued to increase investment in improving English proficiency of employees.

He said that clients have common needs such as practical use of English in meetings and social setting as well as knowledge of industry-specific language in both online and offline solutions.

He said many companies tend to invest in young, employees, but he suggested they should also invest in those holding senior managerial roles as they often need to do presentations in English and speak at international business meetings.

The increasing number of Chinese people studying and traveling overseas is also driving the growing enthusiasm for learning English, said experts.

Official statistics show that each year nearly 1 million Chinese students pursue further studies in English-speaking countries, and Chinese people made nearly 150 million trips overseas in 2018.

 

EF employees take part in a meeting at the company's Shanghai headquarters. CHINA DAILY

 

 

 

 

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2019-12-10 00:00:00
<![CDATA[Internet security to be major focus for China, says regulator]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528462.htm China's cybersecurity industry is set to surpass 60 billion yuan ($8.5 billion) this year, amid concerted efforts to foster more competitive cybersecurity companies, the nation's top industry regulator said on Monday.

Zhao Zhigou, an official at the Ministry of Industry and Information Technology, said China's cybersecurity industry has maintained steady momentum, with year-on-year growth rate set to exceed 20 percent, faster than the global average of 8 percent.

As of November, China had 23 listed cybersecurity companies. More than 100 venture capital and private entity companies have poured in money to finance more than 150 promising startups that engage in cybersecurity, data from the ministry show.

Big data, 5G, cloud computing, industrial internet, artificial intelligence, block chain and other emerging technologies will inject new vitality to the economic growth in China. But they will also bring new risks, challenges and uncertainties, Zhao said.

According to him, the industrial structure for cybersecurity sector is being optimized, with China now having both traditional and emerging products and services.

On Monday, the ministry also unveiled two national cybersecurity platforms, with one for safeguarding the development of industrial internet and the other for sharing information about cyber risks. The move is part of a broader plan to build a sound and complete cybersecurity system to protect China's sprawling cyberspace for consumers and enterprises.

In August, 10 ministries and departments announced a guideline for the cybersecurity sector. The guideline aims to lay out a primary cybersecurity system for the industrial internet by the end of 2020, with at least 20 innovative products and solutions developed as pilot projects to safeguard information security for areas including automotive, aerospace and energy.

Currently, Beijing and Hunan province are building national-level cybersecurity industrial parks. Construction of the park in Beijing started at the end of 2017, and by 2020, the industrial output of the park is expected to reach 100 billion yuan, according to the Beijing Municipal Bureau of Economy and Information Technology.

Qi Xiangdong, chairman of Chinese security company Qi An Xin Group, said in an earlier interview that compared with consumer internet applications such as e-commerce, the industrial internet is far more complex and more vulnerable to sophisticated cyberattacks.

"Once the industrial internet is attacked by 'bad guys', it not only compromises information, it also harms the whole enterprise, or the entire industry," Qi said.

Many agencies, organizations and companies are exploring digitization and information technology without sufficient cybersecurity measures, which create a lot of risks, Qi added.

 

 

 

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2019-12-10 00:00:00
<![CDATA[Digital music market offers big prospects]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528445.htm With a growing number of young customers and strong anti-piracy moves by the government, China has now become a fertile market for digital music and content streaming, powered by a group of internet titans such as Tencent and NetEase.

According to a new report from market research company iResearch, the revenue of China's digital music market jumped 59.8 percent year-on-year to 7.63 billion yuan ($1.08 billion) in 2018.The figure is estimated to hit 42.6 billion yuan by 2023, the report said.

iResearch noted in the report that the revenue is mainly from user payment, advertising and copyright operations. In particular, the share of user payment growth is expanding, which will foster the healthier growth of the Chinese music market.

Zhang Xiao, an analyst from iResearch, said China's digital music market has experienced rapid development during the period from 2015 to 2018, especially buoyed by favorable policies and rising investment.

She said that with the younger generation's growing spending power and the country's continuous key measures on intellectual property protection, the country's digital music market will embrace huge development opportunities.

"More and more Chinese netizens are wiling to pay for music content, and the paying users are mainly young people under 30 years old," Zhang said. "According to our survey, the younger generation, especially students born in the 2000s, are more likely to pay for content. And music fans also have strong willingness to pay subscriptions."

In fact, music availability does affect where Chinese fans choose to stream or buy music products and services.

"I use QQ Music because it has abundant music resources covering various singers, such as Taylor Swift, Jay Chou and JJ Lin," said Gong Zhili, an 18-year-old sophomore at the University of International Business and Economics in Beijing.

Gong usually spends an average of an hour a day on the QQ Music platform. The platform's cheapest option only costs Gong around $1 per month, and the low prices are attractive to students.

"Almost everyone around me uses QQ Music, so it's just a natural choice for us to use Tencent's QQ and WeChat messaging platforms and then QQ Music," she added. "It doesn't cost me too much, and I just love paying for my favorite singers."

Gong is just one among the growing groups of young consumers with increasing spending power in China, which explains the big success of Taiwan singer-songwriter Jay Chou's newly released digital album.

Jay Chou's new song Won't Cry sold a record high of 3.6 million copies within three hours after its release in September. So far, the single has sold nearly 9 million copies on QQ Music platform, with each single selling for 3 yuan.

It's true that the key to Tencent Music Entertainment Group's success lies in the exclusive deals on music libraries, with over 30 million tracks licensed from music labels both at home and abroad, such as Sony Music Entertainment, Universal Music Group and China Record Group Co Ltd.

Currently, TME operates four popular music apps in China-QQ Music, Kugou Music, Kuwo Music and Wesing.

According to statistics from app tracker Analysys Qianfan, QQ Music took the top spot in the domestic digital music sector, attaining more than 270 million monthly active users in October, followed by Kugou and Kuwo. While its archrival NetEase Cloud Music ranked in fourth place on the list, with more than 80 million monthly active users.

Zhang from iResearch noted that as the leading internet companies have ramped up efforts to develop the digital music businesses, this has left less room for the future development of smaller players.

"However, there's still huge potential for the development of the music-related vertical sector," Zhang added. "Big firms will continue to focus on the exploration and establishment of mature business models, which will be conducive to the long-term healthy development of the digital music market."

 

Local residents perform karaoke at a self-service mini KTV room in Shanghai. WANG GANG/FOR CHINA DAILY

 

 

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2019-12-10 00:00:00
<![CDATA[Insurer ownership curbs to be eased]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528444.htm China has reemphasized its decision to remove foreign ownership caps on life insurers in 2020 as part of its efforts to improve the efficiency of life insurance joint ventures in the country, experts said.

The China Banking and Insurance Regulatory Commission issued revised rules for the implementation of the regulations on foreign insurers on Friday, easing foreign ownership curbs for life insurance joint ventures from 50 percent to 51 percent, which will be further relaxed to 100 percent from next year.

As of today, AIA is the only wholly-owned foreign life insurance company in China as its operations were set up before the previous ownership restrictions were introduced.

"Ownership ratio is the biggest problem faced by joint ventures. Chinese and foreign investors that are evenly matched in strength will have a protracted fight if they have different mindsets, opinions, cultures and management approaches… If both investors want to play a dominant role in a joint venture, it will be difficult to solve problems and the firm will be inefficient," said Wang Guojun, a finance professor at the University of International Business and Economics in Beijing.

"The removal of ownership restrictions will help stop the fight and improve the efficiency of joint venture life insurers. The regulator also gives both investors time to discuss how to withdraw from or enter further into a joint venture based on their decisions about whether to be a financial investor or a strategic investor, or completely withdraw from the business," Wang said.

He said that foreign life insurers and property and casualty insurers contributed less than 7 percent of China's premium income due to insufficient localization, cultural differences and regulatory restrictions.

"The current relaxation of rules allows more foreign capital and foreign insurers which do not have operations in China in the past to enter China market. The advanced technologies, mindsets and products they bring will cause big changes in the domestic insurance market," he said.

Zhou Jin, a PwC China financial services consulting partner, said foreign insurers will introduce diversified, excellent products to China, which will enrich consumer choices while increasing the pressure of domestic insurance companies in terms of product design, operations and services.

"Refined management models, mature business experience and brilliant talents of foreign insurers will force their Chinese counterparts to face harsher competition, through which the country will raise the level of its life insurance sector," Zhou said.

Having a deep understanding of the laws of life insurance and a mindset highlighting security and the long-term value, foreign insurers will also set examples for China's life insurance sector to develop soundly in the long run and will contribute to investor education, he said.

The regulator also relaxed market access rules for foreign insurers by scrapping the requirement of a 30-year track record of business operations and the establishment of a representative office in China for two years.

Yang Zeyun, a finance lecturer at Beijing Union University, said the regulator set the requirements previously with the hope that foreign investors will fully understand China's insurance market and joint venture insurance companies will maintain steady operations, in addition to protecting the rights and interests of consumers.

"In reality, however, some newly formed insurers have advantages over those established earlier in terms of risk management, claim settlements and product design. Therefore, lifting these restrictions will help introduce new business models and experiences to China," Yang said.

China has accelerated the opening of its financial sector since 2018. The China Banking and Insurance Regulatory Commission said it hopes that the existing foreign banks and insurers in China will make full use of the further opening-up policies and keep improving their business vitality and management capabilities.

"In the meantime, we welcome more foreign financial institutions which meet our requirements to set up units and conduct business in China on a mutually beneficial basis … We will work hard to create a favorable business environment promoting fair competition and mutual development of Chinese and foreign investors," said the regulator in a statement on Monday.

The regulator also said it will keep stepping up the construction of regulatory institutions and enhancing the standards for prudent regulation.

By the end of October, foreign insurers in China recorded a total premium income of 251.36 billion yuan ($35.7 billion) and their total assets reached 1.28 trillion yuan, according to the regulator.

 

An employee works at the office of ICBC-AXA Life Insurance, a life insurance joint venture between Industrial and Commercial Bank of China, AXA and Minmetals, in Shanghai. CHINA DAILY

 

 

 

 

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2019-12-10 00:00:00
<![CDATA[Suzhou Industrial Park operator planning Shanghai float]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528403.htm China-Singapore Suzhou Industrial Park Development Group Co Ltd, a joint venture promoted by the two countries, has received authorities' approval for its initial public offering in Shanghai.

While no date has yet been announced for the float, the IPO is expected to be soon, sources with knowledge of the matter said.

"The IPO approval means that the park will gain stronger support from the capital market, which will be a lavish gift for both countries," said Lan Shaomin, who took over as the Party secretary of Suzhou in September.

The joint venture is the corporate parent of the Suzhou Industrial Park, its flagship project as well as the first bilateral business venture involving the two national governments.

Based in Suzhou, East China's Jiangsu province, the billion-dollar joint venture is in its silver jubilee year, having been established in 1994.

A brainchild of late Chinese leader Deng Xiaoping and Singapore's founding father Lee Kuan Yew, the venture marks the two countries' economic cooperation for bolstering entrepreneurship.

Spread over 278 square kilometers, the Suzhou Industrial Park houses 4,400 projects from over 70 economies, including 156 initiated by Fortune Global 500 enterprises.

Its economic output reached 257 billion yuan ($36.5 billion) last year, up 7.1 percent year-on-year, official data showed.

Last week, Lan visited Singapore to pave the way for Suzhou-based companies and investors to eye business deals in the Southeast Asian city-state.

The city of Suzhou, Lan noted, aims to build a "new (industrial) park" to spur a new growth engine amid changing economic environment at home and abroad.

"New park", he said, should refer to the rejuvenation and upgrading of the old industrial park where technological innovation will combine with restructuring of industrial and value chains, bolstering its global competitiveness.

Suzhou plans to sharpen focus on emerging sectors like biochemical, artificial intelligence, nanometer technology, new information technology and high-end equipment manufacturing.

"Amid global trade frictions and as economic development zones emerge nationwide, Suzhou can't live off its past gains. The city must challenge itself" to scale new heights, he said.

In August, Suzhou was selected to be among the cities for the China (Jiangsu) Pilot Free Trade Zone, driving the city's opening-up to a new high. Nanjing and Lianyungang are also part of the FTZ.

"We will promote Suzhou through the newly established FTZ by deepening cooperation with Singapore in the area. We hope the FTZ will be a new platform for deepening bilateral cooperation," Lan said.

Other development zones and parks, including those in Jiangsu province, Anhui province, the Xinjiang Uygur autonomous region and the Tibet autonomous region, have modeled themselves on the Suzhou Industrial Park.

Last year, Suzhou's GDP was 1.86 trillion yuan. It ranked 42nd in the world in terms of GDP. It was also ranked as the seventh economically most powerful Chinese city, with metropolises such as Beijing, Shanghai and Shenzhen ahead of it.

"China-Singapore cooperation has now been deepened with the launch of the Suzhou Industrial Park and other initiatives. Singapore has established economic and trade cooperation mechanisms with eight Chinese provinces and cities, including Shanghai and Guangdong," said Han Xiaoyong, Chinese ambassador to Singapore.

He said that in recent years, China-Singapore ties have entered a new era. Economic partnerships have been constantly upgraded, showing strategic, forward-looking and exemplary features.

"More and more Singaporean government officials and entrepreneurs have come to China to promote China-Singapore cooperation, forging deep friendship with their Chinese partners," he said.

"Also, many officials who now hold key positions in Singapore's cabinet and in big companies have once lived and worked in China and continue to contribute to the promotion of China-Singapore ties."

China has been Singapore's largest trading partner last year. Bilateral trade exceeded $100 billion in 2018.

 

Lan Shaomin, Party secretary of Suzhou

 

 

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2019-12-10 00:00:00
<![CDATA[US software company planning more cloud partnerships in China]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528427.htm VMware Inc, a California-based cloud and virtualization software provider, is expanding partnerships in China to tap into the huge potential of 5G cloud in the country.

"As China stands at the forefront of 5G technology, one of our focuses in the country next year is to cooperate with our Chinese partners in speeding up the 5G cloud platform," said Duncan Hewett, senior vice-president and general manager of VMware Asia-Pacific and Japan.

"With such partnerships, we hope to build an open and efficient ecosystem here in the country to drive the digital transformation of Chinese companies," Hewett said.

He made the comments after the firm announced last month at its vForum that it will partner with AsiaInfo Group in deepening cooperation in building the next-generation enterprise cloud.

A key part of the cooperation is to collaborate on Kubernetes, an open-source platform, to improve the company's experience in scenarios including 5G.

According to Hewett, China is one of VMware's largest markets globally and the firm will continue to invest big in the country despite trade frictions.

"We see here a rapid transformation. Not only one or two single aspects, but all of society is moving fast in digitalization and modernization," he said.

Chinese companies and institutions are also showing strong willingness across regions including the Asia-Pacific region. "In Southeast Asia, a string of Chinese companies are also helping to modernize this process locally," he said.

As the number of applications continues to rise in the country, Hewett said that VMware aims to build a common platform.

"The platform is able to offer companies a choice of which cloud they would like to run it on, be it internally or public," he said.

"Our platform also enables a seamless connection for consumers in China between on-premises data centers and what they have on public cloud servers. With these, companies can scale up flexibly," he added.

VMware's revenue was $2.46 billion in the third quarter of its fiscal year which ended in November this year, up 12 percent year-on-year.

"Q3 was another solid quarter for VMware. We will continue to see traction and customer momentum in support of our vision to deliver a software architecture that enables any app, on any cloud, delivered to any device," said Pat Gelsinger, CEO of VMware.

 

 

 

 

 

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2019-12-10 00:00:00
<![CDATA[Dalian iron ore options to give nation bigger say in global market]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528426.htm The newly launched iron ore options will not only help China to have more decision power in the international market but also further enrich the country's financial market, said experts.

Approved by the China Securities Regulatory Commission, the iron ore options started trading at the Dalian Commodity Exchange (DCE) on Monday. With iron ore futures as the underlying assets, the newly launched options include 10 contracts.

Speaking at the launch ceremony, Luo Dongsheng, vice-mayor of Dalian, said the city owns the only bonded delivery warehouse for iron ore futures, providing services to the northeastern parts of China, Japan and South Korea. The launch of the iron ore option has provided market participants a more convenient and diversified risk management tool.

"The iron ore option will help China perfect its steel and iron industrial management system. China will also be able to accelerate its pace in building itself into an international iron ore pricing center," he said.

The iron ore option is the seventh commodity option launched in China so far. DCE president Li Zhengqiang said that the exchange has been able to introduce a complete product portfolio that covers futures, options and swaps. The spot market and the futures market will be better linked, and so will be the domestic and overseas markets, he said.

"This is a major attempt by the bourse to boost quality development of the real economy," said Li.

Li also stressed on the importance of building a derivative market which is in line with China's global economic status and demand. More companies and financial institutions from home and abroad should be involved in optimizing the market structure.

"The yuan-denominated derivatives will better reflect the true market demand in China and help the Chinese prices be more influential in the international market," he said.

According to the statistics provided by DCE, Chinese iron ore futures had an accumulated trading volume of 236 million contracts in 2018. By the end of February this year, 118 overseas clients from 12 countries and regions had opened accounts at the exchange, and 79 of them were involved in the trading. The average daily trading volume of overseas clients reached 21,000 contracts.

Liu Wensheng, deputy director of the ferrous metal department at First Futures, said that the iron ore options have been introduced at a time when the market is witnessing drastic fluctuations in iron ore prices. While most of China's iron ore options were traded over the counter in the past, the newly launched derivatives will serve as an important risk-hedging method apart from traditional futures contracts.

In February 2015, the Shanghai Stock Exchange launched the China 50 ETF option in 2015, ushering in the first option product in the Chinese financial market. The DCE launched soybean meal futures options in March 2017, which was the first futures option in China.

Efforts have also been made to enrich China's financial derivatives market. CSRC vice-chairman Fang Xinghai said at the 15th China (Shenzhen) International Derivatives Forum held in late November that a total of 14 new futures products have been introduced so far this year, hitting a record high. The Shenzhen Stock Exchange unveiled rules on Saturday for the pilot trading of stock options.

 

A cargo vessel unloads iron ore at Lianyungang Port, Jiangsu province. WANG CHUN/FOR CHINA DAILY

 

 

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2019-12-10 00:00:00
<![CDATA[High-tech becomes main driving force in Hangzhou]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528424.htm Hangzhou, capital of East China's Zhejiang province and dubbed China's hub for digital economy, has witnessed a leap in its economic growth and industrial transformation, focusing on the development of key sectors such as e-commerce, cloud-computing, big data and digital security.

Reports from the city's bureau of statistics show between January and September this year, Hangzhou's digital economy core industrial output rose by 270.6 billion yuan ($38.47 billion), rising 15.9 percent year-on-year, 9.2 percentage points higher than the city's GDP growth during the same period.

The digital economy currently accounts for 25.7 percent of Hangzhou's GDP, becoming a key growth engine of the city, where China's internet giant Alibaba is headquartered.

For example, Hangzhou-based Wensli Group, a leading silk brand in China, has leveraged the power of digital technologies such as big data since 2010 for its transformation from a traditional manufacturer to an active player in the cultural and creative industries.

The technology developed by the silk group, which combines the technologies of big data and cloud computing, has created an effective way for Wensli to solve the problem of uneven colors presented on the fronts and backs of silk products and enables its machines to print more complicated and delicate patterns on silk.

"Big data is the new engine to boost the transformation and upgrading of traditional companies," said Li Jianhua, chairman of Hangzhou Wensli Silk Culture Co Ltd. He noted that the ability to use data would be the core competitiveness of companies in the information era.

French luxury group Louis Vuitton Moet Hennessy reached a cooperation agreement with the time-honored silk brand to use its self-developed technology in August 2018. Products made by the technology will be labeled "Wensli Iart Technology Production", the first time a Chinese brand has appeared on LVHM products.

Owning world-leading technologies and brands and reducing dependence on foreign technologies and equipment marks a new beginning for China's silk and fashion industry, said Li.

Last year, Hangzhou unveiled a five-year plan to become the nation's leading city in terms of digital economy with focuses on three major development paths-industrialization of digital resources, digitalization of industries, and digitalization of urban management. The city aims to achieve a digital economic aggregate of more than 1.2 trillion yuan by 2022, according to the Hangzhou municipal government.

In a congratulatory letter to the 2019 China International Digital Economy Expo, which opened on Oct 11 in Shijiazhuang, Hebei province, President Xi Jinping called for more exchanges and cooperation in the field of digital economy and deeper integration of the digital economy and the real economy.

He said the booming digital economy is changing the way people live and work, and will have a profound impact on the world's economic and social development, the global governance system and the development of human civilizations.

Holley Group, headquartered in Hangzhou, which is engaged in the manufacturing of healthcare and pharmaceutical products, embarked on a journey of intelligent manufacturing in 2016.

"The core of intelligent manufacturing is far beyond the automation of production lines," said Wang Licheng, chairman of the group. He said there should be a new manufacturing method which could meet the customized and instant market needs while keeping costs within a reasonable range.

Holley invested 3 billion yuan to digitalize its factory with internet of things equipment, automated machines and artificial intelligence technologies in 2016, which Wang said is the foundation of smart manufacturing. The group joined forces with Siemens in the same year in designing an intelligent manufacturing system, which is expected to be generally completed by the end of 2019.

In May, the first 5G open laboratory in Zhejiang was launched in Binjiang district of Hangzhou with a group of high-tech enterprises and research institutions including Zhejiang Geely Holding Group, Hangzhou Hikvision Digital Technology and Nokia announcing plans to set up operations in the lab's real 5G network environment.

Projects concerning education, healthcare and public transport, including 5G intelligent buses from Geely Automobile Research Institute, are currently undergoing tests inside the lab. Experts say that once officially launched and commercialized, such cutting-edge technologies are expected to transform people's way of living such as daily commuting and the traditional industrial manufacturing model.

"While 5G technology is gaining momentum, the capital city of Hangzhou was selected as one of the first pilot cities for 5G networks in China," said Yuan Jiajun, governor of Zhejiang.

Qin Jirong contributed to the story.

 

Visitors check out a silk imperial robe at Wensli Silk Culture Museum in Hangzhou, Zhejiang province. LI ZHONG/FOR CHINA DAILY

 

 

 

 

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2019-12-10 00:00:00
<![CDATA[Pharma firms pin hopes on lower-tier areas]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528423.htm With policies on new drug access reform and medical insurance negotiations, multinational pharmaceutical firms are stepping up efforts to introduce innovative drugs, expand accessibility and penetrate into grassroots level markets in China.

As early as in 2015, the State Council issued a guideline on the reform of drug and medical equipment access. In 2017, the central government launched guidance on deepening drug and medical equipment access reform, further promoting drug innovation.

Sun Xianze, president of the Chinese Pharmaceutical Association, said that great progress in drug access reform had been made in recent years.

Therefore, international pharmaceutical firms are grasping the great opportunity to introduce innovative drugs to China. California-based Gilead Sciences Inc got approval for seven innovative medicines from the National Medical Products Administration within two years-an unexpectedly good result for an international biopharmaceutical firm.

"During the past three years, China experienced great transformation in drug access, which promoted the research and development of new drugs, and helped to build a healthy drug ecology," said Rogers Luo, vice-president of Gilead and general manager of Gilead China.

During the second China International Import Expo, the drug and medical equipment demonstration zone was one of the earliest zones that was registered to the full, attracting 70 percent of the world's top 500 drug companies. The demonstration zone took up 45,000 square meters, 50 percent larger than that during the first CIIE.

Industry experts noted that this demonstrated that multinational drug companies have attached increasing importance to the Chinese market in recent years.

After innovative drugs are introduced to China, the next step is addressing accessibility. On Nov 28, the National Healthcare Security Administration announced a total of 70 new drugs that will be included in China's national medical insurance catalog, with their prices slashed by 60.7 percent on average.

Most of the additions are new drugs of high clinical value that can be used to treat multiple diseases including cancer, diabetes and tuberculosis, and the prices of most imported drugs will be set at the lowest in the world, said Xiong Xianjun, a senior official with the NHSA.

After the price reduction and medical insurance reimbursements, the financial burden on patients will be eased by more than 80 percent, Xiong added.

However, it still takes time for the innovative drugs to be included in the medical insurance system. Therefore, multinational firms are also exploring other payment options, such as business insurance cooperation, which is more flexible than government medical insurance.

In 2018, when pembrolizumab, an anti-PD-1 therapy was introduced to China for four months, it was included into the supplementary medical insurance for severe and serious diseases in Shenzhen, Guangdong province. The insurance was undertaken by Ping An Insurance (Group) Co and was purchased by the Shenzhen government through bidding.

Ever since 2019, the national centralized procurement pilot program became the major policy factor that influenced the strategies of multinational pharmaceutical firms in China. According to a report issued by Ernst& Young in April, the era when multinational pharmaceutical companies can maintain a high premium in China will end. In addition to introducing innovative drugs, entering markets in third-to fifth-tier cities and rural counties has become increasingly important for them.

The report said that patients suffering from chronic diseases such as cardiovascular disease and diabetes are mainly from such areas, which shows the need for greater drug accessibility. In addition, for those medicines that lost a bid in the procurement pilot program, only through entering these areas can they expand their markets.

The fact that multinational pharmaceutical firms are penetrating into such areas can be seen from the second CIIE. In October, Plavix, a cardiovascular medicine manufactured by French pharmaceutical giant Sanofi, won a bid in the procurement pilot program. On Nov 6, the company demonstrated a county-level program based on Plavix during the second CIIE.

"The grassroots level has played an increasingly important role in the healthcare sector in recent years, where a great amount of the public go to see a doctor. This is why foreign pharmaceutical enterprises are cooperating with county-level medical institutions," said Wu Suwei, a senior official with the Chinese Medical Doctor Association.

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An employee examines vials of insulin at a facility of insulin producer Sanofi-Aventis Deutschland in Frankfurt, Germany. DPA/PICTURE-ALLIANCE

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2019-12-10 00:00:00
<![CDATA[Foreign trade efforts set to be stepped up]]> http://www.chinadaily.com.cn/kindle/2019-12/10/content_37528443.htm China has reiterated confidence in its efforts to ensure stable growth in foreign trade with a high quality focus and achieve total trade volume of 30 trillion yuan ($4.26 trillion) by the end of this year, the Ministry of Commerce said on Monday.

Li Xingqian, head of the Department of Foreign Investment Administration at the ministry, said during a media briefing that the country's foreign trade volume has achieved stable growth despite trade uncertainties.

"From January to November, China's foreign trade volume totaled 28.5 trillion yuan, up 2.4 percent on an annualized basis. In addition, China's exports grew at a quicker pace than most of the other major global economies," he said.

Data from the General Administration of Customs showed that in 2018, the total volume of China's imports and exports stood at 30.51 trillion yuan, 9.7 percent higher than the level in 2017.

Li said that to maintain stable and high quality development of foreign trade, the ministry will take more steps to boost imports. It will continue to lower tariffs and institutional costs to unlock the import potential and also normalize the organization of the China International Import Expo.

"The preparation work for the third CIIE in 2020 is under way," Li said.

"Trade facilitation should be enhanced. In addition, a batch of import trade demonstration zones will be cultivated, and platforms to promote innovation in imports will be set up," Li said.

Zhao Ping, director of the international trade research department at the China Council for the Promotion of International Trade Academy, said: "China's initiative to expand imports is not only an important step to promote the balanced development of foreign trade, but also an inevitable requirement to promote industrial upgrading, meet the needs of people, achieve high quality economic development, and promote economic rebalancing."

She said that import has a consumption demonstration effect and helps cultivate the consumption market, which in turn is conducive to industrial growth. Expanding the imports of special high-quality products and high-tech products that are not available in the country will not only meet the immediate demands of consumers, but form an obvious demonstrative effect on other consumers, creating greater market demand, which will lay a foundation for the development and growth of the industry.

Ren Hongbin, China's assistant minister of commerce, said that another important aspect to promote foreign trade is the development of services trade.

"Through the reform and opening-up of the services sector this year, service trade experienced rapid growth, providing new momentum for foreign trade development. From January to October, China's foreign services trade volume grew 2.6 percent year-on-year to 4.4 trillion yuan," Ren said.

He said that in the next step, the ministry will promote pilot projects for innovative services trade development, cultivate new business modes for service trade, and enhance international cooperation in services trade.

In addition, Ren underscored the importance of enhancing the innovative capability of foreign trade. "An innovation-driven development strategy will be an important engine for China's high quality economic development."

Specifically, cross-border e-commerce, market procurement trade, or trade through the procurement in recognized market clusters, as well as innovative development of services trade, are all recommended directions for foreign trade development, he said.

On Nov 28, the country issued a guideline to promote high-quality development of trade with a key focus on forging stable and better-structured trade development. According to the ministry, an action plan for concrete work in this regard is being worked out.

Specific work plans will be introduced to clear the priority and the division of responsibility of relevant departments. The central and local governments will work together to achieve synergy for steady and high-quality development of trade, the ministry said.

 

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2019-12-10 00:00:00
<![CDATA[Chengdu showcases 'first-store economy' to stimulate demand]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528192.htm As China is on the way to building more world-class cities, Chengdu, capital of southwestern Sichuan province, will roll out more measures to attract global brands that have never reached the city or the region via first-store economy.

The concept of first-store economy is about factors behind opening the first of many stores that can boost local consumption. A first store of a well-known brand or chain operating elsewhere is said to stimulate local people's desires and demands. Consumers can understand the brand's products and services, said Ou Jianling, secretary-general of the Chengdu Retail Business Association.

Such a business model was first tried in Shanghai last year, and Chengdu followed suit.

In the first half of 2019, some 237 new brands set up storefronts in Chengdu-only behind Shanghai and Beijing, data from the local commerce bureau showed.

These stores, run by companies from countries including the United Kingdom, France, the United States, Japan and South Korea, boosted Chengdu's total retail sales by 10 percent year-on-year to 366.03 billion yuan ($52 billion) in the first half of this year.

Chengdu introduced its own policies to push the growth of first-store economy in April. Ou said the opening of new stores is just the first step. Chengdu also encourages locals to build their own signature or flagship shops that can potentially migrate to other cities.

"Major cities such as Chengdu are ideal to spread the first-store concept because it is supported by well-developed high-speed railway networks. There are several cities connected to the city by one-hour high-speed train rides. The stores owned by global brands in Chengdu certainly can serve consumers living in surrounding cities," she said.

Ou believes that growing number of international premium brands not only offered Chengdu residents the chance to keep pace with overseas trends, but also improved the city's ability to attract more tourists, business opportunities and investment.

After rolling out its first consumer car in 2017, Chinese electric vehicle startup Nio Inc opened its first showroom in Chengdu late last year. It is the company's first showroom in the city, as well as the first in Southwest China.

The local popularity was the main reason behind the carmaker's store opening, and another reason is that the city is keen to have more brands to support its first-store economy campaign, said Liu Chengjun, head of services operation at Nio's regional office in Chengdu.

According to the Ministry of Commerce, a number of measures were piloted in 11 pedestrian zones across the country since 2018, including Chengdu's Chunxi Road, Beijing's Wangfujing Street and Shanghai's Nanjing Road. Annual visitor volume in these renewed pedestrian zones is estimated to exceed 1 billion.

"Chinese shoppers, in particular those born in the 1980s and 1990s, love living a comfortable life ... they like traveling, care about their individuality, and have different pursuits to match their lifestyle," said He Xiaoqing, global partner at A.T. Kearney, the US-based management counseling firm.

She said many of them in big cities are also proficient in using digital tools. With e-commerce platforms making shopping so convenient, many companies have invested in stores that push the boundaries of what is possible to meet local consumers' expectations.

Similar to the trend in big cities, the number of consumers from third-or lower-tier cities has also surged in the third quarter of this year, according to data released by market measurement and data analytics company Nielson in late November.

This can be partly due to urbanization, said the report, adding more people who lived in rural areas before have migrated to cities. In this way, more jobs will be filled and as the payroll increases, there will be more room for them to shop and buy.

China's consumption has continued its surge, and would remain the main driver of economic growth, the Ministry of Commerce said during a regular briefing in November.

The ministry estimated that the country's retail sales would climb 9 percent year-on-year in 2019, contributing some 65 percent to overall economic expansion.

 

 

 

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2019-12-09 00:00:00
<![CDATA[East leads local GDP race]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528248.htm Total GDP of China's top 100 counties is estimated at 8.9 trillion yuan ($1.27 trillion) in 2019, according to rankings of China's top 100 counties released by Beijing-based China Academy of Information and Communications Technology on Nov 13.

By the end of 2018, there were 30 counties (or county-level cities) with a GDP of over 100 billion yuan each, accounting for 5.1 percent of the country's total. Most of such local economies are dominated by the manufacturing sector.

In terms of distribution, the top 100 counties (and county-level cities) are located in 16 provinces, autonomous regions and municipalities. Among them, Jiangsu, Zhejiang and Shandong are leading provinces on the list.

Sun Fuquan, a researcher at the Chinese Academy of Science and Technology for Development in Beijing, said the overwhelming dominance of East China's counties reaffirmed the active development of the private sector and high-level of opening-up in the area, especially in county-level economies.

 

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2019-12-09 00:00:00
<![CDATA[Chinese tea tastes success in Moroccan market]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528244.htm RABAT-About three years after entering the Moroccan market, Chinese tea brand Le Mont Yoto has gradually gained popularity in some areas.

Zhang Daiquan, general manager of Cathaysian Tea Company, which is responsible for the production of Le Mont Yoto tea, said annual sales volume of the first Chinese tea brand to enter the Moroccan market has exceeded 100 metric tons.

Although Morocco is a big market for green tea in terms of consumption, Chinese tea brands have to strive hard to succeed here, said Zhang.

Morocco has a long history of tea culture and local enterprises have established a stable market structure after decades of intense market competition, which means it is challenging for a new brand that wants to share a slice of the cake, Zhang said.

Zhang said that due to different tea drinking habits, Moroccan consumers have their own preferences for tea taste and flavor.

Tea has become a part of life of most Moroccans. They drink several times a day the mint-flavored tea made from green tea, fresh mint leaves and white sugar, usually served in traditional handmade pot.

According to the Association of Moroccan Tea Professionals, local consumers on average bought more than 2 kilograms of tea each in 2018.

As the world's largest importer of green tea, Morocco imported 77,600 tons of tea from China in 2018, as stated by the association.

Zhang explained that in 2015, Morocco adjusted its import tariff policy for tea. The import tariff on large-packaged tea has dropped to 2.5 percent, while the import tariff on the small-packaged (below 3 kg) has risen to 32.5 percent.

Under such policy, Cathaysian Tea Company's parent company Lichuan Jinli Tea Industry Co decided to register a subsidiary in Morocco and establish a tea packaging factory, so as to directly export large-packaged tea to Morocco, and distribute the small-packaged tea with self-owned brand in the local market.

In 2016, Cathaysian Tea Company set up a tea packaging factory in the Mohammedia industrial zone and registered the first Chinese tea brand Le Mont Yoto in Morocco.

Zhang said that the factory currently employs more than 70 Moroccans.

China is a large tea exporting country, and China's own brands should have a place in the overseas market, which is very important for the future of Chinese tea, he said.

After more than three years of hard work, some Moroccan people began to recognize the Chinese tea brand. Consumers in regions like Mohammedia have become accustomed to drinking Le Mont Yoto tea.

Zhang admitted that compared with Moroccan local tea brands, the market share of Le Mont Yoto is still limited.

"Chinese tea companies still have a long way to go before they can get more Moroccan consumers to recognize and consume Chinese tea," he said.

Zhang believes that letting more Moroccan young people understand China will help the long-term development of Chinese brands in the Moroccan market.

 

A tea picker carries her leaves in Ikumbi, Kenya. Although Africa is a big market for green tea in terms of consumption, Chinese tea brands have to strive hard to succeed there due to strong market competition. CHRIS JACKSON/GETTY IMAGES

 

 

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2019-12-09 00:00:00
<![CDATA[Anti-monopoly laws can bolster competitive, efficient markets]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528232.htm When I was studying economics 40 years ago, in the late 1970s, I was taught that monopolies are not a problem for a market economy. According to this doctrine, which was then just starting to become dominant, most monopolies are created by government fiat.

The few that arise naturally achieved their positions by developing new technologies or by providing cheaper or better products to consumers. Anyway, the argument continued, new competitors should enter the market to restore competition.

Starting with president Jimmy Carter (1977-81), these ideas have driven the policies of presidents of both parties, resulting in American economy that is much more highly concentrated with fewer opportunities for new entrepreneurs.

A new book by Matt Stoller, Goliath: The 100-Year War Between Monopoly Power and Democracy, provides a detailed history of the fights between those who believed that active government power is needed to break up the concentration of monopolistic business and finance versus those who argue an economy dominated by large monopolistic firms is either beneficial or unavoidable.

Anyone who wants to understand the economic and political history of the US of the entire twentieth century should read this book. I highly recommend it, with a few caveats discussed below.

An effective antitrust policy is especially crucial at a time that large online companies are coming to dominate many sectors of the economy. In the last 20 years, the rise of tech giants has further exacerbated the monopolistic nature of the American economy.

The importance for the Chinese economy of antitrust policy was stressed by the Oct 31 report of the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China. The plenum concluded that the government should "strengthen the basic position of competition policy, implement a fair competition review system, and strengthen and improve anti-monopoly and anti-unfair competition law enforcement".

In 2018, multiple Chinese market regulators were consolidated into the State Administration for Market Regulation as part of an overall government overhaul which focused on eliminating duplication of work, streamlining regulation, and improving coordination between ministries. The new SAMR is responsible for market regulation, anti-monopoly enforcement, investigating price violations and unfair competition, management of intellectual property rights, and registration of small and medium enterprises.

In what may turn out to be a landmark case, JD, China's second-largest online retail platform, sued market leader Alibaba for antitrust violations in the Supreme People's Court in Beijing after 44 fashion apparel brands closed their JD online stores in 2017. JD claims that Alibaba required these brands to choose one platform or the other. Alibaba denies wrongdoing.

On Nov 5, the SAMR warned e-tailers that they cannot require such either-or contracts and that they could be fined 2 million yuan ($28,3990) for violations, Xinhua reported. This is a big step in stopping anticompetitive practices by the tech giants.

Stoller shows, in great but fascinating detail, how president Franklin Roosevelt was able to build up an anti-monopoly regime that allowed small businesses to flourish. Then, he shows the details of how this New Deal economy was dismantled step-by-step beginning in the 1970s. Banks were allowed to escape the regulations that had constrained them since the 1930s and, in many sectors, big companies were allowed to dominate, with little governmental control.

Stoller argues that this has led to corruption and inequality. He cites numerous examples of companies that gave large campaign contributions or speaking contracts to politicians just before a regulatory issue was settled in the company's favor. And, he says that the rise of big banks and monopolistic industry is a primary reason the wages of America's middle-and working-class people were stagnant for 40 years-just starting to rise a bit in the last three years.

On many points, Stoller is a polemicist-despite his detailed history, he does not mention counters to his arguments. For example, he abhors the rise of chain stores, which have killed local small businesses and made each American city look much like every other one. But, he ignores the equally well-researched work of economist Robert Gordon, whose The Rise and Fall of American Growth argued that chain stores were a key factor in raising American living standards by providing competition to stores which previously had a local monopoly. And Alfred Chandler, the famous historian at Harvard Business School, argued that anti-trust prosecutions of IBM and RCA destroyed America's position in electronics and enabled Japanese companies to become dominant.

But, Stoller's overall critique of government policies that allowed the growth of concentrated market power is damning.

For example, Amazon grew partly by its logistic and software expertise. But, it also did not pay state sales taxes for more than 15 years, thus getting an unfair big advantage over local stores. Stoller also discusses Amazon's use of predatory pricing to drive competitors out of business. For example, the company lost $100 million in three months selling diapers below cost to force Diapers.com out of the market.

Similarly, Walmart grew partly by having more efficient logistics and a competitive spirit. But, it also uses its size to pressure suppliers to lower prices to itself and deny those lower prices to competitors. This is just a transfer of wealth from producers to Walmart.

Google controls 90 percent of the online search advertisement market in the US, but the government did nothing to prevent its 2007 acquisition of DoubleClick, which had been its direct competitor in that market. And, its acquisition of YouTube in 2006 eliminated another major rival in the online advertisement market.

According to Stoller, Google has been allowed to acquire 145 companies. Plus, a European Union investigation of Google showed that the company was doctoring its search engine to move competitors off the first page of search results.

Similarly, Facebook used its acquisition of Instagram in 2012 and Whatsapp in 2014 to eliminate growing social media competitors.

Of course, it is important to protect intellectual property. But, the tech giants are filing such broad patents and have such large teams of high-priced lawyers that new entrants are stifled. At the same time, the tech giants can safely ignore the patent rights of small players who can't afford the huge legal expenditures needed to enforce them.

My impression as a wireless phone user in both countries is that China's telecom providers (China Mobile, China Telecom, and China Unicom) provide much lower prices and much better service even though (perhaps because) they are State-owned. They see their mission as making money, but also acknowledge their role in economic development and public service.

In many ways, Chinese markets are more highly competitive than any other. There are more car brands than anywhere else. Makers of appliances and other household durable products have been forced by competition to become highly efficient. In the computer and electronics sectors, competition is cut-throat-much tougher than in Silicon Valley.

Some big American internet companies, Amazon and eBay for example, have simply been unable to face the competition in China. Competition forces average profit margins to be much lower than in equivalent industries in the US.

When I was in economics graduate school, we learned none of the history Stoller discusses and our mathematical models did not reflect the real economic consequences of policies. Many of my fellow students specialized in antitrust and went on to become senior regulators. But, I'm sure they did not understand the negative consequences of dismantling Franklin Roosevelt's anti-monopoly laws and regulations. I hope that Chinese regulators become familiar with this history, so they don't make the same mistakes Americans did.

 

CAI MENG/CHINA DAILY

 

 

 

 

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2019-12-09 00:00:00
<![CDATA[Things changing beyond big cities, so optimizing resources holds key to future]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528193.htm In many Chinese counties or towns, livelihood-minded people, as well as the economy, used to depend on agriculture, low-end manufacturing and other material processing businesses. For some rural people, money sent by family members working as migrant workers in big cities was the lifeline.

But things are changing fast as rural people make ardent efforts to further integrate their lives into the development of city clusters and regional linkages, as well as the development of the Belt and Road Initiative. Many of them have found that the country's city clusters will play a huge role in optimizing resources of surrounding counties or towns, and eliminate homogeneous development.

As Chinese-made high-end intelligent equipment, China's new generation of information technology, new materials, new energy vehicles and other emerging industries are highly sought after in many parts of the world, regional development of the Guangdong-Hong Kong-Macao Greater Bay Area, the Yangtze River Delta and the Beijing-Tianjin-Hebei city clusters will help create a number of leading cities, supported by the agglomeration of industries in surrounding areas.

However, it is worth mentioning that unlike big cities, many companies in counties may lack sensitivity to the change in market trends and still rely on the feedback from traditional marketing channels. Market demand may change due to the fragmentation of the manufacturing business.

In the meantime, consumers have also begun to pursue niche and customized products. This has become a challenge for county-level economies. Their established industrial structure and workforce may become a financial burden, and reach a crossroads, in terms of industrial upgrading.

To give full play to China's existing innovation advantages, counties with various development patterns should further upgrade their pillar industries via digital technology and brand awareness across the world, because it can be economical and beneficial to combine digital technology with the contemporary industrial system in order to raise the added value of their goods or services.

Artificial intelligence and big data analysis can efficiently boost the matching degree between consumers' diversified preferences and manufacturers' production capacity, so as to build a better industrial chain, supply chain and value chain supported by digital solutions.

For county-level economies, the way of conducting original equipment manufacturer (OEM) activities no longer meets the demand of their manufacturers for further growth, after decades of economic development.

Expanding domestic demand, adopting new marketing methods such as e-commerce platforms and building independent brands will continue to be an arduous task for the majority of Chinese manufacturers in these counties over the next stage.

During this process, they should be more inclined to see small batches of personalized and R&D-focused investment instead of simply pursuing scale. It will take time to shift from old drivers of manufacturing growth to new models.

In the face of complex domestic and international situations, China's ongoing supply-side structural reform can also bring opportunities for county-level economies as many of them are confronted with several challenges, including unbalanced economic structure and anemic growth of residents' incomes.

To resolve these issues, deploying resources to attract talent and promoting a modern service system including a professional service chain are crucial for supply-side agricultural structural reform.

Initiated in 2015, the reform has focused on five fronts: pruning overcapacity, clearing up the large inventory of unsold homes, curbing debt levels, lowering business costs and tackling weak links. It has yielded the desired results, promoted economic restructuring, and stabilized growth in China.

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2019-12-09 00:00:00
<![CDATA[How consumer sector is exploiting China's pent-up demand]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528230.htm China's economy is the world's second-largest behind only the US, and perhaps more importantly, its national stock market is also No 2 when measured by market capitalization, leaving plenty of reason for investors to look into the A-share market.

The general opening-up of China's economy over the past several years, including the recent removal of foreign ownership restrictions, enhanced stock-connect programs and continued inclusion into global benchmarks, offer many new opportunities for global investors while also driving greater and more dynamic participation in the A-share market.

The latest development in this respect should be global index provider MSCI raising the weighing of A-share constituents in its investment benchmarks on Nov 26, the third time since the beginning of this year.

Given the growing appeal of China's A-share market, there are a multitude of sectors which show great promise including consumption, transportation, healthcare and IT.

From a consumption standpoint, China's large population, with young demographics and rising income trends, are paving the way for a wealth of newly prosperous middle-class consumers for decades to come. These trends also serve as structural growth drivers for consumption-orientated companies that are positioned to profit from shifting consumer demand dynamics; these trends include e-commerce, product premiumization, upgrading consumer experience and domestic rural expansion.

The rise in China's consumption also creates opportunities in other sectors such as transportation, which is mainly driven by the increase in tourism within China. Companies listed in the A-share market which focus on infrastructure, such as airports, will be bolstered by the growing tide of consumer spending.

While this trend does boost corporates such as airlines and travel agencies, these industries are more prone to pressure from cyclical headwinds brought on by external forces, and as such, infrastructure-focused companies are still more attractive as they should be able to avoid any oncoming headwinds.

The upgrade in consumption will also help drive China's healthcare sector as there is ample room for China's market to mature further. Demand is increasing from both the young and older populations for a range of more sophisticated healthcare products and services, which are being actively developed by Chinese companies.

China's aging demographics have also translated into higher demand for pharmaceuticals and medical devices, which, when coupled with the strong R&D capabilities of some of China's pharma-tech players, offer a wealth of untapped potential and growth.

Considering the structural reform and market consolidation of the industry, there is also the potential for better earnings margins in the area for select companies in the long term.

China's tech sector also has much to offer, as the theme of technological upgrade in China becomes more and more evident. The A-share market and newly launched STAR board provide access to many of China's budding IT companies, which, due to China's market size and depth, can develop, innovate and sustain themselves into globally competitive players, especially in areas like cloud technology, enterprise solutions and online payment systems.

In short, we assert that consumption remains a reliable driver of growth for China as the world's second-largest economy. Favorable demographics, rapid income growth, improved accessibility and low penetration are releasing pent-up demand in China, especially in second-and third-tier cities. Consumer companies are tapping into this market to capture growth potential in consumption trade-up and experience seeking, thereby ensuring the continued expansion of the consumer sector.

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2019-12-09 00:00:00
<![CDATA[Hoermann investment set to open the door to green buildings in country]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528216.htm Hoermann KG, one of the world's largest industrial and residential door manufacturers by product categories and production volume, will further expand its manufacturing capacity in China, said Martin Hoermann, its top executive.

The firm will also export its products made in China to more global destinations.

Demand for new buildings in China and the Asia-Pacific region is growing, creating growth opportunities for the sector. Schools, retail stores, high-end factories and public service facilities are increasing. Focus is also sharpening on sustainable development strategies for urbanization, industrialization and service sectors, Hoermann said.

To better meet the demand of Chinese customers, the family-owned German firm started factory operations in Changshu, Jiangsu province, in early November. It is its third factory in China. The facility will seek to provide better-quality products to its Chinese customers. This project represents a total investment of 50 million euros ($55 million).

Hoermann, the fourth-generation owner of Hoermann Group, said this manufacturing facility will enrich the variety of the firm's products sold in China, especially for residential and commercial sectors. The hinged doors can even meet the high chemical and hygienic requirements of the pharmaceutical, electronics, and food and beverage industries.

To create a better user experience, the company installed the latest automated production lines and adopted advanced SAP technology system at its Changshu plant to improve product quality and work efficiency.

Founded in 1935 and supported by over 6,000 employees, Hoermann runs 36 professional plants worldwide and more than 100 sales companies in over 40 countries and regions throughout the world. Its door products are used in manufacturing and public buildings as well as healthcare, logistics, education and residential sectors. The company generated over 1 billion euros in sales revenue globally last year.

Facing fierce market competition, the Steinhagen-headquartered group will provide more tailor-made solutions to customers in eastern and southern China from its Changshu factory. The new plant will also shorten the production cycle and reduce transportation costs for its clients in the Yangtze River Delta and Pearl River Delta.

"It is also a key location for products to be shipped from ports in Shanghai, Jiangsu and Zhejiang to other markets that are participating in the Belt and Road Initiative, such as South Korea, Vietnam, Singapore, Thailand, and Australia," said Hoermann.

He believes that the tangible development of the BRI will create a massive infrastructure and economic engine, thanks to its huge population base, growing demand for infrastructure, and economic dynamism.

"Globalization and the BRI are strong forces linking people and economies through cross-border solutions and supporting the prosperity of communities across the globe," said Hoermann, stressing that improvements in infrastructure, transportation, healthcare, and digital manufacturing will not only bolster the world economy but bring new opportunities for partnerships between domestic and global companies.

The firm entered China in 1998.Since then, it has set up three factories and research centers in Beijing, Tianjin and Changshu. It has 18 subsidiaries and over 100 dealers across the country. Hoermann said the company expects to see double-digit growth in China this year.

In addition to expanding its production volume, the company has further diversified its retail sales channels in China this year. Its authorized dealers opened more than 20 retail stores in the nation's top-and second-tier cities such as Beijing, Tianjin, Shijiazhuang, Taiyuan, Jinan, Xi'an, Hefei and Changchun.

Hoermann said China's ongoing smart city development and consumption upgrade have pushed many of its real estate developers, manufacturers, hotel and logistics business operators, public utility service providers and consumers to either change or upgrade their doors, like those used for fireproof facilities and residential purposes. The firm also makes sliding doors and garage doors.

"We pay more attention to market demand and localization strategies in key markets including China and the United States, in addition to Europe," said Hoermann, outlining the company's ongoing investment in staff training programs to remain competitive.

"Chinese clients regard value-added services as important and we are hoping to bring a comprehensive range of products and ideal solutions to core customers. This will not only bring us more customers but attract more companies and individuals to our brand," he said.

China's rapidly developing 5G technology would also lead to improvements in resource efficiency as well as productivity, and attract foreign direct investment in the long run, said Chai Yongzhi, a researcher at the Chinese Academy of Science and Technology for Development in Beijing.

 

A Hoermann KG employee works on a production line at the company's facility in Changshu, Jiangsu province. CHINA DAILY

 

 

 

 

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2019-12-09 00:00:00
<![CDATA[Hidden magic of county-level economies]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528195.htm Though it is almost dinner time, Guanyun Midnight Charm Garment Co's warehouse in Guanyun county of East China's Jiangsu province is a beehive of activity. Workers busily print delivery waybills, stuff sensual underwear and various lingerie products into boxes, prepare parcels for dispatch...

The address labels on some parcels bound for the domestic market state the contents inside are garments (or household articles). This is to protect the privacy of the consumers concerned, besides making it easier for both courier firms and their deliverymen to sort various items.

Many parcels are bound for overseas markets as well. Guanyun county's overall daily delivery volume is around 20 million parcels, mainly to countries such as Japan, South Korea, Thailand, the United States, and many others in the European and Middle East Markets.

Once a poor county located in the northern part of Jiangsu province, Guanyun is home to residents and even government leaders who were either shy or reluctant to talk about their popular business a decade ago. Lingerie manufacturing today has replaced agriculture to become the county's pillar industry. It supports over 20,000 jobs for the local community.

Lu Xijuan, director of the e-commerce office at Guanyun county's commerce bureau, said the boom has not only created over 500 lingerie factories with 2 billion yuan ($284 million) in sales revenue last year and 3,045 online shops on Taobao, an e-commerce platform owned by Alibaba Group, but attracted the county's migrant workers back to their hometown to join the business.

This is just one example of how China's reform and opening-up has created a positive impact on not just urban areas but counties and rural areas. Why, even the global supply chain has benefited a lot, said market analysts.

In addition to China's status as the only country in the world to get all the industrial categories listed in the United Nations industrial classification, many unknown areas of China's factory business are hidden in its counties. A large number of China's small and medium-sized enterprises are operating in these areas with various characteristics, said Li Zibin, chairman of the China Association of Small and Medium Enterprises, which is based in Beijing.

"Even though the GDP of many county-level economies is relatively small, they produce a variety of products and they have worldwide influence," he said, noting if one county shuts down its factories, supply shortages may rock the global markets.

A growing number of Chinese counties have emerged as the capital of various goods in the world. For example, Shaodong county of Hunan province exported over 5 billion lighters to global markets last year. Zhuji and Shengzhou, two county-level cities in Zhejiang province, are major suppliers of socks and ties respectively to the world markets.

"Despite many counties not having advantages like natural resources, their compact industrial structures and typical acquaintances across the society are key to the formation of industrial clusters," said Qiao Runling, deputy director of the China Center for Urban Development, which is a part of the National Development and Reform Commission.

Qiao said as long as there is a person or a business to find the road to get prosperous, an entire county or town may decide to tread a brand new economic track.

By the end of 2018, the number of SMEs surpassed 30 million and the number of self-employed industrial and commercial households exceeded 70 million in China, data from the Ministry of Industry and Information Technology showed in September.

These contributed over 50 percent of the country's tax revenue, over 60 percent of the GDP, over 70 percent of technological innovations and more than 80 percent of labor force employment.

Eager to compete with its rivals in Guangdong province in the area of lingerie manufacturing, Guanyun county plans to invest 3.25 billion yuan to build a new industrial zone in its eastern part over the next three years. It has set a goal of creating 80,000 jobs and 5 billion yuan in annual sales revenue in the long run.

Currently, about half of its lingerie products are shipped to the US, according to Lu from Guanyun's commerce bureau. He said unlike Chinese consumers, manufacturers found that the consumers in the US prefer to have lingerie with bright colors and flashy styles.

About 420 kilometers from Guanyun county, workers from Caoxian County Huifengyuan Wooden Products Co are also busy to put pet casket wood and wood coffins engraved with dragons and phoenixes, into the container trucks in Caoxian county in East China's Shandong province. These goods will be shipped to Japan via Weihai Port, another coastal location in Shandong.

Traditionally famous for its timber processing skills in China's northern region, about 70 percent of its coffin products, made by around 2,000 wood processing factories, are exported to Japan annually, which faces a rapidly ageing population. In addition, other related items such as cinerary caskets, memorial tablets and sacrificial altars are also popular in many Asian countries.

This business received a push from China's cremation policy to save valuable farmland and change traditional burials, as well as from trade globalization. However, it still has a place in Japan backed by its accumulated skills in the timber processing business.

"Japanese clients are strict with details, from raw materials to sizes and decorations, or even smells," said Tian Liang, a manager at Dehong Wood Product Co in Caoxian county.

The company currently partners with four listed companies in Japan, and has exported more than 200,000 coffins to the country, with an annual revenue of more than 90 million yuan.

To secure their market share in Japan-the county's biggest overseas market for coffins and related funeral products-many local businesses have also studied their clients' demands relating to coffin weight, carvings, appearance, designs and materials. For instance, they make coffins decorated with sakura elements during the flower's blooming season in Japan.

Huang Qunhui, an industrial economics researcher at the Chinese Academy of Social Sciences in Beijing, said coordinated development in a region relies on county-level economies, which helps bridge the economic coordination among medium-sized and large cities in a region, and helps optimize resource allocation.

"There is no way that a region can develop well if it has weak county-level economies," Huang said.

To boost county-level economies, it is important to devise development strategies based on geographic locations and regional resource advantages, to forge an industry chain that suits the development of the region, instead of blindly copying development models of others and chasing after hot industries, he said.

By June this year, China counted 1,879 county-level economies, including 375 county-level cities and 1,335 counties, according to data from the Ministry of Civil Affairs.

For 15 years now, Kunshan city in Jiangsu province has been topping the list of China's top 100 counties and county-level cities. Its rankings for China's top 100 counties and districts revealed the most economically vibrant county-and district-level regions, the Research Institute of Development Strategy for Small and Medium Cities said in October.

The county-level city of Kunshan has a strong economy with dozens of industrial clusters, and 912 companies, each of which has an annual output value exceeding 100 million yuan.

East China, especially the region's coastal areas, has the largest number (62) of counties making the list.

China's reform and opening-up began with its coastal areas. East China got into global trade and resources allocation earlier than the other regions, and so had the early advantage to attract foreign capital and form industrial chains, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

He said many county-level economies' development is still weak in many parts of China, especially in its central and western regions.

So, it is critical to ensure development directions based on geographic locations and regional resource advantages in these regions, to build an industry chain that suits the development of the region, he said. It is not a good idea to copy industrial models of others or to blindly chase after hot industries that demand a large amount of initial investment.

To further ease the burden on SMEs, especially those in the country's western and central regions, the Chinese government introduced a series of tax reforms since 2018. It plans to cut the tax burdens and social insurance contributions of companies by nearly 2 trillion yuan this year.

 

Workers make socks at a production line in Dexing, a county-level city in Jiangxi province. The cotton socks are exported to all parts of the world. HUO ZHONGWEI/FOR CHINA DAILY

 

 

A worker fixes glasses to a spectacle frame at Fangshi Glasses Manufacturing Co Ltd in Ruian, a county-level city in Zhejiang province. PAN HAISONG/FOR CHINA DAILY

 

 

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2019-12-09 00:00:00
<![CDATA[TAILG shrugs off trade row, eyes e-vehicle exports]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528194.htm TAILG Group, one of China's leading electric vehicle manufacturers, will step up its efforts to explore the overseas market despite the rising tide of trade protectionism in some countries.

"In the coming decade, we would like to improve our overseas business to 50 percent, from less than 10 percent now," said Hu Dongwen, assistant president of TAILG Group.

Despite the Sino-US trade row, the company's overseas sales more than doubled this year, compared with the average annual growth of 50 percent in the past four years.

"That's because we invest more in exploring emerging markets, especially in Africa and Asia," said Huang Jiangsong, general manger of TAILG's overseas business department.

"The nation's electric bicycle market has entered a phase of stability since 2014, but we have found opportunities for rapid growth in the overseas markets."

As a growing number of developing countries attach more attention to environment protection, there is rising demand for electric bicycles which can save more energy and pollute air less than conventional bicycles powered by fossil fuels.

In Africa, Kenya-headquartered United Nations Environment Programme or UNEP is making efforts to promote environmentally friendly traffic. More African countries took relevant measures, thus creating huge opportunities for leading electric bicycle manufacturers such as TAILG.

"Though our exports to Africa account for a small proportion of our overseas portfolio right now, we believe the growth potential there will be huge and we are going to invest more in that market," said Huang. Meanwhile, sales in the domestic market had peaked around 2015, thus pushing more electric bicycle manufacturers to look for overseas markets.

"Owing to our huge investment in R&D and our efforts in producing products catering to local demand, our profit margin in the overseas markets is almost double that in the Chinese market," said Huang. "So far, the rest of Asia remains our biggest overseas market, contributing 40 to 50 percent of our overseas business."

TAILG recently joined hands with the UNEP, and donated 30 electric bicycles to the Philippine Postal Corporation or PHLPost, helping the country's postal system to increase the use of clean mobility.

In the past two years, TAILG has donated electric bicycles with energy-saving and longer riding range to the UNEP, to launch test projects in many countries.

The ongoing trade friction between China and the United States did affect the company's exports, according to Huang. But due to TAILG's efforts to explore other overseas markets, the impact on the company's overall overseas business remains under control.

"As most US customers are not so sensitive to minor price changes, there is a very limited impact on our sales in the US after US President Donald Trump imposed a 10-percent tariff in September 2018 on $200 billion worth of Chinese products. But our sales saw more obvious downward pressure when the US government further raised the duties to 25 percent in May this year," said Huang. "But the rising protectionism will not change our commitment to expanding overseas."

Established in 2004, Shenzhen-based TAILG specializes in the R&D, manufacturing, sales and after-sales service of a variety of e-vehicles like e-bicyles, e-scooters, e-special bikes, e-motorcycles, and e-tricycles. TAILG ranks third in China in terms of sales among electric bicycle makers. It boasts 5,638 exclusive shops in more than 70 countries and regions.

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TAILG employees pose for photographs with Kenyan importers in Nairobi. CHINA DAILY

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2019-12-09 00:00:00
<![CDATA[Pinduoduo disrupts China's e-commerce]]> http://www.chinadaily.com.cn/kindle/2019-12/09/content_37528231.htm Wu Weidong was never much of an online shopper.

The 47-year-old resident of Yanzhou, a small town in China's eastern Shandong province, typically bought groceries from local stores.

But messages from friends asking him to join their group purchases of fruits at bargain prices on the website Pinduoduo finally persuaded him to open an account there.

"It's mainly because my friends said the items there are cheap," he said. "So I've started using Pinduoduo more to buy fruits and snacks."

Started four years ago by a former Google engineer, Pinduoduo has become one of China's biggest retail disruptors, breaking the dominance of Alibaba and JD by persuading users like Wu, who live in China's smaller cities, to start shopping online.

Alibaba and JD have for years tried to unleash rural China's spending power, teaching residents how to use their online platforms and using drones for deliveries to remote spots, with mixed results.

But the success of Pinduoduo's model, which offers users deeper discounts on mostly generic products if they buy in groups, and encourages them to share purchases through messaging app WeChat, is driving Alibaba and JD to make a fresh push into China's lower-tier cities.

Pinduoduo did not reveal its Singles Day (Nov 11 or 11-11) sales data this year, but big data provider Syntun said Pinduoduo was ranked as the third-largest online sales platform during the shopping festival.

Syntun noted Alibaba's Singles Day sales grew 26 percent year-on-year to 268.4 billion yuan ($38 billion) this year. That tremendous figure made Alibaba the largest online platforms during the festival, followed by JD and Pinduoduo, Syntun data showed.

Pinduoduo said the company considered Singles Day as just an ordinary busy day.

"Compared with the numbers, we care more about whether the consumers have enjoyed real benefits and fun," the company said in a public letter.

According to the letter, more than 1,000 cars were sold on the platform in just over 16 minutes of the Nov 11 event this year, mainly from the third-, fourth-and fifth-tier cities.

Pinduoduo noted in the letter that agricultural products from less-developed areas reported 220-percent growth in Singles Day sales, mainly purchased by consumers from the first-and second-tier cities.

Actually, residents of lower-tier cities and towns are becoming the new driving force behind the online sales growth. Mobile developer-service provider Jiguang showed that consumers from the third-tier cities or below accounted for 55.5 percent of the total Singles Day consumers last year.

Pinduoduo has already seen the big potential in the spending power of lower-tier city folk and townspeople, with its unique business strategy that aimed at capturing the large number of deal-seeking users via team purchasing. And it has already made a name.

Pinduoduo reported 483.2 million active buyers at the end of June, versus Alibaba's 674 million. JD has 321.3 million annual active customer accounts.

"China's e-commerce has been a duopoly market for years. Against everyone's expectation, there came Pinduoduo, emerging with a completely different set of practices to engage with users," said Keso Hong, an independent internet commentator in China.

Analysts say Pinduoduo gained a foothold in the market thanks to the shortcomings in some of Alibaba and JD's models.

The two e-commerce giants built their businesses on the country's burgeoning middle-income group, competing intensely to woo big international brands like Burberry or Valentino to set up online stores. But it was hard to persuade residents in lower-tier cities that they needed to shop for luxury goods online.

Pinduoduo's model encourages users to recommend products to friends and family to gain discounts, and heavily leverages WeChat, China's dominant messaging service, which is owned by Pinduoduo-backer Tencent Holdings.

A slowing economy has hurt Alibaba's purchasing power and JD's big-city core consumer base. Residents in lower-tier cities are starting to have higher disposable incomes compared with their first-tier city compatriots, whose living costs are higher, economists say.

To be sure, Pinduoduo's user base remains much smaller than market leader Alibaba's, and its rise has not been without challenges.

Local media reports last month cited Pinduoduo's founder Huang Zheng as saying in an internal meeting that its gross merchandise volume, the value of goods sold on its website and app within a certain time period, had surpassed that of JD. The remarks drew a sharp response from the latter.

"Based on our internal analysis, we believe there is a significant gap between Pinduoduo and JD in terms of GMV (by any imaginable measures), basket size, return rate, and so on," a JD spokesman said.

Pinduoduo also remains dogged by accusations that its site hosts counterfeits. The company says it is cracking down on fakes.

Meanwhile, Alibaba and JD are trying to get a foothold in rural areas. JD in September upgraded its group-buying platform, renaming it Jingxi, and is looking to improve logistics for users, saying that it wants to eventually fulfill deliveries to smaller cities within 24 hours.

Alibaba has announced a fresh focus on expanding in less-developed areas. Last year, it launched a mobile app called Taobao Tejia, or Taobao Discounts, which offers rock bottom bargain deals.

In August, Alibaba Vice-Chairman Joe Tsai predicted that retail consumption from the lower-tier cities and townships would triple from $2.3 trillion to nearly $7 trillion by 2030, equivalent to compounded annual growth of 10 percent.

An Alibaba spokesman said that although 85 percent of Chinese residents in developed areas have used Alibaba's retail marketplace, the penetration was only 40 percent in less-developed places. That presents a "tremendous opportunity", he said.

Xinhua contributed to the story.

 

A Pinduoduo user shows the app on the smartphone in Beijing. CHINA DAILY

 

 

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2019-12-09 00:00:00
<![CDATA[Bosch's Wuxi hydrogen fuel cell plant set to enhance local R&D]]> http://www.chinadaily.com.cn/kindle/2019-12/08/content_37528084.htm Bosch, a Germany-based leading global supplier of technology and services, has kicked off construction on its first hydrogen fuel cell plant in China, which is expected to facilitate the technology's application in both commercial and passenger vehicles.

Hydrogen fuel cells are a promising technology due to their light weight, long driving range, short refilling time and zero emissions. The fuel cells are especially suited for use in medium and heavy commercial vehicles that travel long distances.

The plant in Wuxi, Jiangsu province will be mainly engaged in research and development as well as trial production of hydrogen fuel cell products, which will cover a full array of test equipment for key components, stacks and even fuel cell systems, according to senior Bosch executives at the groundbreaking ceremony on Nov 29.

The plant, with construction set to be completed by the end of 2020 and small-scale production scheduled to begin in 2021, will also house a sample production line for stacks.

"As the first of its kind outside Germany (by Bosch), the fuel cell center in Wuxi marks another strategic step for Bosch in boosting the widespread manufacture and adoption of fuel cell products," said Uwe Gackstatter, president of the Bosch Powertrain Solutions Division.

"The advantages of the technology for electrifying heavy commercial vehicles are clear and include zero local emissions, high energy-conversion efficiency and a diverse range of hydrogen sources," he said.

Bosch expects the plant to further strengthen its local research and development as well as manufacturing capabilities and help the company serve the Chinese market in a quicker and more flexible way.

The company said it has started full cooperation on fuel cell technology with Chinese partners, which is also expected to drive innovation in the area.

"China is a strategically relevant market for the development and application of fuel cells," said Wang Weiliang, regional president of Bosch Powertrain Solutions China.

He said the plant in Wuxi will enhance Bosch's local competitiveness, while the development and application of fuel cell key components such as hydrogen injection valves and electronic air compressors, as well as the manufacturing of sample stacks, will create a solid foundation for mass production in the future.

"Furthermore, it will help us better serve our local customers with innovative technology, localized products and flexible business models to support the transformation and upgrade of the Chinese automotive industry," Wang said.

Bosch said it is well-positioned to leverage its solid experience and expertise in fuel cell technology.

Thanks to its competencies in key components and comprehensive system engineering services, the company said it can help carmakers and fuel cell engine manufacturers improve system performance and reliability while reducing both system and vehicle costs.

Besides the plant, Bosch is expanding its presence in the city of Wuxi by establishing an innovation and software center to support its business segments.

The center, with an initial investment of 35 billion yuan ($4.97 billion), will mainly be responsible for innovation as well as research and development in electrification, connected solutions and big data platforms. It is scheduled to be completed and put into service in mid-2020.

 

 

 

 

]]> 2019-12-08 10:04:32 <![CDATA[Display panel firms gain ground globally]]> http://www.chinadaily.com.cn/kindle/2019-12/08/content_37528043.htm Display panel makers from China are expected to dominate the global TV panel industry and seize more than half of the global market share next year, according to AVC Revo, a unit of market consultancy firm AVC.

"Global TV panel shipments will drop by 4.7 percent to 271 million units in 2020, compared with 284 million units this year, but the supply and demand of TV panels will balance it up in the first three quarters of next year," said Bian Zheng, deputy director of research at AVC Revo.

Bian said China will have a 51 percent market share in global TV shipments in 2020, while South Korea will have 25 percent, adding that large-sized TV panels will bolster the healthy development of the industry.

The consultancy said panel makers are making an active layout in the 80 to 90-inch display panels, and the production capacity of large-sized organic light-emitting diodes or OLED screens is enhancing.

Bian said OLED, micro light-emitting diode and quantum light-emitting diode (QLED) will be the next-generation flat-panel display technologies that are in the spotlight.

AVC Revo's estimates are also echoed by Li Yaqin, president of market research firm Sigmaintell. Li said the general price will be stable across the TV panel sector next year and the relation between supply and demand of panels will gradually become balanced.

Li added due to demand from 5G and intelligent systems, large-size screens are becoming essential as the only tool of the interaction between humans and machines.

A production plant of South Korea's LG Display Co Ltd went into operation in August in Guangzhou, capital of Guangdong province. The plant is able to manufacture 60,000 OLED panels per month that are used for large-sized OLED televisions.

TV maker Skyworth Group is betting big on the cutting-edge and innovative OLED technology to conquer the domestic TV market. It has been producing OLED TVs in partnership with LG Display since 2013.

BOE Technology Group Co Ltd, a leading Chinese supplier of display products and solutions, is doubling down on flexible OLED screens mainly used for smartphones, and the shipment of OLED panels will triple to at least 70 million units next year, said Chen Yanshun, chairman of BOE.

Moreover, Chen added the mini LED, which offer much better image quality and is highly efficient, will witness explosive growth in the next two to three years and become a new development direction.

The company has become the world's largest flat-panel display producer in the first quarter of 2019, statistics from Sigmaintell showed.

"China has transformed into the world's largest consumer market and manufacturing base for display terminals, with huge market potential," said BOE Vice-President Zhang Yu.

Shenzhen China Star Optoelectronics Technology Co Ltd, a subsidiary of consumer electronics giant TCL Corp, announced in November last year that its Gen 11 TFT-LCD and active-matrix OLED production line had officially commenced operations. The project will produce 43-inch, 65-inch and 75-inch liquid crystal display screens.

Li Dongsheng, TCL founder and chairman, said China will likely take the lead in the semiconductor display sector across the world within the next three to five years.

He added China will play an active and vital role in promoting the development of the semiconductor display industry, which has a high entry threshold and needs high investment.

"At present, 4K panels including 55-inch products and 65-inch products are in the red. The launch of 8K ultra-high definition will quickly improve product structure and increase the profitability," Li of Sigmaintell said.

Li underlined those manufacturers who can promote 8K quicker than others will get more profits next year, which is also an opportunity that panel manufacturers should grasp.

She estimated that the penetration rate of the 75-inch 8K market will increase sharply in 2022 and 8K will gradually become the mainstream resolution ratio.

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2019-12-08 10:04:32
<![CDATA[PSBC sets up wealth management unit]]> http://www.chinadaily.com.cn/kindle/2019-12/08/content_37528042.htm Postal Savings Bank of China Co Ltd started operations of its wealth management subsidiary on Thursday, amid increased efforts by lenders to step up retail banking and asset management transitions.

The commencement of operations of PSBC Wealth Management Co Ltd followed similar actions taken by the other five large State-owned commercial banks and a few national joint-stock commercial lenders, such as China Everbright Bank Co Ltd and China Merchants Bank Co Ltd.

By setting up PSBC Wealth Management, Postal Savings Bank of China hopes to achieve rapid development and upgrade of its retail banking strategies, in addition to implementing supply-side structural reforms in the financial sector, serve the real economy and pursue high-quality development, said Liu Aili, chairman of China Post Group.

"Digitization has brought a whole new experience to customers and changed their habits ...The banks should provide customers with full life cycle asset management services through the supply of diversified financial services... PSBC Wealth Management must follow the reform trends in modern operation," Liu said.

Banks are also institutional investors, not just lenders. In China, investments account for 25 percent or even more of a bank's total assets, said Nicholas Zhu, vice-president and senior credit officer at Moody's Investors Service.

"Nowadays, commercial banks in China are transitioning from relying heavily on interest income to offering more fee-based financial services. This is a big trend," said Zhu on the sidelines of Moody's & CCXI 2020 China Credit Outlook Conference on Wednesday.

"Establishing their own wealth management subsidiaries is one of the steps taken by banks to make a transition in terms of asset management. What is more challenging for the reform is how the customers will react to the switch of wealth management products from the expected returns model to the net asset value model, which does not guarantee the return of principal and interest," he said.

By the end of last year, outstanding non-principal guaranteed wealth management products stood at 22.04 trillion yuan ($3.13 trillion), roughly the same as the end of 2017, said a report jointly issued by the China Banking Association and China's Banking Sector Wealth Management Registration and Trusteeship Center in March.

To maintain the image of banks in terms of providing a steady return on investment in wealth management products, the key is to devote more efforts to customer classification and education, said Liu Lina, vice-general manager of PSBC Wealth Management.

"The wealth management industry in China must reshape itself through reforms, make a transition through innovation, and create a win-win situation for various market players with an open mindset," she said.

Representatives from UBS, Ant Financial, JPMorgan, DBS and Tencent, strategic investors of Postal Savings Bank of China, attended the opening ceremony of PSBC Wealth Management.

Liu Lina noted that banks' wealth management subsidiaries are likely to take strong moves in the pension funds market, which has a significance meaning to transitions of bank wealth management and the pension system in China.

Upon its opening on Thursday, PSBC Wealth Management also launched several types of new wealth management products such as pension-themed products, as well as index-based, fixed income and strategy-based products.

 

 

 

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2019-12-08 10:04:32
<![CDATA[Robust demand for imported goods buoys overseas FMCG companies]]> http://www.chinadaily.com.cn/kindle/2019-12/08/content_37528041.htm Enduring fever for imported goods is driving consumer goods demand in China, dispelling concerns that an economic growth slowdown would dent spending.

Expenditure on fast-moving consumer goods (FMCG) like shampoo to fabric softeners or pet food saw a steady growth of 5.7 percent in the third quarter of 2019, same as that of last year, according to the latest China Shopper Report jointly published by consultancy firms Bain &Co and Kantar Worldpanel.

During the first six months of this year, imports accounted for 18 percent of all FMCG sales and jumped 10 percent, almost doubling the pace of overall sector growth, the report said.

This was driven mostly by online channels, registering a 30 percent surge in sales during the first half of 2019 and accounting for 35 percent of all online sales in the country.

The pursuit for imported brands "is especially true for product categories where consumers perceive foreign goods as of higher quality than those produced domestically, such as fragrances, wine and milk powder", said Bruno Lannes, a partner from Bain and co-author of the report.

The report found that sales of nutritional supplements from South Korea increased 35 percent in the 12-month period ending in the second quarter of 2019, whereas the value of biscuits from Singapore surged by 22 percent during the same period.

"By concentrating on selling online, foreign FMCG companies have gained traction in China without the need to build a complex physical route to market model," said Jason Yu, managing director of Kantar Worldpanel Greater China, who is also a co-author of the report.

The momentum has also been fueled in part by the second China International Import Expo in Shanghai, where thousands of products made their debut in the Chinese market.

"For new product launches in China, we are moving from 'intuition-driven readiness' to the employment of data that depict the clear preferences of customers," said Charles Kao, president of cosmetics group Amorepacific's China unit, which saw nearly 30 percent of its revenue in China come from online channels.

In categories like toothpastes, imports have consistently outpaced category growth, sometimes by a wide margin. This indicates that imported goods have become a crucial impetus for premiumization and consumption upgrade, said Derek Deng, a partner of Bain and lead for the company's consumer products practice.

In terms of sector-breakdowns, personal care and home care categories recorded 11.8 percent growth in the third quarter, the strongest performance in three years, whereas food and beverage rose by only 2.3 percent year-on-year.

"The two-speed growth pattern lingers because product categories associated with healthier lifestyles are favored by consumers, whereas categories viewed as relatively unhealthy, such as soft cake, candy and chewing gum, experienced declining value," Yu said.

According to Deng, foreign companies need to "design, decide, deliver and digitize" their Chinese business in order to navigate the world's largest consumer market.

 

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2019-12-08 10:04:32
<![CDATA[Intelligent shipping to sharpen maritime edge]]> http://www.chinadaily.com.cn/kindle/2019-12/07/content_37528180.htm Intelligent shipping, which involves the use of informationization and digital technologies, could well be the silver lining for the global shipping industry to stave off an industrial recession and the ideal conduit for China to become a global maritime power, said experts.

After reaching a peak in 2008, the global shipping market has been facing a torrid time due to the sluggish economic fundamentals. New regulations have made it mandatory for the shipping industry to reduce its carbon footprint, leading to steps like the 2020 sulfur cap, water ballast regulations and carbon emission reduction rules, said Martin Stopford, nonexecutive president of Clarkson Research.

New technology is now the buzzword in the shipping sector as companies are exploring the possibilities of using digital tech for ship design.

"The existing challenges confronted by the shipping industry like the sluggish market and shortage of crew are largely due to high global logistics costs. Science and technology helps companies to use intelligent shipping, especially for unmanned ship freight," said Zhang Baochen, chairman of the academic committee at China Waterborne Transport Research Institute under the Ministry of Transport.

Zhang said the shipping industry is labor intensive and therefore crew reduction is seen as a viable solution to reduce costs and increase efficiency.

Intelligent shipping, the highlight of the 20th Marintec China conference that ended on Friday in Shanghai, is a new shipping system created through the integration of traditional shipping and state-of-the-art technologies. Specifically, it includes five elements: intelligent ships, intelligent navigation support, intelligent ports, intelligent shipping services and intelligent shipping supervision.

Experts attending the event said autonomous maritime technologies will not only reduce operational costs, but also ensure shipping safety with fewer human errors and also avoid the exposure of people to dangerous situations.

In addition, unmanned autonomous tech enables disruptive operational scenarios, and can help further optimize the complete logistics chain.

To date, international organizations as well as major maritime nations and regions including the UK, Finland, Norway, the Netherlands, Japan and South Korea have announced their plans for intelligent shipping. At the same time, technology is also developing rapidly across the world.

In China, COSCO Shipping Group started commercialization of the world's first large smart container ship recently, said Sun Jiakang, director of the board at China COSCO Shipping Co Ltd.

A guideline to further develop intelligent shipping as a new business model was jointly released by seven government agencies including the Ministry of Transport and the National Development and Reform Commission, has stressed the deeper integration of advanced technologies with the shipping industry in late November, Xinhuanet reported.

According to the guideline, China aims to become a global shipping development and innovation center based on breakthroughs made in several key technologies by 2025.

By 2035, the shipping industry will see new business models featuring sufficient intelligence and a high-quality intelligent shipping system will be built by 2050.

"The next 15 years will be crucial for the development of intelligent shipping technologies," said Zhang.

Intelligent shipping offers an opportunity for China to grow from a large shipping nation into a shipping power, he said.

A model of a COSCO cargo vessel is displayed during an industry expo in Shanghai. NAN SHAN/FOR CHINA DAILY

]]> 2019-12-07 00:00:00 <![CDATA[HK plans to bolster financial stability]]> http://www.chinadaily.com.cn/kindle/2019-12/07/content_37528174.htm The Hong Kong Monetary Authority will adopt necessary measures including a possible further cut of the countercyclical capital buffer ratio for banks to maintain financial stability amid a deteriorating economic outlook, the authority's chief executive said.

Maintaining the soundness and stability of Hong Kong's financial system has been the most important task as the city is facing a complex and volatile internal and external environment, said Eddie Yue Wai-man, HKMA's chief executive, at a press briefing in Beijing on Wednesday.

"If the economy further declines and the property market suffers correction, there is room for us to further lower the CCyB (countercyclical capital buffer)," Yue said. "Maintaining public and market confidence is crucial for us to keep the financial system stable."

The HKMA cut the CCyB ratio to 2 percent from 2.5 percent in October citing that economic indicators have signaled significant deterioration of the economic environment in Hong Kong since June.

The city's economy has been hit by a set of factors including global economic slowdown, trade tension between Beijing and Washington and local social unrest, which have led to a sharp drop of retail sales and the number of tourist arrivals.

Yue said that the HKMA will continue to use macroprudential tools to support the economy and will introduce favorable policies to encourage more bank lending to small-and medium-sized enterprises, which usually are the hardest hit during an economic downturn.

The HKMA chief noted that Hong Kong's financial system has remained stable and there has been no sign of significant capital outflows or large-scale market speculation or short selling.

The banking system in Hong Kong remained resilient and the banks have adequate capital buffer to face economic downturn, Yue said.

The banking sector in Hong Kong has a 150 percent liquidity coverage ratio and 20.6 percent capital adequacy ratio, which are higher than international standards. The banks also saw a 2.4 percent increase of deposits from the beginning of this year while nonperforming loan ratio stood at a low level of 0.56 percent, according to the HKMA.

Yue said that more fiscal spending can be expected to invest in infrastructure and improvement of people's livelihood as the city's government has a high fiscal reserve.

Hong Kong's GDP contracted 2.9 percent year-on-year in the third quarter, sharply down from a 0.4-percent growth in the second quarter. The city's government has downgraded its forecast for this year's GDP growth to negative 1.3 percent, the first annual growth contraction since 2009.

Despite the gloomy economic outlook, Hong Kong will continue to seize opportunities in line with the further opening of the mainland's financial sector and hopes to continue to serve as the gateway for overseas capital into the onshore market, Yue said.

The HKMA and the People's Bank of China have agreed to establish a pilot two-way wealth management connect scheme, which will allow Hong Kong and mainland residents in the Guangdong-Hong Kong-Macao Greater Bay Area to buy wealth management products in each other's markets.

Yue said that the HKMA is discussing detailed arrangement of the program with the PBOC and hopes to launch the scheme as soon as possible.

]]> 2019-12-07 00:00:00 <![CDATA[Guangdong achieves sustained progress in utilization of FDI]]> http://www.chinadaily.com.cn/kindle/2019-12/06/content_37528034.htm Guangdong province in South China has achieved sustained growth in use of foreign direct investment this year after deepening reform and furthering competitiveness in advanced manufacturing through scientific and technological innovation.

A growing number of leading foreign companies have set up facilities and projects in the province, or have charted plans to do so, since the beginning of the year.

Ma Xingrui, governor of Guangdong province, said Guangdong welcomes foreign companies to participate in its economic development and expects to further expand cooperation and exchanges with the rest of the world in the coming years.

Ma made his remarks when meeting with Darren Woods, chairman and CEO of Exxon Mobil Corp, in Shenzhen on Wednesday.

Exxon signed a contract with Guangdong to construct a $10 billion petrochemical project in the city of Huizhou last year. Construction of the mega-project is expected to officially start in April 2020.

"Guangdong expects Exxon to play a role in promoting the province's energy structure and upgrading its petrochemical industry," Ma said.

Ma promised to further improve Guangdong's investment and business environment. He also pledged to promote the rule of law to support Exxon's investment and development in the province where the market for petrochemical products is vast.

Earlier this year, Ma urged related departments and cities in the province to deepen reform and further their competitiveness in advanced manufacturing through scientific and technological innovation.

Woods said Exxon had good long-term cooperation with Guangdong and he expects to further expand cooperation with the province.

In addition to the Exxon project, German chemical giant BASF officially commenced construction of its $10 billion smart Verbund petrochemical project in Zhanjiang, a coastal city in the western part of Guangdong, on Nov 23.

The smart Verbund site will form a solid foundation for a world-class industrial cluster in Zhanjiang and establish stronger business connections between the province and Asian countries. It is the first large petrochemical project solely owned by a foreign investor in China.

Also last month, GE Renewable Energy commenced construction of its first wind power factory in Asia in Jieyang in eastern Guangdong.

In addition, German pharmaceutical giant Merck launched its Guangdong innovation hub in Guangzhou last month. Pharmaceutical firm AstraZeneca announced last month to establish its South China headquarters in Guangzhou.

According to statistics released by Guangdong Provincial Department of Commerce, Guangdong used actual foreign investment of 130.25 billion yuan ($18.48 billion) from January to October, up 2.41 percent year-on-year.

Of the investment used, 42 projects involved an actual utilized FDI of more than $100 million each.

Guangdong's actual utilized FDI in the pharmaceutical manufacturing and high-tech services sectors surged 63 percent and 59.1 percent respectively year-on-year in the first 10 months of 2019.

Xiao Yaofei, a professor with Guangdong University of Foreign Studies, attributed the sustainable growth of Guangdong's utilization of FDI to the province's huge market and its extensive opening up.

"Meanwhile, Guangdong, which has been opening up for more than four decades, has plenty of high-end talents and skilled workers," Xiao said.

He said Guangdong will continue to attract growing foreign investment when it deepens reforms and opens its door wider to the outside world in the coming years.

Guangdong, which borders Hong Kong and Macao special administrative regions, is expected to achieve a GDP of more than 10 trillion this year, compared to 9.73 trillion yuan last year.

 

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2019-12-06 00:00:00
<![CDATA[Shenzhen-HK stock connect gains ground]]> http://www.chinadaily.com.cn/kindle/2019-12/06/content_37528096.htm The stock connect program between the Shenzhen and Hong Kong bourses, which was launched in 2016, has seen its trading volume expand over time to become an important conduit for the Chinese capital market's opening-up, experts said.

The Shenzhen-Hong Kong stock connect, which celebrated its third anniversary on Thursday, was launched two years after the successful operation of the Shanghai-Hong Kong stock connect, which was the first of its kind launched in 2014.

By Wednesday, the accumulated trading value of the Shenzhen-Hong Kong stock connect during the past three years was 9.42 trillion yuan ($1.34 trillion), according to Shanghai-based market tracker Wind Info. The total trading value so far this year has reached 5.11 trillion yuan, outnumbering the sum of the previous two years.

On the other hand, the Hong Kong stock market has also been buoyed by the stock connect mechanism. According to Hong Kong Exchanges and Clearing Ltd, the operator of the Hong Kong bourse, southbound trading volume-investment made by Chinese mainland investors in the Hong Kong stock market-has been valued at over HK$8.7 trillion ($1.1 trillion) cumulatively as of Oct 31. The Chinese mainland investors held about HK$999.5 billion worth of Hong Kong shares via the mechanism, up from the HK$13.1 billion in 2014.

Li Daxiao, chief economist of Yingda Securities, said that the bonding between the capital markets in Shenzhen and Hong Kong has been further strengthened with the stock connect program. Based on its success, more attempts to connect the capital markets in different regions using different currencies will be made possible in the near future, he said.

Over the past three years, the A-share market has attracted total cross-border capital inflows of more than 136.4 billion yuan via the Shenzhen-Hong Kong stock connect program. According to Yang Delong, chief economist of Shenzhen-based First Seafront Fund, the ongoing changes in investment style among the A-share market investors are more noticeable and important than capital inflows.

According to Yang, overseas investors have always focused on the primary operations of companies and stuck to long-term investment and value investment. The top 20 A-share listed companies that they have invested in the most heavily over the past three years have reported compound returns of 350 percent, which is way ahead of the average performance of most public companies and even the benchmark indexes.

As of Aug 31, 989 out of the 2,179 companies listed on the Shenzhen bourse were from the strategically emerging industries, according to public information.

"Overseas investors have shown preferences for A-share market listed technology, consumption and finance companies, which abound in the Shenzhen stock exchange. The higher-than-average return over the past three years shows that overseas investors are still more mature in choosing the right targets, experiences that domestic investor can learn from," said Yang.

Overseas investors have taken increasingly important roles in the A-share market. According to Swiss investment firm UBS, overseas investors had 1.77 trillion yuan worth of A shares by the end of September. That number equaled 3.2 percent of the total value of the A-share market, up from the 2.4 percent registered at the end of 2018.

The inclusion of the A-share market into leading global indexes such as the MSCI is another important impetus. According to UBS estimates, about 300 billion yuan of overseas capital will flow into the A-share market in 2020, if the A-share constituent in the MSCI remains unchanged.

 

A promotion board for the stock connect program between the Shenzhen and Hong Kong bourses is seen at a securities brokerage in Shenzhen, Guangdong province. XINHUA

 

 

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2019-12-06 00:00:00
<![CDATA[Photography startups click the right picture for growth]]> http://www.chinadaily.com.cn/kindle/2019-12/06/content_37528082.htm Rising demand for good portraits from young consumers is opening the door for a host of new photography startups in China.

"Jokingly, photographers and hairstylists used to be those who never understood what style I wanted," said Li Xingran, a 24-year-old graduate student from Beijing, who claimed that her ID photos over the past years were "unnatural, stiff, and of course not beautiful".

While Li was distressed about not having a decent photo for her resume since she was hunting for a job, a friend suggested her going to Elefoto, a young photography studio, which in hindsight turned out to be a lifesaver for her.

"It was surprising that I looked naturally beautiful and confident in the photo from Elefoto. The photo has been a bonus point, according to one of my interviewers," Li said.

Li is just one of the several Chinese consumers who are in need of a decent portrait to look for a job and for other purposes, including ID photos, wedding registration pictures and business portraits.

Such demand has spurred huge business opportunities for a group of portrait photography startups like Elefoto, Himo and Naive Blue, industry experts said.

Unlike traditional photography studios, companies like Elefoto scramble to offer high-end portrait photos through professional photography and photoshop abilities as well as full services.

"At Elefoto, we aim to help consumers discover their true beauty through the lens. With our whole set of services, we also want to make the photography process efficient and joyful," said Chong Xiaojie, founder of Elefoto.

To get the perfect portrait, consumers should first make a reservation. Once they arrive at the studio, staff will help them choose a style and clothes. Professional stylists will apply makeup according to the individual characteristics.

After the professional photography, the consumers are involved in the photoshop process to discuss later embellishments. The whole process usually takes around 40 minutes.

"I was treated with respect in these studios and the detailed services made my photo stand out and gave it a personalized touch," said Tong Yang, a 37-year-old employee in an internet firm in Beijing, who had just finished a business portrait.

But at these studios, prices are higher compared with traditional ones, varying from 299 yuan ($42) to 1,990 yuan. Though at least 50 percent higher than the traditional companies, many consumers still opt for them.

Jin Chen, managing partner of investment firm Ventech China, said in a report: "Photos for ID, marriage and business have seen resurgent demand. Companies are building their brands with higher quality photographs and services."

A Goldman Sachs report pointed out that over 30 percent of the total population in China are born in the 1980s and 1990s. With the average annual revenue of these people expected to soar to $13,000 by 2024, they will lead the consumption wave in the next decade.

To tap into such demand, photography companies are also gearing up efforts to offer more diversified portraits, such as family photos and pet photos.

With Christmas Day falling later this month, Himo, another leading portrait startup, has launched portraits designed exclusively for the festival.

Gao Cheng, a 29-year-old engineer from Nanjing, and his wife are having such a photo taken at Himo. Both of them are putting on clothes and makeup.

"With Christmas coming, both of us believe that such photographs will bring good luck and cherished memories," he said.

Zhang Chao, founding partner of EverShine Capital, said: "Consumer demand for portraits has transformed from just a simple photo to an object of beauty. Those who can transform traditional photography studios, offer high-quality solutions and online tools will gain a lead."

 

An Elefoto employee puts finishing touches to portrait pictures at a studio in Beijing. CHINA DAILY

 

 

 

 

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2019-12-06 00:00:00
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-12/06/content_37528044.htm GOVT AND POLICIES

Xinjiang's foreign trade up in first 10 months

China's Xinjiang Uygur autonomous region recorded around 131.5 billion yuan ($18.7 billion) in imports and exports in the first 10 months of this year, up 28 percent year-on-year, local authorities said. The autonomous region's export volume during the period was 100.2 billion yuan, up 19.9 percent, while its import volume soared to 31.3 billion yuan, up 63.1 percent, according to the customs authorities of Urumqi, the regional capital. In the first 10 months, Kazakhstan topped the list of Xinjiang's major trade partners, with trade volume between the two growing by 28.2 percent to 60.2 billion yuan.

COMPANIES AND MARKETS

Eyewear brand seeks bigger China presence

Global fashion eyewear brand Gentle Monster is expecting a bigger presence in the Chinese mainland market by opening more stores and seeking various partnerships. The brand, headquartered in South Korea, will soon open its 10th flagship store in the Chinese market in downtown Beijing's new high-end department store SKP-S. The two sides have worked together to turn SKP-S into a futuristic retail space with fashionable designs, artistic exhibits and high-tech services, aiming to offer fresh shopping experiences. The sunglasses and optical glasses brand, established in 2011, opened nine flagship stores across China by the end of November. Six or seven new flagship stores were expected in 2020, according to the company's founder and CEO Hankook Kim.

Qualcomm unveils new 5G mobile platforms

US leading chip manufacturer Qualcomm unveiled two new 5G Snapdragon mobile platforms at its annual tech summit that opened in Maui, Hawaii, on Tuesday. Alex Katouzian, senior vice-president and general manager of the Mobile Business Unit at Qualcomm Technologies Inc, introduced the two new platforms to hundreds of participants. The Snapdragon 865 Mobile Platform, which includes the Snapdragon X55 Modem-RF System, is a global 5G platform designed to deliver unmatched connectivity and performance for the next generation of devices, he said. And the Snapdragon 765/765G bring integrated 5G connectivity, Artificial Intelligence (AI) processing and select Qualcomm Snapdragon Elite Gaming experiences, Katouzian said.

India's OnMobile teams up with Samsung

India's OnMobile has collaborated with smartphone brand Samsung to manage the latter's contests, ecosystems and ensure a rewarding experience to the smartphone's app users in the country, a company statement said on Wednesday. "Our collaboration with Samsung to build and manage its contests ecosystem reiterates the trust and credibility we have built over the years among our partners in India," said Sanjay Bhambri, OnMobile Global Ltd's president and chief operating officer. With over 20 million users in India, Samsung My Galaxy app offers a unique all-in-one experience including videos, music, games, news and personalized offers and updates.

Nokia names Baldauf as new board chairman

Finnish telecoms equipment maker Nokia has announced that Sari Baldauf would succeed Risto Siilasmaa as board chairman in April. Baldauf was in charge of Nokia networks during its glorious years from 1998 to 2005, and joined Nokia's board as a non-executive director in 2018. She also served in companies such as Daimler, Deutsche Telecom and Finnish utility Fortum. Nokia CEO Rajeev Suri and his team are working hard both to address the short-term issues and strengthen Nokia's longer-term value drivers, Baldauf said in a statement.

AROUND THE WORLD

UK service PMI drops in November

British service sector activity in November dropped into contraction territory amid domestic political uncertainty, according to a survey published on Wednesday by IHS Markit/CIPS, a London-based global information provider. IHS Markit/CIPS statistics showed that the seasonally adjusted service Purchasing Managers' Index (PMI) stood at 49.3 in November, down from 50.0 in October, slipping below the 50.0 no-change benchmark. "Domestic political uncertainty once again led to cautious business and consumer spending," said the survey.

NZ to increase banks' capital requirements

The Reserve Bank of New Zealand released its final decisions to increase banks' capital requirements on Thursday. The Reserve Bank of New Zealand Governor Adrian Orr said the decisions are about making the banking system safer for all New Zealanders, and will ensure bank owners have a meaningful stake in their businesses. The changes will be implemented over seven years, giving plenty of time for banks to manage a smooth transition and minimize any adjustment costs. "Our decisions are not just about dollars and cents. More capital in the banking system better enables banks to weather economic volatility and maintain good, long-term, customer outcomes," Orr said.

Capital adequacy ratio of lenders improves

South Korean banks' capital adequacy ratio inched up to 15.4 percent in the third quarter, financial watchdog data showed on Wednesday. The capital adequacy ratio of 19 local commercial and state-run banks averaged 15.40 percent under the Bank for International Settlements (BIS) framework as of the end of September, up 0.05 percentage point from three months earlier, according to the Financial Supervisory Service (FSS). The ratio, a barometer of financial healthiness, measures the proportion of a bank's capital to its risk-weight assets. Banks are required by the BIS to maintain the ratio above 8 percent.

Japanese vehicle sales continue downtrend

Japanese vehicle sales in South Korea kept a halving trend last month amid the continuing campaign to boycott Japanese products and tours to Japan, industry data showed on Wednesday. The number of Japanese cars sold in November was 2,357, down 56.4 percent from the same month of 2018, according to the Korea Automobile Importers& Distributors Association (KAIDA). The Japanese vehicle sales began to fall sharply in July when Japan tightened control over its exports to South Korea of three materials, vital to make memory chips and display panels that are the mainstay of the South Korean exports.

Malaysia's exports fall by 6.7% in October

Malaysia's exports contracted by 6.7 percent year-on-year to 97.59 billion ringgit ($22.86 billion) in October as shipments for all sectors fell, official data showed on Wednesday. According to its Ministry of International Trade and Industry, exports of manufactured goods contracted by 4.5 percent, with exports of mining goods and agriculture goods declining by 24.6 and 8.9 percent respectively. Meanwhile, the total trade in October decreased by 7.6 percent year-on-year to 163.86 billion ringgit. Imports also declined by 8.7 percent to 73.27 billion ringgit. Trade surplus, therefore, rose 2.8 percent year-on-year to 17.33 billion ringgit.

Mongolia mortgage loans benefit 95,000

Mongolia has provided housing mortgages to 95,000 borrowers since 2013, a senior official of the Mongolian Mortgage Corp (MIC) said. The Mongolian government started implementing a mortgage loan program in 2013 to increase the afford-ability and accessibility of apartments for urban residents. "Providing housing mortgages at a rate of 8 percent is also part of the government's efforts to reduce air pollution in the country, especially in the capital city of Ulaanbaatar," Zorig Munkh-Orgil, first deputy CEO of the MIC, said at a workshop on air pollution and housing. "A total of 95,000 borrowers have benefited from the housing program. Over 90 percent of them are residents of Ulaanbaatar," she said.

 

 

 

 

 

 

 

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2019-12-06 00:00:00
<![CDATA[China makes steady progress in adoption of clean energy]]> http://www.chinadaily.com.cn/kindle/2019-12/06/content_37528060.htm Construction of new coal-fired power plants across the world fell to their lowest level in a decade in 2018, with China accounting for nearly two-thirds of the fall, a new report said.

After peaking at 84 gigawatts of new capacity in 2015, coal project completions plummeted to 39 GW in 2018, demonstrating the steady progress in energy transition, said the report from Bloomberg New Energy Finance, or BNEF, a wholly owned unit of Bloomberg.

The report said that despite the spike in coal-fired generation, the pace of new coal capacity added to the grids in developing nations is slowing.

"The transition from coal toward cleaner sources in developing nations is under way," said Ethan Zindler, head of Americas at BNEF. "But like trying to turn a massive oil tanker, it takes time."

Zhao Changwen, director-general of the Department of Industrial Economy at the State Council's Development Research Center, said: "Energy transition is a medium-to long-term mission, and the fundamental driving force is technological progress, which will not happen overnight. Therefore, we must not have unrealistic expectations about energy transition.

China has been accelerating its clean energy shift by optimizing and improving its energy mix. Data from the National Bureau of Statistics showed that in the early years, raw coal accounted for 96.3 percent of total energy production while other types of crude oil accounted for 0.7 percent, and hydropower for 3 percent.

Over the past 70 years, the share of raw coal output has continued to decline, falling to 69.3 percent in 2018. The share of crude oil output steadily increased to 24.8 percent in 1976, and then gradually declined to 7.2 percent in 2018. The proportion of natural gas output increased from 0.1 percent in 1957 to 5.5 percent in 2018. The proportion of primary electricity and other clean energy output surged from 3 percent in 1949 to 18 percent in 2018, according to the NBS.

Since the 11th Five-Year Plan (2006-10) period, with deepening energy reform, energy consumption has been further controlled. Data from the NBS showed that from 2005 to 2018, the average annual growth of total energy consumption was 4.5 percent, 1.5 percentage points lower than the level between 1980 and 2005. The growth rate of coal, petroleum and other traditional energy consumption slowed down. From 2005 to 2018, coal consumption grew at an average annual rate of 3.7 percent, and the average annual growth rate dropped by 2 percentage points from 1980 to 2005.

Though coal continues to be a major ingredient of the overall energy consumption, it has been showing a downward trend, from 94.4 percent in 1953 to 59 percent in 2018, according to the NBS. The proportion of oil consumption has increased from 3.8 percent in 1953 to 18.9 percent in 2018. Natural gas consumption rose from the lowest 0.1 percent in 1957 to the highest 7.8 percent in 2018. Primary electricity and other clean energy consumption increased from 1.8 percent in 1953 to the highest 14.3 percent in 2018, according to the NBS.

During the same period, the average annual growth rate of oil consumption was 5 percent, 0.4 percentage point lower than the level from 1980 to 2005. The consumption of clean energy such as natural gas, hydropower, nuclear power has grown rapidly, with the consumption of natural gas growing 14.8 percent on average every year.

Xu Bin, a professor at China University of Petroleum, said that China's energy transition has been progressing steadily, thanks to technological advancement and the transformation of energy utilization.

He noted that in the next step, China should continue the transformation from resource-driven to innovation-driven. "The country should accelerate the improvement of independent innovation capabilities and industry technology standard leadership capabilities, and make innovation the driving force for development, in order to reduce renewable energy investment and operation and maintenance costs. It is necessary to do extensive research and forge important breakthroughs in core technologies."

According to BNEF, China ranked fourth in terms of the overall potential for clean energy development. The top three countries were India, Chile and Brazil.

 

Engineers check equipment at a photovoltaic power station in Tianchang, Anhui province, on Sept 2. SONG WEIXING/FOR CHINA DAILY

 

 

 

 

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2019-12-06 00:00:00
<![CDATA[Microsoft keen to tap industrial internet potential in China]]> http://www.chinadaily.com.cn/kindle/2019-12/06/content_37528057.htm Microsoft announced on Thursday that it will start to offer in China its smart manufacturing solutions, jointly provided by UK-based accounting and professional services firm Ernst& Young. This is part of the US tech giant's efforts to tap into opportunities brought by the country's industrial internet.

The product is based on Microsoft Azure, the company's cloud service, and is able to gather and analyze a huge amount of IoT, or internet of things, data to further offer management solutions to companies.

"As China moves fast toward digitalization, especially in manufacturing, we hope to leverage our global insight and localized capabilities to speed up the process," said Horace Chow, chief operating officer of Microsoft China.

The new move also reflects a broader push from multinational enterprises to gear up efforts in the industrial internet as the sector gains momentum in China. The industrial internet refers to a network of linked advanced machines with internet-connected sensors and big data analytics.

"The industrial internet is paying off in the country, especially by helping reduce costs, improving efficiency and service quality and creating new value," said a white paper published jointly on Thursday by Microsoft and the Contemporary Service Alliance for Informatization and Industrialization, which is under the Ministry of Industrial and Information Technology.

Equipment and product management, operations optimization and social resources collaboration are the top three application scenarios of the industrial internet in the nation.

"Currently, China has 50 industrial internet platforms with regional or sector-wide influence. An increasing number of applications are being commercialized, with each platform owning more than 1,900 apps on average," said Chen Zhaoxiong, vice-minister of industry and information technology in October.

To tap into such demand, Microsoft has also cooperated with manufacturing leaders including ABB, Honeywell and Rockwell Automation to bring the latest industrial internet solutions to China.

"It is not fair to say that China's industrial internet application is already the world's top, but it is quickly transforming the manufacturing industry, which creates huge opportunities," said Chow from Microsoft China.

Earlier data showed that Microsoft has served more than 120,000 enterprise clients with its Azure cloud services in China. And, over 1.8 million users at 30,000 enterprise clients have adopted the company's Office 365 services.

Its cloud service, Dynamics 365, officially became available in China starting May 6, which means that local companies can access all of Microsoft's three pillar cloud services to accelerate their digitalization efforts.

 

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2019-12-06 00:00:00
<![CDATA[Pig farming gets a welcome boost]]> http://www.chinadaily.com.cn/kindle/2019-12/06/content_37528055.htm Traditional pig industry players and agricultural companies are increasing their investments in pig breeding and expanding production, in the wake of a pork shortage in China following an outbreak of African swine fever.

The swine fever has caused a shortage of more than 10 million metric tons of pork, or at least 20 percent of China's total pork output this year. Pork accounts for more than 60 percent of China's meat consumption.

New Hope Group, a major Chinese private company involved in animal husbandry and food processing, said it would build nine pig-breeding projects with an investment of 8.95 billion yuan ($1.28 billion). Among which, 20 percent of the funds will come from the company itself, and the rest will be from loans, according to a company statement on Wednesday.

Sichuan-based New Hope will build eight facilities in the Guangxi Zhuang autonomous region, in addition to Hubei, Hebei, Hunan, Shandong and Liaoning provinces. Together, the facilities are expected to foster 6.7 million pigs annually.

In addition, the company will set up a new facility in the Philippines, which will breed 165,000 pigs a year. Those will also drive New Hope to produce an additional 2 million tons of feed, it said in the statement.

"The projects will help New Hope raise its market share in advantageous breeding resources, thus increasing the company's competitiveness and ability to profit. They will also help promote the regional industrial layout and increase the local supply of pork," the statement said.

The Shenzhen-listed New Hope achieved sales revenue of 69.06 billion yuan last year, up 10.38 percent year-on-year. Its net profit reached 1.7 billion yuan, falling 25.23 percent over the previous year. The number of pigs it bred last year remains among the top four nationwide, according to its earnings.

In November, New Hope announced its board had approved plans to acquire two pig-breeding companies, which will cost nearly 1 billion yuan.

Guangdong-based Wens Foodstuff Group Co Ltd, China's largest pig breeder, said last week that it will purchase a 41.22 percent share of Henan-based pig breeder Xinda Muye Group with 350 million yuan in cash. Wens will also invest 460 million yuan into the company, which will increase its stake in the company to 61.86 percent.

The acquisition will help Wens improve its layout in China and quickly expand production, as Xinda boasts rich sow-breeding experiences, Wens said.

Muyuan Group, a Henan-based major pig breeder, said on Sunday that it plans to establish six sub-affiliate companies in Hebei, Henan, Shandong, Jiangsu, Anhui, and Hubei provinces, with an investment of 140 million yuan.

"We are gradually expanding the scale and we need to improve our industrial chain that integrates the processing of feed and pig breeding. The setup of sub-affiliates will help us increase production scale and market share and achieve higher profits," Muyuan said in a statement.

Zhu Zengyong, a pork analyst at the Chinese Academy of Agricultural Sciences, said it would take about six months for a recovery in the pig production capacity and breeding of new pigs.

 

An employee conducts checks on pigs at a breeding facility in Deyang, Sichuan province. LI MENGXIN/XINHUA

 

 

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2019-12-06 00:00:00
<![CDATA[Frozen 2 merchandise casts a magic spell on young Chinese consumers]]> http://www.chinadaily.com.cn/kindle/2019-12/06/content_37528063.htm Walt Disney Animation Studios' Frozen 2, the sequel to its 2013 animated blockbuster, has cast a spell on product categories like toys, apparels and makeup items, and has recreated the magic of Arendelle for Chinese retailers due to resurgent demand for movie merchandise products from young consumers.

Frozen 2, which hit Chinese theaters on Nov 22, has so far grossed more than 662 million yuan ($93.9 million) in box-office receipts in the country, with the number climbing steadily.

Disney's 2013 hit Frozen grossed $1.3 billion at the box office and more probably through its consumer product and licensing businesses.

According to Disney China, Frozen 2 merchandise was extremely popular at the Disney Store China in November. The dress worn by Elsa, the protagonist of the movie, was already among the top five selling items on the store weeks ahead of the movie's opening on Nov 22. Besides kids wear, fashion accessories such as the Frozen 2 brooch and the woolen scarf created by the China team were well received by young adult female consumers.

The excitement for Frozen 2 consumer products has also been intense in online platforms. During the 24-hour period on Nov 11, a shopping occasion created by Alibaba's Tmall platform, every second 59 Disney products were sold online including Disney's self-owned retailing platforms or franchised products. Many of them were Frozen-themed products.

Consumer products are part of the Walt Disney Company's businesses that bring stories and characters to life through physical products and digital experiences.

In October, McDonald's China said it has joined hands with Disney to launch themed Happy Meals based on Disney movies, with the first batch of free toys featuring Frozen 2. The toys include five beloved characters-Elsa, Anna, Kristoff, Olaf and Svan. Meanwhile it has also rolled out Frozen-themed parties for restaurant goers.

According to McDonald's, the collaboration with Disney is very successful given the popularity of the Frozen-themed toys among children since its release.

Miniso, a Guangzhou-based low-cost retailer that has 3,500 chain stores worldwide (2,500 in the country), has developed more than 70 kinds of products including skin care, make up, accessories and digital products in its Frozen 2 collection.

Most of these products are targeted at the generation Z consumers, particularly female consumers, with affordable prices.

Wang Guangyong, director of branding at Miniso, told China Daily that many of the products featuring the Frozen theme have sold out or are extremely popular items on social media.

Disney's well-known IP has played a big role in improving in-store traffic as well as in boosting sales, he said. They will continue to work with Disney on its other world famous IPs including Mickey Mouse, especially in the upcoming Lunar New Year.

Jason Yu, general manger of Kantar Worldpanel China, said the popular IP has helped boost consumption demand among young consumers, citing the success of Peppa Pig merchandise.

Commenting on the number of new dresses Princess Elsa has changed in the new film, a top influencer Gogoboi wrote, jokingly, in an article, "Parents, prepare to tremble." But retailers are definitely not rushing into the unknown.

 

A visitor takes a snapshot at a Frozen 2-themed exhibition in a shop in downtown Shanghai. WANG GANG/FOR CHINA DAILY

 

 

 

 

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2019-12-06 00:00:00
<![CDATA[Belt and Road Initiative brings more imports to small commodity hub]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527850.htm HANGZHOU-In one section of the massive Yiwu International Trade Market in East China's Zhejiang province, there is a large variety of imported goods, from Spanish wine to Czech crystal glasses and Russian milk.

"Ninety percent of our goods are imported through the China-Europe freight train service," said Zhang Ruizhi, manager of the exhibition hall of Zhejiang Mundiver Import and Export Co Ltd at the market.

Many imported commodities such as wine and sunflower seed oil are very popular among Chinese consumers who are upgrading consumption, said Zhang.

"The China-Europe train service helps shorten the transportation cycle, allowing us to keep a low inventory," said Zhang.

It takes 30 to 40 days to take Spanish wine to China by sea, and now the train service can slash the transportation time in half, said Jin Haijun, general manager of Zhejiang Mundiver.

Over the past five years, the company has imported more than 200 standard containers of goods through the train service linking the Chinese small commodity hub of Yiwu with Spain, the Czech Republic, Iran, Britain and Central Asia.

The city of Yiwu has set up five logistic distribution centers and eight warehouses in cities along the Belt and Road, including Madrid, Duisburg and London, to facilitate trade.

"Over 10 Spanish wine brands we work with have lauded China's opening-up policy, including the Belt and Road Initiative, hoping to bring more goods to the Chinese market," said Jin.

The China-Europe train service not only sends Chinese goods to Europe but also brings back overseas goods to Yiwu where they are then sold to many parts of the country, said Liu Mingming of the Yiwu Tianmeng Industrial Investment Co Ltd, a private operator of the service.

Yiwu is a beneficiary of the Belt and Road Initiative, said Lin Yi, secretary of the Yiwu municipal committee of the Communist Party of China. "The initiative has sped up the development of the China-Europe freight train service and greatly promoted the international trade for Yiwu," said Lin.

"Imports are still our weakness," said Lin. "The city not only sells to the whole world but also aims to buy from the whole world."

Yiwu, dubbed the "World's Supermarket," receives more than 550,000 overseas buyers and sells commodities to more than 210 countries and regions every year.

As the city makes the trade development transition, the China-Europe freight train service is expected to bring more imported goods to Yiwu in the future, said Liu.

The freight trains made 168 round trips in 2017 and 320 round trips in 2018, and are expected to make 500 round trips this year, said Liu, adding that the rapid expansion of the freight train service is a result of the new progress made by the Belt and Road Initiative.

 

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2019-12-05 00:00:00
<![CDATA[Ministry plans slew of tax, fiscal measures to boost border trade]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527896.htm China has decided to adopt a slew of measures, including tax and fiscal policies, to enhance the innovation and development of border trade, according to the Ministry of Commerce.

Implementation of the measures aims to give full play to the role of border trade in stabilizing foreign trade and to ensure that border trade achieves actual results like facilitating employment, improving local people's livelihood, poverty alleviation, enhancing bilateral relations and furthering domestic ethnic unity, the ministry said on its website on Wednesday.

The measures include value-added tax exemption policy and simplified declaration process for small-scale border trade exports at pilot areas, and properly increasing amounts of local government bonds in border areas, to support infrastructure construction in border (cross-border) economic cooperation zones and key development and opening-up pilot zones.

Construction land permissions will be granted to border (cross-border) economic cooperation zones on a priority basis, and the authorities will also encourage development of "internet plus border trade", to reduce transaction costs, broaden border trade channels, and expand border trade scale, as well as the establishment of e-commerce platforms at border regions to promote new businesses and models for border trade.

Border marketplaces will be encouraged to improve their functions for commodities display, marketing, wholesale, retail, and distribution, and clusters of trade centers that respectively trade on special products from neighboring countries and products with Chinese characteristics will be cultivated, based on existing key border trade commodities marketplaces.

Besides, the law on the administration of barter trade between border residents will be revised, to clarify barter trade scope, forms, transaction subjects, place and modes, and supervision method, and a negative list on imports of barter trade will be published.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said border trade plays an important role in sustaining good trade relations between China and neighboring economies, and the Chinese authorities' new move reflects an intention to update the administration and support mechanisms to adjust to new circumstances to facilitate healthy development of border trade.

"The new measures and policies have given full consideration to development of new technologies and business models, as well as the continuously growing border trade scale between China and neighboring economies, under the Belt and Road Initiative," he said.

Border trade is crucial for bilateral economic and trade exchange to achieve a win-win situation, although China's border trade is not as strong as maritime trade, because border trade often relies on surface trade while China's border areas with other countries are often tremendously rugged with mountains, he said.

The new policies and measures are set to enhance development of border trade, as they are made on the basis of clusters of research and studies in border areas, and deep communications among related government departments, he said.

He spoke especially highly of the introduction of a negative list on barter trade imports, the special permission arrangement on land used for border (cross-border) economic cooperation zones, and the consideration of internet-based business channels and models.

He also suggested the development of border trade should be coordinated with inland markets, so that border trade will become a bridge connecting foreign markets with inland markets.

 

Consumers buy Russian goods at a shop in Manzhouli, a border city in the Inner Mongolian autonomous region. Xinhua

 

 

 

 

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2019-12-05 00:00:00
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527895.htm GOVT AND POLICIES

PBOC skips open market operations

China's central bank, the People's Bank of China, skipped open market operations via reverse repos on Wednesday, citing abundant liquidity in the banking system. The system posts a relatively high level of liquidity at present, the People's Bank of China said in an online 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. China vowed to keep its prudent monetary policy "neither too tight nor too loose" while maintaining market liquidity at a reasonably ample level in 2019.

Logistics sector sees robust expansion

China saw active logistics activities in November due to growing market demand, industrial data showed. The Logistics Performance Index stood at 58.9 percent for last month, increasing 4.7 percentage points from October, the highest level so far this year, according to the China Federation of Logistics and Purchasing. A reading above 50 percent indicates expansion, while one below 50 percent reflects contraction. The federation attributed strong logistics growth to a warming global trade environment and a robust e-commerce market.

COMPANIES AND MARKETS

CRRC unveils new metro train in Sydney

The China Railway Rolling Stock Corp (CRRC), the world's largest rolling stock manufacturer, unveiled its latest metro train in Australia's largest rail event in Sydney on Tuesday. The new metro train, featuring a world-leading intelligent control system, light weight construction and passenger information system, will provide a safe, efficient and green service, said Deputy director of the CRRC National Engineering Research Center of Railway Vehicles Hong Haifeng at the AusRail, an annual rail event hosted by the Australasian Railway Association. According to Hong, the new metro train was fully automatically operated, and capable of starting and stopping, controlling the doors and handling emergencies autonomously.

Didi expands to 13 more Chilean cities

China's ride-hailing giant Didi kicked off operations in 13 more Chilean cities on Tuesday, bringing the total to 23. The company's expansion means the service is available from north to south, with five northern cities of Arica, Iquique, Calama, Copiapo and Ovalle and seven southern cities of Curico, Chillan, Los Angeles, Valdivia, Osorno, Coyhaique and Punta Arenas, as well as the central city of Los Andes, now within DiDi's sphere of operations. DiDi's ride-sharing and taxi services have been well-received in the South American country, enabling the company's rapid expansion, said Simeng Wang, general manager of Didi Chile.

Trade volume at border port in Yunnan bustling

The cargo volume at southwestern China's Tianpeng port, located on the border of Yunnan province and Vietnam, totaled 63,095 metric tons in the first three quarters of 2019, up 22.86 percent year-on-year. From January to September, trade value at the port amounted to $46.77 million, expanding 19.71 percent year-on-year. Border authorities recorded a total of 120,302 inbound and outbound visits in the first nine months, a year-on-year increase of 4.67 percent, according to the port's administrative office.

Ryanair handles 11m passengers in Nov

A total of 11 million passengers were handled by Ryanair Group in November 2019, up 6 percent compared with the same month last year, said the airline on Tuesday. Of all the passengers handled by the group in the month, 10.5 million were carried by Ryanair while another half a million were contributed by its subsidiary Lauda, an Austria-based budget airline acquired by Ryanair last year, it said. Lauda posted a 67-percent increase in its November passenger numbers while Ryanair only registered a 4-percent growth in the month, according to the figures released by the airline.

Maruti Suzuki to raise car prices from next year

Maruti Suzuki India will raise prices of its vehicles across various models in January to overcome the adverse impact of input costs, said the company statement to the Bombay Stock Exchange, on Tuesday. It has become imperative for the company to pass on some impact of the additional cost to customers through a price increase across various models in January 2020, the statement said. Indian automobile sector has been going through low demand during the current fiscal year with slight revival seen during the festive season in October.

AROUND THE WORLD

Australian economy sees sluggish Q3 growth

Australia's economy has grown at a lackluster pace in the third quarter of 2019, with official figures on Wednesday showing a mere 0.4 percent rise over the three months to September. Falling short of the 0.5 percent increase predicted by economists, the Australian Bureau of Statistics National Accounts data revealed that over the year, the rate of growth Down Under remains well below the long run average at just 1.7 percent. While net exports, mainly from the mining sector, accounted for 0.2 percent to the overall growth rate, government spending on services such as disability, health and aged care was by far the largest contributor domestically.

South Korea's revised GDP rises by 0.4%

South Korea's revised gross domestic product for the third quarter grew 0.4 percent on a quarterly basis, central bank data showed on Tuesday. Real GDP, adjusted for inflation, rose 0.4 percent in the July-September quarter from three months earlier, unchanged from the preliminary figure, according to the Bank of Korea (BOK). From a year ago, the real GDP gained 2.0 percent. During the second quarter, the real GDP increased 1.0 percent. The BOK lowered this year's growth outlook for the economy from 2.2 percent to 2.0 percent last week. Private consumption added 0.2 percent in the third quarter from the previous quarter, with facility investment rising 0.6 percent.

US crude oil inventories fall on weekly basis

The American Petroleum Institute on Tuesday reported a decrease of 3.72 million barrels of crude oil in the US crude oil inventories for the week ending Nov 29. API reported a build of 3.639 million barrels of crude oil inventories for the previous week ending Nov 22, and the US Energy Information Administration (EIA) reported an increase of 1.6 million barrels. Oil prices ended on a mixed note Tuesday as traders awaited a meeting by the world's major oil producers to see their next move on output cuts. The West Texas Intermediate (WTI) for January delivery increased 14 US cents to settle at $56.10 a barrel on the New York Mercantile Exchange.

Motorcycle exports increase in Indonesia

Exports of Indonesia's motorcycles from January to October grew the highest pace in five years amid favorable prices and improved quality, media reported on Tuesday. The Indonesian Motorcycle Association recorded that the shipment of the products overseas expanded 34 percent to 682,325 units in the first 10 months this year. "This is because the price of motorcycles produced by Indonesia is very competitive and complies with the international standard," said Sigit Kumala, head of the association's commercial unit. On domestic sales, Sigit expected the sales of the products would start drifting higher before the end of the year.

S. Africa growth wanes as mining output falls

South Africa's gross domestic product (GDP) growth rate decreased by 0.6 percent in the third quarter of 2019, Statistics South Africa (Stats SA) said on Tuesday. The largest negative contributors to growth in GDP in the third quarter were the mining, manufacturing and transport, storage and communication industries, the agency said. The mining and quarrying industry decreased by 6.1 percent, contributing-0.5 percentage point to GDP growth. Decreased production was reported for mining of PGMs (platinum group metals), coal and iron ore. Manufacturing industry decreased by 3.9 percent, contributing-0,5 percentage point to GDP growth. Decreased economic activity was reported in basic iron and steel, nonferrous metal products, metal products and machinery; and petroleum, chemical products, rubber and plastic products.

Sri Lanka aims to narrow fiscal deficit

Sri Lanka aims to narrow its fiscal deficit from 7 percent of GDP in 2019 to 4 percent of GDP in the medium term, a statement by the Ministry of Finance said on Tuesday. The Finance Ministry identified dips in government revenue due to slow growth and election-related expenditures as reasons for the higher-than-expected fiscal deficit of 7 percent of GDP in 2019. The statement said the government would pursue a sustainable reduction of the fiscal deficit to 4 percent of GDP in the medium term.

Mongolia central bank boosts gold purchases

Mongolia's central bank announced on Tuesday that it has bought a total of 14.4 metric tons of gold from legal entities and individuals in the first 11 months of this year. As of November, the bank's average gold purchase price was 128,002.45 Mongolian tugriks ($47) per gram, the Bank of Mongolia said in a statement. Purchasing gold is said to be one of the key instruments for the Asian country's central bank to increase its official foreign exchange reserves. The Bank of Mongolia has been striving to ensure economic stability by consistently increasing its foreign currency reserves.

 

 

 

 

 

 

 

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2019-12-05 00:00:00
<![CDATA[Online influencers taking center stage]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527894.htm While the growth of digital marketing budgets in China will likely slow because of downward growth pressure, a report says social media marketing will remain in a sweet spot next year with online influencers taking center stage in the thriving social media scene.

Those are among the key findings of the latest report on China Digital Marketing Trends 2020, which was released during the Global Digital Marketing Summit in Shanghai earlier this week.

Based on a survey of 221 brands spanning more than 20 industries, the study compiled by data technology companies Miaozhen Systems and AdMaster revealed that digital marketing spending is forecast to surge 14 percent year-on-year in 2020.

That is 6 percentage points lower than last year and marks the first spending slip in three years since annual tracking began in 2017.

To be more specific, only 18 percent of surveyed marketers said they plan to increase their budget by 30 percent and more in the coming year, a staggering 11 percentage points lower than a year ago. Almost 60 percent reported their digital marketing budget will grow less than 10 percent.

Two reasons account for the change: macroeconomic pressure and the already-fair share of digital marketing in the overall budget basket, said Maggie Wang, president of AdMaster, a data marketing technology firm and a key publisher of the report.

"Among the majority of the companies we've spoken to, digital marketing budgets account for somewhere between 30 percent to 60 percent of the entire marketing expenditure, which already represents a considerable proportion," Wang said.

Three quarters of the newly allocated marketing budgets will be placed on mobile devices, with only 9 percent going to personal computers.

At the same time, average growth in social media budgets is projected to hit 15 percent, with online influencers, or Key Opinion Leaders in the Chinese online community lexicon, remaining in the driver's seat.

"Using top-tier influencers such as Justin Li Jiaqi or Viya Huang for brand endorsement will continue to be the trend in 2020. But it's not necessarily that the current popular KOLs will prevail, as Chinese internet users are generally accustomed to changes," Wang said.

Brands are also waking up to the fact that they need to have a firm grip of their own traffic and turn clicks into cash. More marketing dollars will likely flow into so-called private online domains, such as indigenous online stores and virtual followers' clubs, the report said.

That is what propelled appliances manufacturer Joyoung to make livestreaming a "business imperative." That means a compulsory eight hours livestreaming per month is assigned to each employee in the marketing section, said Xu Nan, the company's marketing director.

Her remarks echoed a report which revealed that 53 percent of surveyed marketers said they will place more emphasis on short videos and livestreaming for better engagement with customers and the creation of original and compelling content.

"Livestreaming is on the radar of many brands to navigate China's fast-changing consumer market," said Zhao Yuanyuan, operating chief of Taobao Live, the livestreaming unit of e-commerce juggernaut Taobao. "It's like re-creating the TV shopping programs in the mobile internet age."

Another finding is that artificial intelligence will exert a bigger impact on smart marketing through a more thorough and stratified analysis of user preferences based on algorithms that decode customer activities.

"With the advent of 5G, the internet of things and AI, the distinction between online and offline will become increasingly obsolete, making omnichannel and multimedia marketing (in the forms of video) a business necessity," AdMaster's Wang explained.

 

Employees of a digital marketing company converse during an internet exhibition in Beijing. A Jing / For China Daily

 

 

 

 

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2019-12-05 00:00:00
<![CDATA[Bright spots seen in bearish investment market]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527855.htm China's investment market is witnessing its "coldest winter" with total funds raised falling by 10 percent on a yearly basis to 1.08 trillion yuan ($153 billion) during the first 11 months of this year, with some industry experts opining that the drought is not as bad as predicted.

According to a report from venture capital and private equity research firm Zero2IPO, net investment in the domestic market during the first 11 months was 730 billion yuan, down 29.5 percent on a yearly basis.

The information technology, internet and medical care sectors were the major beneficiaries with investments of 135.7 billion yuan, 105.5 billion yuan and 103.2 billion yuan, the report said.

"Though the funds raised and the investment amount have fallen, the decline is lesser than expected," said Ni Zhengdong, chairman of Zero2IPO, at the 19th China Venture Capital & Private Equity Annual Forum on Tuesday.

Ni said it has been a good year for VC and PE investors to cash out through initial public offerings and said these investors have supported two-thirds of the total 287 IPOs both at home and abroad, up 60.5 percent year-on-year.

Also, State-owned entities invested in 13.5 percent of the total 29,000 private equity funds. During the first 11 months this year, State-owned funds have invested or subscribed to 72.4 percent of the total funds raised, Ni said.

"China's equity market is experiencing a big 'physical examination' this year but the sector needs such adjustments for the survival of the fittest," he said.

The report also pointed out that investment was stronger in machinery manufacturing, IT and medical care industries, up by 64.1 percent, 34 percent and 10.1 percent respectively.

"The benefits brought by mobile internet have gone and the growth rate of the digital economy is also slowing down in the country. The next investment opportunity will come from back-end innovations driven by technologies," said Kaifu Lee, chairman and CEO of Sinovation Ventures.

Back-end industries, according to Lee, refer to mostly traditional industries that need tech for transformation, such as enterprise services, factory supply chains, medical care and logistics.

Ying Wenlu, founding partner of investment firm Addorcapital, said technology will be the buzzword for the next decade of investment in China.

"Industrial upgrade and supply chain restructuring can be potential gold mines, especially for fundamental materials and core industrial components," he said.

He said that next year would be challenging for both startups and investors due to trade friction, deepening of reforms, industrial upgrades and credit issues of industries entering a key period.

To tackle the challenges, Ni Zewang, chairman of Shenzhen Capital Group, strongly recommended that more investment firms should team up than compete for investments so as to improve capital efficiency.

"Next year, we will beef up our presence in foreign markets and scout for new growth engines," he said.

 

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2019-12-05 00:00:00
<![CDATA[Policy focus to be on stable growth, lower risks in 2020]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527877.htm Macroeconomic policies in China are expected to strike a balance between growth stability and risk prevention next year, with the overall GDP growth during the period expected to be around 6 percent, economists said on Wednesday.

The comments came ahead of the much-anticipated Central Economic Working Conference, a high-level meeting that will set the policy tone for next year, later this month and discussions on whether the GDP target should remain above 6 percent or be allowed to slip further.

Unlike a decade ago, more efforts are certainly needed to sustain a growth rate of 6 percent and above, including an expansionary fiscal policy and a higher tolerance of debt growth as investment efficiency has weakened, said the economists.

The 2020 GDP growth rate target may be set at "around 6 percent", compared with the wording of "from 6 percent to 6.5 percent" in 2019, said Lu Ting, chief economist in China for Nomura Securities.

To support such a goal, the fiscal deficit ratio-the budgeted deficit to the total GDP ratio, should be raised to 3 percent next year from the existing 2.8 percent, while the monetary policy will have even less room for further easing, said Lu.

More tax and fee reductions are likely next year as these measures are an important ingredient of the fiscal policy. But the targeted amount will be set lower than that for 2019, given the fiscal spending difficulties faced by some local governments, experts close to the finance ministry told China Daily. The total tax and fee cuts will exceed 2.3 trillion yuan ($326 billion) this year, Finance Minister Liu Kun said earlier.

Lu from Nomura said it is not necessary for the government to maintain a GDP rate higher than 6 percent, and the viewpoint is different from that of Yu Yongding, a senior economist with the Chinese Academy of Social Sciences. Yu said in a recent article that the government's top priority should be to arrest the decline in GDP growth, as falling growth will worsen the financial stability indicators.

Uncertainties over China-US trade talks and external headwinds will push the policymakers to focus more on maintaining stable growth, unlike the last two years when risk prevention was the priority, said Mao Zhenhua, founder and president of China Chengxin International Credit Rating Co Ltd.

But maintaining a higher growth rate would have lateral side-effects like a fast expansion of credit, the economists said. They said that household debt has accelerated during the first three quarters of this year.

"China has demonstrated a strong willingness toward de-risking," said Nicholas Zhu, vice-president and senior credit officer at Moody's Investors Service. Zhu said global credit ratings agencies are keeping a close watch to see if financial leverage increases due to the stimulus measures for curbing downside pressures on the economy.

Yi Gang, the central bank governor, said in a recent article that China will maintain a prudent monetary policy, although the world's economic downturn will likely stay for a long time.

In the article, Yi said that economic development should not be judged only on the basis of GDP growth. He said the nation needs to be wary of a contraction in credit in some areas as downward pressure increases.

The country is still in the process of shifting to a consumption-led economy. Consumption contributed over 60 percent of China's GDP growth in the first three quarters of this year. Besides, the services industry is expected to contribute more to growth, according to the National Bureau of Statistics.

As a result, the services industry will absorb massive labor force, said Zhu from Moody's. "Despite China's economic growth slowdown, very few people have actually lost their jobs. The country is not under high stress of unemployment because a large number of job opportunities are transferring from the manufacturing sector to the services industry amid economic transition in China."

 

 

 

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2019-12-05 00:00:00
<![CDATA[Xiaomi follows Alibaba and Tencent with internet finance services in India]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527876.htm Xiaomi Corp has launched a personal loan service in India aimed at young professionals and millennials, as the Chinese smartphone vendor looks to consolidate its presence in the country's fast-growing internet finance market.

Xiaomi's move comes after Chinese tech peers like Alibaba Group Holding Ltd and Tencent Holdings Ltd have already established a beachhead in the India internet finance sector via investments.

It is also the latest push by Xiaomi, which has been the top smartphone vendor in India for nine consecutive quarters, to leverage its sizable local user base to offer more internet services.

Xiaomi said it is launching Mi Credit, a marketplace for digital lending, which offers users credit between 5,000 Indian rupees ($70) and 100,000 Indian rupees at low interest rates.

It has partnered with a number of local startups, such as Bengaluru-based ZestMoney, CreditVidya, Money View, Aditya Birla Finance Ltd and EarlySalary, to determine who should get credit and then finance it, according to a report by tech news website Tech-Crunch.

Xiaomi said earlier that it has shipped more than 100 million smartphones in India. Xiaomi has been operating its lending business in its home turf for some time. In mid-2018, its financial services' lending business stood at a loan book of $8 billion with $2 billion in outstanding balances.

Xiaomi is not the first Chinese company that is eyeing the Indian internet finance market. Ant Financial, the finance arm of Alibaba, has invested in Paytm, the largest mobile payment platform in India. Tencent has also reportedly bought a minority stake in Policybazaar.com, an Indian online insurance aggregator.

The rising enthusiasm in India came amid the rapid penetration of smartphones in India, serving as a sound digital foundation to support a booming internet finance market. The digital lending sector alone in India is expected to be worth about $1 trillion by 2023, according to market research company Boston Consulting Group.

Li Chao, an analyst at Beijing-based research firm iResearch Consulting Group, said Xiaomi can pre-install internet finance apps on its smartphones, which is the biggest advantage of the company.

The millions of current users of its handsets are also a large potential consumer group for its lending business. But it still faces mounting competition, Li said.

Xiaomi's adjusted net profit grew 20.3 percent year-on-year in the third quarter of this year, to 3.5 billion yuan, while total revenue rose 5.5 percent year-on-year to 53.7 billion yuan ($7.6 billion). Its overseas business has continued to grow rapidly, with revenue rising 17.2 percent year-on-year to 26.1 billion yuan and accounting for 48.7 percent of the total revenue.

 

Pedestrians walk past a Mi home mobile store in Kolkata, India. China Daily

 

 

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2019-12-05 00:00:00
<![CDATA[Favorable policies increase access to medicines and spur innovation]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527872.htm China's favorable policies in accelerating drug access and encouraging innovation over the past few years have promoted the research and development of new medicines, helping build a healthy drug ecology in the country, a senior executive of Gilead Sciences Inc said.

The California-based biopharmaceutical firm got approval of seven innovative medicines from the National Medical Products Administration within two years-an unexpectedly good result for international biopharmaceutical firms.

"During the past three years, China experienced substantial changes in drug access, which greatly stimulated the R&D process of new medicines," said Rogers Luo, vice-president of Gilead and general manager of Gilead China.

He noted that badly needed medicines already approved overseas are now given the green light in China. They can get drug access first and submit clinical data later on, enabling patients to immediately get the much-needed drug in the first place.

"Once new medicines got the approval, the next step is medical insurance," he said.

On Nov 28, the National Healthcare Security Administration announced the new drug list included in China's national medical insurance catalog, and four of Gilead's innovative medicines were in the list, including an anti-AIDS drug, an anti-hepatitis B drug, and two anti-hepatitis C medicines.

"Through actively engaging in drug price negotiation, we hope to bring international innovative products to Chinese patients with lower prices, making them enjoy the fruit of government drug price negotiation, as well as the value of global innovative technology. In addition, Gilead will join efforts with related departments and social organizations to enhance the healthcare level of the Chinese public," Luo said.

Gilead is a major US biotechnology company focusing on the development of antiviral medicines effective in the treatment of the HIV, which causes AIDS, and hepatitis, a major liver disease. The company is based in Foster City, California.

Using the four medicines that have entered the national medical insurance as an example, Gilead will promote more products to enter the catalog to increase drug accessibility, and enable more patients in China to get access to good medicines, the company said.

A total of 70 new medicines will be included in the national medical insurance catalog with their prices slashed by an average of 60.7 percent, the NHSA said.

After the price reduction and medical insurance reimbursements, the financial burden on patients will be reduced by over 80 percent, said Xiong Xianjun, a senior NHSA official.

Chen Qiaoshan, a medical analyst at Beijing-based market consultancy Analysys, said: "The new medicines able to enter the national medical insurance catalog are recognized in terms of drug quality. In addition, the fact that they will be offered in a great amount demonstrated the strong productivity of the bid winners."

"We appreciate the efforts that the Chinese government has made these years in building a healthy drug ecology," Luo added.

He noted that the national centralized procurement pilot program launched in 2018 in four municipalities and seven local cities, better known as "4+7", is also a blessing for both biopharmaceutical companies and patients.

"To a large extent, the policy will change the pattern of China's drug market, in that it encourages innovation, enabling biopharmaceutical firms to focus on producing medicines that contain more R&D value. It benefits the public eventually, promoting the sustainability of the healthcare sector," Luo said.

Gilead said that in the future, it plans to increase its investment in China as the country is a major market for hepatitis, and the unmet demand is huge. It will even consider manufacturing its products in China locally.

"We are confident about the Chinese market," Luo said.

Data from the Chinese Center for Disease Control and Prevention showed that at this time, there are roughly 93 million people in China infected by hepatitis B virus, and more than 1 million new cases of viral hepatitis occur each year. China also spends more than any other country on the treatment of hepatitis.

 

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2019-12-05 00:00:00
<![CDATA[Digital experience economy to unleash huge opportunities]]> http://www.chinadaily.com.cn/kindle/2019-12/05/content_37527893.htm The digital experience economy will bring huge market opportunities for China and the outside world, as technology has profoundly affected consumer behavior and raised the expectations of potential customers, a white paper said on Wednesday.

The term digital experience economy refers to a broad range of economic activities that drive systematic changes in all industries through digital transformation, with data as the key production factor and next-generation information technology as the cornerstone, the research paper said.

China's digital experience economy market has been expanding, with the scale of information consumption constantly growing, according to the White Paper on Digital Experience Economy Development.

The research report was conducted by the China Center for Information Industry Development and AbobeInc, a US-based computer software company. The paper was released on Wednesday in Beijing.

Liu Fawang, a deputy chief engineer with the China Center for Information Industry Development, which is a leading Chinese think tank, said in the digital age products and services are optimized while consumers have higher requirements for their experiences.

"The global digital experience economy is becoming a new high ground for technology and industry competition. China is a major player in terms of this," Liu said at a news conference.

Li Yongjian, a researcher at the National Academy of Economic Strategy under the Chinese Academy of Social Sciences, said the digital economy has a pillar position in the national economy, and the digital experience has greatly affected the economic and social life of people.

"The digital experience economy has brought new types of trust and partnership. Social media has become one of the most important parts of their daily needs," Li said.

According to the report, mainstream technologies in a digital experience economy should feature real-time feedback, personalized experience based on data mining, and scalability for providing quality experiences.

It noted that companies are facing challenges in adapting to the constantly evolving digital experience economy. To address the difficulties, they must first face the transformation toward a digital experience, evaluate and then adjust their strategies, the report said.

Nathan Farner, head of China strategy and operations of Adobe Digital Experience, said the emerging technologies like artificial intelligence, virtual reality, the internet of things, and 5G will greatly promote the evolution of global business models and create huge market opportunities for China to develop a digital experience economy.

To succeed, companies need to foster experience-enabled businesses, Farner said.

Brands that meet the high expectations of customers and provide them with a seamless and outstanding experience will have an advantage over their counterparts in the industry, he said.

China has introduced a variety of measures to bolster the digital economy. In September 2018, the National Development and Reform Commission issued guidelines on developing a stable digital economy and expanding employment.

 

 

 

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2019-12-05 00:00:00
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527579.htm GOVT AND POLICIES

PBOC skips open market operations

The People's Bank of China, China's central bank, skipped open market operations via reverse repos on Tuesday, citing abundant liquidity in the banking system. The system posts a relatively high level of liquidity at present, the People's Bank of China said in an online 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.

Retail prices of diesel and gasoline raised

China has raised the retail prices of gasoline and diesel on Tuesday, the country's top economic regulator said. Based on recent changes in international oil prices, the retail prices of gasoline and diesel will rise by 55 yuan ($7.83) and 50 yuan per metric ton, respectively, according to the National Development and Reform Commission. Under the current pricing mechanism, if international crude oil prices change by more than 50 yuan per ton and remain at that level for 10 working days, the prices of refined oil products such as gasoline and diesel in China will be adjusted accordingly.

COMPANIES AND MARKETS

Digital energy trade center set up in Rizhao

A digital energy trade center was established in Rizhao, a coastal city of East China's Shandong province, over the weekend, aiming for developing a big data cloud platform for the energy industry with emerging technologies of 5G, AI, the internet of things and block chain. The center is jointly developed by the Rizhao government, Baoneng Logistics Co Ltd and Newlinks Group, a digital energy service provider. More than 30 transportation-related platforms such as Huolala, a vehicle-hailing platform for cargo, signed contracts to set up branches in the center.

Facebook service lets users transfer data

A new service developed by social media giant Facebook to allow its users to transfer data from Facebook to another online platform has been put into use on a trial basis in Ireland, local media reported on Monday. Starting from Monday, Facebook users in Ireland will be able to move their photos and videos directly to Google Photos, making them the first users of such a service in the world, said RTE, a national radio and television broadcaster in Ireland. The photo transfer tool can be accessed in the Your Facebook Information section of the app's settings, said the report, adding that all data transferred will be encrypted and users will be required to enter their password before a transfer begins.

Sluggish Nov sales hurt Indian automobile firms

Indian automobile companies continued with its declining sales trend in November with three companies on Sunday indicating a drop in its monthly sales volume. The Mahindra group's auto company reported total sales including domestic and exports of 41,235 vehicles in November compared to 45,101 vehicles in November 2018, down 9 percent. In the preceding month of October, the company had report sales of 51,896 units. "The month post festive season is historically a lean month for the automotive industry. Consumer demand, especially for passenger vehicles, typically picks up in the year-end that is in December. Therefore, we expect December to pan out better for the automotive industry," said Veejay Ram Nakra, chief of Sales and Marketing, Automotive Division, Mahindra and Mahindra Ltd.

AROUND THE WORLD

Corporate sales fall in Japan for first time

Corporate sales in Japan dropped for the first time in three years in the July-September quarter, the government said in a report on Monday. According to the Finance Ministry, domestic firms' total sales in the reporting period fell 2.6 percent from a year earlier to 349.50 trillion yen ($3.19 trillion). The decline came on the heels of a 0.4 percent rise booked in the previous quarter, the ministry's statistics showed, with the latest decline being partly attributed to declines on petroleum product prices. Companies in manufacturing industries, specifically those related to metal production and making telecommunication equipment, weighed heavily in terms of sales, the ministry noted.

ADB assistance to help add jobs in Philippines

The Asian Development Bank (ADB) said on Tuesday that it has approved a $400 million policy-based loan to support the Philippine government's efforts to reduce the number of out-of-school and unemployed young Filipinos that impedes more inclusive growth in the country. The Manila-based ADB said this program will support government reforms aimed at improving the employability of young Filipinos through labor market programs and providing easier access to on-the-job training schemes to help them secure and retain jobs. The ADB said the program builds on ADB's previous support to the government's employment initiatives, particularly the Department of Labor and Employment's design and roll out of the Jobstart Philippines Program, a full-cycle youth employment facilitation program that has become law with adequate government funding.

South Korea's online shopping hits record

South Korea's online shopping hit a record monthly high in October amid a rapid change into consumption using smartphones, statistical office data showed on Tuesday. Shopping in the cyberspace gained 17.3 percent over the year to 11.8 trillion won ($9.9 billion) in October, according to Statistics Korea. It was the biggest since relevant data began to be compiled in 2001. The double-digit growth came amid the rising number of consumers doing the shopping through smartphone apps. Mobile shopping jumped 23.2 percent to 7.7 trillion won in the month, marking the biggest since the data began to be compiled in 2013.

Brazil economy to grow by 2.22% next year

Brazilian financial market analysts upgraded their 2020 economic growth forecast to 2.22 percent for the fourth week in a row, the Central Bank of Brazil said on Monday. Next year the country's gross domestic product (GDP) will see the biggest expansion since 2013, when it grew by 3 percent, according to the bank's weekly survey of some 100 economists. Last week's survey projected the 2020 economic growth of 2.2 percent. For 2019, the analysts maintained their previous forecast of 0.99 percent.

Vietnam's exports rise 7.8% in first 11 months

Vietnam made export turnovers of more than $241.4 billion in the first 11 months of this year, up 7.8 percent against the same period last year, while seeing import turnovers of more than $232.3 billion, up 7.4 percent, the country's General Statistics Office said on Monday. Specifically, Vietnam earned $48.7 billion from exporting phones and components, up 5.4 percent; reaping $32.4 billion from electronic goods, computers and components, up 19.4 percent; and $16.5 billion from footwear, up 12.5 percent.

 

 

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2019-12-04 00:00:00
<![CDATA[New energy vehicle sales gain traction]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527650.htm New energy vehicles are expected to account for 25 percent of the total car sales in China by 2025, up from the 20 percent estimated in 2017, an indication that the country is even more committed to making steady progress in the burgeoning sector.

The target has been updated in a draft plan released by the Ministry of Industry and Information Technology on Tuesday. The new plan will serve as the development guideline for the sector in China from 2021 to 2035.

It, however, does not include sales forecasts from 2026 to 2035 of new energy vehicles composed of battery electric cars, plug-in hybrids and fuel cell ones.

But it says that China will be an automotive power by 2035 and Chinese companies will be global leaders in new energy vehicle-related technologies. In addition, brands from the country will be competitive in international markets.

The plan suggests that from 2021 new vehicles for public use should be new energy ones in some areas including the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Pearl River Delta.

The market should also play a major role, with carmakers free to choose their technical routes, while the authorities will create a favorable business environment through legislation and quality supervision, said the plan.

It added that the authorities will make it easier for companies to enter the industry, facilitate use of new energy vehicles and improve charging infrastructure.

China has been the world's largest market for such vehicles since it overtook the United States in 2015. It is also home to the world's largest new energy vehicle maker BYD and the largest power battery producer CATL, which is a supplier for international carmakers including BMW and Volkswagen.

From January to October this year, new energy vehicle sales reached 947,000 units, up 10.1 percent year-on-year. They accounted for 4.6 percent of total vehicle sales in the period, which fell 9.7 percent year-on-year, according to the China Association of Automobile Manufacturers.

But their sales had been falling on a monthly basis since July after purchase subsidies were slashed, said the association.

China has been offering subsidies on purchases of such vehicles from 2009. But it has been phasing out the subsidies gradually and is scheduled to stop them altogether by the end of next year.

Yale Zhang, managing director of Shanghai-based consulting firm Automotive Foresight, said the new draft plan, which comes at a good time, will help boost confidence of companies in the sector.

"It shows the Chinese government's attitude and determination. It is a crucial sign to carmakers that this is the direction, especially as sales growth is slowing."

Carmakers have been speeding up their electrification process. At the Guangzhou auto show that concluded on Dec 1, one in six models were electric cars or plug-in hybrids.

Toyota's premium unit Lexus unveiled its first electric model, the UX 300e sport utility vehicle at the show. It said the model is specifically crafted to suit the needs of consumers in China and Europe, where it will be available in 2020, before it hits the Japanese market in 2021.

In November, Toyota partnered with China's BYD to build a joint venture for developing electric vehicles.

Volkswagen AG said it will invest 1.6 billion euros ($1.76 billion) with its Chinese partners on e-mobility in China in 2020, adding that it foresees spending more on new energy vehicles than on gasoline cars in coming years.

"We are closely watching the ups and downs in the new energy vehicle market. The ongoing long term growth still excites us, as our electrification gathers speed," said Stephan Woellenstein, CEO of Volkswagen Group China.

The German carmaker said it will offer 14 new energy vehicles in China by the end of this year. Its subsidiaries Audi and Porsche have also launched electric vehicles in the country as well.

The group said its China-made new energy vehicles will reach 30 by 2025, with their combined annual sales expected to total 1.5 million units.

China's Great Wall Motors and BMW unveiled their joint venture in Jiangsu province in late November, under which they will jointly develop and produce electric versions of the German brand's MINI vehicles.

BMW is also scheduled to produce its electric iX3 SUVs in Liaoning province in 2020 and sell them in China and other markets.

German automotive supplier Bosch is building a fuel cell plant in Jiangsu province. Its construction is set to be completed by the end of 2020 and smallscale production is scheduled to begin in 2021.

"As the first of its kind outside of Germany (by Bosch), the fuel cell center marks another strategic step for Bosch in boosting the widespread manufacture and adoption of fuel cell products," said Uwe Gackstatter, president of the Bosch Powertrain Solutions Division.

 

A boy touches a new energy vehicle on display at an industry expo in Zhengzhou, capital of Henan province. LIU XU/FOR CHINA DAILY

 

 

 

 

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2019-12-04 00:00:00
<![CDATA[Beijing to widen services market access to foreign investors]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527649.htm Beijing will further open its services market to foreign investors in several industries including tourism, internet access services and non-profit nursing institutions for the aged, as well as audio and video products, a senior official said on Tuesday.

Liu Meiying, spokeswoman of Beijing municipal government's commerce bureau, said the State Council has approved the measures the capital has proposed to further open the city's services industry to foreign capital in early November.

According to the new measures, Beijing will allow wholly foreign-owned companies to provide outbound travel services to customers.

In 2003, the first wholly foreign-owned travel agency was set up in China. However, there were limitations on its service, as it could not offer outbound travel products.

Wang Yue, deputy head of the Beijing Municipal Bureau of Culture and Tourism, said the new measure will enrich the outbound travel products in the market and bring more competition to their domestic counterparts which would be beneficial for the long-term development of the industry.

"The international tourism business mode and advanced management will become a good incentive to the market and consumption, which will help to meet the growing demand from the public," she said.

Zhang Guodong, a senior official at online travel agency ly.com, has a positive view of the new policy.

"It will not have any huge impact for the industry because China's tourism industry is growing rapidly and has created a huge market for different niche customers. Online travel businesses have developed even faster, with an annual growth rate of 35 to 40 percent," he said.

Compared with the United States and Europe, whose online travel market is growing at 45 percent to 50 percent annually, China still has enormous growth potential, he added.

"The new policy will only bring better experience to the market and the customers. It won't be a big threat to the domestic travel agencies. Together with foreign-owned travel agencies, we should cooperate and make the market bigger and better."

In addition to the tourism industry, Beijing will call off the limits on shares of foreign investment in the internet access service industry.

In the past, the foreign capital could not take more than 50 percent of the shares of companies providing internet access services.

Zhu Chunxia, an official at Beijing's communication management bureau, said the new policy will attract more foreign capital to set up telecommunication companies in Beijing, offering better service to its residents.

Foreign capital will be allowed to invest in the audio and video products production business within certain Chinese cultural bases in the capital by cooperating with their Chinese partners, according to the new regulation. But the Chinese side should take the major share in those firms and be responsible for checking content.

 

 

 

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2019-12-04 00:00:00
<![CDATA[Investment access eased for bank's wealth units]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527648.htm The latest regulation on net capital management of commercial banks' wealth management subsidiaries encourages the subsidiaries to invest in standard and high-grade assets, operate in a prudent manner, and avoid expanding business blindly, analysts said.

The China Banking and Insurance Regulatory Commission has fixed the net capital threshold for commercial lenders' wealth management subsidiaries at 500 million yuan ($71 million) and 40 percent of the subsidiaries' net assets.

Net capital of the subsidiaries should also be no less than 100 percent of the risk capital, according to a regulation for trial implementation released by the CBIRC on Monday.

Coming into effect on March 1, the regulation forbids bank wealth management subsidiaries to invest their own capital in nonstandard assets and sets higher risk coefficient for the subsidiaries to invest wealth management funds in nonstandard assets, compared with standard assets.

According to the rules, the risk coefficient for investment in nonstandard debt-based assets ranges from 1.5 percent to 3 percent, whereas that for investment in cash, bank deposits, interbank placement, fixed-income securities and other standard debt-based assets is zero percent.

"The regulator's intention to guide these wealth management subsidiaries to invest in standard assets is made explicit," said Wang Yifeng, an analyst with Everbright Securities, in a report.

Moreover, by aligning the rules on net capital management of bank wealth management subsidiaries with those for subsidiaries of fund management companies and trust companies, the regulator aims to provide a level playing field to market players and prevent them from capitalizing on loopholes in regulatory systems to circumvent unfavorable regulations, Wang said.

Currently, banks are investing an increasingly larger portion of their portfolios in standard assets, such as strengthening bond investment. In addition, bank wealth management subsidiaries may step up their efforts to invest in equity-based assets by tracking equity indexes or using the strategy of a fund of funds, which is a pooled investment fund that invests in other types of funds, said Guosheng Securities analyst Ma Tingting in a research note.

"The overall risk-weighted coefficient of the wealth management industry of China's banking sector is estimated to range from 0.41 percent to 0.67 percent. On this basis, we estimate the wealth management subsidiaries of most banks will meet the risk capital requirement regarding net capital management, considering that the amount of their registered capital is fairly large," Ma said.

For China's six largest State-owned commercial lenders, registered capital of their wealth management subsidiaries vary from no more than 8 billion yuan to 16 billion yuan. The number is no more than 5 billion yuan for the wealth management units of major national joint-stock commercial lenders, such as China Merchants Bank Co Ltd and China Everbright Bank Co Ltd.

 

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2019-12-04 00:00:00
<![CDATA[Content is top criteria for internet users in nation, says report]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527647.htm A growing number of Chinese internet users are willing to pay for digital content, with a rising need for high-quality products, video content and better user experiences brought about by new technologies, a report said on Tuesday.

The new 2019 content trend report released by Chinese internet giant Tencent Holdings Ltd showed that 53.3 percent of surveyed netizens are dissatisfied with online content, and they require higher-quality online information.

Among the surveyed internet users, high-end consumers have a stronger demand for better quality and customized content. Mass content consumers desire more knowledge content.

Specifically, 34.8 percent of the surveyed group said they want useful and interesting content, especially on topics related to lifestyle, health and culture.

The report said 26.8 percent of those living in first-tier and second-tier cities said they probably or are very likely to pay for high-quality content. For those living in fourth-tier and fifth-tier cities and those who have middle school degrees or less, they care more about content quality, learning knowledge and whether the content they get is real.

"As users have increasingly higher demands for high-quality content, reducing low-quality content will be the main task for content producers," Tencent vice-president Chen Juhong said during the 2019 Tencent ConTech technology conference held on Tuesday in Beijing.

"Against this backdrop, we will see major growth and development in content production and consumption technologies. It will be a natural next step to introduce a variety of technical means to offer better consumer experiences and enhance content production efficiency," Chen said.

In first-tier and second-tier cities, 56.1 percent of netizens aged between 21 and 40 said they spend more time on smartphones, and 45.8 percent of them said video content is their top choice or the only choice when viewing online information, the report said.

A growing number of emerging groups are actively embracing the digital world, including elderly adults and those who did not complete middle school.

Of the 249 million elderly people aged above 60, some 59 million are internet users, with a 39.9 percent year-on-year increase seen compared to the previous year. The number of netizens who have middle school degrees or less has reached 479 million, up by 26.7 percent year-on-year.

"Today, residents of lower-tier cities and towns have become the new growth engine to boost the consumption market. And we do see huge potential in that," said Zheng Qingsheng, a partner at Sequoia Capital China.

"Unlike those born in the 1950s, 1960s and 1970s who lived through a long period of material deprivation, those born in the 1990s and 2000s have a more open-minded attitude toward consumption and will pay for various products and services. With their growing spending power, they will become the new driving force for consumption," Zheng added.

According to the report, Chinese internet users now love embracing new technologies such as the next-generation 5G technology. This will generate new growth engines in the content consumer market in the coming year.

Wu Hequan, an academician of the Chinese Academy of Engineering, said the 5G network will enable the combination of terminals with artificial intelligence technologies, which will help foster new applications and businesses for digital content such as intelligent and high-definition news content.

 

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2019-12-04 00:00:00
<![CDATA[Organic infant formula makers test new waters as sales soar in China]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527590.htm Organic infant formula sales continued to be the mainstay of high-end infant food product sales in China, as a growing number of parents are opting for safe and natural products in the country, experts said.

Buoyed by the rising demand, several multinational companies like Germany's Hibb, Switzerland's Nestle and its unit Wyeth are not only witnessing resurgent sales, but also promoting their products via new growth channels like e-commerce platforms.

German organic infant formula and baby products producer Hipp is looking to further expand its presence in the e-commerce market. The company, which witnessed annual growth of about 20 percent in China and is the largest organic food producer globally in terms of sales revenue, is set on becoming the top premium baby products brand in its second-largest market after Germany.

"We have seen a huge growth for our infant formula products. Infant formula designed for babies aged between 12 months to 36 months is the most popular product category," said Stephan Hipp, global managing director and the fourth generation heir of Hipp, a family firm with over 120 years of history.

"When it comes to organic infant formula, this is a big chance for us to grow. We will promote more organic products in the country and we are confident about the growth potential," he said.

Hipp said the organic farms of the company do not use chemical fertilizers and pesticides, and they artificially remove weeds and pests using the natural ecological chain.

Last year, the overall growth rate of the infant formula market in China was 10.8 percent year-on-year, while sales of organic infant formula products rose 46.8 percent year-on-year, according to Euromonitor International, a market research company.

On the other hand, Hipp has donated 10 million yuan ($1.4 million) this year to China Soong Ching Ling Foundation to help launch maternal and child care education classes nationwide and train more pediatricians in western China.

Meanwhile, Swiss food and drink provider Nestle, which launched its first organic full cream milk powder product under the Nido brand in China last year, is looking for further growth in the high-end organic dairy product market. The product was launched in China on a trial basis through cross-border e--commerce channels.

The Nido brand has been a member of the Nestle family with annual sales of over $1.04 billion. Since 1944, Nestle has been producing Nido milk powder in Switzerland.

According to data from Nielsen Consulting, 40 to 50 percent of Chinese consumers are willing to pay higher prices for natural, sustainable and organic products.

The latest organic full cream milk powder is also a positive response of Nestle to the changing demand of Chinese consumers, and is expected to provide an option of safe, high-quality organic milk powder to the public, said Roberto Reniero, head of Nestle's research and development unit in China.

Besides, Wyeth, the baby and infant formula unit of Nestle, has introduced Illuma 3 organic products for Chinese parents since 2017. Its research released in October shows that the sales of organic infant and maternity products grew by 33 percent year-on-year in China, creating a generation of "organic mothers".

US infant formula maker Mead-Johnson introduced its grass-fed Enfagrow to Chinese consumers this September. Grass-fed milk contributes to merely around 10 percent of the global milk pool, the company said. Grass-fed milk refers to the milk produced by cows that feed naturally in lush pastures and mainly feed on fresh leafy grass.

Unlike organic milk, grass-fed focuses on providing natural breeding environment for cows, allowing them to produce milk under natural living conditions.

In the United States, sales of grass-fed milk grew by 30 percent to 50 percent from 2012 to 2017, and sales volumes reached 2 million gallons in 2017, according to the US dairy industry data.

 

Consumers check out infant and toddler formulas at a supermarket in Qingdao, Shandong province. CHINA DAILY

 

 

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2019-12-04 00:00:00
<![CDATA[Smartphone vendors turn to chip sector for cutting edge]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527618.htm An increasing number of Chinese smartphone vendors are marching into the chip sector, after realizing the importance of in-house research and development capabilities for the semiconductor sector.

Vivo, a major smartphone vendor, for instance, joined hands with South Korean tech giant Samsung to unveil a 5G chip in November, marking the former's latest push to showcase its increasing emphasis on enhanced research and development capabilities.

The Exynos 980 chip, which was jointly developed by the two companies, will debut on Vivo's X30 smartphone later this year.

Zhou Wei, vice-president of Vivo, said the two sides have cooperated closely with each other to improve the efficiency of product development. As a result, the X30 model, powered by Exynos 980, can hit the market two to three months ahead of schedule.

The Exynos 980 chip supports both non-standalone (NSA) and stand-alone (SA) networking modes, making it the second dual-mode 5G chip after Huawei's Kirin 990 5G. NSA and SA are two ways of constructing a 5G network, with the former still relying on existing 4G infrastructure for some functions.

Currently, most 5G smartphones unveiled in China only support NSA mode. But China will kick off the large-scale construction of an SA 5G network soon, so that 5G phones will have to support both modes in the future.

Vivo said more than 500 of its research and development engineers have partnered with Samsung in the past 10 months to jointly develop the chip. It has shared more than 400 features and functions it had accumulated with Samsung to complement the latter's platform.

Exynos 980 has an integrated 5G modem, which can enable a peak downloading speed of 2.55 Gbps in sub-6 GHz spectrum. It also can greatly improve energy efficiency.

Smartphone vendor Xiaomi Corp is also intensifying its inputs in the sector.

In 2014, Xiaomi founder Lei Jun termed the chip segment the "crown of the smartphone sector". Three years on, he has his own jewel in that crown-the Surge 1, Xiaomi's first in-house chip.

The technology tycoon has fond and vivid memories of a momentous instant that signifies Xiaomi's entry into the chip sector.

He recalls a night in September 2015 when, at 1:40 am, in a trial, the Surge 1 enabled the first call between a group of engineers and Lei. "My heart was surging with excitement at that moment. That's how the chipset got its name."

James Yan, research director at Counterpoint Technology Market Research, says that although the Surge 1 is still at the entry level, Xiaomi's attempts to make inroads into the competitive industry highlight its determination to differentiate its products from a crowd of rivals and to seek growth via innovation.

The pursuit of innovation was what drove the Beijing-based tech major in 2014. It coasted on the success of its online-only sales model to establish a chip unit, Beijing Songguo Electronics.

It had figured out that reliable access to chips was going to be the key to success in the fiercely competitive smartphone market.

Xiaomi has also invested into several chip design companies in China, partly in the hope of learning more from these players to better produce its own chips.

Another tech major Oppo is also jumping onto the bandwagon. The company is recruiting chip professionals to beef up its smartphone design department and it is working on a coprocessor, a processor used to supplement the functions of the primary processor.

Such strong motives to double on the chip sector also came after the US government banned Huawei Technologies Co from accessing crucial US semiconductor components. The incident triggered worries that some US technologies on which Chinese companies are heavily reliant will no longer be accessible and alternative plans need to be generated.

But developing chips is a high-tech and cash-intensive business. When Xiaomi was considering chip business, several experts had told Lei that it is a risky business. R&D of chips alone would require 1 billion yuan ($142 million) and making a success of it would require at least $1 billion.

"It is a promising sign that more players want to overcome the obstacles and be a success at chipmaking, but it remains to be seen who could really make it in the end," said Xiang Ligang, director-general of the telecom industry association Information Consumption Alliance.

 

The Surge 1 chip, the first semiconductor developed by Xiaomi Corp, is displayed at the China National Convention Center in Beijing. QUAN YAJUN/FOR CHINA DAILY

 

 

 

 

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2019-12-04 00:00:00
<![CDATA[BUSINESS]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527613.htm  

Bloomberg

 

 

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2019-12-04 00:00:00
<![CDATA[Gree Electric steps on reform pedal]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527603.htm Shares of China's largest air conditioner maker Gree Electric Appliances Inc closed at its highest level in three weeks on Tuesday after the company announced its State-owned parent company Gree Group sold a 15 percent stake in the subsidiary, a move that will boost the company's market competitiveness, improve operating efficiency and diversify its product portfolio.

The shares of Gree Electric surged 5.35 percent to close at 60.8 yuan ($8.6), having risen during the session by 6.03 percent to trade at the day's peak of 61.19 yuan. It was the best close for the shares since Nov 11, 2019 when the stock ended at 61.17 yuan.

Analysts said the stake sale of Gree Electric is part of the country's push to pare down government ownership in highly competitive industries such as home appliances.

Gree Electric said in a statement on Monday night that Zhuhai Mingjun Investment Partnership, a private equity fund backed by Hillhouse Capital, won the bid to acquire the 15 percent stake from its largest shareholder Gree Group. The deal has an estimated value of 41.66 billion yuan ($5.9 billion).

After the sale, Gree Group will no longer be the controlling shareholder with its holdings reduced to 3.2 percent from 18.2 percent. Hillhouse Capital, which already had a 0.72 percent stake in the company, will become the biggest shareholder, as the Zhuhai, Guangdong province-based Gree Electric undergoes a mixed-ownership reform.

Li Jin, chief researcher at the China Enterprise Research Institute in Beijing, said the ownership change in Gree Electric is of great significance as the company is facing tough competition in the domestic home appliance sector.

"The mixed-ownership reform will help Gree Electric enhance its competitiveness and push forward the internationalization of the Chinese manufacturing industry," Li explained.

"What Gree Electric lacks most is the ability to keep abreast of the retail market and the post-1990s and post-2000s consumers' preferences. Hillhouse Capital has invested in some internet giants such as Tencent Holdings Ltd and JD, so the introduction of strategic investors will help the company further innovate," Everbright Securities analyst Jin Xing said.

Founded in 2005, Hillhouse Capital is known for its investments in top Chinese technology firms such as Tencent, Baidu, Didi Chuxing and Meituan-Dianping.

At this time, Dong Mingzhu, the chairwoman and president of Gree Electric Appliances, holds a 0.74 percent stake in the firm and is ranked as the seventh-largest shareholder of the company.

The shift of controlling shareholders in Gree Electric will help optimize the company's management structure and diversify its businesses, said Liu Buchen, an independent researcher in the home appliances sector.

Gree Group is a State-owned enterprise supervised by the Assets Supervision and Administration Commission of the Zhuhai local government.

In April, Gree announced its plan to sell the stake, and firms such as Baidu, Singapore's Temasek Holdings, and Hopu Investment Management all sought to buy the shares.

Gree Electric is ramping up efforts in intelligent manufacturing by setting up unmanned factories and using industrial robots in a variety of production cycles as part of its broader push to upgrade the country's manufacturing industry.

It has also worked on diversifying its business and entered fields such as mobile phones, automobiles, and microchip production. Air conditioner sales, though, still make up for more than 80 percent of its total annual revenue.

Company revenue reached 200 billion yuan last year, a year-on-year increase of 33.33 percent.

 

Visitors watch a Gree robot making coffee during a high-tech exhibition in Beijing. REN CHAO/XINHUA

 

 

 

 

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2019-12-04 00:00:00
<![CDATA[High-quality development, more reforms, opening-up key to economic growth]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527591.htm BEIJING-Facing increasing global complexities and waves of tech revolution, China has outlined its blueprint for higher-quality growth with deeper reform and wider opening-up measures.

China will work to uphold and improve its basic socialist economic system and promote the high-quality development of the economy, said the milestone document adopted at the fourth plenary session of the 19th Communist Party of China Central Committee.

The country will step up efforts to improve the socialist market economy and put in place new institutions for an open economy with higher standards.

The view that the charted path will unleash new growth potential was shared among participants from home and abroad at the recent New Economy Forum in Beijing.

"China always looks ahead to the next stage, and that, I think, is even more important now than it ever was," said Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science.

"The Chinese government has defined a domestic agenda for continuing economic reform, and I think that they are on the right path," said Ahmed Saeed, vice-president of the Asian Development Bank.

By the end of 2018, China's secondary and tertiary industries saw their combined output value reach around 93 percent of GDP, said Ning Jizhe, head of the National Bureau of Statistics, citing results of the fourth national economic census.

"The primary feature of the market is that enterprises are the main players," said Ning, adding that the total number of market entities in China has exceeded 100 million.

"The path to increase growth will come through economic reform, and hopefully through some elements of structural reforms," said Saeed, noting that the country is on a natural path from export-driven to consumption-driven growth.

His point was echoed by Ning, who said with the advancement of the consumption level and structure, Chinese enterprises will inevitably change the structure of their products, investments and industries.

"This holds the key to the transformation and upgrading of China in the future," he said.

Openness, also a prominent feature of the Chinese market, forms a large part of China's reform measures as the country steps up modernizing governance.

China's opening up offers mutual benefits to the world. In 2018, China's GDP accounted for 16 percent of the world's total, but its contribution to world economic growth remained at nearly 30 percent.

By holding a national-level import expo in 2018 and 2019, China is injecting impetus into the world and creating opportunities for cooperation, said Zhang Yansheng, a researcher with the China Center for International Economic Exchanges.

From the newly launched section of the Shanghai free trade zone to Shenzhen's pilot demonstration zone of socialism with Chinese characteristics, China is building "a platform and system for a new round of opening up in the new era," said Zhang.

"Despite the attraction of the China market and its considerable private sector, China's economic model is amplified through highly strategic initiatives, including the Belt and Road," said Charlene Barshefsky, former US trade representative.

In the first 10 months of 2019, foreign direct investment into the Chinese mainland expanded 6.6 percent year-on-year to 752.41 billion yuan (about $107 billion), while that from the economies involved in the Belt and Road Initiative rose by 19.3 percent, data from the Ministry of Commerce showed.

As China opens wider with concrete policies and an improved business environment, the country is becoming more attractive for foreign investment.

"China is now a fascinating place for foreign investors. I have seen China become much more open toward foreign direct investment," said Khaldoon Khalifa Al Mubarak, group CEO and managing director of the Mubadala Investment Company.

The evolution of the Chinese market is continuing, more importantly, with further progress expected in the coming months, according to the Abu Dhabi-based investor.

 

 

 

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2019-12-04 00:00:00
<![CDATA[Huawei shifting R&D center from US to Canada]]> http://www.chinadaily.com.cn/kindle/2019-12/04/content_37527619.htm Huawei Technologies Co Ltd is planning to shift its research center to Canada from the United States, as the Chinese tech giant readjusts its business layout amid restrictions from Washington.

Ren Zhengfei, the founder of the Chinese telecoms equipment maker, said in an interview with Canada's Globe and Mail that Huawei's "center for research and development will be moved out of the United States. It will be relocated to Canada."

He said the company will also manufacture some mobile network equipment outside China.

The comments came after the US Commerce Department in May placed Huawei on a trade blacklist, banning it from buying US technologies without special government approval.

Last month, the US Federal Communications Commission approved an order, which imposes limitations on the use of an $8.5 billion government fund to purchase equipment or services from companies including Huawei deemed a threat to national security.

Huawei CFO Meng Wanzhou, who is also Ren's daughter, is currently detained in Canada following a request by the US, which is seeking her extradition on fraud charges. Both Meng and Huawei have repeatedly denied any wrongdoing.

Amid such pressure, Huawei is busy relocating its business layout including research and development centers.

Huawei represents a significant and growing contribution to Canada's GDP with a total benefit equivalent to $690 million in 2018 alone, according to a new study conducted by Oxford Economics Ltd.

In addition, the report said that Huawei supports nearly 5,000 full-time Canadian jobs, has invested $164 million in R&D initiatives and generated $204 million in taxation, potentially helping to support public spending on healthcare, education and other core services in 2018.

"Huawei's economic impact in Canada has grown significantly since 2012. The company's workforce has increased substantially, along with its procurement spending on goods and services from Canadian suppliers," said Andrew Goodwin, director of Applied Economics at Oxford Economics.

Huawei Canada President Eric Li also said the company sees Canada as a strategically significant destination for ongoing investment and growth.

"Canada's concentration of technology partners-both international and domestic, its outstanding network of universities and researchers and its welcoming immigration policies, particularly for skilled high-technology workers, make it our preferred North American platform for future growth," Li said.

Huawei is also stepping up efforts to buy more components and technologies from Japanese and European suppliers, so as to reduce reliance on US technologies and deepen its multi-vendor strategy to ensure sustainability in business development.

 

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2019-12-04 00:00:00
<![CDATA[Regulators smooth bumps on IPO roads]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527325.htm Regulators are set to promote the normalization of initial public offerings in the A-share market for a more sustained development of the Chinese capital market, according to the China Securities Regulatory Commission.

Four State-owned financial newspapers published stories on Monday quoting people close to the CSRC as saying that the regulator will continue to advance the normalization of initial public offerings in the hope of developing equity financing, optimizing the quality of listed companies and better serving the real economy.

CSRC will also emphasize the balanced development of both investment and financing. Stocks issuance, registration and market tolerance will be connected organically to avoid risks. "There will neither be a suspension of IPO approvals nor collective approvals," said the people close to the regulator.

The commission's statement came at a time when IPOs are in the limelight. Up to seven companies listed on the newly launched technology-focused STAR Market at the Shanghai Stock Exchange have collectively seen their prices drop below their initial offering price by Nov 28.

Another two commercial banks listed on the main board also encountered a similar situation last month.

Li Xunlei, chief economist of Zhongtai Securities, said: "Prices of newly-issued shares falling below their offer price is completely normal based on market rules. In the mid-to long-term, a pricing mechanism based on market rules, which the central regulator is advancing, will become more mature in the A-share market."

Public information shows that the Issuance Appraisal Committee of the CSRC had approved IPO applications of 115 companies by Nov 28, with the total financing reaching over 156.3 billion yuan ($22.2 billion).

Meanwhile, a total of 120 companies were successfully listed on the main board, SME board and ChiNext of the A-share market by Nov 28. The weekly financing amount of these companies came in at 3.69 billion yuan.

Xun Yugen, chief strategist at Haitong Securities, said that the A-share market is sure to attract more capital inflows in 2020, which is estimated at around 1.1 trillion yuan. About 500 billion yuan of the funds will have flown into the A-share market by the end of this year, he said.

According to global law firm Baker Mckenzie, IPO activity in China will be on par with that in 2018 this year, reaching $16.4 billion, with domestic IPOs continuing to be the main driver.

Looking ahead, Baker McKenzie expects China IPOs to rise by 42 percent year-on-year in 2021 to $22.2 billion, and by a further 17.6 percent in 2022 to $26.1 billion.

Yang Delong, chief economist at Shenzhen-based First Seafront Fund, pointed to the fact that direct financing, of which stocks account for an important part, is still at a low rate in the Chinese capital market. A higher rate of direct financing is the prerequisite of a prosperous capital market, he said.

Yang also called for efforts to perfect the A-share market's delisting mechanism while maintaining the steady pace of IPOs. Only in this way can the A-share market attract truly quality companies and eliminate the unfit ones, he said.

Investors at a securities brokerage in Nanjing, capital of Jiangsu province. XING QU/FOR CHINA DAILY
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2019-12-03 00:00:00
<![CDATA[Tianjin LNG terminal expansion on track, says Sinopec]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527324.htm Oil and gas giant China Petrochemical Corp, or Sinopec, has completed the re-gasification capacity expansion work for the second-phase of its liquefied natural gas receiving terminal in Tianjin, marking a step closer in the completion of the country's largestto-be LNG terminal.

Following the expansion, the LNG terminal's re-gasification capacity has increased to 45 million cubic meters daily, including the newly added daily capacity of 30 million cubic meters, which became operational on Saturday.

Following the re-gasification expansion project that was accomplished 10 days before schedule, the terminal will continue with construction of LNG storage tanks and docks.

Once finished, its annual receiving and supply capacity will be 10.8 million metric tons and 13.6 billion cubic meters respectively, making it the country's largest LNG terminal, according to the company.

Currently, Shenzhen in Guangdong province has the country's largest LNG terminal, with a designed capacity of 4 million metric tons a year, operated by China National Offshore Oil Corp, also known as CNOOC.

Experts said the terminal's progress has furthered LNG development in China and its role as an important part of the country's natural gas supply system.

"The expansion of Tianjin LNG terminal's re-gasification capacity will no doubt help secure gas supplies in the surrounding region that has a large appetite for the clean energy, and is also of importance on a national level," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

Absence of a new national pipeline project, except the China-Russia east route natural gas pipeline, where gas started flowing on Monday, has made LNG increasingly important to meet China's fast-growing natural gas demand since 2017, although it is still second only to pipeline gas supplies due to higher costs, said Lin.

Driven by the country's commitment to environment protection, China registered fast growth in gas consumption and imports over recent years.

In 2018, China imported 54 million tons of LNG, accounting for about 60 percent of the total gas imports, data from the General Administration of Customs showed.

The China-Russia east-route natural gas pipeline Lin mentioned has a designed transmission capacity of 38 billion cubic meters, equivalent to about 13.6 percent of China's total gas consumption last year, according to data from the National Development and Reform Commission.

Li Li, energy research director at ICIS China, a firm providing analysis of China's energy market, said the Tianjin terminal project is vital to boost gas supplies in North China.

Whether North China is supplied with sufficient gas is a focus of national attention, because it tests the whole country's gas supply capability, she said.

The area needs a large amount of gas not only for residential heating purposes but also for industrial use, experts said, adding that the slow transition from coal to gas for heating in North China since 2018 makes it easier for the gas supply system to meet the demand.

Li also said it was important to have coordinated policies for environment protection and energy development to bolster gas supplies.

Sinopec technicians check liquefied natural gas facilities in Tianjin. CHINA DAILY
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2019-12-03 00:00:00
<![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527313.htm COMPANIES AND MARKETS

Renminbi strengthens against greenback

The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 36 pips to 7.0262 against the US dollar on Monday, according to the China Foreign Exchange Trade System. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day. The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

BMW, Great Wall in new energy vehicle pact

German automaker BMW has teamed up with its Chinese partner Great Wall Motor to build a new factory for new energy vehicles (NEVs) in East China's Jiangsu province. The new plant, due for completion in 2022 in the city of Zhangjiagang, will produce BMW's electric MINIs and Great Wall Motors models, with a capacity of 160,000 cars per year. BMW and Great Wall Motors are investing 650 million euros ($715 million) in their joint venture Spotlight Automotive Ltd. to build the factory. "This joint venture will enable us to produce a larger number of MINI-brand fully electric vehicles at attractive prices for the world market," said Nicolas Peter, a member of BMW AG's Board of Management.

German firms shell out $79.2b for R&D efforts

German companies invested more than 72 billion euros ($79.2 billion) in research and development (R&D) in 2018, a German association has announced. The amount marked an increase of around 3 billion euros, or 5 percent, over the previous year, according to Stifterverband, which compiled the data on behalf of the German Ministry of Education and Research. The value of German research contracts awarded to companies, universities or research institutions remained unchanged at 19.5 billion euros compared to the previous year, according to the German association.

Daimler to cut jobs for reducing expenses

German car manufacturer Daimler AG has announced that it plans to cut thousands of jobs worldwide by the end of 2022 to reduce costs amid the auto industry transformation. The maker of Mercedes-Benz said it would reduce staff costs by around 1.4 billion euros ($1.54 billion) by the end of 2022 and, among other things, to reduce the number of management positions worldwide by 10 percent. The job cuts is part of a program launched in mid-November to streamline the German carmaker's structure and increase competitiveness, innovation, and investment strength. The company said in a statement that the program is a response to "the biggest transformation" in the history of the automotive industry, as the development toward CO2-neutral mobility requires large investments.

AROUND THE WORLD

Manufacturing output declines in Australia

Australia's manufacturing sector has run into a brick wall, according to a leading business lobby on Monday, with activity levels hitting their lowest point in three years. With 50 marking the line between expansion and contraction, the Australian Industry Group's Australian Performance of Manufacturing Index, which measures production, new orders, deliveries, inventories and employment, found a 3.5 point drop to 48.1 in the month of November. Hampered by unprecedented drought conditions across large parts of the country, a downturn in Australia's agriculture sector is thought to be one of the key reasons for the decline.

S. Korean production falls by 0.4% in Oct

South Korea's industrial production, private consumption and facility investment reduced last month simultaneously, marking the first "triple" fall in eight months, a government report showed. The seasonally-adjusted output in all industries, which exclude the agriculture, forestry and fishery industries, dipped 0.4 percent in October from a month earlier, according to Statistics Korea. The industrial output kept sliding for the second straight month as the continued slump in export weakened activity among manufacturers. Production in the mining and manufacturing industries diminished 1.7 percent last month as the global supply glut of display panels and the weaker demand for large-sized sedans negatively affected the automotive and electronic parts sectors. The country's export continued a downward trend for the 11th consecutive month through October amid the global chip industry's downturn.

Unemployment rate slips further in Brazil

Brazil's unemployment rate fell to 11.6 percent in the quarter ending in October, from 11.8 percent in the quarter ending in July, the country's Institute of Geography and Statistics (IBGE) said. The rate also fell slightly, compared with the same period of 2018 when it was at 11.7 percent. IBGE said in its report that the country's unemployment rate "remained statistically stable." The statistics agency said the unemployed population amounted to 12.4 million people in the quarter ending in October, while the employed population reached 94.1 million people, achieving a 0.5-percent growth compared with the previous quarter ending in July.

China mainstay of Sept trade in Botswana

China accounted for 30 percent of Asia's total exports to Botswana in September, the southern African country's statistical agency said. Statistics Botswana said in its report for September that imports from Asia were valued at $36.4 million, representing 7.5 percent of the country's total imports. Meanwhile, 81.6 percent of imports were sourced from the Southern African Customs Union, which consists of Botswana, Namibia, South Africa, Lesotho and Eswatini, valued at $395.3 million. Botswana's imports from China were worth $11.0 million, or 2.3 percent of total value, followed by India at 2.1 percent, and Japan at 1.2 percent.

Ireland retail sales up by 3% on yearly basis

Ireland's retail sales in October increased by 3 percent compared with the same month last year, said the country's Central Statistics Office (CSO). The "core" sales, which refer to sales excluding motors, in the month rose by 3.2 percent over a year ago, said the CSO. During the first 10 months of this year, retail sales in the country edged up by 1.8 percent compared with the corresponding period of last year while its "core" sales posted a year-on-year increase of 4.4 percent, it said. Commenting on the CSO figures, Alan McQuaid, an economist with a local consultancy firm, said that the retail sales figures, especially the "core" sales ones for the first 10 months of 2019 suggest that the Irish economy continued to grow at a solid pace during the period.

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2019-12-03 00:00:00
<![CDATA[Talent shortage hampering digital transformation moves of firms, say experts]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527303.htm With the rapid transformation of almost everything into digital, the hunt for talent seems to be following in similar footsteps.

In fact, the significant increase in the number of digital job opportunities has not been matched by an equivalent increase in talents.

"Probably 80 percent of Chinese enterprises are adopting the digital transformation concepts, while only 16 percent of the companies will finally succeed in the digital transformation process," said Nancy Wang, head of talent solutions of LinkedIn China.

Wang explained the biggest problem is the hiatus between the demand and the supply of digital talent.

"We found there are very few companies lacking strategies to hire more digital talent. The main reason is that companies cannot attract enough digital talents in the market. All firms are competing for the same small pool of leading talents, such as data scientists and algorithm engineers," Wang said.

In the past five years, professionals with data skills have increased nearly threefold, LinkedIn data showed. In 2019, 40 percent of the candidates listed data skills as a talent on the LinkedIn platform, compared with just 13 percent in 2015.

However, the gap between the demand and the supply of data talent is widening. LinkedIn noted in a recent report that demand for talents with data skills rose nearly sevenfold in the past five years. In 2019, 46 percent of the jobs required data skills, compared with 6 percent in 2015.

Today, digital technology impacts not only the IT sector, but a wider range of sectors, creating a huge demand for digital skills.

Among industries with the fastest growth for data skills, many are from the non-tech fields and even the traditional sectors, including real estate, finance, petroleum energy and human resources.

Notably, the supply of talent has not kept pace with the surge in demand since 2018. This year, the supply of data talents is sufficient for just 85 percent of the job market requirements.

Wang said the key is to find the right talent, adding that companies need to hire new talents and train the current employees to embrace digital transformation.

"During the process, companies need to have a better understanding of today's much-needed skills and then take actions accordingly, Wang said.

Another new report released by LinkedIn last month noted that there will be a shortfall of 12.3 million workers by 2020 in the Asia-Pacific region, leading to added costs of nearly $4.2 trillion every year.

One of the reasons that is driving the labor shortage is the rapid change in skill needs, which requires employees to refresh their skills more frequently to cope with the fast-changing digital environment. By 2020, the essential skills for most jobs will see a significant change, the report said.

LinkedIn highlighted the top 10 emerging skills in the Chinese talent market, including compliance, cloud computing, data science, small languages, risk management, interaction design, artificial intelligence, blockchain, digital marketing and full stack development.

"Among these skills, many are those we had not heard of five years ago," Wang said. "But now there is a huge demand for them in the job market. Both digital companies and traditional companies are actively embracing the digital transformation, and they are looking for similar digital talents in the job market."

Wang believes when taking the first step toward digital transformation, the biggest obstacle is the lack of talents rather than technologies or money.

"The key to success is to recruit high-quality digital talents, (maintaining the ability) to analyze talent data, transform it into business insights and ensure the human resources department is adaptable (to the new requirements)," Wang said.

Buoyed by the blossoming big data, cloud computing, AI, the internet of things, blockchain and other emerging technologies, the digital economy is playing an increasingly significant part in driving China's economic growth.

The size of China's digital economy hit 31.3 trillion yuan ($4.5 trillion) in 2018, accounting for 34.8 percent of the country's gross domestic product. To gain a key edge in the future market, a growing number of Chinese companies are gearing up for digital transformation.

Daniel Sun, research vice-president and analyst at Gartner, a leading research and advisory company, said it will still take some time for Chinese companies to deepen the digital transformation.

"During the process, many foreign companies will spend more than 3 percent of their total revenue on digital transformation. Chinese firms, on the other hand, may spend 1 percent to 1.5 percent of their revenue for the same," Sun said. "It is a good thing that more and more Chinese companies now consider digital transformation a priority. But it will still take a long time for them to increase the IT spending and finally enter the mature period when the integration of IT and the firm's business will foster new opportunities and generate new revenue streams."

College graduates hand in resumes at a job fair in Heihe, Heilongjiang province, on Nov 19. QIU QILONG/FOR CHINA DAILY
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2019-12-03 00:00:00
<![CDATA[Prudent policy stance to offset headwinds]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527302.htm China will not resort to competitive measures like zero interest rate or quantitative easing, but would instead maintain its conventional monetary policies over the long term and ensure currency stability, a top monetary official said.

Yi Gang, governor of the People's Bank of China, the central bank, said in an article in Qiu Shi, the Communist Party's flagship magazine, that the nation's prudent monetary policy, which is neither too tight nor too loose, "will help maintain the monetary conditions matching the requirements of potential output and price stability, along with countercyclical adjustments, to maintain reasonable and ample liquidity."

Policy observers speculated that Yi's article, which was published on Sunday, might indicate the basic policy tone for the Central Economic Work Conference, a top-level policymaking meeting to be held later this month. That meeting will discuss the major macroeconomic targets for next year.

In terms of the foreign exchange rate policy, the renminbi exchange rate is determined by the market-oriented demand and supply relationship, and China will neither use the exchange rate as a tool nor join the competition of currency depreciation, said the PBOC governor.

China will continually push forward the market-oriented reform of renminbi exchange rate regime, and keep the flexibility of the currency. Necessary macro-prudential management will be launched when some pro-cyclical signals emerge, to keep the renminbi exchange rate basically stable at a reasonable equilibrium, Yi said.

Monetary policy needs to consider economic growth, but does not have to stimulate the growth too aggressively. Gauging from past experiences worldwide, monetary policy has been used as a means to pursue economic growth, but has been difficult to achieve the targets. On the contrary, it may lead to higher inflation or stagflation, Yi said in his article.

"No matter how many measures we take, even tens of thousands of those, they will never work if we fail to tame the money issuance," said Yi, who stressed that the monetary policy is the key to stabilize prices.

The large recession that followed the Global Financial Crisis of 2008-09 triggered unprecedented monetary policy easing around the world. Central banks in some major advanced economies started deploying a new set of instruments to provide liquidity by using subzero interest rates and large scale asset purchase programs of domestic assets-including government bonds, mortgage backed securities, and private sector debt. That became commonly known as unconventional monetary policy.

Robert Subbaraman, Nomura Securities' Head of Global Macro Research, said that unlike global peers, the Chinese central bank has maintained a relatively neutral policy stance and has no strong reason to take unconventional monetary steps, given the still stable GDP growth rate.

Another reason preventing a further easing of the monetary policy is the need to prevent systemic financial risks. But fiscal policies can play a major role in supporting economic growth in China, he said. "When unconventional monetary policies are becoming conventional, it will be difficult to come back," which in turn may lead to corporate debt surges or stimulate property bubbles.

The latest macroeconomic indicators in China, including the official purchasing managers index (PMI) issued by the National Bureau of Statistics and the Caixin PMI, signaled a rebound in manufacturing activity during November. Economists said economic growth is stabilizing and business confidence is improving in light of supportive government policies.

Raymond Yeung, chief economist for China at ANZ Bank, said: "There is little room for the PBOC to lower interest rates next year, in order to control the debt growth. Monetary policy is not a priority to spur long-term economic growth, and we need to use credit very carefully."

China is seeking to strike a balance between supporting a slowing economy that has been affected by the trade friction with the United States and controlling financial risks.

"In the next stage, we should continue to make good use of structural monetary policy tools, create and improve policy tools as needed, dredge the transmission of monetary policy to support economic restructuring and optimization," said PBOC's Yi.

Some experts said the short-term rebound of productive activities may not indicate a bottoming out of the economy, as strong growth headwinds remain. So further supportive policies are required, especially from the fiscal side, to maintain a GDP growth rate of above 6 percent.

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2019-12-03 00:00:00
<![CDATA[New version of internet protocol to help integrate real, virtual economies]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527243.htm China is making a big push to build the world's largest IPv6, or internet protocol version 6, network, which according to the top industry regulator will pave the way for a sound digital infrastructure to integrate the real and virtual economies.

IPv6 is the most recent version of the internet protocol, the communications protocol that provides a unique numerical address, or IP address, for every internet-connected device and every website on the internet. This address allows devices and websites to find each other online.

China's move came as the world has run out of IP addresses offered by IPv4, the former version of internet protocol. IPv6 can offer considerably far more IP addresses than IPv4, better designed for the internet of things era.

The Ministry of Industry and Information Technology said in a document that developing the next-generation network based on IPv6 is the inevitable trend of internet evolution and upgrading.

It also meets the urgent need to deepen integration of the internet and the real economy and support the high-quality development of the economy. It is also of great significance to enhance the comprehensive competence of the country's cyber power, the ministry said.

To make better sense of the opportunities brought by the new-generation internet network, Yu Yingtao, CEO of Chinese IT solutions company New H3C, said in an earlier interview with Xinhua News Agency that "both IPv4 and IPv6 are like the internet's oil fields and the IP addresses are oil. Now that IPv4 resources are exhausted, it is hard to continue extraction. But oil is pouring out of IPv6."

As early as November, 2017, the State Council, China's cabinet, unveiled a guideline on accelerating efforts to build an IPv6 network. The action plan aims to cultivate 500 million IPv6 users in China by the end of 2020 and the country will take five to 10 years to build the world's largest commercial IPv6 network.

As of May this year, China had about 311 million active IPv6 users, with most of them often using video streaming and online shopping applications, according to the China Academy of Information and Communications Technology.

The research institute said China has made significant progress in the deployment of the IPv6 network, but the country is still in the initial stages and lags behind advanced countries in both data traffic and active user numbers.

But it is worth noting that China has taken steps to build the root servers for IPv6. In the era of IPv4, the world only has 13 root servers, and only one of them is located in Asia. That is in Japan. But China now has four root servers for IPv6, according to a report by IT news website IThome.

IPv6 is an important starting point for the whole online ecosystem, including big data, IoT, cloud computing and other applications, the China Academy of Information and Communications Technology said.

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2019-12-03 00:00:00
<![CDATA[China's trust funds seek new development modes]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527266.htm BEIJING-The steel sector might not be a good investment target at first glance given its price swings and the campaign to cut overcapacity, but some financial institutions are hoping to strike gold in the middle of the market's upgrading.

Bohai International Trust Co Ltd has launched a trust product in partnership with Zhaogang.com, a leading digital B2B platform in China that brings together steel producers and consumers. They will offer loans to steel purchasers to encourage efficient deals on the platform.

Over 9,000 firms along the steel industrial chain have benefited from the trust product, which leverages Zhaogang.com's matchmaking services to enhance the steel sector's efficiency.

The trust firm has invested over 330 billion yuan ($47 billion) in manufacturing, infrastructure, energy conservation, environmental protection, industrial upgrading and other real economy fields, said company president Ma Jianjun.

China's trust fund flows are shifting direction as the country keeps a tight rein on speculation and looks to raise investment in the real economy.

Chinese trust fund managers are also seeking new development models to invest in small and private companies to support economic growth, according to business leaders.

The country's financial regulators have been tightening rules to control systemic financial crisis, reduce the leverage rate and channel money into the real economy. Given the challenges, trust firms are increasing investment into infrastructure construction, public facilities, and healthcare, said Yan Guijun, chairman of the board of directors of China Everbright Trust.

"The company is developing new financial products to invest in private, small-and medium-sized companies," Yan said.

At this time, about 450 billion yuan of funds managed by the China Everbright Trust have gone into privately owned companies, accounting for more than 70 percent of the total trust fund it owns. Nearly 90 percent of the investment targets are small and micro companies, the chairman said.

Yan said a key business the company plans to develop would be asset securitization products.

"Trust fund companies usually have advantages of dealing with bankruptcy cases, as they have bankruptcy isolation function. Thus, they have the comparative advantage of participating in the asset securitization business."

Asset securitization products can also help companies in the real economic sector to reduce financing costs, he added.

China Everbright Trust has promoted asset securitization financial instruments such as asset backed securities and the scale of the property right trust has reached 36.6 billion yuan.

At the end of September, the total entrusted assets balance of the country's 68 trust firms stood at 22 trillion yuan, down by 2.39 percent quarter-on-quarter, data from the China Trustee Association showed.

The trust fund balance in the real estate sector shrank by 148.07 billion yuan at the end of September compared to the end of June, the first quarter-on-quarter drop in over three years.

Industrial and commercial firms remained the biggest destination for trust funds flows. During the first three quarters, the sector saw new trust investment of 1.09 trillion yuan, making up about one-third of the overall new trust investment during this period.

The basic industries registered new trust investment worth nearly 140 billion yuan in the third quarter, up over 60 percent year-on-year.

"Serving the real economy is the trust sector's primary role," said Lai Xiufu, head of the trust institution supervision department with the China Banking and Insurance Regulatory Commission.

Lai said despite enhanced regulation, the country's economic shift is "creating many fresh opportunities for trust firms" such as investing in the green sector and expanding direct investment.

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2019-12-03 00:00:00
<![CDATA[Trade tensions cast gloom over US holiday shopping season]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527262.htm WASHINGTON-The holiday shopping season is traditionally considered a time full of joy and cheer for both US retailers and consumers. But as this year's holiday shopping season kicked off on Thanksgiving, the mood is a bit mixed.

Retailers, especially small ones, have been struggling to deal with the additional US tariffs on Chinese imports, while consumers, who crave a bargain, are worried about potential price increases in the future.

Holiday shopping season usually refers to the period between Thanksgiving and Christmas, and some define it as the whole months of November and December. The National Retail Federation said holiday sales represent about 20 percent of annual retail sales each year, but the figure can be as high as 30 percent for some retailers, such as hobby, toy and game stores.

Retailers reported higher costs from tariffs and firms generally expected higher prices going forward, but their ability to raise prices to cover higher costs "remained limited," according to the US Federal Reserve's latest survey on economic conditions, known as the Beige Book.

In the Cleveland Fed district, a clothing retailer reduced the use of price discounting to offset higher costs resulting from tariffs. A food retailer said that even though tariffs had increased costs, the company "cannot raise prices on a whim" because of fierce competition.

Retailers' reluctance to raise prices is evident to consumers such as Kelsey Burhan and Sloane Smith, who said that they haven't noticed any price change for the same stores they usually shop.

"I think it's a good discount. I feel like it's about the same with last year," said Burhan, who planned to purchase some purses at Kate Spade and clothes at American Eagle.

For Kumar Kincun, who has been coming to the outlets on Thanksgiving for the past nine years, this year is certainly different. Despite generally stable prices at this moment, Kincun said he is "definitely" concerned about the additional tariffs resulting from the US-China trade tensions.

"The tariffs would impact the price, it will. It goes gradually up, I think that's what is happening," Kincun said. He said he would purchase more products, including Christmas gifts, early in the holiday season to avoid higher prices later on.

Despite strong opposition, the US government imposed 15-percent additional tariffs on some $110 billion worth of Chinese imports, effective on Sept 1, covering a wide range of consumer goods including clothing, footwear, food and books. The United States also threatened to levy additional tariffs on other Chinese products including toys and electronics.

According to the Fed survey, companies affected by the tariffs were more inclined to pass on cost increases. Business contacts in the Chicago Fed district reported that retail prices "increased modestly" and they expected prices to "rise at a somewhat faster pace" over the next 12 months.

"One contact said that food, home goods, and apparel retailers were struggling to pass on higher costs; in contrast, another contact noted that retailers continued to raise prices to reflect higher potential and realized tariffs," the survey said.

In September alone, US businesses and consumers paid $7.1 billion in tariffs, up 59 percent year-on-year, said US anti-tariff advocacy group Tariffs Hurt the Heartland, which noted that the "significant increase" was primarily driven by tariffs implemented by the current US administration.

Kincun, the consumer, voiced hope that the United States and China can work out a trade deal in the near future. "It does not only impact China and the US, it impacts everyone else as well, because both of them are pretty big countries with big economies, so it impacts the world economy," he said.

On the ongoing US-China trade negotiations, Portaro said he is cautiously optimistic. "We are very encouraged that the tariffs have come to a standstill and hopeful that this will soon come to an end," said the startup co-founder.

A potential phase-one deal would have a positive effect on his business and on the industry as well, according to Portaro. "We anxiously hope that both sides can come to an agreement," he said.

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2019-12-03 00:00:00
<![CDATA[Ningbo taps 'smart' manufacturing]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527248.htm Ningbo, a port city in East China's Zhejiang province, has been harnessing opportunities from advanced technologies and globalization to transform and upgrade its traditional sectors, bolstering the city's high-quality development.

The city on China's eastern coast, which is one of the economic hubs in the Yangtze River Delta, recently rolled out a plan to double its current foreign trade volume by 2025, allowing both its imports and exports to each hit 1 trillion yuan ($142.1 billion).

Ningbo has a solid foundation in traditional manufacturing industries such as textiles, chemical engineering, auto parts, rubber and plastic goods. Those industries have been a major engine for its economic growth for years. The city is one of the province's economic powerhouses.

In the first nine months of 2019, the value-added of enterprises above their designated size, which means an enterprise with annual revenue of more than $2.85 million, from Ningbo's nine traditional manufacturing industries witnessed a year-on-year growth of 8.5 percent. The research and development expenditure of those enterprises increased by 14.7 percent.

Since Zhejiang mapped out a plan to accelerate the transformation and upgrading of its traditional manufacturing sector in 2017, Ningbo has been seeking ways to achieve intelligent transformation, innovative development and the further opening-up of traditional industries.

Targeting industries with a competitive edge nationwide, the city put the intelligent transformation of traditional manufacturing as its first priority with the aim of improving manufacturers' core competitiveness and their ability for sustainable development.

Youngor Group Co Ltd, China's leading clothing manufacturer based in Ningbo, launched an intelligent factory in July last year. Making a cashmere sweater used to take a whole week, but at its 10,000-square-meter new factory, the process has been shortened to eight hours through a highly-automated system.

"We are attracting more customers, both in the online and offline sectors, through using big data, which is a key factor in guiding our manufacturing," said Youngor board secretary Liu Xinyu.

Through its intelligent ordering and purchasing platform the company launched prior to the "Singles Day" shopping festival this year, buyers can order clothes online and get them delivered if they failed to find the right size in the store.

"To transform the traditional production system with standardized, automated and digitalized technologies is a new mode of intelligent manufacturing," said Li Rucheng, the clothing group's chairman.

Ningbo Fotile Kitchenware Co Ltd, a manufacturer of high-end home appliances and integrated kitchen ware, has widely adopted automated machines in its production lines for higher efficiency. Thanks to a smart system Fotile developed, workers are able to access the real-time data of production at any time.

Official statistics showed in the past two years, over 7,000 Ningbo enterprises have introduced smart manufacturing and enhanced R&D in their production lines, accounting for 94.4 percent of the total.

In Ningbo, the building of innovation strengths has reached a strategic height in the city's development strategy.

At this time, Ningbo has established 60 research institutes for advanced industries and technologies such as artificial intelligence and smart manufacturing. Innovation centers have been stationed in the city focusing on cutting-edge products such as graphene and magnetic materials.

An official from the Ningbo Municipal Science and Technology Bureau said the local government has been ramping up efforts to deepen cooperation with the academic world to attract professionals and projects for the purpose of increasing the city's innovation capacity.

In collaboration with a research institute of the China Shipbuilding Industry Corp, Ningbo Cixing Group Co Ltd, a global supplier of intelligent knitting machinery, created China's first 3D sewing robotic arm that can quickly scan pieces of cloth with a laser scanner, sew them together based on programmed patterns, and cut the threads.

The production efficiency is expected to rise around 50 percent thanks to the new invention, said Wu Huansen, a project manager at the company. Li Lijun, deputy general manager of Cixing, said seeking innovation is an effective way for traditional manufacturing to get rid of development difficulties.

Cixing, recognized by the Ministry of Industry and Information Technology for intelligent manufacturing, possesses over 1,300 patents and mastered a large group of core technologies in the field of textiles.

"Industrial transformation and upgrading will play a vital role in boosting Ningbo's exporting sector," said Pan Xiaofeng, an official with the Ningbo Municipal Bureau of Commerce.

A Joyson Electronics employee conducts safety checks on products at the company facility in Ningbo, Zhejiang province. CHINA DAILY ]]>
2019-12-03 00:00:00
<![CDATA[Nation walks the talk on efforts to create 'fair business environment']]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527244.htm BEIJING-Earlier this month, China's State Council released a guideline detailing 20 policies to create a more "fair, transparent and predictable" business environment for foreign investors in the country's latest opening-up push.

Amid rising tides of protectionism and unilateralism, the move highlighted China's resolution to liberalize its economy, and with top leaders' repeated promise of wider opening-up on various occasions, the world can count on the country to continue to walk the talk, analysts said.

The significance of reform and opening-up cannot be overstated as it has defined the country's growth stories over the past decades and will continue the role going forward.

In 1979, China assigned Guangdong and Fujian provinces with the task of piloting implementation of special and flexible policies in economic activities with foreign countries, marking a historic step in the country's opening-up.

Since then, China has taken solid steps to open up its market and now become an industrial powerhouse and an engine driving global growth.

Last year, China contributed to 27.5 percent of global economic growth, 24.4 percentage points higher than the ratio in 1978, according to the National Bureau of Statistics.

A key milestone in the opening-up process was China's entry into the World Trade Organization in 2001, which saw the country gradually adapt to international trade rules and become a constructive member in the mechanism.

The more convenient flows of goods and capital had generated growth opportunities for China and the world at large. China is now the largest trade partner of more than 120 countries and regions.

Knowing too well that opening-up is the right path, China in recent years has quickened the pace and spared no effort to open up wider.

China has established 18 free trade zones across the country to experiment with new regulations and explore ways to improve the business environment that would later be replicated nationwide.

In 2013, China proposed the Belt and Road Initiative, which opened up new space for the world economy, spurring trade and economic growth and stimulating investment and creating jobs worldwide. So far, more than 160 countries and international organizations have signed cooperation agreements under the BRI.

Since the first China International Import Expo (CIIE) last year, the event has become a new initiative to push the opening-up to higher levels.

The second CIIE, which concluded earlier this month, had tentative deals worth $71.13 billion inked for one-year purchases of goods and services.

Apart from covering a wider range of areas, the new round of self-initiated opening-up focused more on institutional changes, according to Long Guoqiang, deputy head of the Development Research Center of the State Council.

In the past year, China passed a landmark foreign investment law and a new regulation on optimizing the business environment, shortened the negative list for foreign investment, and enhanced opening-up of the manufacturing and financial sectors.

The government also decided to remove caps on foreign ownership of brokerages, futures dealers and life insurers by 2020, a year ahead of the previous plan.

While some countries are in the habit of complaining that China is not moving fast enough, the World Bank's ease of doing business study tells the truth.

According to the latest World Bank report, China's ranking in terms of ease of doing business has advanced to the 31st place this year from the 46th slot last year, and it is also among the 10 economies that has improved the most on the ease of doing business after implementing regulatory reforms.

"No matter how the international landscape changes, China's opening-up steps will only be bigger and quicker," noted Xie Fuzhan, president of the Chinese Academy of Social Sciences.

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2019-12-03 00:00:00
<![CDATA[Profit growth improves as upgrade measures bear fruit]]> http://www.chinadaily.com.cn/kindle/2019-12/03/content_37527301.htm Profit recovery in the high-end sector and some key industries during the first 10 months of the year despite rising downside pressure is an indication that China's ongoing industrial transformation and upgrade efforts are gradually bearing fruit, experts said.

Profits of the high-tech manufacturing sector rose 7.5 percent year-on-year from January to October, 1.2 percentage points higher than in the first nine months, according to the National Bureau of Statistics.

Strategic emerging industries and the equipment manufacturing sector saw profits jump 5.3 percent and 2 percent, respectively, in the first 10 months, 0.7 percentage point and 1.1 percentage points higher than that in the first nine months, NBS data showed.

Analysts said the rebound in the key sectors shows that the country is progressing steadily toward its high-quality development goals.

Tang Jianwei, chief researcher at the Bank of Communications' Financial Research Center, said the profit growth has largely been driven by the strong supportive policies from the government.

"Facing downward pressure amid uncertainties due to Sino-US trade friction, China will continue to ramp up efforts to boost innovation and achieve independent control of key core technologies, which will offer new opportunities for high-end companies and give them ample room for recovery."

In the first 10 months, profits of major industrial enterprises decreased by 2.9 percent year-on-year, wider than the 2.1-percent fall recorded in the first nine months, according to NBS data.

Among the 41 industries surveyed, 30 sectors witnessed year-on-year growth in total profits in the first 10 months, while 11 sectors saw profit declines.

Tang said the industrial profit decline was mainly due to dwindling producer prices and the slowdown in industrial production as well as the dip in profit growth of some key sectors, such as the 14.7-percent year-on-year decrease in vehicle manufacturing profits.

Despite the sharp decline in major industrial profits, Tang added some structural opportunities still exist.

"While many industries saw declines in profit growth, some have witnessed an increase in industrial concentration and profit growth for leading companies. One of the reasons is that some less-competitive small enterprises in the low-end segment have been phased out due to supply-side structural reforms and phasing out of backward capacity."

More efforts are needed to lighten the burden for companies, and government should take key measures to implement the tax and fee reduction policy more thoroughly and foster a better business-friendly environment, Tang said.

In fact, China's November manufacturing activity returned to the expansion zone, a new sign that the country's economy is gradually stabilizing. The purchasing manager's index for the manufacturing sector firmed up in November to 50.2 from 49.3 in October.

Zhang Wei, an analyst with Chongqing-based Southwest Securities, noted that the industrial profit almost bottomed out in October, and will recover gradually.

"Buoyed by the countercyclical policies, infrastructure investment will improve steadily. The overseas replenishment needs will last at least until the first quarter of 2020, a sign of recovering overseas demand. Caused by those factors as well as the future rise in producer prices, the industrial profit will gradually pick up," Zhang said in a recent report.

"Affected by several positive factors, the downward pressure will be released to some extent in 2020," Liu Yuanchun, vice-president of Renmin University of China, said during the recent China Macroeconomy Forum in Beijing.

A new report released during the forum predicted that China would see a 6.1 percent GDP growth in 2019, which would meet the annual projected growth goal of 6 to 6.5 percent growth.

Looking ahead for 2020, the report estimated that the GDP growth would reach 5.9 percent.

"As China is actively taking key measures to maintain employment and the financial sector, foreign trade, foreign and domestic investments are slated to remain stable, the economy will continue to enjoy resilience and flexibility," the report said.

An employee installs an intelligent pipe winding machine at an industrial park in Lianyungang, Jiangsu province, on Nov 27. GENG YUHE/FOR CHINA DAILY
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2019-12-03 00:00:00
<![CDATA[Catering, tourism, shopping, retail shine after sunset]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526924.htm The allure of active night life is prompting consumers to spend 1,600 yuan ($228) on a return flight to and from certain tourist destinations in China just to savor popular late-night dishes.

For instance, Changsha in Central China's Hunan province recently attracted Wu Yi, a senior university student in Beijing, for a quick weekend trip.

"I didn't plan the trip in advance. Content about a crayfish restaurant in Changsha went viral on the internet, so I wanted to give it a shot. I really wanted to experience Changsha's famed night life," she said.

Wenheyou crayfish restaurant that Wu visited boasts a record of serving over 7,000 diners on a single night. Thousands of foodies had lined up just for a late-night bite. According to Wenheyou, its sales revenue surpassed 100 million yuan last year.

In recent years, Changsha's nighttime consumption boomed, contributing greatly to the city's economic development. For instance, in the first half of this year, its Furong district saw 274 commercial establishments stay open for business until midnight, and raked in 432 million yuan in total sales. For some food streets, nighttime sales accounted for one-third of total sales, according to local government officials.

"Our busiest time everyday is from 6 pm to midnight. Last year, nearly 3.7 million tourists came to the restaurant," said Li Mingyue, assistant to chairman of the Hunan-based Wenheyou Group.

A report on China's nighttime economy from the Yaok Research Institute showed that in 2017, total sales revenue of Changsha's nighttime industries grew 12 percent year-on-year. The number of people involved in the city's nighttime economy was 49.2 percent more than that of 2016.

"Nighttime economy has extended the consumption duration, serving as a new breakthrough point in consumption growth, a potential bonus," said Mao Zhonggen, director of the Western China Economic Research Center at the Southwestern University of Finance and Economics in Chengdu, Sichuan province.

Apart from the catering sector, commodity retail involving household provisions and consumer goods is an important driving force for nighttime economy. According to Yin Zhixin, from the Guangzhou Development and Reform Commission, the most profitable part of Guangzhou's nighttime economy is commodity retail, with an annual sales revenue of over 280 billion yuan, accounting for roughly 30 percent of the total retail sales.

Nighttime catering ranked second, with around 80 billion yuan in annual sales revenue, which took up two-thirds of daily catering sales.

Food, tourism and shopping top the nighttime economy areas, but new avenues like nighttime exhibition, nighttime reading and nighttime running are becoming popular. Industry experts noted that innovative businesses that focus on mental health and a healthy lifestyle are proving to be new growth points.

This year's Lantern Festival on Feb 19 attracted 570,000 visitors to the photoelectric fireworks show on Sichuan Tower of China in Chengdu. The operator of the tower attributed the new rush to the booming nighttime activities in the city. Fashion bars and museums stay open till late, attracting tens of thousands of young consumers who spend liberally.

Nighttime economy may be booming now but many problems could pose problems in the future. Zhu Dejun, a government official from the Tianxin district in Changsha city, said: "With the rise of people's living standards, demand for night life has increased, and the future of nighttime economy is promising. However, the range of businesses in the sector tends to be predictable and monotonous. Catering alone won't suffice. More innovations are needed."

Yang Jirui, head of the China Consumer Economics Society, said sales during day and night differ, but so do costs, because nighttime operations require lighting, public transportation, public security management, food safety, logistics and emergency management. Such requirements test the efficacy of a city's urban management systems.

"These support services must keep pace with the evolution of nighttime economy and be offered constantly," Yang said.

 

Since the start of the 2019 Chongqing night market cultural festival in August, Chongqing's five "strange, elegant, fashionable, beautiful and spicy" night market blocks have attracted 6.7 million visitors. TANG YI/XINHUA

 

 

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2019-12-02 00:00:00
<![CDATA[The 'dark' side of consumption]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526984.htm 11 pm. With light music playing in the background, I light a fragrant candle, drape my face with a moisturizing mask, and rub lotion on my body. This is no daily bedtime ritual but a wakeup call of sorts. For a busy 'day' awaits. The night's young, as they say-it's time to shop. Online, that is.

Taobao is the first app I hit to check on the day's hot deals. My shopping record on the app shows I spent roughly 2,000 yuan ($285) in October. About 80 percent of the purchases were made during evenings. My top three favorites are: clothes, skincare products and cosmetics.

Money also flows out into online orders for food. With a few quick taps on my nifty smartphone, I can choose from a variety of delivery apps. Within minutes, my favorite foods arrive in thermal packaging boxes, hot, aromatic, and fresh.

Call me an old-fashioned couch potato, if you must, but I'd not like to move an inch on my cozy soft while watching movies at home. This is my favorite time of the day. I am the sole owner, boss, manager of this time-slot. Me-time, as they call it these days. I love spending quality time with myself every day. Thank heavens for nighttime e-commerce.

A latest report from market consultancy iiMedia Research showed that China's nighttime economy, or business activities between 6 pm and 6 am in the services sector, reached 22.9 trillion yuan in 2018, up 11.5 percent from 2017. With an average annual growth rate of over 16 percent, the sector is estimated to surpass 42 trillion yuan by 2022.

Besides food and personal products, my nighttime consumption includes services of a neighborhood beauty salon, which I visit every Friday evening, after the work week. For facial and body care, I pay around 10,000 yuan for a halfyear subscription.

Saturday and Sunday evenings, I often hang out with my friends. Our regular routine is to eat out-Japanese, South Korean and Thai restaurants are our preferred haunts. Dinners are followed by visits to a KTV center or a sober bar. We chat, sing, drink, or just sit in silence, taking a breather to relax.

Compared to daytime, I prefer evenings to go out, which invariably involves spending some money. Why? I don't know. Maybe it is the dazzling lights, the serene atmosphere, and the fact that there is no work pressure weighing on my mind at that time. Whatever it is, I think evenings are more romantic.

Perhaps, Fu Yifu, a senior researcher at the Suning Institute of Finance, knows more. "In modern society, with the development of global economy and the accelerated pace of work of urban populations, people need more space to find release, and nighttime provides that with recreation and entertainment."

With the general increase in household income and the rise of the young generation, more and more people want to free themselves from the clutches of modern hectic lifestyles. So, nighttime activities are gradually becoming a fashion trend and economy-boosters in Asia, he said.

Fu suggested that cities should develop the sector based on local cultural elements, with support from local governments. Besides, urban public transportation system should be improved, to meet people's transport needs, so that they are willing to go out and consume during nights.

 

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2019-12-02 00:00:00
<![CDATA[Amid slowdown, the challenge is to keep the jobless rate low]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526983.htm Just as people were getting used to the co-existence of economic slowdown and high employment growth that marked the past decade in China, the monthly surveyed jobless rate at the national level rose twice this year, only to retreat later-but that was enough to spark discussions over the health of the labor market.

In February, the surveyed unemployment rate in urban areas rose to 5.3 percent, the first time since the National Bureau of Statistics started the record in January last year. The rate dropped to 5.0 percent in April and May, and then peaked at 5.3 percent again in July.

We (the China Macroeconomy Forum) believe that China's labor market will remain stable as adequate employment is being generated nationwide. Structural employment pressures, meanwhile, have surfaced and should be addressed.

On the one hand, despite the rises in the surveyed unemployment rate, it has stayed below the government's 5.5 percent annual upper-limit target over the first 10 months of this year. Over the same period, some 11.93 million people were newly employed in urban areas nationwide, achieving the annual goal of 11 million ahead of schedule, indicating an overall stability of the labor market.

On the other hand, some industrial businesses accelerated to cut payrolls this year. Each of the sectors of auto, electronic communications, six traditional manufacturing industries including textiles, construction, real estate and information services is estimated to have cut about 500,000 job positions or more so far this year.

The loss in job positions in industrial businesses has been made up mostly by the services sector, whose contribution to the country's total employment rose to 46.3 percent last year from 38.5 percent five years ago.

The above developments indicate that the principal contradiction in China's labor market is transiting from a quantity-focused past to a quality-focused future. Or, looking ahead, it is very unlikely that any massive unemployment would burst out nationwide, while more efforts should be made to avoid the quality of employment from worsening.

The total amount of employment generated nationwide is expected to stay on a steady footing partly because adequate job positions can be created even with slower economic growth, considering that the economy has grown to its current huge size.

Also, the size of labor force is shrinking as the country is aging: China's population aged 15-64 declined constantly after peaking at 996 million in 2014, according to the World Bank.

In other words, the jobless rate is becoming less sensitive to changes in economic growth, a new feature that will give the employment situation adequate resilience.

Meanwhile, employment in some industrial sectors may continue to shrink amid the prolonged trade tensions with the United States and accelerating technological progress. Though new technologies replace some job positions but create others, the impact of replacement may dominate in some industrial sectors in the next few years, as these businesses have been investing actively in robotics as wages rose.

Labor forces laid off by those sectors may be re-employed in the services sector, especially some traditional industries with lower wages and slower productivity improvement. This restructuring could impair the quality of employment.

Also, the weakness of industrial firms-partly due to rising operating costs and sluggish demand amid the trade tensions-may weigh on the businesses that provide services for them, or the producer services sector. Any contraction in employment by the producer services sector would add drag on employment quality as well, as the sector hires labor with higher wages than other players in the services sector.

For instance, if the Chinese economy expands at 6.2 percent year-on-year in 2020, nationwide nonagricultural employment is forecast to grow by 7 million people year-on-year, up from about 6.3 million for 2018 and an estimated 4 million for 2019. This recovery would be achieved at the expense of a decrease in employment quality.

While employment is expected to shrink by 9.35 million jobs in industrial businesses next year, that number may expand to 14.04 million including services like wholesale and retail, education, accommodation and catering, and leasing and business services, where each will account for more than 1 million people. These services-related sectors, however, are industries where labor productivity rises slowly and the problem of low wage is palpable.

To enhance the quality of employment will be a long-term task the authorities need to complete, which is critical for the nation to cross the middle-income trap and achieve high-quality development.

We at the CMF suggest that the government ramp up efforts to enhance the skill-set of labor force and build human capital. Amid the wave of technological progress, the authorities could provide more training for workers in industrial sectors, which market entities are reluctant to offer, to avoid large-scale unemployment.

The government could also grant subsidies to industrial enterprises that increase employment, to buffer the impact of technology progress on employment.

In the short term, the policymakers also should closely monitor and deal with the impact of the Sino-US trade friction on employment. The trade friction is not likely to cause any major unemployment concerns at the national level, but some industries and regions may see sourer labor market conditions.

If additional tariffs imposed on businesses in some labor-intensive industries surpass a certain threshold, they would face losses and even shut down, leading to a wave of payroll cuts.

General-purpose equipment manufacturing, as well as electric equipment and machinery manufacturing, are among the most risky industries. These industries cluster in coastal areas of Jiangsu, Shandong, Zhejiang and Guangdong provinces, making it necessary for authorities to formulate measures preventing unemployment risks in these industries and regions.

The authorities could extend financing support, export subsidies and tax benefits to the affected enterprises, as well as introduce new clients or sales channels, helping them to overcome the short-term difficulty.

In short, a new trend is beckoning the country's labor market, in which the jobless rate at the national level could maintain at low levels despite slower economic growth.

Meanwhile, enough actions should be taken to improve employment quality and deal with possible structural employment pressure, with enhancing human capital as a focus area.

The article is based on a report published by the China Macroeconomy Forum, a think tank affiliated to the Renmin University of China in Beijing. Ding Shouhai, one of the authors of the report, is a professor of applied economics with the RUC and a research fellow of the CMF.

 

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2019-12-02 00:00:00
<![CDATA[On the move]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526982.htm Li leaves multiple roles at Ping An Insurance

Ping An Insurance (Group) Co of China Ltd announced the resignation of Li Yuanxiang (pictured) as executive board director, co-CEO, standing deputy general manager, and executive officer for the company's insurance unit. Li will continue working until Jan 31. Li joined Ping An Insurance in 2004.

Wang lands key job at Fidelity International

Financial consulting firm Fidelity International appointed Flora Wang as director for management and sustainable investment of the company's Chinese operations. In the new position, Wang will be responsible for communication and management of environmental, social, and governance-related tasks involving the company and its invested firms.

Michelle Ho to lead UPS' Chinese operations

UPS appointed Michelle Ho as president of its Chinese operations. She will succeed Harld Peters. An industry veteran with 26 years' logistics experience, Ho will lead the company's small package and strategic business planning operations in China. Ross McCullough, president of UPS Asia-Pacific, said Ho's experience and leadership will help the company deliver the best-in-class logistics experience for customers inside and outside of China.

 

 

 

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2019-12-02 00:00:00
<![CDATA[DAWN OF THE DAZZLING DUSK]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526964.htm It's coming to midnight in Guangzhou, Guangdong province, and Liao Zhihai's restaurant is bustling. It's as though the business day has just started for the 25-year-old restaurateur. Amid much noisy cheer and excitement, Liao serves a plate of garlic-flavored crayfish and several bottles of beer to a bunch of merrymakers, probably workers socializing after a long day's late-shift work.

Liao's crayfish restaurant is open every day from 11 pm to 7 am. Office-goers, youngsters who play new-age video games at gaming parlors in the neighborhood, and those who simply crave another meal ... all flock to his restaurant for a late bite.

Guangdong province officials aver the capital city's nighttime economy has never been stronger.

The term nighttime economy refers to business activities undertaken between 6 pm and 6 am in the services sector. It is a golden period for merchants seeking to expand their business.

"I once sold 180 plates of crayfish one night. Total sales reached 24,840 yuan ($3,535). That's my best record," said Liao, whose restaurant serves popular local food specialities like spicy crayfish, garlic-flavored crayfish, and steamed crayfish.

"Nighttime eaters can never have enough. I've made a new plan for this winter. If the nighttime economy continues to upgrade, I will definitely join in and extend my business to more places," Liao said.

Not far from Liao's restaurant, a sober bar is also throbbing with life. In dim lighting, a music band belts out popular numbers while appreciative customers sip whisky on the rocks. Impressed with the scene visible through the bar's roof-to-floor thick glass-walls, some passersby walk in and settle for a late night friendly chat.

Liao said: "People there enjoy the music and the drinks, and love talking to each other in a relaxing atmosphere. Then, after downing a bottle or two of liquor or wine, they get hungry and come over here to order loads of food. My restaurant is their best option in this area."

Data from the Ministry of Commerce showed that in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen in Guangdong province, nighttime consumption was worth over 50 percent of daytime (6 am and 6 pm) consumption.

The nighttime consumption sector has been growing at an compound annual growth rate of 17 percent, serving as a powerful driving force for domestic demand. The sales volume of major shopping malls during the 6 pm to 10 pm time-slot accounted for over half of that for the whole day, demonstrating that nighttime is prime time for consumption.

As a result, many shopping malls are taking active measures to exploit the business opportunity. A general manager of a shopping mall in Beijing, who sought anonymity, said that to promote nighttime consumption, shopping malls build indoor and outdoor commercial streets.

Such lanes contain kiosks and stalls that sell special snacks, energy bars. KTV establishments and restaurants with live music bands are not uncommon. Such commercial streets stay open to business until midnight. Adjacent shopping malls offer evening discounts to attract consumers.

He noted that currently 60 percent of China's business spending occurs nighttime. This trend is spilling over into digital channels too as e-commerce platforms operate round the clock.

According to a recent report from Alibaba, China's largest online-shopping group, the one-hour slot from 9 pm to 10 pm is the peak period for transactions on Taobao, China's largest online marketplace by sales volume, transactions and number of eshoppers.

Nighttime consumption took up more than 36 percent of the total. From 11 pm to 3 am, tens of millions of people shop on Tmall, Taobao's sister concern that is a platform for established domestic brands.

According to a report from the China Tourism Academy and online food delivery-to-ticketing services platform Meituan Dianping, China's night catering consumption jumped 47 percent in 2018 from a year earlier, 2 percentage points higher than the daytime growth.

A report from market consultancy iiMedia Research said that with local governments' favorable policies and amid rising market demand, China's nighttime economy will show explosive growth in the coming years to surpass 30 trillion yuan in sales revenue by 2020, and surpass 36.4 trillion yuan by 2021, growing 17.6 percent year-on-year.

This year, many cities implemented policies one after another to support the development of nighttime economy. On May 13, Beijing's Haidian district government rolled out a three-year action plan to promote overall consumption. According to the action plan, the local government will introduce nighttime economy subsidies, encourage related retail enterprises to extend evening business hours, explore several transport lines during night and promote nighttime cultural and artistic consumption in cultural salons, cinemas, theaters, and other such places.

Meanwhile, Tianjin started business hours extension since June 1. It held 19 beer festivals from July to the week-long National Day holiday to stimulate nighttime consumption this year.

The six municipal demonstration plots of the nighttime economy markets built in Tianjin had welcomed 130,000 customers per day on average, with a monthly total sales of 20 million yuan in August, according to the Tianjin Information Center.

This spring, Jinan and Shanghai also implemented guidelines to boost the regions' nighttime economy.

Xu Hongcai, deputy director of the economic policy committee with the China Association of Policy Science, said: "To explore the consumption potential of cities, nighttime economy is a practical and efficient approach.

"Currently, China's gross national income per capita is nearly $10,000, which is higher than the average level of middle-income countries. At this development stage, residents' demand for high-quality nighttime consumption grows steadily."

Globally, many metropolises boast thriving nighttime consumption. Some economists use the brightness of nighttime lights to evaluate the economic vitality of a city, Xu said.

Market experts said currently nighttime economy has become an important indicator to measure the quality of life, consumption level, openness, vitality and investment climate of a city.

They said social environment, especially public transportation, offers necessary support to nighttime economy. Data from iiMedia Research showed that the daily average operation time of subways in China's developed regions is 16.35 hours, and Beijing ranked first with an operation time of 17.28 hours.

On the back of the policies formulated by local governments to boost nighttime economy, cities have reached a consensus to promote the development of the sector by enhancing infrastructure construction. Public transportation, power supply, and 5G projects will bring another round of economic growth, market insiders said.

Mao Zhonggen, director of the Western China Economic Research Center at the Southwestern University of Finance and Economics, said: "Support services are a priority for the development of the nighttime economy. There are still many obstacles that hinder the development of the sector, such as climate difference between day and night, residents' lack of spare time, predictable business practices, the homogeneity of products, as well as the inconvenience of public transportation."

These problems need to be addressed, so that nighttime economy can make a bigger contribution to the consumption sector, he said.

 

China's nighttime economy MA XUEJING/JIN DING/CHINA DAILY

 

 

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2019-12-02 00:00:00
<![CDATA[Brands prepare to woo Chinese sports-loving consumers]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526925.htm Companies operating in China, where hundreds of millions of consumers are internet-savvy sports-lovers, are gearing up to promote their brands in the busy sports season ahead.

Multiple big-ticket sports events are scheduled for the near future: the 2020 Tokyo Olympic Games, the UEFA Euro 2020 football bonanza, the 2022 Winter Olympics and more.

Since 2014, awareness of, and interest in, sports have risen sharply in China, according to a joint report from the China Advertising Association, marketing data technology company AdMaster and the Miaozhen Academy of Marketing Science.

The report analyzed related online data such as search frequency and discussions. Opinions expressed in the public domain about sports in 2019 more than doubled that in 2014. The peak was in 2018 when Russia hosted the 2018 soccer World Cup, the report said.

"By having their brands exposed during hot sports events, companies can reach their potential consumers in a more efficient way, so as to help increase sales and expand brand influence," said Leon Zhang, partner of global consultancy Prophet.

Charles Chen, associate account director of consultancy Kantar Worldpanel China, said besides brand reputation, companies also expect to build a healthy and dynamic brand image, in line with people's increasing preference for a healthier lifestyle in China.

Traditional sports marketing includes sponsorships of sports teams and events, enrolling star sportspersons as brand ambassadors, publicizing related advertisements and organizing offline and online branding activities, experts said.

Sports marketing has also expanded to the so-called pan-sports marketing segment, which includes marketing for esports events, sports entertainment programs, sports social platforms, e-commerce platforms and key opinion leaders in sports, according to the report.

Companies showing interest in the segment have ranged from sports and automobile brands to finance, home appliance, beverage, energy and other industry brands, it said.

Credit card brand Visa has been a sponsor for the Olympics from 1986 to 2032. Chinese property conglomerate Evergrande Group invested big time in soccer events. China Mengniu Dairy, smartphone manufacturer Vivo, home appliance giant Hisense Group and property giant Dalian Wanda were all among the various sponsors of the 2018 FIFA World Cup in Russia.

Companies also do marketing in different ways. Huawei functioned at the 2014 FIFA World Cup in Brazil as communications guarantee service provider. Japanese carmaker Toyota will provide cars for the torch relay of the 2020 Tokyo Olympics. P&G released advertising short videos entitled "Thank you, mom" during the 2014 Sochi Winter Olympics and the 2016 Rio Olympics.

Sports marketing has proved to be profitable. According to research of Kantar Worldpanel, sales of beer and carbonated beverages during the 2018 World Cup grew 43 percent and 32 percent year-on-year, respectively, thanks to massive promotions.

Its survey showed 53 percent of consumers remembered watching Mengniu's ad with star soccer player Lionel Messi, far more than other sponsors, though the growth of sales is far less than beer or beverage, due to its weaker linkage to soccer.

"Instant sales surge after a sports event may not be possible, but the company succeeded in raising awareness of its brands," Chen said.

AdMaster's report said sports enthusiasts show more interest in automobile, digital products, commodities for daily use, and mother and baby products.

Kantar Worldpanel's study showed men love watching soccer and basketball games most, while women favored diving and swimming. "Brands need to select different sports events to sponsor or do marketing after learning the preference of their consumers, to increase brand value and promote sales effectively," Chen said.

The upcoming 2022 Winter Olympics has also attracted big investment. According to a People's Daily report in October, the organizing committee has nine official partners, including Bank of China, Chinese dairy giant Yili, and State Grid. The event has signed six sponsors, including Tsingtao Beer, and two exclusive suppliers EF Education and artificial intelligence company iFlytek, it said.

Chinese Olympic skating champion Wu Dajing endorsed water brand Evergrande Spring and automobile brand Hongqi. TV and online media also broadcast programs related to winter sports.

Zhang from Prophet said since there are still more than a couple of years to 2022, more brands are preparing for related promotions.

He said it is important to select the right sports events to invest in, instead of going in for blind investments. "The sports and marketing channels should target their consumers accurately."

Chen suggested companies should insert sports events-related ads on multiple platforms, including TV broadcasts, video websites, WeChat, Sina Weibo, news apps and outdoor billboards.

He said sports marketing is all about brand-building over the long-term. It requires continuity and stability. "Coca-Cola, for example, has sponsored Olympics for about 90 years, and the soccer World Cup for over 40 years, while releasing related ads and limited-version products during the events, so that its brand image can be passed down from generation to generation."

 

Consumers check out 2022 Winter Olympics souvenirs at a Tmall shopping event in Beijing on Nov 8. DU JIANPO/FOR CHINA DAILY

 

 

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2019-12-02 00:00:00
<![CDATA[Xi'an looks to develop as national digital security powerhouse]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526962.htm The 2019 Huashan Swords Cyber Security Conference held recently in Xi'an, capital of Shaanxi province, revealed importance of digital security and the steps the city is taking to handle with it.

The event focuses on big data, cloud security, cultivating industry professionals, and how information is being comprehensively integrated with industry.

Xi'an Mayor Li Mingyuan said the city is making nation-leading advances in these areas.

"With a sound industrial foundation and rich scientific and educational resources, Xi'an is aiming to become an important city in these areas," Li said.

"As cities become more digital and intelligent, the importance of network security is becoming increasingly prominent. As one of the few cities in China that have a complete network security industrial chain, Xi'an has already attracted many well-known global companies," he added.

Bao Yongneng, director of the Shaanxi Provincial Office of Cyberspace Affairs Commission, said Shaanxi is aiming to achieve high-quality development by promoting big data and information technology as its specialism for accelerating economic transformation.

"I hope that the conference will provide more opportunities for the integration of the internet, big data, artificial intelligence and traditional industries, and promote the development of network security and the digital economy," Bao said.

Zhao Hongzhi, deputy secretary-general of the Cybersecurity Association of China, said with the rapid development of information technology, how to effectively respond to cybersecurity challenges and protect new resources have become key issues that all countries must face.

"We will actively guide various enterprises in the network environment to fulfill their cybersecurity responsibilities, and create a strong atmosphere for maintaining network information security," Zhao said. During the event, Xidian University and Hangzhou Anheng Information Technology signed a contract to jointly build a 5G security innovation research center.

The management committee of the Xi'an High-tech zone and Hangzhou Anheng Information Technology also unveiled a network security training center under the Belt and Road Initiative.

Hu Ruimin, dean of the School of Cyber Engineering at Xidian University, said it is necessary to build a training system of interdisciplinary, corporate and overseas study tours to achieve student-oriented and differentiated training.

At the same time, the role of the government, enterprises and schools must be brought into play, and alumni, colleges and national platforms must be closely integrated to achieve the best results, he added.

Fan Yuan, chairman of Hangzhou Anheng Information Technology, said in his speech that cyberspace has evolved from point-to-point connection to industry-to-industry interaction.

As a result, network security threats have also begun to change. This has brought many new changes and challenges to governance, Fan said.

Xie Xuhui, chairman and CEO of IP service website Wtoip, gave a keynote speech on the protection and realization of intellectual property in the digital age during the event.

As a science and technology innovation platform focusing on IP, the company aims to create a new online and offline integration model in the field of intellectual property by using emerging technologies such as artificial intelligence, big data and the internet of things.

It provides enterprises with technologies including artificial intelligence, big data and other science and technology services.

Huicheng Brain is a cloud system specially created for smart intellectual property-based science and technology urban parks.

It focuses on urban patents and technology, and conducts industrial analysis with cutting-edge technologies such as AI, cloud computing and big data.

Xie said digitization and IP will become very important in the intelligent era. Intellectual property is a core asset in the era of network intelligence. The application of AI across all technologies and applications will generate a large amount of intellectual property.

"The successful holding of the Cyber Security Conference in Xi'an will help the city to build unique advantages in cultural creative IP, encourage a large number of upstream and downstream enterprises to invest in Xi'an, and promote the healthy and vigorous development of the digital IP industry," he added.

Roy Zur, CEO of Israel-based Cybint Solutions, said Xi'an's fast-growing economy can effectively boost industrial upgrading and drive development in the digital security field.

In addition, both government officials and ordinary people attach great importance to the digital economy and network security, which will bring very good development opportunities for network security companies, he said.

"I am here to share the Israeli education models and experiences in cybersecurity and promote cooperation between Israel and Xi'an in the digital economy industry."

 

The 2019 Huashan Swords Cyber Security Conference held in Xi'an, Shaanxi province, focuses on big data, cloud security and cultivating industry professionals. CHINA DAILY

 

 

 

 

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2019-12-02 00:00:00
<![CDATA[Music for world, no strings attached]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526943.htm Zheng'an, a small county in Guizhou province of Southwest China, is the world's largest guitar manufacturing center from where locals export the instrument globally.

In all, 56 producers of guitar and related spare parts are based out of the guitar industrial park in Zheng'an. The county has developed 34 independent brands, according to the local government.

Zunyi Shenqu Musical Instruments Manufacturing Co Ltd, a major guitar retailer in the county, has developed three independent brands. It also does processing work for some top global music instrument brands such as Japan's Ibanez and US' Fender. So far, it has exported its products to the United States, Brazil, Spain, Germany, and Japan.

"The main consumer groups who buy guitars are schools, art training centers and guitar lovers. Compared with overseas markets, we have relatively lower costs and prices. The prices of average products range from 1,500 yuan ($214) to 5,000 yuan each. Higher-end guitars can cost over 10,000 yuan each, depending on their quality, features and craftsmanship," said Zheng Chuanjiu, general manager of Zunyi Shenqu.

The firm has two production lines, one for electric guitars, the other for wooden instruments. The company's annual output value has exceeded 400 million yuan. To expand production scale and operational efficiencies, Shenqu will add more production lines, its executives said.

This year, some companies from South Korea and the United Kingdom have visited the plant and tried out sample products of Shenqu in Zheng'an. They are exploring further cooperation.

From January to September, the export value of Shenqu reached $14.31 million. The company said it expects the full-year export value to reach $18 million, up 25 percent year-on-year.

"We import raw materials and export the finished products. The cheap land and labor costs are the advantages in Zheng'an," Zheng said.

In 1995, Zheng and his brother, both natives of Zheng'an, went to Guangzhou, capital of Guangdong province, to work at a guitar plant, where they were later promoted to management positions. In 2013, the two brothers started their own factory in Zheng'an, sowing the seeds of what turned out to be a booming business in guitars.

Last year, Zheng'an produced more than 6 million guitars, and the output value reached 6 billion yuan. More than 3.6 million guitars were exported to more than 30 countries and regions globally, including the US and Brazil, and the export value accounted for nearly one-third of the export value of guitars made in China.

With nearly 15,000 employees working there, the industrial park in Zheng'an expects sales to exceed 7 million units by the end of this year, with an output value of more than 7 billion yuan, according to the local government.

Guizhou Baikal Musical Instrument Co Ltd, another major guitar producer in Zheng'an, has developed two independent brands, and has sold its products nationwide through e-commerce platforms.

Its daily sales reach about 3,000 to 4,000 guitars, the largest nationwide, on online marketplace Taobao of Chinese e-commerce giant Alibaba Group.

"The user groups of guitars online are much broader, and the market potential is bigger. It's not difficult to tap the market by selling high-quality but inexpensive instruments to entry-level guitar players," said Zhao Shan, general manager of Guizhou Baikal.

Zhao has put in more efforts to sell guitars online. He aims to promote sales using the marketing strategy of "internet plus". The company has launched its products on major e-commerce platforms such as Tmall and JD, and sells its products domestically and overseas using its person-to-company, or P2C, business model.

Last year, the company sold more than 600,000 guitars online, with an average monthly sales of 53,000, it said. With strong sales, and demand rising, the production volume of Baikal is inadequate. But the six other guitar producers in the industrial park help meet the demand somehow.

In China, Zheng'an has come to be associated with guitar. Fittingly, the county has also built the world's largest guitar sculpture, a guitar street, a guitar-themed park, and a guitar-themed hotel.

Che Weiwei in Guiyang contributed to this story.

 

A worker strings guitars at the production center of Zunyi Shenqu Musical Instruments Manufacturing Co Ltd in Zheng'an, a small county in Guizhou province of Southwest China. ZHAO YONGZHANG/FOR CHINA DAILY  

 

 

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2019-12-02 00:00:00
<![CDATA[Thales' tech, investments to bolster China]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526942.htm Thales Group, the French industrial conglomerate, will deepen its presence in China by supplying air traffic control solutions and digital security products.

It will increase China investments to build innovation resources over the next five years, said a senior executive.

Demand is surging from airports in China that are keen to upgrade their infrastructure to accommodate wide-body passenger aircraft. Ground transportation players are also seeking to improve their efficiency and make breakthroughs in digital technology, said Pascale Sourisse, president of Thales International.

As China has begun to develop its CR929 wide-body jetliner to meet the demand for international and regional civil aviation, the company hopes to supply avionic solutions for the CR929 aircraft, Sourisse said.

"We always had strong interest in providing cockpit display systems as well as the integrated modular avionics systems. These are domains where we have a lot of capabilities," she said, adding the company is ready to partner with Chinese players such as Aviation Industry Corp of China, or its subsidiaries, to co-develop solutions that will be suited for the project.

For the CR929, Thales has been discussing with Commercial Aircraft Corp of China, and with the joint venture between COMAC and Russia's United Aircraft Corporation. It has already submitted offers to the parties concerned.

For the newly inaugurated Beijing Daxing International Airport, Thales and its joint venture Beijing EasySky Technology Ltd or BEST provide air traffic management systems to increase its safety, capacity and efficiency in air traffic management.

In addition to supplying these systems to secure more than 60 percent of China's air traffic, it provides urban rail signaling systems to 33 metro lines in 14 cities through another joint venture-Thales SEC Transport.

Supported by over 2,300 employees across China, the company runs three joint ventures, three plants, two innovation hubs and two R&D centers in cities including Beijing, Shanghai, Dalian, Chengdu and Shenzhen.

Sourisse said together with its Chinese partners, the company also exports its products made at its China factories to other parts of the world, including economies participating in the Belt and Road Initiative.

Sourisse believes that China's growing demand for digital security and identity would boost the application of embedded SIM cards, the latest technological evolution for connecting devices.

The traditional SIM card is evolving toward a miniaturized embedded element soldered in the equipment which would replace or complement the removable SIM card.

"It is based on secure software integrated into a piece of hardware and basically this tiny technology enables not only new generation of connected devices, smartphones but also wearables and PCs. We also demonstrate what we do in the field of IoT(internet of things)," she said, stressing one of the technologies that is important to Thales in China is biometrics, in particular, for authentication and identification use-cases.

Thales has invested more than 7 billion euros ($7.71 billion) in digital technologies since 2014, including artificial intelligence, big data analytics, connectivity with internet of things as well as cybersecurity.

"We are developing, in particular, all these competences in China, because we believe China is also a fantastic country to grow all these competences," she said.

The group's headquarters is located in La Defense, a business district in Paris. It employs over 80,000 staff worldwide, including 3,000 researchers and 28,000 engineers dedicated to R&D, in 68 countries and regions.

The firm generated 19 billion euros in sales revenue globally in 2018, from its business portfolio spanning aerospace, defence, transportation, digital identity, security and space markets.

As a newcomer to the second China International Import Expo held in Shanghai from Nov 5 to 10, Thales showcased its full range of different civil market activities.

To enhance its strength in digital technology, Thales acquired Gemalto, a major player in digital security, in April. It provides technologies and services to authenticate people, transactions and objects, encrypt data and create value for software-enabling businesses and governments to deliver secure digital services for users.

Sourisse said this big-ticket acquisition has created a strong opportunity for the group to help China to achieve certain national objectives like developing competencies in domains that are promising for the future, including digital technologies, aerospace, ground transportation and security. All these domains pack in a lot of potential for future growth, she said.

Sun Fuquan, a researcher at the Chinese Academy of Science and Technology for Development in Beijing, said companies from France, Germany, Japan and the United States have discovered that it is time to invest more in China's research and development, design, high-end manufacturing businesses. He said these new growth opportunities will present themselves as the economy becomes more sophisticated.

Under the government's policies, foreign companies are encouraged to invest in high-end, smart and green manufacturing, set up innovation centers and strengthen cooperation with domestic peers. They will also be allowed to join China's national science and technology programs.

"New technologies such as artificial intelligence and 5G will change the way we manage, secure and exchange data, creating new opportunities to seize," he said. "Major multinational companies have already spent more on innovation and new technologies, to reinforce themselves and maximize the value for their customers."

 

An engineer from Thales' joint venture Thales SEC Transport conducts a signal test on the subway line 9 in Hangzhou, capital of Zhejiang province. CHINA DAILY

 

 

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2019-12-02 00:00:00
<![CDATA[Nation's touch enlivens Double Eleven in Vietnam]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526941.htm HANOI-It is almost midnight of Nov 10, a Sunday, and Dinh Thi Thu Huong, a 26-year-old Hanoian, is still keeping her eyes wide open. Her fingers swipe on the mobile phone's screen, selecting items from the online shopping platform Shopee and depositing them into the e-cart.

"I've been waiting for this 'big day' for months," Huong said, explaining that she is preparing for the sales on the Singles Day-the Double Eleven online shopping festival celebrated every year on Nov 11, an invention of China's Alibaba e-commerce platform.

This 11-11 has shown the festival is now popular in Vietnam. "Double Eleven is becoming a phenomenon in Vietnam, a version of 'Black Friday' for online shopping," Huong said, adding she is impatiently waiting to place some 10 orders at the stroke of midnight.

With attractive discounts and promotion policies announced weeks ahead of Nov 11 by China-invested e-commerce retailers such as Shopee, Vietnamese shoppers grasped the chance to acquire their in-need products at the "crazy" best prices of the year.

"The trick here is you put your needed items in e-shopping baskets in advance, find the limited promotion codes and place orders as fast as you can. It's a paradise for bargain shoppers," the white collar worker said passionately.

Shopee, Huong's favorite online shopping platform, is one of several e-commerce players operating in Vietnam. It is backed by Chinese companies. Although it entered the local market just a few years ago, it has wowed local users with unrivalled experiences, and injected tremendous momentum into the local e-commerce market.

"Some years ago, Vietnamese people did not have the habit of going online for shopping," recalled Huong. "But now many of them do it as a daily hobby, since it is very convenient and the goods' quality is guaranteed by reputable platforms."

The global social media agency We Are Social found that in 2018, almost 50 million people in Vietnam bought consumer goods online, spending a combined $2.2 billion, up almost 30 percent compared to 2017.

According to a report revealed by the Vietnam E-commerce Association, the average annual growth rate of Vietnam's e-commerce market during 2017 and 2019 is 25 percent to 30 percent.

Foreign e-commerce players such as Lazada and Shopee, and local Tiki, which have received investments from China's e-commerce giants such as Alibaba, Tencent and JD, are said to be dominating the market with impressive growth.

According to the online shopping aggregator Iprice's e-commerce ranking, in the third quarter of this year, Shopee held lead in web traffic with nearly 34.6 million visits per month, Tiki ranked fourth with more than 27.1 million visits and Lazada was placed in the fifth place with nearly 24.4 million.

"These retailers offer so many choices at reasonable prices, not to mention their brilliant and entertaining promotion campaigns, which give customers something to look forward to every month, every week, even every day," Huong said, adding Double Eleven has become the most anticipated shopping festival throughout the year since its launch in 2016.

For this year's Double Eleven, Lazada announced programs with participation of hundreds of thousands of sellers who offered discounted prices. It also launched a series of games and initiatives to improve customers' experience and reward them with low promotional prices.

On the other hand, Shopee kicked off the year-end shopping season with big sale days earlier on Sept 9 and Oct 10, saying that it had spent months preparing for Double Eleven, curating the very best deals with sellers and brands to optimize delivery processes with logistics partners.

Lazada Vietnam has benefited from its investor Alibaba's mastery over e-commerce technology. Lazada's top-notch technology has satisfied young and tech-savvy consumers in Vietnam who are seeking new and convenient experiences, its country's CEO James Dong told local media recently.

"China has a strong, well-developed e-commerce market with innovative and advanced technology. The sector is now quickly emerging in ASEAN markets," said Vo Dai Luoc, former head of Hanoi-based Institute of World Economics and Politics, which is under the Vietnam Academy of Social Sciences.

 

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2019-12-02 00:00:00
<![CDATA[The fine art of maintaining financial stability]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526926.htm China is facing "significantly increasing challenges in terms of financial risk prevention and tackling", but given the country's sound economic fundamentals and its pre-emptive approach to controlling financial risks, the financial sector remains well under control-that's the key takeaway from two major developments last week.

On Nov 25, the People's Bank of China, the central bank, released a report on China's financial stability, pointing out multiple challenges the country is facing in financial risk management and what it has achieved in that respect.

And on Thursday, the Financial Stability and Development Committee, the country's Cabinet-level financial regulatory body and part of the State Council, China's Cabinet, stressed several priorities: balance the relationship between stabilizing growth and preventing risks; enhance counter-cyclical adjustments; further reform the capital market as well as small and medium banks; ensure healthy development of the private fund industry; achieve financial inclusion and fair competition; encourage commercial banks, especially small and medium ones, to increase capital through multiple channels; improve the long-term mechanism to prevent, resolve and dispose of financial risks, so as to stabilize the financial system and sustain the economic and social stability.

Last Monday's PBOC report is candid in admitting the potential financial risks facing the world's second-largest economy.

According to the report, the slowing world economic growth, the fallouts of the trade frictions between China and the United States, debt risks in some major economies, the rapid development of fintech that poses challenges to financial regulators, and the uncertainties surrounding Brexit have combined to bring risks from the external front that may affect China's financial stability.

In July, the International Monetary Fund lowered its forecast for the world economic growth this year to 3.2 percent from its previous forecast of 3.3 percent made in April.

While the world economy is losing steam, the developed economies have kept their general interest rates at around zero, which, together with the high debt levels of some developed countries, will limit the room for monetary loosening if the global economy sours further.

The report also takes cognizance of the large scale of local government debt, default pressure of corporate credit securities, the downturn in some real estate markets across the country, the fraud-prone internet finance sector, and some financial institutions troubled by poor governance and bad loans. Even issues like illegal fund raising by some private-sector players like venture capital firms and online sneaker peddlers have attracted PBOC attention in recent months. Such factors may also trigger financial risks that could potentially spread and destabilize the country's financial system.

Such a frank elaboration of potential dangers in the financial market, whose security is closely related to the overall stability of the national economy, shows that the monetary authorities are fully aware of the country's financial problems and challenges.

More importantly, the country is capable of coping with those challenges. The top leadership has required that "financial stability" should be one of the country's six main policy priorities-and regulators have adopted proactive policies to tackle those financial risks and prevent them from developing into real damages.

The authorities have made a plan to "stabilize the overall situation, enhance coordination, adopt differentiated policies, and use targeted approach to tackle risks". Specifically, the regulators have vowed to effectively stabilize macro leverage level, control credit risks in some key areas, resolve the "shadow banking" problem, tackle problems of highly risky financial institutions, restore financial order, and strengthen financial opening-up, according to the central bank.

The authorities are also exploring an exit mechanism for unqualified shareholders of rural financial institutions, as well as market-based and diversified approaches for financial institutions to exit the market.

In its targeted approach, the central bank regularly sends risk reminders to local governments to urge them to closely monitor the operation of highly risky financial institutions under their jurisdiction.

The central bank also provides suggestions to such financial institutions on how to address their risks; it may suggest those institutions increase capital, reduce bad assets, lower leverage ratio, replace management or improve corporate governance, according to the report.

Such a forward-thinking and prudent approach, at least until now, has proved effective in taming risks.

For instance, in its efforts to resolve risks posed by insolvent Baoshang Bank in Inner Mongolia autonomous region, the central bank's early intervention in May had successfully prevented the risks from worsening and there had not been a run on the bank, boosting market confidence in the security of the country's small lenders.

By the end of 2018, China's macro leverage level stood at 249.4 percent, down by 1.5 percentage points compared with a year ago, according to the central bank.

At the end of the fourth quarter of 2018, non-performing loan ratio of China's commercial banks dropped to 1.83 percent from 1.87 percent registered at the end of the previous quarter, according to the Chinese Banking and Insurance Regulatory Commission.

Central bank data also showed that the capital adequacy ratio of China's commercial banks has also been on the rise.

Although some risks still remain, PBOC data indicates that the country's pre-emptive financial regulation has been largely effective and successful.

As a developing country that has only gradually established a comprehensive financial regulatory framework in the past two decades and is still exploring what the best way of financial governance is, it is crucial for Chinese regulators to step in as early as possible when serious risks loom, and act well before they develop into a substantial threat to the country's financial stability.

That said, China has accumulated quite a lot of experience in previous rounds of financial regulatory stress starting from early 1990s, making it quite capable of containing financial risks in a way that is in line with specific Chinese conditions.

In early 1990s, property prices surged in Hainan province, attracting large amounts of banking funds to the island in South China. With the local real estate bubble continuing to balloon, banks had poured loans into the province, posing serious risks of default if the bubbles burst.

Regulators, led by then Vice-Premier Zhu Rongji (who later became China's Premier), stopped banks from extending loans to Hainan's real estate sector to prevent larger risks. Consequently, local property prices tumbled, leading to mass bank loan defaults.

The banks suffered another heavy blow at the end of the 1990s, following the Asian financial crisis that began in July 1997. Against such a backdrop, the first national financial work conference was convened at the end of 1997, where regulators decided to spin off bad debts of the four biggest banks and again inject funds into the banking system to help them survive.

A higher-level market-based economic reform was then carried out, with State capital withdrawing from most of the small and mid-sized State-owned enterprises to revitalize the economy. As the market became more active and enterprises became more competitive, the banks also benefited and got financially more viable.

Then the commercial housing reform, which no longer provided free or low-priced housing for State sector employees and government workers and encouraged market forces in property transactions, was kick-started, bringing a good source of income for the banks.

As the Chinese banking sector was in a better shape, policymakers decided to allow them to get listed on both domestic and overseas stock markets to further improve their corporate governance, laying a solid groundwork for them to grow stronger and more competitive.

Then came the 2008-09 global financial crisis. The Chinese regulators were forced to resort to the colossal 4 trillion yuan ($569 billion) plan to keep the economy and its financial sector moving.

In retrospect, those measures targeted at reviving and strengthening the banking sector may not be flawless; but with very distinct Chinese characteristics, they had been largely effective in restoring financial stability. In that process, the "invisible hand" of the market and the "visible hand" of regulation were combined and balanced to achieve the best possible efficiency.

With the global economy slowing, and the debt scene in many countries worsening, and amid rising protectionism and weak domestic economic growth, the situation seems to be more complicated and harsher for China.

The positive side is that the domestic economy, in spite of a weakening trend, remains resilient and its job market remains stable. Supported by such still-sound macroeconomic conditions, policymakers, now equipped with more regulatory experience, will properly use their fiscal and monetary resources to charter the economy and the financial sector through unknown waters.

Chen Jia contributed to this article.

 

CAI MENG/CHINA DAILY

 

 

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2019-12-02 00:00:00
<![CDATA[Millennials show Hugo who's Boss]]> http://www.chinadaily.com.cn/kindle/2019-12/02/content_37526963.htm For German luxury fashion house Hugo Boss, its fashion show at Tank Shanghai on Oct 18, a Friday, was more about showcasing its new collection than anything else. It was a resounding statement of the brand's commitment to the Chinese market, said the company's CEO Mark Langer.

"We have a very special connection with Shanghai. The first store we ever opened in China was here, along the Bund. Shanghai is the city where it all started," he said in an exclusive interview at The Middle House, a luxury hotel in downtown Shanghai.

"This fashion show is about sending a very strong message to the Chinese market that we're here to stay and are eager to show a new level of commitment."

The fashion show, the company's first in China in six years, comes on the back of what Langer calls "robust growth" in the Chinese mainland market. According to the German, China is a key driver of the company's growth.

He said while the Macao and Hong Kong markets are currently experiencing a slowdown, the brand's stores in major cities such as Beijing and Shanghai have been posting double-digit growth throughout the year.

Some of the key factors behind Hugo Boss' emphatic growth in China, said Langer, is its focus on integrating its digital and physical retail channels, increasing its presence on social media, as well as partnering brands that resonate with the Chinese audience.

Some of these efforts in recent years have taken the form of a soccer-themed event in Shanghai's IAPM shopping mall, releasing a gift-hunting game on WeChat, and leveraging its sponsorship of Spanish soccer giant Real Madrid, which is highly popular in China.

Another key factor is the purchasing power of Chinese consumers, especially those from the millennial generation.

"Chinese consumers are on average 15 to 20 years younger than our European customers. In China, we are especially catering to the millennials. The majority of our Chinese consumers are younger than 35 years," said Langer.

"Millennials are very curious about the product origin. They want to understand the product. As such, storytelling is especially important for Chinese consumers."

While the brand's high-end casual wear has traditionally been the most popular among Chinese consumers, Langer noted that there has been strong growth in the sales of formal wear, particularly Hugo Boss' most premium offerings-made-to-measure suits that typically cost between 2,000 euros ($2,201.4) and 3,000 euros.

"Chinese consumers have a true love for the extreme end of our sophisticated collection. When it comes to our most advanced products-the made-to-measure offerings-China accounts for more than 50 percent of our global sales," he said.

"These suits represent a sizeable investment, but Chinese consumers have shown that they possess a very fine appreciation for the craftsmanship and the quality of the fabrics, and the comfort they afford."

Since taking over as CEO from Claus-Dietrich Lahrs in 2016, Langer has been pivotal in shifting the company's focus to bolstering its online business and media exposure. These efforts have not been in vain-the company's global online sales in the final quarter of 2018 were up by double digits.

Its 2018 annual report also stated that three-quarters of the marketing budget in the coming years will go to digital marketing, and that a key focus would be on "expanding the company's presence in relevant social networks". In a previous interview with Vogue Business, Langer said that he is looking to quadruple last year's e-commerce sales of 110 million euros by 2022.

"People are changing their shopping behaviors. They no longer go to our stores to discover new collections. All this is done on social media," explained Langer.

"But we believe physical stores will still play an important role. Things will just become increasingly integrated.

"Today, omnichannel sales are probably one of the biggest technical evolutions of the retail market globally, and this is especially so in China. We will continue to work with transactional platforms in China to provide consumers with a seamless integration between inspiration and transaction."

Looking ahead, Langer pointed out that the company will, in line with the increasing popularity of casual office wear around the world, release more casual apparel and make a bigger push for its Hugo brand, which offers more contemporary fashion options.

He said Hugo Boss will be opening more stores in China over the coming years while further enhancing its e-commerce capabilities and collaborations with local partners and personalities. An increase in marketing efforts for the Boss Womenswear collection is also on the cards.

"We believe that there's still more room for growth in China. The key is to be consistent in our branding globally. Whether you are in Singapore or London or Shanghai, once you are in our stores, you should get the same world of Boss," he said.

"Certain elements might be more important in China than in Hamburg, but to be generally consistent in our global execution is the core element of a successful global luxury business."

 

Mark Langer, CEO of Hugo Boss, poses for photographs during a fashion show in New York City. CHINA DAILY

 

 

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2019-12-02 00:00:00
<![CDATA[China charts plans to boost pork imports]]> http://www.chinadaily.com.cn/kindle/2019-12/01/content_37526593.htm China will look to procure more types of pork from overseas destinations and expand domestic market access for registered foreign enterprises, as it contemplates more measures to tide over the pork shortage in the country due to an African swine fever outbreak, officials said.

The African swine fever has resulted in a shortage of more than 10 million metric tons of pork, or at least 20 percent of China's total pork output this year. It will take at least six months for a full recovery in the pig production capacity and breeding of new pigs. Pork, a staple, accounts for more than 60 percent of China's meat consumption.

In the meantime, China has been actively expanding new import channels and allowing enterprises to carry on trade discussions with foreign countries. China aims to give full play to the positive role of pork imports in maintaining domestic supplies and ensuring price stability, according to the Department of Foreign Trade under the Ministry of Commerce.

During the first nine months of this year, China imported 1.32 million tons of pork, up 43.6 percent from the same period a year ago. Most of the meat came from European countries such as Spain, Germany, the Netherlands, Denmark, France, the United Kingdom, in addition to Canada, Brazil and the United States, the Ministry of Commerce said.

"A large amount of frozen domestic and imported pork that was put in stock starting from the fourth quarter of last year is exiting warehouses, and being put on the market as a leverage to stabilize pork prices since October. As a result, pork prices have dropped recently," said Zhu Zengyong, a pork analyst at the Chinese Academy of Agricultural Sciences.

"After about two months, when most of the commercial frozen pork leave warehouses, prices may go up seasonally before Spring Festival next year. Later, the central and local governments may put more frozen pork in the market to leverage prices," he said.

Last week, the average wholesale price of pork was 43.66 yuan ($6.24) per kilogram, down 8.6 percent from the previous week, but still higher by over 140 percent from a year ago, according to the Ministry of Commerce.

Meanwhile last week, the average wholesale price of beef was 68.13 yuan per kg, flat with the previous week. The wholesale price of mutton stood at 63.62 yuan per kg last week, edging up 0.5 percent from a week earlier. Prices of eggs and fish dropped, and the prices of vegetables and fruits went up last week, data from the Ministry of Commerce showed.

The average price index of pork in 16 provinces and municipalities has been dropping for three consecutive weeks. Last week, the pork price index was 42.44 yuan per kg, down 8 percent week-on-week, according to a report put out by the Ministry of Agriculture on Tuesday.

Separately, the China unit of US supermarket chain Walmart has worked with leading domestic pork producers to ensure supply of fresh and safe pork in China. It has imported pork from its strong global sourcing network.

Since the end of last year, Walmart started to collaborate with pork suppliers from Denmark and has been offering good quality pork to Chinese consumers, the company said.

Guangdong-based Wens Foodstuff Group Co Ltd, China's largest pig breeder, achieved sales revenues of 48.3 billion yuan in the first nine months of this year, up 18.29 percent year-on-year. During the period, its net profit reached 6.09 billion yuan, up 109.84 percent year-on-year, according to its earnings report.

The company is investing in more biological assets and building new projects to expand breeding scale, and guarantee growth in pig supplies next year.

The pig and chicken breeding industry will generally benefit from a price increase trend in the market, and big listed companies are expected to embrace the emergent business opportunities and realize more profits, said a research report from Huatai Securities.

Zhong Nan and Wang Zhuoqiong contributed to this story.

Visitors check out various types of imported pork, including Fratelli beretta ham and Italian Palma bacon, at a food expo in Shanghai. CHINA DAILY
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2019-12-01 07:53:31
<![CDATA[China's free trade zones open doors wider to foreign investors]]> http://www.chinadaily.com.cn/kindle/2019-12/01/content_37526585.htm NANJING-When Stephen Toope, the vice-chancellor of the University of Cambridge, toured the Jiangbei New Area in Nanjing, in East China's Jiangsu province, "great" was his most frequently used word.

In September, Toope led his team to attend a groundbreaking ceremony for the Cambridge University-Nanjing Center of Technology and Innovation in the new area, which belongs to the Nanjing section of the newly inaugurated Jiangsu pilot free trade zone (FTZ).

He was among the first batch of foreign guests in the zone after the State Council announced six new pilot FTZs in August, a move to further promote liberalization and facilitation of foreign trade.

Toope believes the overall planning, talent support and convenience of the FTZ will help the center further promote innovation and development.

"The innovations emerging from this center will enable the development of smart cities in which sensors can enable sustainable lifestyles, improve healthcare, limit pollution and make efficient use of energy," Toope said. "We will become the best partners."

Covering an area of nearly 40 square kilometers, the Nanjing section of the Jiangsu pilot FTZ carries out institutional reforms to seek greater opening up of the economy. More than 20 preferential policies have been implemented in the past two months, helping the FTZ attract more than 1,000 new enterprises.

Thanks to these policies, Canadian firm Jiangsu Deying Training Service Co was successfully set up in Nanjing in only three weeks.

"As more Chinese citizens travel overseas, we have found the market for travel safety training is immense. Previously, foreign-owned enterprises were unable to conduct such training in Jiangsu, but the new policies of the FTZ offer us the opportunity," said company official Shen Yangu.

Companies have high expectations for the new FTZs.

Wu Jian, general manager of Sinotrans Changjiang (Nanjing) Co, said establishment of the pilot FTZ in Jiangsu has helped the firm provide logistics services to more export-oriented businesses.

China's FTZs have a proven track record in attracting foreign investment. In the first half of this year, the country's initial 12 FTZs attracted foreign investment of nearly 70 billion yuan ($10 billion), accounting for 14 percent of the country's total, said Vice-Minister of Commerce Wang Shouwen.

"With institutional advantages and better business environments, the FTZs are at the forefront in attracting foreign investment," Wang said.

The new pilot FTZs located in Shandong, Jiangsu, Guangxi, Hebei, Yunnan and Heilongjiang are opening up the economy further. The pilot FTZ of Shandong, for instance, took measures to nurture new businesses, develop the marine economy and explore China-Japan-South Korea economic cooperation.

Starting from Dec 1, China will carry out trial programs separating operation permits from business licenses in all pilot FTZs in a move to further expand market access. The procedures for approval of 442 items are expected to be streamlined.

"China is accelerating its opening up, which is a big cake that has great appeal for foreign firms," said Han Jian, a professor from the Business School of Nanjing University.

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2019-12-01 07:53:31
<![CDATA[China-Russia natural gas pipeline to bolster energy security]]> http://www.chinadaily.com.cn/kindle/2019-12/01/content_37526557.htm Natural gas will start flowing through the China-Russia east route natural gas pipeline from next month, and will help meet clean energy demand in several places across Northeast China, the Beijing-Tianjin-Hebei region, and the Yangtze River Delta area, China National Petroleum Corp said on Thursday.

The Chinese part of the China-Russia east route pipeline project stretches 5,111 kilometers throughout eight provinces and one municipality from Heilongjiang province in the north to Shanghai in the east.

Together with the Russian part of the project, or the 3,000-kilometer Power of Siberia pipeline, the pipeline is expected to pump 38 billion cubic meters of natural gas from Russia to China annually when it reaches full capacity, under a 30-year agreement between Russian company Gazprom and China's CNPC.

That amounts to about 13.6 percent of China's gas consumption in 2018, or 280.3 billion cubic meters, according to data from the National Development and Reform Commission.

Experts said gas deliveries from the pipeline, which signify deepening energy cooperation between China and Russia, will diversify China's gas import sources and bolster China's gas supply and energy security.

"With a transmission capacity of 38 billion cubic meters, the pipeline is China's second-largest pipeline project for gas imports," said Xiong Wei, assistant director of the pipeline gas trading department at Shanghai Petroleum and Natural Gas Exchange.

"It will not only increase gas supplies to targeted areas, but also has great significance in improving pipeline infrastructure construction and interconnection, as well as enticing market competition to reduce gas costs."

Gas deliveries from the new pipeline can help hedge uncertainties about existing gas pipelines, and are also free from the obstacles that liquid natural gas transports often face during bad weather, he said, adding China imported 125.5 billion cubic meters of natural gas in 2018, with a foreign reliance of 45 percent, among which 42 percent were from pipeline transmission.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said the large quantity of natural gas flowing through the pipeline project will ensure gas supplies at low costs in related areas, such as the Beijing-Tianjin-Hebei region, and the Yangtze River Delta area.

China still has massive room for natural gas consumption to grow, as the clean energy makes up about 8 percent of the country's primary energy consumption, while in many developed countries the figure is above 20 percent, he said.

The project will first benefit Northeast China, which currently relies on natural gas supplies primarily from Daqing Oilfield, Jilin Oilfields, Dalian LNG Terminal, and Qinhuangdao-Shenyang pipeline, and lags far behind national level regarding use of natural gas, according to Xiong.

Natural gas made up only 4.7 percent of primary energy consumption in Northeast China in 2018, in contrast with the national level of 8 percent, he said, adding it is positive for the region to increase natural gas utilization as the China-Russia pipeline will provide relatively low-cost natural gas to the area.

Both experts said Russia and China have great potential in energy cooperation, because Russia has abundant natural gas resources while China has a huge market, and also because as neighboring countries, they don't need to consider a third-party's influence to cooperate and build related infrastructure.

There will be significant increase in Russia's natural gas output and exports by 2035, with increased exports mainly pivoting to the Asia market, according to the country's draft energy strategy up to 2035, Xiong said.

However, Lin suggests China strengthen unconventional natural gas development to reduce reliance on natural gas imports.

Xiong said market mechanisms should play a larger role to make the most of natural gas transmission and sale networks.

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2019-12-01 07:53:31
<![CDATA[Debt ceiling may be raised for local govts]]> http://www.chinadaily.com.cn/kindle/2019-12/01/content_37526556.htm China is likely to raise the debt ceiling for local governments from next year to ease fiscal deficit pressure and strengthen investment, a key measure to stabilize economic growth against further headwinds, experts said on Thursday.

Like this year, local governments will focus more on issuing special bonds-a type of debt instrument outside the purview of fiscal deficit calculations, to raise funds for infrastructure construction projects, including transport, energy, and agriculture, they said.

An expert close to the Ministry of Finance told China Daily that the 2020 quota of new special bonds may be increased to 3 trillion yuan ($426 billion), up by about 40 percent from 2019. "The 2020 debt ceiling is still under discussion," he said.

The Ministry of Finance has already issued a 1 trillion yuan new special bond quota and urged local governments to inject the funds raised via this debt instrument into specific infrastructure projects.

The issue is a pre-delivered amount of next year's new special bond quota. This part of debt accounted for 47 percent of the 2019's total quota of newly issued special bonds, which was set at 2.15 trillion yuan in March. The new quota for 2020 will be approved by the country's top legislators next year.

The Ministry of Finance has urged local governments to speed up special bond issuances, and ensure that the front loading of debt quota will come into effect from the beginning of next year. It will also help shore up economic growth, said the statement.

If the government raises the new special bond quota to 3 trillion yuan next year, the debt ratio can be controlled and financing demands of local governments can be satisfied, said Wang Zecai, a researcher at the Chinese Academy of Fiscal Sciences under the Ministry of Finance.

"According to the current development environment abroad and at home, some measures can be explored to moderately increase the issuance of local government bonds in some regions for targeted purposes, so as to ease the pressure on local governments to repay debt and further expand financing channels," said Wang.

During the first 10 months of this year, local governments issued bonds worth 4.28 trillion yuan, including 2.53 trillion yuan of special bonds, according to ministry data.

Increased special bond issuances will help offset the economic downside pressures due to China-US trade friction, and enable fiscal policy to be an important measure to support economic growth, said Wang Hongju, an economist with the National Institution for Finance and Development (NIFD), a financial think tank.

The policy, which allows funds from the special bonds to be used as registered capital for infrastructure projects, has taken effect and stabilized enterprises' expectations, he said. "As the fiscal spending needs to maintain a higher growth rate, it is necessary to continually increase the issuance of local government bonds."

According to NIFD data, during the first three quarters of this year, the fiscal deficit-the part where government spending exceeds its income, accounted for 5.2 percent of the GDP, indicating a higher burden of government debt compared with the previous years.

It also showed that from January to September, the new local government bonds, including both general and special types, supported 20 percent of total spending, which was 5.5 percentage points higher than in the same period of 2018.

Wang from the NIFD said that the increasing fiscal deficit pressure, partly due to the large tax and fee reduction, may continue next year, and policymakers have to take steps to prevent debt defaults.

New bonds can be issued to swap the debt which is becoming due, and the government can leverage foreign capital to expand financing resources to pay back the debt, economists said.

An employee of China State Construction Engineering Corp works on a construction site in Chongqing. XINHUA
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2019-12-01 07:53:31
<![CDATA[Briefly]]> http://www.chinadaily.com.cn/kindle/2019-11/30/content_37526738.htm Business confidence of SMEs improves

China's small-and medium-sized enterprises (SMEs) showed improving business confidence in November as the country's economy has stabilized amid strong policy support, a report showed. The China SME Confidence Index rose to 54.7 in November from 54.5 in October, rising for the second consecutive month, a report from Standard Chartered Bank said.

Shenzhen firm bags boarding bridge order

China's major boarding bridge provider Shenzhen CIMC-TianDa Airport Support Ltd has secured a 518.5-million-yuan ($73 million) order for making boarding bridges for the Chengdu Tianfu International Airport, the largest single order in the sector so far in the country. The Shenzhen, Guangdong province-based company will produce 127 boarding bridges, 68 fixed bridges and 195 aircraft ground air-conditioning devices for the airport. The Chengdu airport, which is expected to come into service in 2021, will become the largest airport in Southwest China, with an expected capacity of 90 million passengers a year.

WeRide starts trials of self-driving taxis

China's smart mobility company, WeRide, on Thursday announced the launch of a trial run of selfdriving taxis in Guangzhou, capital of South China's Guangdong province. A fleet of dozens of L4-class autonomous driving cars, named RoboTaxi, was introduced to roads in a 144 square kilometer area in the city. The Nissan pure electric vehicles are installed with WeRide's newest autonomous driving software and hardware. They are consistent with other taxi cabs owned by the Guangzhou Baiyun Taxi Group in appearance and use the same taxi meters. WeRide teamed up with the largest taxi company in South China in August to launch the self-driving taxi business.

]]> 2019-11-30 00:00:00 <![CDATA[ETFs supporting development strategy, technology innovation]]> http://www.chinadaily.com.cn/kindle/2019-11/30/content_37526739.htm Exchange-traded funds, which were first introduced into the Chinese market 15 years ago, have grown into indispensable tools in the A-share market, serving the country's real economy development and transformation while connecting to the global capital market, said experts.

Liu Ti, deputy general manager of the Shanghai Stock Exchange, said at the 15th anniversary of the Chinese ETF market held on Friday that the increasingly enriched product portfolio of ETFs in the Chinese market has facilitated the country's economic transformation. ETFs targeting the Belt and Road Initiative, 5G and semiconductors have been introduced over the past few years to support the country's development strategy and technology innovation, he said.

As SSE calculated, there were more than 240 ETFs traded in the market by November, with the total market value exceeding 650 billion yuan ($92.5 billion). A total of 177 ETFs are traded at the Shanghai bourse. Since the beginning of 2017, the number of investors taking part in ETF trading has also surged more than five times to 2.6 million this year.

In addition, up to 13 cross-border ETFs have been listed at the SSE. The China-Japan ETF connectivity scheme was launched in June.

"As the A-share market is included in the global benchmark indexes such as the MSCI, the ETF will become an important tool for both domestic and overseas investors," said Liu.

The first ETF product-China 50-was launched by China Asset Management 15 years ago. Over time, the investment targets for ETFs have included stocks, bonds, currencies, gold and overseas assets.

According to Li Yimei, general manager of China Asset Management, while ETFs such as China 50 track the ups and downs of the leading A-share listed companies, they can work as the references for macroeconomic analysis and investment decisions.

"ETFs have great potential in China since they can lead investors to long-term investment and value investment, which is crucial to the market's sustained development at a time when China's capital market is carrying out a deepened two-way opening-up," she said.

Zheng Fushi, deputy director of the Asset Management Association of China, said that ETFs have maintained robust growth worldwide over the past few years, serving as an important driving force of the US, European and Asia-Pacific securities markets. By the end of October, more than 6,900 ETFs were traded worldwide, with the total asset value amounting to $5.79 trillion.

]]> 2019-11-30 00:00:00 <![CDATA[Sustained reforms to bolster real economy]]> http://www.chinadaily.com.cn/kindle/2019-11/30/content_37526741.htm Sustained financial reforms and opening-up measures will bolster the real economy and prevent financial risks in China, according to a top regulatory body.

China has reached the phased objectives in its battle to prevent and resolve major financial risks, said a statement issued by the Financial Stability and Development Committee under the State Council, after a meeting on Thursday, chaired by Vice-Premier Liu He.

The previously issued opening-up policies have taken effect, boosting market confidence and supporting stable economic growth. Measures, in the next step, should balance the relationship between stabilizing growth and preventing risks, and enhance countercyclical adjustments, it said.

The Committee called for further reforms in areas like capital markets and medium and small banks. The reforms should guide the healthy development of the private fund industry, while financial inclusion and fair competition needs to be encouraged.

It also highlighted that commercial banks, especially the medium and small-sized ones, need to increase capital through multiple channels.

Zhang Xuechun, deputy director of the Research Bureau of the People's Bank of China, the central bank, said on Friday that financial reforms will focus on developing the multiple-level equity and bond markets, to change the current situation as the financial system is heavily reliant on bank funds.

"The most significant aspect of China's monetary policy is to improve the transmission of monetary policy," Zhang said at the China Finance Annual Forum 2019 & Financial Market Meeting.

She suggested that regulators release more information about small-and medium-sized commercial banks, let the market gauge high-quality banks and better assess risk premiums.

China has the ability to spur economic growth by leveraging monetary policy, but the monetary policy cannot be abused. "It is easy to inject liquidity (into the market) but difficult to collect it back."

The central bank will also deepen the market-oriented interest rate reform, Zhang said.

Li Yang, head of the National Institution for Finance and Development (NIFD), said that the monetary policy needs to anchor the producer price index (PPI) at the current situation and prevent deflation, as the rising consumer inflation was fueled mainly by pork prices.

Investment needs to be encouraged by reforming the macroeconomic policy framework, which is the priority to stabilize economic growth, said Li. "Another important thing is to prevent financial risks and to curb the leverage level."

According to Thursday's top-level financial regulatory meeting, a long-term mechanism to prevent, resolve and dispose risks should be improved, aiming to stabilize the financial system, as well as sustain the economic and social stability, the statement said.

The Committee has deployed reform measures, including strengthening the function of serving the real economy, improving the fundamental mechanism of the capital market, enhancing financial governance and further opening up the financial industry.

The country's financial regulators have pushed the commercial banks to increase capital, dispose nonperforming loans and speed up mergers and acquisitions to prevent risks, given the concern on economic downside risks.

A pedestrian walks past the headquarters of the People's Bank of China in Beijing. LUO YI/FOR CHINA DAILY ]]>
2019-11-30 00:00:00
<![CDATA[Experts warn of potential risks from AI]]> http://www.chinadaily.com.cn/kindle/2019-11/29/content_37526550.htm You turn on your Taobao app and a list of shopping items comes up.

A lipstick of your preferred color. A dress that matches your newly-purchased top. The next book to read based on your browsing history.

While people enjoy the perks of smart recommendations powered by artificial intelligence, those mind-reading algorithms, if not properly handled, could be manipulated with malware and create new cybersecurity threats.

Diana Kelley, the cybersecurity field chief technology officer at Microsoft Corp, said hackers will increasingly use AI to make malware more destructive. This will emerge as among the top five trends for the global cybersecurity landscape in 2020.

"The rise of AI capabilities provides new opportunities for attackers to create malware that hides from detection while hunting down targets," she said. "It's already in use but often goes un-detected."

According to the 2019 Poneman Institute report, the global average cost of a data breach is $3.92 million. Unfortunately, it normally takes organizations an average of 206 days to identify a data breach, and another 73 days to contain it.

Technology advancement has always been a double-edged sword. AI and cloud computing are revolutionizing the customer experience but they pose new threats to cybersecurity.

Around 55 percent of millennial consumers aged 23 to 38 surveyed by consultancy IDC said they like some websites and mobile apps to be personalized to fit their interests.

As a result, 40 percent of the data collected by companies throughout the customer journey will be used to create a better product and a bespoke experience.

As the internet of things and cloud greatly expand the number of devices and the amount of data they gather, the area of attack by hackers widens just as sharply as well.

"It gives us more signals we could also take in and consume for security purposes too," Kelley said. "And because of the cloud, we can see attacks around the globe, and respond around the globe very quickly."

She said an overarching approach for companies creating customization while protecting customer privacy is to collect only what is needed and be transparent.

"Companies should be clear and transparent with your customers about what you are collecting, how you are using and protecting that data, and ensure that you got consent from them so they have the knowledge that their data are being collected," she explained.

Cathy Huang, associate research director of Services and Security at IDC, agreed. She said: "If your company doesn't have a strong policy, that's going to be a potential problem."

Organizations must build a program that incorporates defense in depth and implements fundamental security controls, Kelley said.

"We must consider how operations will continue after a catastrophic cyberattack and build systems that can both withstand the attack and be instantaneously resilient," she stated.

Microsoft invests over $1 billion annually on cybersecurity research and development. Kelley called for nurturing cybersecurity talents to include people in different trades like law and communications.

]]> 2019-11-29 00:00:00 <![CDATA[Online firms provide impetus to agricultural product sales]]> http://www.chinadaily.com.cn/kindle/2019-11/29/content_37526580.htm Shipments of Shawo radish, which has gained a reputation in China as a major culinary ingredient for State banquets since the 1970s, are expected to see a 20 percent growth this year due to online sales, according to an official in Xinkou township of Xiqing district in Tianjin municipality.

The radish variety is also set to maintain its lead position in online sales of local agricultural products in the city, said local agricultural authorities. This year, Shawo radish sales are expected to be worth 400 million yuan ($56.9 million), with online sales accounting for over 50 percent of the total.

Ren Xiuyuan, Party secretary of Xinkou township, attributed the growing market presence to the region's efforts to build online channels with market leaders. "We have invested heavily to team up with leading e-commerce giants like JD, top delivery company China Post and market leader New Hope, in a bid to secure top-notch channels, which is key to online sales," he said.

"This year, the strengthened partnership with companies will open new growth avenues for us," he said.

Shawo radish is an ideal example of how online firms are powering agricultural product sales in China. Statistics indicated that during the first three quarters of this year, China's online agricultural products sales hit 282.4 billion yuan, up 26.4 percent year-on-year, according to the Ministry of Commerce.

An industry expert, however, said that Shawo's success is hard to replicate because of its large investment, including "up to 400 million yuan from the government to protect the local ecology and environment" and the amount spent on patent protection.

From next year, Shawo radish will have "origin marks" and the variety will be available only through the JD platform, to ensure its authenticity.

Han Yuanqing, general manager of Tianjin Quality Xiaozhan Rice Development Co, told China Daily that despite the company's rice, Risi-brand Xiaozhan rice, sales rising by 10 percent this year, he is feeling the pinch due to fake products.

In fact, the fake Xiaozhan rice varieties have crimped the contribution from online sales to the total despite being one of the first to make products available through such channels.

Wang Zhongqin, a professor of e-commerce at the Tianjin Chengjian University, indicated that several e-commerce companies for agricultural products have shut shop in Tianjin in recent years as it is hard for them to continue spending money on leading online portals as it takes some time for the authentication of quality products and patent protection.

Qian Fangli, director of the division of electronic commerce and information under the Ministry of Commerce, said in a previous interview that despite the strong growth in the online sales of agricultural products, many companies in the sector are still reliant on favorable policies and capital support.

]]> 2019-11-29 00:00:00 <![CDATA[What's news]]> http://www.chinadaily.com.cn/kindle/2019-11/29/content_37526559.htm GOVT AND POLICIES

China conducts new central bank bills swap

The People's Bank of China, the central bank, on Wednesday conducted the sixth central bank bills swap (CBS) operation to improve the liquidity of perpetual bonds issued by commercial banks. The CBS, valued at 6 billion yuan ($852.9 million), are open to primary dealers for bidding at a fixed rate at 0.1 percent, the central bank said in a statement. The swap will be due on Feb 27, 2020, the statement showed. The CBS scheme allows dealers to swap the perpetual bonds they hold for central bank bills, which will effectively boost market demand for perpetual bonds but have a neutral impact on liquidity in the banking system.

Banks to beef up data governance steps

The Chinese banking industry's self-regulatory organization on Wednesday said more technological standards are in the pipeline to help better govern torrents of data in the sector. As the industry is typically data-driven, stronger data governance gives a strong boost to lenders' efficiency and competitiveness, said Pan Guangwei, vice-president of the China Banking Association (CBA), during a digital banking forum in Shenzhen, South China's Guangdong province. While the banks possess enormous troves of customer and transaction data, they face problems in data integration, standardization and application, which are dragging down the industry's digital transformation, Pan said.

Number portability program launched

China launched a mobile number portability program across the country on Wednesday, allowing cellphone subscribers to switch service carriers without changing phone numbers, according to the Ministry of Industry and Information Technology. Technology, systems and rules for services related to the program have been implemented after nationwide trial operation, it said. The ministry has asked related enterprises to rectify problems exposed during the trial, such as some carriers creating obstacles for the service switch, said Lu Chuncong, a ministry official, noting that the program will promote benign competition among enterprises.

Overseas Chinese invest $497m in Anhui

Nearly 100 overseas Chinese signed agreements for projects worth 3.5 billion yuan ($497.9 million) in an innovation center in Hefei, capital of East China's Anhui province on Tuesday. A total of 32 project agreements were signed in the Overseas Chinese Innovation Center of Hefei, covering biomedicine, intelligent manufacturing, artificial intelligence and other industries. "Overseas Chinese have made important contributions to China's economic development with their innovative spirit and entrepreneurial enthusiasm. The country's rapid economic development has also offered them bigger room for development," said Qiu Liguo, deputy head of the overseas affairs department of the China Overseas Friendship Association.

COMPANIES AND MARKETS

Diatomite mining in Kenya to start in Jan

Chinese mining firm Chuanshan International Mining Co will begin mining of diatomite in January 2020 in northwestern Kenya's Baringo county, a government official said. John Morangi Omenge, principal secretary in the Ministry of Petroleum and Mining of Kenya, told journalists in Baringo that the Chinese firm has been conducting exploration activities in the region for more than two years to confirm the size of the mineral deposits.

Leica Microsystems opens innovation center

Leica Microsystems, a leading German optical technology and product manufacturer, has opened an innovation center in the city of Suzhou, East China's Jiangsu province. Located in Suzhou Industrial Park, the center covers a floor space of 500 square meters. It is expected to develop high-quality and cutting-edge products for the Chinese and global markets, driving the company's sales up to an estimated $200 million over the next five years. "We are attracted by the prospects of China's economy and the huge market potential here," said Gordon Chen, marketing director of Leica Microsystems China.

John Deere lowers outlook for 2020

John Deere, the world's leading tractor maker, has reported less quarterly earnings and lowered its 2020 sales outlook amid prolonged trade tensions between the United States and its key trade partners. The Illinois-based farm and construction equipment maker, reported on Wednesday net income of $722 million for the fourth fiscal quarter that ended Nov 3. That's an 8 percent decline year-on-year, compared to $785 million for the same period of 2018. "John Deere's performance reflected continued uncertainties in the agricultural sector," said John C.May, its chief executive officer.

AROUND THE WORLD

Retail sales grow in S. Korea during October

South Korea's retail sale grew last month on the continued double-digit growth in online shopping, a government report showed on Thursday. Combined revenue of 26 major online and offline retailers rose 4.1 percent in October from a year earlier, according to the Ministry of Trade, Industry and Energy. Sale by online retailers expanded 12.5 percent in the month, keeping a double-digit gain for three straight months amid a rapid change into the consumption pattern using smartphone apps. Demand for food in the cyberspace grew in double figures after the spread of one-day food delivery services.

Mexico downgrades GDP growth target

The Central Bank of Mexico on Wednesday downgraded its economic growth forecast for 2019 and 2020, citing weak production and uncertainty. The bank's latest report lowered its growth forecast for this year to between-0.2 and 0.2 percent from the previous projection of 0.2 to 0.7 percent. For 2020, expected growth was adjusted from the earlier forecast of 1.5 to 2.5 percent to 0.8 to 1.8 percent. "The latest information shows weakness will be greater and last longer than previously forecast," the bank said.

US economic growth expands by 2.1% in Q3

US economic growth in the third quarter expanded at an annual rate of 2.1 percent, up from its previous estimate of 1.9 percent, the US Commerce Department reported on Wednesday. According to the second estimate released by the Bureau of Economic Analysis, upward revisions to private inventory investment, nonresidential fixed investment, and personal consumption expenditures were partially offset by a downward revision to state and local government spending. The 2.1 percent growth rate in the third quarter, which is slightly up from the 2 percent in the second quarter, marks a sharp deceleration from the 3.1 percent in the first quarter.

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2019-11-29 00:00:00
<![CDATA[Skyworth aims to grow its footprint across global markets]]> http://www.chinadaily.com.cn/kindle/2019-11/29/content_37526558.htm Chinese home appliance maker Skyworth Group plans to build three manufacturing bases in South America, North Africa and the Middle East regions in the coming two to three years as it strives to expand its global footprint amid growing saturation in the domestic market.

Internationalization is an important part of Skyworth's overall strategy, Liu Tangzhi, its chief executive officer, said.

"We aim to further expand our global network in the coming years in order to improve our supply chain," he said in an interview in Shenzhen on Wednesday.

"We haven't established our supply chain in South America, North Africa and the Middle East so far. These three regions are where we are going to march into in the coming two to three years."

At the current time, the company has four overseas manufacturing bases-in Germany, South Africa, India and Indonesia.

It has also set up research and development centers and subsidiaries in a number of countries and regions, including Austria, the United Kingdom and South Africa.

Liu said the company plans to increase the number of its overseas organizations from the current 22 to 30 in the coming two to three years.

Skyworth's push in international markets comes at a time when the company is grappling with an increasingly saturated market in China. The situation is even bleaker amid the country's economic growth slowdown as Chinese consumers cut their spending on home appliances.

According to a report jointly published by China Household Electric Appliance Research Institute and National Electrical Appliance Industry Information Center, home appliance sales in the Chinese market dropped 4.2 percent year-on-year to 174.5 billion yuan ($24.8 billion) in the third quarter of 2019.

Home appliance exports totaled 73 billion yuan over the same period, growing 1.7 percent year-on-year, the report said.

To diversify its products, the company unveiled a smart tea table on Wednesday. The product, with a smart system, serves as a "central brain" of home appliances in an apartment, with the ability to control them through voice recognition.

While stressing the importance of developing international markets, Liu also noted that it could be a difficult path.

"With China's development, geopolitics has been put on a high place by some countries. This has increased our difficulty in exploring overseas markets," Liu said.

But he said the Belt and Road Initiative will offset the impact and bring new opportunities for Chinese companies in their "going global" process.

"Following the initiative, Skyworth has already set its foot in Europe. I believe Chinese companies including us will become more mature in their overseas exploration under the initiative."

Liang Zhenpeng, a senior industry analyst, said that China's highly saturated home appliance market had already stagnated this year, therefore international markets are of significance to Skyworth.

The home appliance market in many countries in Asia, Africa and Latin American is far from saturated and has a huge room for growth, which can be a new driver of growth for the company, he said.

In developed countries and regions like Europe and the United States, meanwhile, there is also high demand for high-end products. "The company needs to enhance its branding and reputation in order to gain a bigger market globally," Liang said.

Skyworth's OLED TV is displayed at the Consumer Electronics Show (CES) in Las Vegas, the United States, earlier this year. XINHUA

]]> 2019-11-29 00:00:00 <![CDATA[Lingang to focus on seven key industries]]> http://www.chinadaily.com.cn/kindle/2019-11/29/content_37526555.htm The Lingang Special Area of the China (Shanghai) Pilot Free Trade Zone released its industrial map presenting the layout of the key industries in the zone on Thursday, the hundredth day since its launch.

Seven projects involving a total investment of 15 billion yuan ($2.13 billion) in the special area were also signed.

According to the map, the area will generally focus on seven industries, covering integrated circuits, artificial intelligence, biomedicine, aerospace, new energy vehicles, equipment manufacturing, and green remanufacturing.

The zone is also focusing on the development of five modern services, namely international trade, cross-border financial services, shipping services, information services, and scientific and technological innovation services.

"The map presents enterprises with the industrial development orientation and the overall layout of the area," said Chen Yi, director of investment management department at Shanghai Lingang Industrial Area Economic Development Co.

"It will benefit the supervision of the industrial development in the region, and help to provide more accurate guidance for companies as well," said Chen.

According to the map, the layout of the enterprises in different industries is classified into eight regions in the area.

For example, the frontier industrial zone will gather enterprises in integrated circuits, smart new energy vehicles, high-end equipment manufacturing, green remanufacturing, technology and aerospace.

Companies related to cross-border financial services, international trade and international medical services will be in the zone for the modern services industry.

"The plan will demonstrate that the Lingang Special Area is not merely a simple expansion of Shanghai Free Trade Zone, but promotes all-round services, and it will influence the development of the Yangtze River Delta economic zone," said Chen.

The release ceremony on Thursday also saw the establishment of an investment promotion and service center at the area.

According to Chen, the center will guide enterprises to understand the advantages of the Lingang New Area, illustrate policies, and help in the procedure during and after the launch of the enterprises in the area.

Covering an area of 119.5 square kilometer, the Lingang area will be set up to the south of Dazhi River, east of Jinhui Port, and south of Xiaoyangshan Island and Pudong International Airport in Shanghai.

By 2025, the area plans to have a relatively mature institutional system of investment and trade liberalization and facilitation. By 2035, it will be built into a special economic function zone with strong global market influence and competitiveness, becoming an important platform for the country to integrate economic globalization.

More than 90 projects have been agreed and are planned to launch in the area. The first batch of 23 key projects in Lingang New Area were agreed and started on Sept 12, with a total investment of more than 11 billion yuan.

The past 100 days have seen a series of favorable policies released to boost talent attraction, financial support and industry innovation.

The latest were 48 supportive policies issued by the Lingang administrative committee on Nov 20 to offer preferential policies including housing subsidies for talented staff to live and work in the area.

In order to enhance the capacity of scientific and technological innovation and industrial integration, 56 favorable measures have been released last month. Among them were 10 supportive policies for four industries including integrated circuits, artificial intelligence, aerospace and biomedicine.

]]> 2019-11-29 00:00:00 <![CDATA[Cosmetics firm to sharpen focus in China]]> http://www.chinadaily.com.cn/kindle/2019-11/29/content_37526552.htm Japanese cosmetics giant Shiseido Co Ltd is pouring resources and betting on innovation in China as the 147-year-old firm aims to sharpen its focus in its largest overseas market against the backdrop of a softening global cosmetics industry.

"Developing in China is not merely for growth. As China spearheads the world in innovation, doing business here has contributed and will contribute greatly to our continued growth globally," said Naoko Hase, head of the corporate strategy division at Shiseido China.

"China has become a strong growth driver for Shiseido and continued to be our largest overseas market for a third consecutive year," Hase explained.

Shiseido reported a strong financial performance in the fiscal third quarter for the period ending in September. The firm registered sales revenue of 846.63 billion yen ($7.75 billion) in the period, up 5.1 percent year-on-year.

China led the growth with sales revenue of 158.52 billion yen, accounting for 18.7 percent of the company's total revenue.

"We will introduce more brands into the Chinese market next year. The same effort will also be made in cross-border e-commerce so that local consumers can have access to more products that haven't been launched in China," she said.

Over the past year, Shiseido's prestige brands, such as Cle de Peau Beaute, have maintained their growth momentum in the market. "It is interesting to find that a growing number of young Chinese consumers have started to use these high-end series, especially some anti-wrinkle products."

Hase said that one notable source of innovative growth comes from Chinese outbound travelers, showing a trend that features the increasing consumption power of Chinese consumers abroad.

An industry report which quoted data from Shiseido showed that more than 22 million Chinese female travelers would frequently buy items during their trips, including duty-free shops in airports.

On average, they would buy luxury beauty products in the travel retail channel at least twice a year. Some 55 million buy such products once a year.

"This group of Chinese consumers have shown stronger willingness of buying where they go, which has inspired us," Hase said.

"With these purchase, we are also learning from the data and use them to redrive our sales globally. We are also exploring ways to maintain these consumers to stick to our products back home," she said.

The firm also established a China Business Innovation & Investment Representative Office in Shanghai from the beginning of the year. The hub aims to promote innovations in existing businesses and new business development that would respond to market trends in China.

"Related startups are being incubated now under the innovation and investment office as we hope to accelerate more innovative growth here in China," Hase stated.

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2019-11-29 00:00:00
<![CDATA[Saxophone village plucks new strings for growth]]> http://www.chinadaily.com.cn/kindle/2019-11/29/content_37526551.htm Sidangkouzhong is a name that is hardly known to the outside world and even most of China. But the nondescript village in Jinghai district of North China's Tianjin municipality has been thriving thanks to its instrument-making industry, or largely saxophones.

Known as the "Saxophone Village" of China, Sidangkouzhong is now looking to move up the value chain by making more high-end products, amid renewed efforts to sustain its mass production of original entrusted manufacturing through industrial upgrades.

Saxophones, named after their Belgian inventor Adolphe Sax, have been the lifeline of the village with a population of 5,000 people. Sidangkouzhong accounts for half of the world's total output with an industrial value of over 400 million yuan ($57.1 million), according to local authorities.

The mass production of saxophones during the last four decades, covering the entire industrial chain including parts manufacturing, electroplating, melding, polishing and assembly, has not only boosted local economic growth, but also benefited e-commerce and logistics sectors in the surrounding villages including the West and South Sidangkou villages.

In addition to saxophones, the village also produces other wind instruments such as clarinets, and horns. Its total production of saxophones and other Western musical instruments hit 500,000 units last year.

Wang Yuchun, president of Shengdi Co, a market leader in China's saxophone production, said: "Shengdi has shifted 20 percent of its production to the high-end market and is devoting more efforts to strike a chord with leading global music troupes."

Shengdi, which has an annual output value of over 80 million yuan, expects its high-end segment to account for 20 percent of its total production in the next few years.

Wang said industrial production peaked in the village in 2008. But since then, most of the US and European clients have disappeared, he said, adding that "OEMs were never the future for us".

It is not just the big players like Shengdi who are changing tack. Smaller-sized local musical instrument makers are also making efforts to upgrade their production.

Zhang Guomin, president of Tianjin Oves Musical Instrument Co Ltd, another market leader with annual sales of up to 70 million yuan, said the low end market has an average profit of 7 percent while the high end market can attain profits of over 30-40 percent.

"Our company is targeting the cutting edge market with bespoke products," he said.

"Low-threshold competition is fast disappearing from the Chinese musical instruments market. It will become very difficult for companies without competent technologies to survive," he said.

Chen Baozhan, the owner of a small company in the village, has sent two of his sons to the Sichuan Conservatory of Music to study saxophone playing and music theories.

"When they come back, we will organize training sessions for local villagers. It is important for us to gain insights and share the musician's feelings when playing, instead of dealing with simple and repeated manufacturing," he said.

"The transformation is hard for us, particularly for smaller-sized companies, but we are blazing our own trail," he said.

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2019-11-29 00:00:00
<![CDATA[Experts: Revised negative list to help increase global investment]]> http://www.chinadaily.com.cn/kindle/2019-11/28/content_37526229.htm China's shorter negative list for domestic and global investors will further ensure its status as one of the top global destinations for foreign direct investment and boost business confidence in many partner economies, said officials and business executives.

Their comments came after the Chinese government released the updated market access list for 2019 last week. The new list has 131 items, down from the 151 in 2018. In comparison with the negative list for foreign investment market access released in June, the unified list applies to all market players, including domestic and foreign investors.

A negative list rules which economic activities are prohibited, while all others are considered to be allowed.

"The revision of the negative list demonstrates China's continued willingness to deepen reform and opening-up to benefit companies entering its market," said Bian Yi, director of international cooperation bureau at Sino-German (Shenyang) High-end Equipment Manufacturing Industrial Park in Liaoning province.

Bian has engaged in investment and related work for over a decade and said that many foreign companies had called her recently for further information on the new policies for foreign investment.

"I can certainly feel their enthusiasm and rising expectations for China's huge consumer base and diversified market demand," said Bian.

Liu Jie, vice-president of the United States-based medical equipment provider Carestream Health Inc, said China has cut the number of sectors and businesses that are off limits for both domestic and foreign investors in the 2019 negative list for market access.

"This makes market access management more open, inclusive and predictable, while improving market vitality," he said.

As the latest negative list eases market access in a number of sectors, including the establishment of nursing homes and social welfare institutions, it will further open up the country's service industry to both domestic and overseas businesses, said Li Hongbiao, a senior researcher from the Revitalization Research Institute of Shenyang-based Northeastern University,

The previous foreign investment negative list mainly dealt with the entry permit issue, while the new negative list also addresses a wider range of issues in the services sector, he said.

Even though trade tensions, geopolitical risks and concerns about a shift toward more protectionist policies have further weakened business confidence, China's ability in attracting FDI has remained strong as many multinationals such as ABB, BASF, Procter & Gamble, Saudi Aramco, BMW and Cargill added investment in the country this year.

The FDI into the Chinese mainland expanded 6.6 percent year-on-year to 752.41 billion yuan ($107 billion) in the first 10 months of this year. More than 1,300 major projects with investment of more than $50 million have been launched this year, up 5.4 percent from the same period last year, data from the Ministry of Commerce showed.

"China is not only our largest market in the world but also a leader in innovation and related services," said Jochen Goller, president and CEO of BMW Group China. "It is thus a country of strategic priority for us."

In addition to attracting FDI, China also adopted the negative list system for the first time to conduct negotiations on services trade and investment in the second phase of China-South Korea Free Trade Agreement talks since late March of 2019, according to the Ministry of Commerce.

If the negotiations with South Korea are successful, it means that China's negative list system can push the country to further optimize this system to support various economic activities, not only available in its domestic economic areas, said Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

Introducing negative list in the FTA negotiation indicates that China is keen to further connect this mechanism with global markets, he said.

Technicians work on an automobile production line of Toyota in Tianjin. CHINA DAILY

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2019-11-28 00:00:00
<![CDATA[More European countries keep doors open to Huawei's 5G tech]]> http://www.chinadaily.com.cn/kindle/2019-11/28/content_37526210.htm An increasing number of European countries are taking an unbiased approach toward the use of Huawei Technologies Co's technologies in their 5G network rollout, despite the US government's efforts to persuade them into banning the Chinese company.

French Junior Economy Minister Agnes Pannier-Runacher recently said in an interview with local media that France will not follow the United States and exclude China's Huawei from its next-generation 5G network.

On Sunday, German Economy Minister Peter Altmaier also defended the decision not to ban Huawei from participation in Germany's 5G network in a debate.

Altmaier said: "The US also requires its companies to provide certain information needed to fight terrorism."

"We didn't boycott them," he said when commenting on the alleged cybersecurity risks associated with Huawei's telecom equipment.

The US ambassador to Germany complained to such a comparison, saying that there is no moral equivalency between China and the United States.

In responses to the comment, China's Foreign Ministry spokesman Geng Shuang said some US politicians and officials always attack and discredit China. Their poor performance fully exposed their unspeakable sinister intentions and political attempts.

Germany announced in October that it would not single out any telecom player, including Huawei, in its 5G build-out. German government spokesman Steffen Seibert said at a news conference earlier this year that "we are not taking a preemptive decision to ban any actor, or any company".

The objective attitude toward Huawei came as the world is at the tipping point for large-scale 5G network rollout. According to the global telecom industry association GSMA, there will be 60 5G commercial networks by the end of this year, up from the 40 commercial 5G networks in more than 20 countries and regions as of October.

Next year, more aggressive steps will be seen around the world to accelerate the rollout of new-generation wireless technology, according to Si Han, president of GSMA Greater China.

Europe, which is seen by Ren Zhengfei, founder of Huawei, as the second home of the company, will also see more 5G commercial networks running in 2020. As its largest overseas market, Europe has many telecom operators that purchase Huawei's products. At the same time, Europe is where most of the US government's allies are located and Washington is intensifying push to dissuade them from including Huawei on 5G plans.

Such a complex situation puts all eyes on Europe to see how it will act on 5G amid uncertainties.

Bai Ming, a senior research fellow with the Chinese Academy of International Trade and Economic Cooperation, said some foreign countries may doubt or distrust Chinese technologies simply because they are from China.

But mixing politics with normal business cooperation will delay the rollout of the superfast wireless technology in the world, Bai said.

Models display Huawei P30 Series smartphones during the new product launch event in Paris, France, earlier this year. CHINA DAILY

]]> 2019-11-28 00:00:00 <![CDATA[Belt and Road Initiative project to boost transport in northwest region]]> http://www.chinadaily.com.cn/kindle/2019-11/28/content_37526228.htm Construction of Asia's highest tunnel in elevation, located in Northwest China's Qilian Mountains, is progressing smoothly with 45 percent of the job done. The tunnel would link Gansu and Qinghai provinces when completed in October 2020.

The Dongshan Tunnel, part of the Sunan-Qilian section within the G213 national highway, will help traffic flow between the Sunan Yugur autonomous county in Gansu and Qilian county in Qinghai.

A key project in the Belt and Road Initiative, the 3,639-meter-long tunnel is being built by the First Engineering Co Ltd of China Tiesiju Civil Engineering Group (CTCE), project safety director Li Huping said.

The Qilian Mountains stretches for over 1,000 kilometers at the south of the Hexi Corridor-a main artery on the ancient Silk Road. It has an average elevation of 4,500 meters, with many ridges piercing high into the sky.

The Sunan-Qilian Highway starts at Baizhuangzi in Sunan and ends at the S215 provincial highway in Qinghai. It has a total investment of 1.4 billion yuan ($200 million). It will save travelers between Sunan and Qilian more than 400 kilometers on the road and cut their transport time by five hours, said Li.

Li said after entering the region in March last year for preparation work, they started digging the tunnel in June 2018. They intend to finish the whole construction by October 2020 and make it a key transport artery in China's northwest.

Li added they are building the No 5 bid (15.01 kilometers long) of the highway, covering roadbeds, bridges and culverts, of which the Dongshan Tunnel is the most difficult project. Their section alone costs 496 million yuan.

Sunan is home to the Yugur ethnic group and belongs to Zhangye city, which was once called Ganzhou prefecture and was one of the biggest international trading markets on the ancient Silk Road.

He said the tunnel has an elevation of some 4,000 meters with unstable geologic conditions and very high risks when it comes to digging and construction.

With an annual average temperature of around minus 10 degrees Celsius and frozen soil as deep as 1.8 meters, Li said the project reminded people of the Qinghai-Tibet Railway, a previous project that CTCE staff helped to build on that plateau.

In June 2001, the CTCE builders, led by Chief Director Zhang Hechuan, became a main force in construction at the harsh zone of Kekexili in Tibet. At an elevation of over 4,700 meters, they accomplished their task successfully, spurring a spirit in the company of overcoming difficulties with daring and hard work.

The Dongshan Tunnel is now the first plateau tunnel for the CTCE builders, Li said.

Zhang, who is now chairman of CTCE, paid a visit to the tunnel on Nov 22, inquiring about the difficulties facing the construction team and calling on them to build a quality project.

Li said since March of last year, they had no running water, no electricity and no mobile communication for almost four months due to the high elevation. The area also caused headaches, dizziness, nausea, vomiting and tinnitus to new workers there.

To ensure the safety of employees, Li said they hired a local doctor to treat the workers.

Ma Zhizhen, deputy manager of the project department from CTCE, recalled: "As it is impossible to dig wells for water, we had to take water from ditches one kilometer away."

Chen Taiheng, Party secretary of the project department, said he was pleased at their progress. Besides the 60 managerial staff, they also had some 300 workers. They equipped the workers with heating equipment and cold-proof materials, creating a "warm home" for them in this harsh environment.

Zhao Changping, a 45-year-old native of Yunyang county in Chongqing, said as a CTCE employee, he can earn a monthly salary of 12,000 yuan, which is a boon for his wife and their three children aged 17, 10 and eight years old respectively.

]]> 2019-11-28 00:00:00 <![CDATA[Regulators set to offer SOEs more power]]> http://www.chinadaily.com.cn/kindle/2019-11/28/content_37526239.htm China will offer more power to its State-owned investment and assetoperating companies to inject vitality into the State-owned asset authorization and operating systems in the next stage of reform, a senior regulatory official said on Wednesday.

Weng Jieming, vice-chairman of the State-owned Assets Supervision and Administration Commission, made the remarks after the State Council issued a document to improve the reform of State-owned capital management earlier this month, urging an acceleration in the role transfer of State-owned enterprises from the 'management of companies' to the 'management of capital'.

Successful experience gained from previous tasks in these firms can also be introduced to other centrally and locally administrated SOEs in the future, said Weng, adding the SASAC will revise its list of power and responsibilities, as well as further clarify the contents of supervision and administration of State-owned assets.

China currently has 19 State-owned asset investment companies. They include the China Merchants Group, China Minmetals Corp, China Communication Construction Group and China Poly Group Corp. There are also two State-owned asset operation firms, the China Chengtong Holdings Group and China Reform Holdings Corp.

"As the operational and financial structure of central SOEs improves, they will see constant increases in their ability to ward off risks, their growth quality and efficiency, as well as their core competitiveness," said Ma Jun, director at the Enterprise Research Institute of the State Council's Development Research Center.

Zhou Yubo, chairman of China Reform Holdings Corp, said the moves will also enhance the power of State-owned capital investment or operation companies on strategy planning, management of core businesses, human resources, equity incentives, wages and management of major financial issues.

Eager to boost the central SOEs' abilities, China Reform Holdings Corp has invested 200 billion yuan ($28.47 billion) in 180 innovation and high-tech related projects in selected companies in the past three years. Among them, about 110 billion yuan were invested in over 70 projects that China heavily relied on imports in the past.

"We have also invested $22 billion for domestic companies to expand their presence in global markets," said Zhou, stressing the group would be more inclined to invest in high-end manufacturing and service projects to facilitate the "go global" strategy of SOEs.

Since China aims to build a group of world-class, role-model SOEs that lead in high quality development, empowering State-owned investment and asset-operating firms will boost the government's ability to further shift its role to serve the real economy, said Yu Gang, chairman of the Shenzhen Municipal Stateowned Assets Supervision and Administration Commission in Guangdong province.

Combined profits of China's central SOEs rose 7.5 percent year-on-year to 1.94 trillion yuan for the January-October period this year, while their total sales revenue jumped 5.4 percent year-on-year to 29 trillion yuan, the Ministry of Finance said on its website on Wednesday.

]]> 2019-11-28 00:00:00 <![CDATA[Mars Wrigley China eyes expansion]]> http://www.chinadaily.com.cn/kindle/2019-11/28/content_37526244.htm Mars Wrigley China is poised to grow its confectionary and chewing gum business by enhancing its digital connection with local consumers, introducing new brands and strengthening innovation as customers look for healthier food and a solid connection with their brands.

Clarence Mak, president of Mars Wrigley China, said in an interview with China Daily that the country is Mars' second-largest market after the United States, and they are eager to grow in this market.

"We want to continue to grow but it is also about how we grow," said Mak, who took the position three months ago. "We want to focus on long term sustainability in China."

The confectionary and chewing gum producer is facing pressure from consumers looking for healthier foods. The market has been increasingly competitive in recent years, with growth rates on the decline, although Mak said there will be more growth seen this year.

Data from the China Shopper Reporter 2019, released jointly by Kantar Worldpanel and Bain & Company, said food categories with perceived health benefits, such as nutrient supplements, led the growth in the industry. Snacks under the impulse category such as chewing gum declined.

Kantar's third quarter data this year said the chocolate category grew 2.2 percent, sharply higher than the 0.6 percent growth recorded in the third quarter of 2018. The chewing gum sector fell 4.6 percent, compared to a decline of 8.8 percent in the same period a year ago.

Mak said they have seen some growth in both the chocolate and chewing gum market this year.

"I think in the end we are competing with a much bigger selection of all kinds of snacks. There are consumers who make choices among chocolate, biscuits and candies," he said. "We want to trade in more local innovations and also connect with the consumers in a more relevant way. I think this is the way we plan to grow the categories."

Mars Incorporated is a privately-owned business with more than $35 billion in annual sales. It sells brands such as M&M's, Snickers, Dove and pet food brands like Blue-Pearl and VCA. The company acquired Wrigley in 2016 and has combined its chocolate and Wrigley segments into Mars Wrigley.

M&M's is partnering with the local fashion brand Peacebird, which took part in Fashion Week in New York this year.

For its leading chocolate brands, Mars has seen fast growth compared to last year. Mars launched some of the light Dove chocolate brand in 2018. This year, it will launch some of the premium options and new flavors of the Dove-Sakura brand.

The company has also launched new gifting products this year, as a lot of consumers give chocolates not only to lovers but also teachers and parents.

Mak said the gum category is still growing and they continue to see strong performance in the sector where they have brands like double mint, Extra and 5. Chinese consumers are looking for a lot of innovations, healthier products, and new ways to connect with their brands.

"At Mars, we talk about how can we move from being present in China to being more relevant in China," said Mak. The company launched "BE-KIND", a popular nut bar brand in the United States, as a new healthy snack product for Chinese consumers at the CIIE.

"We are also going to continue to introduce new products after the imports of BE-KIND from the US and Maltesers," he said.

Mars set up the Mars Global Digital Innovation Center in China two years ago to innovate with partners like Alibaba, Tencent and other forms of digital media.

In 2018, Mars China teamed up with the Alibaba Group to create a chile-infused Snickers bar that aims to satisfy Chinese consumers' hunger and craving for a tongue-tingling treat.

The collaboration involved the integration of analytics from Mars' consumer research, the 500 million-plus users of Alibaba's online marketplaces and a customer survey aimed at finding a new flavor to bring to the market.

The result showed that not only did Chinese consumers love spicy food, they were willing to try chocolate with an extra kick to it. Mak said development of the spicy Snickers was one of the fastest decision making processes in Mars globally.

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2019-11-28 00:00:00
<![CDATA[China plans rules for SIBs to curb risks]]> http://www.chinadaily.com.cn/kindle/2019-11/28/content_37526209.htm China is planning to impose special regulations for a group of systemically important banks (SIBs) to curb financial risks and management failures, according to financial regulators.

The regulators have indicated that about 20 large lenders, out of the 30 on a waiting list, are likely to be approved as systemically important banks by the Financial Stability and Development Committee under the State Council.

After the selection of banks, a certain number of insurance and securities companies will also be earmarked as systemically important financial institutions and follow the special regulatory rules, the People's Bank of China, the central bank said.

The PBOC and the China Banking and Insurance Regulatory Commission have jointly come out with a system to identify domestic systemically important banks (D-SIBs), based largely on the global standards issued by the Basel Committee on Banking Supervision along with some domestic elements.

It uses four indicators and 13 subfactors to evaluate banks' degree of significance. Once the banks are regarded as "systemically important", they will be asked to achieve higher regulatory standards, such as stricter liquidity and capital requirements, the PBOC said in a statement on its website.

Systemically important banks always have huge assets, a complicated structure with several businesses, and are usually tightly connected with other financial institutions. They also provide irreplaceable key services in the financial system, said analysts.

If any of these banks fails, it would lead to systemic financial risks and hurt the real economy, thereby making the tighter regulatory rules all the more important, said Wen Bin, chief researcher with China Minsheng Bank.

The PBOC has called this assessment method "a key mechanism", which is designed to win the battle of preventing and resolving major financial risks, and strengthen the stability of the banking sector.

"The draft regulation is credit positive for Chinese banks, because the increased supervision of large banks will ensure stability of the financial system," said Nicholas Zhu, a banking analyst at Moody's Investors Service. "It will also improve the transparency as D-SIBs need to make disclosures under four indicators and subfactors."

The regulation, however, will also widen credit divergence between the larger banks designated as D-SIBs and non-systemic small banks that receive less government support, he said.

The banking industry has a dominant role in China's financial sector. The total assets of the country's financial industry stands at 300 trillion yuan ($42 trillion), and 268 trillion yuan of this comes from the banking system, accounting for 89 percent of the entire financial sector, according to PBOC data.

"When the draft is finalized, it will have a major impact on the banking industry," said Wen. "It will halt the impulsive expansionary streak of small-and medium-sized banks. Lenders will also be focused more on providing services to the real economy."

However, banks that are included in the systemically important list would need to untangle their complex business structure and simplify connections with other institutions to control potential risks. The increased regulations will push them to improve corporate governance, risk controls and capital management, said Wen.

Bank of China Ltd, Agricultural Bank of China Ltd, Industrial & Commercial Bank of China Ltd, and China Construction Bank Corp were in the 2018 list of 29 global systemically important banks, or G-SIBs, published by the international Financial Stability Board.

An S&P Global Market Intelligence report said recently that these banks are becoming more entwined with the global banking system, which also means that the world is more exposed to domestic risks facing the Chinese lenders.

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2019-11-28 00:00:00
<![CDATA[Companies eye Black Friday sales bonanza]]> http://www.chinadaily.com.cn/kindle/2019-11/28/content_37526260.htm Major online retailers are looking to cash in on the Black Friday shopping spree, which falls on Nov 29 this year, and formed partnerships with each other as more Chinese consumers scout for high-quality products from abroad.

Amazon Global Store, the cross-border shopping platform of tech behemoth Amazon.com Inc, has launched a pop-up store on social commerce site Pinduoduo Inc, and plans to operate it through the end of December.

The pop-up store offers Chinese customers a selection of about 1,000 overseas products from Nintendo Switch consoles, Australian baby formula to personal care products.

With Amazon Global Store's strengths in high-quality imported products in China and Pinduoduo's large customer base, Amazon is looking forward to enabling customers to enjoy cross-border shopping through this store.

In July, Amazon shut down its third-party seller services on its Chinese online marketplace amid increasingly fierce competition from homegrown e-commerce rivals such as Alibaba Group Holding Ltd and JD, as well as Pinduoduo.

Black Friday, the start of the Christmas shopping season, is a major shopping day featuring the highest discounts all year round and is a bonanza for brick-and-mortar retailers, e-commerce players and consumers from around the world.

An increasing number of Chinese consumers have participated in the global shopping festival, since Amazon China brought Black Friday to China in 2014.

Tmall Global, the cross-border e-commerce platform owned by tech heavyweight Alibaba, has kicked off its cross-border cold chain delivery service for Black Friday promotion, and will provide more than 2,500 blue-chip brands from more than 70 countries around the world.

More than 40 well-known brands will launch their new and exclusive products, and lab-grown meat will make its debut in the domestic market, the e-commerce heavyweight said.

In September, Alibaba announced it acquired NetEase Kaola, the cross-border e-commerce platform of NetEase Inc for $2 billion, to bolster its efforts to cater to local demand for quality products from abroad.

Alibaba's Tmall Global and Net-Ease Kaola took up 27.7 percent and 25.1 percent of the country's cross-border e-commerce market respectively in the first half of this year, followed by JD Worldwide (13.3 percent), JD's cross-border commerce unit, and Vipshop International (9.9 percent), according to consultancy iiMedia Research.

JD also invested in online discount retailer Vipshop Holdings Ltd to tap more female shoppers in 2017.

Ymatou, a Shanghai-based cross-border e-commerce site, said its sales revenue surpassed 100 million yuan ($14.2 million) in just 116 seconds when it started its Black Friday shopping carnival on Nov 22. It has collaborated with Fenqile, an installment e-commerce platform under Nasdaq-listed LexinFintech, to offer credit services.

"E-commerce platforms hope to tap the huge consumption potential from the Chinese market. It is noteworthy that the tie-up between Amazon and Pinduoduo will help Amazon tap the massive annual active buyers on Pinduoduo's app," said Mo Daiqing, an analyst at the China E-Commerce Research Center.

The competition in the cross-border e-commerce sector will be more intense, as more and more Chinese consumers tend to buy high-quality goods from overseas through online retailers, Mo said, adding each player wants to get a bigger slice of the pie.

Chen Tao, an analyst with Beijingbased internet consultancy Analysys, said Black Friday is still smaller compared with China's homegrown Singles Day shopping extravaganza.

]]> 2019-11-28 00:00:00 <![CDATA[US biotech firm bullish on Chinese business]]> http://www.chinadaily.com.cn/kindle/2019-11/28/content_37526257.htm US biotech company Amgen is aiming at rapid development of its business in China by bringing in more bone and inflammation therapies to build on its robust annual growth in the country.

The enormous growth this year came mainly from the launch of a biologic injection to treat cardiovascular disease, and the product was moving much faster than anticipated, Penny Wan, vice-president and general manager of Amgen Japan, Australia and Asia-Pacific, said during an interview with China Daily.

"We estimate we will see triple-digit growth in China this year," Wan said.

China is absolutely on top of the worldwide agenda of the company, which started its business in the country in 2012 and has two products for three indications so far, Wan said.

"For China, two out of every five deaths are due to cardiovascular diseases. We see our solution as fitting for the Chinese community and we want to move really fast to help those patients," she said.

Annual rankings by the Genetic Engineering & Biotechnology News, a US-based industry journal, showed Amgen was ranked first among biopharmaceutical companies in the world for 2019 for the second time. It is one of the world's largest independent biotechnology companies, with its headquarters located in Thousand Oaks, California.

At the beginning of this month, the company announced it was in the process of closing a deal with BeiGene, a Beijing-based domestic biomedicine enterprise. The deal is awaiting regulatory approval.

"We are accelerating our momentum to building a more robust and complete portfolio in our key China market. Such strategic collaboration with local leading players is aimed to expand our oncology presence in China and to jointly advance Amgen's oncology pipeline in China and globally," Wan said.

Amgen wants to accelerate the transformation of its healthcare model from disease treatment to prevention through collaboration with multiple stakeholders to help the country achieve the Healthy China 2030 initiative.

In the area of bone health, a major issue in an aging society, it is trying to work with different partners to help prevent falls and fractures for people with low bone density.

Statistics from the National Health Commission last year showed that the rate of osteoporosis among Chinese people aged 50 and older was 19.2 percent.

"With aging, the number one challenge is what if people lose their mobility when they fall, have fractured bones, and then they can potentially become dependent," Wan said, adding that one in three patients with a hip fracture dies within 12 months.

The disease presents a heavy economic burden for families and the society. Figures from the International Osteoporosis Foundation showed that medical bills caused by hip fractures totaled more than $9 billion in China in 2010, and are forecast to more than double to nearly $20 billion in 2035.

"So we're working with partners to promote prevention ahead of treatment of a hip fracture. It's a better option for osteoporosis patients to receive treatment for osteoporosis so that they don't break their bones," Wan explained.

She said the company is gearing up to launch an injection product taken every six months to help increase bone density and prevent fractures for people in the Chinese market.

"We have specific plans and are conducting active discussions with the regulatory authorities to bring the project into the country," Wan said.

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2019-11-28 00:00:00
<![CDATA[FC Barcelona teams up with Chinese firms]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525756.htm Spanish professional soccer club FC Barcelona, known as Barca, places a huge strategic importance on China as it presents a huge opportunity to drive engagement with new and existing fans.

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Spanish soccer club plans to grow partnerships, engage with fans, generate further revenue streams through expansion

Spanish professional soccer club FC Barcelona, known as Barca, places a huge strategic importance on China as it presents a huge opportunity to drive engagement with new and existing fans.

Josep Maria Bartomeu i Floreta, president of FC Barcelona, said the Chinese market, which is home to 47 million Barca fans, represents 16 percent of the club's fans globally. He sees huge potential from business-to-consumer business, and China is a key part of that.

The club has accelerated steps to expand its presence in China, and a key part of its China strategy is the development of youth soccer. Across China, FC Barcelona coaches have trained more than 15,000 children in academies, camps and programs to date. Moreover, in 2018, the club opened the Barca Experience Haikou, the first ever museum outside of Spain.

It now has six commercial partners in China. FC Barcelona and Chinese smartphone maker Oppo renewed a partnership agreement for the next three seasons in July. They will be working together in different areas, such as digital branded content, to raise engagement among fans and TV advertising.

In an exclusive interview with China Daily, Bartomeu talked about the club's investments and expansion plans in China, and his vision for Chinese soccer fans and the soccer industry.

What is FC Barcelona's development plan in China? What kind of strategy will be adopted?

China is huge and extremely important to us for one simple reason, that is, our fans are here, and we believe that we have a fan potential of 47 million in China - people who are interested in FC Barcelona - and it's growing every day. This presents a huge opportunity for us to grow awareness and understanding of our club, engage with our fans every day and generate additional revenue streams that contribute to the bottom line of the club.

Arguably most importantly, the purpose of our brand is to transform the world through sporting excellence. Although we are a local club from Barcelona, we know that we have a responsibility globally to help society through sport. That's why we have five FC Barcelona Academies in China, where we teach sport through the club's values and using our unique methodologies. That's also why we have partnerships through our foundation which aims to support children and young people through sports and education, for the purpose of contributing to a more inclusive society.

What is the role of the Chinese market in FC Barcelona's global business layout?

We've recently released our revenue for the 2018-19 season, which was 990 million euros ($1.09 billion), our highest revenue ever in a season. The season before, we were the first sports club to surpass one billion dollars in revenue to become the highest earning sports club in the world. China is already contributing to that and we want to continue that.

We will continue to develop our business-to-business model here - we have strong partners in Asia, where the relationship is mutually beneficial. Simply, they allow us to reach more of our fans and they are able to leverage the power of Barca to tell their own brand story and engage with customers. Our partners in Asia already account for about 40 percent of our partnership revenue globally - from 15 partners including our main shirt sponsor, Rakuten. We are growing year-on-year and we want to contribute even more to global revenue for the club. However, whilst we have a strong B2B business here in Asia, we see the real potential being B2C and China is a key part of that.

Which companies or sponsors does FC Barcelona currently cooperate with in China? Will you increase your investment in China's sports or soccer industry in the future?

We have important partners in China, including big brands like Oppo, Shanghai Pudong Development Bank, Yunnan Baiyao and Mission Hills Group. They are invaluable in giving us local expertise and knowledge and we want to continue to grow partnerships in China. The way that we interact with these partners is key - everything from digital content, to the launch of products and soccer camps for Chinese children. Not only can we tell our brand story, but we can help Chinese companies tell their stories too.

The club has invested in China, with an office in Hong Kong and a joint venture with Mission Hills Group in Haikou, Hainan. It was the first FC Barcelona experience outside of Spain - a museum and a retail store. Soccer is such a huge sport in China and there is commitment from the government to grow it further. We'll continue to work with fans, government and brands in China to identify opportunities to invest more.

How do you see the Chinese soccer industry developing in the future? Will there be an opportunity to bring in some Chinese players to your club in the future?

The sport has grown exponentially since President Xi Jinping outlined the plans and objectives for soccer in China. We know from third-party data that about 31 percent of the urban population aged between 16 and 59 are interested in soccer.

However, it will be a long process for China, but there's no reason why the country can't succeed with the ambitious plans and resources. We are willing to support this by contributing to improving player experience both locally and internationally, sharing knowledge through our coaching systems, building facilities adjusted to the sport and athletes' needs, like we have done in Haikou.

We recently brought a team to Kunming in Yunnan province for LaLiga Hope Cup and won the competition, and that's something we're keen to continue, not only giving our FC Barcelona youth teams the chance to experience China, but also allowing young Chinese players to interact with a Barca youth team.

Do Chinese fans differ from those in other countries when watching soccer matches or buying peripheral products?

All Barca fans around the world have something in common - a love and passion for the club and the way we play soccer. Of course, there are nuances in the way that fans watch soccer matches and news, and that's exactly the reason why we have international offices, employees and global partners. They help us understand the local markets.

In China specifically, we know that a lot of fans choose to follow their favorite players over a specific club, and fans consume the majority of their soccer content through digital platforms like Weibo and WeChat. More than 90 percent of fans watch games at home, whereas in Europe, a lot of fans will watch the games in bars. Smartphone penetration, particularly in urban areas, is extremely high so we need to think "mobile first" in everything we do in China - experiences, content, news, merchandise and ticketing.

What is your business management philosophy?

I place huge importance on three things: consistency, transparency and leading by example. In FC Barcelona's case, this means making sure everything I do is aligned with the club's values: humility, effort, ambition, respect and teamwork. I recognize that we have a team of exceptionally talented individuals working in their own fields of expertise. Sports is a complex industry and we need to rely on and trust in each other to make sure we make the right decisions. This means giving people a degree of autonomy and being honest with ourselves.

How do you motivate your international team?

I apply the same management philosophy to the international team as here in Barcelona. It's important to understand the motivations of the individual - just like you would with a soccer player. What motivates that individual? What are they passionate about? What do they want to achieve?

We believe that we have a lot to offer. Our mission is to be the most admired, loved and global sports institution - note the use of the word "global" in that statement. First and foremost, anyone who works at FC Barcelona must understand our club, our history and our values. However, as FC Barcelona attracts more and more international fans, we need more people who understand international markets, and understand that this great club can offer something to people all over the world. Even though our international teams may be thousands of kilometers away from Barcelona, we try to ensure that they feel as much a part of the club, part of the family, as the people based here.

Do you know about the Chinese Super League and the Chinese players?

Well, we know about the CSL, of course, and monitor the growth of the league from afar. The league is getting more competitive and they've been able to attract some huge global talent in recent years, both players and coaches, which has improved the visibility of the game all around the world. There have also been some notable players from the CSL coming to Europe, which also shows that the standard of the league is getting stronger.

Chinese FC Barcelona supporters pose for a photo during a LaLiga match between FC Barcelona and SD Eibar in Barcelona, Spain. Getty Images 

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2019-11-27 07:46:10
<![CDATA[Bentley drives home China focus with latest models]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525755.htm Despite a downturn in China's overall car market, British carmaker Bentley Motors is introducing its latest models into the country, convinced that there is plenty of room for growth for luxury vehicles.

"We've brought all of our new products up to China VI emissions standards, we are just about to see the very first boat of the new Continental GT and the new Continental GTC arrive in the port of Guangzhou soon, which will be the very first vehicles into the Chinese mainland," said Kim Airey, Bentley's managing director for Chinese mainland, Hong Kong and Macao.

Airey made the remark at the ongoing Guangzhou auto show, where the British luxury carmaker is presenting its whole lineup from the Flying Spur and the Continental GT to the long-wheelbased Mulsanne and the Bentayga SUV.

"The year 2019 has been a transition year for Bentley - and the market performance meets our expectation. On top of a successful year through November, we are expecting an amazing December because of all the customer deliveries," Airey said.

Bentley has been insulated from the downward trend in car sales that emerged in the second half of 2018 and is expected to continue well into 2020 in China's auto market, which is the largest worldwide since 2009.

"At this point it hasn't (affected us). We are a very thin layer at the top of the market and our market has grown," said Airey.

He said the economic success of China is ferocious, generating wealthy companies and individuals, and that translates to the purchase of luxury cars, so it is a good time to bring all of its new products to the Chinese market.

"People are finding their success, and with that, the wealth comes very quickly. Once that wealth starts to come in, they'll go buy a premium car first and then maybe they will buy a Bentley," said Airey.

"The luxury sector has continued to grow consistently since Bentley has been in the market, nearly 20 years now. It took a bit of a wobble in 2014 and 2015, but these business cycles are typical. Bentley is wellplaced to manage them and work through them."

He expects Bentley to see an even stronger performance in 2020 as it now has an refreshed lineup in the country.

"We will have a full year of the new Continental GT, not just one month. We may have nearly a full year of the new Flying Spur as it arrives, and of course we will have a full year of Bentayga and Mulsanne."

Airey said Bentley has seen a strong order book on the all-new Flying Spur while it has only shown one car in the whole country, the books are beautiful for the new Continental GT and the Bentayga has become the favorite Bentley in China.

"Bentley is intrinsically linked to the aspirations of our Chinese customers, providing the pinnacle products to meet the needs of them. We will remain fully committed to meeting the needs of our discerning customers," said Airey.

He said the brand tries its best to listen to its customers and makes sure the feedback it's getting from the market, particularly a market as important as China, is reflected in its next generation of products.

Bentley's tradition of innovation and its eagerness to listen to customers have provided it with strength in the market.

"We've prided ourselves on our innovation and our ability to identify new markets. The Continental GT in 2003, the Bentayga in 2015, and you can see the Bentayga Hybrid will be the first in its own segment again," said Airey. He said the hybrid model is a great solution for Bentley right now as it offers sustainability and environmental responsibility while it is free of mileage anxiety.

"It's a package of what our customers want and has been proved by the success of our products in the market. The willingness for NEV versions is growing proportionally with the technology available to meet customer demands," he said.

The company plans to offer hybrid versions of all its models by 2023 and the first fully electric model will hit the market in 2025.

The luxury carmaker expects China to continue its leading role in its global strategy as the brand.

"China's front and center role will probably remain the same in the sense that it's already at the forefront of pushing the electric agenda. The very fact that you've seen the Bentayga Hybrid as the first SUV is testimony to how important the China market is to Bentley," said Airey.

 

 

Bentley Motors displays its models at the ongoing Guangzhou auto show. Photos provided to China Daily

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2019-11-27 07:46:10
<![CDATA[Innovation smooths bumps in 5G rollout]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525754.htm As the world is at the tipping point for large-scale 5G network rollout, the global telecom industry faces a common challenge: how to quickly and efficiently find enough sites for 5G base stations.

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Huawei working with telecom carriers for tech, industrial solutions to face the challenge of insufficient sites

As the world is at the tipping point for large-scale 5G network rollout, the global telecom industry faces a common challenge: how to quickly and efficiently find enough sites for 5G base stations.

It is a grave challenge, for 5G technologies use a higher frequency than 4G, and each 5G base station covers a smaller area than its 4G counterpart. Moreover, 5G will see wider industrial use, further increasing the demand for network coverage. As a result, far more base stations, with some estimating as much as three times base stations, are needed in the 5G era than in the 4G era.

To overcome the difficulty, Huawei Technologies Co, the world's largest telecom equipment maker, is working with telecom carriers and tower operators including China Tower Corp on innovative technological and industrial solutions.

"The challenge of acquiring 5G sites and the growing 5G network density represent a key contradiction that affects large-scale 5G deployment," said Qiu Zheng, vice-president of site domain at Huawei's wireless product line.

Also, contrary to public perception that telecom equipment accounts for the majority cost of base stations, Qiu said every $100 that telecom operators invest in base station construction, $60 is spent on site acquisition, civil work, power supply, and other auxiliaries.

The estimated proportion is even higher in the research of the global telecom industry association GSMA Analytics. According to its study, 80 percent of the total construction cost of base stations lie in site acquisition, civil work, power supply, and other auxiliaries.

With this in mind, Huawei has launched the Open Site initiative to convert utility poles into telecom poles, helping operators with massive 5G site acquisitions and optimized site costs.

Under the initiative, Huawei has collaborated with multiple partners to jointly provide 5G sites quickly and efficiently. Major achievements have been made in promoting site approval simplification, as well as developing open 5G pole site standards, which are essential for preparing public resources for long-term 5G development.

In Shanghai, for instance, Huawei has partnered with the municipal government to draft standards on how to better facilitate large-scale pole site deployment with reduced costs.

Moreover, Shanghai has rolled out plans to provide 30,000 5G sites by the end of 2020 simply by building or turning utility poles into telecom poles along its 500-kilometer roads. That is equivalent to 75 percent of the current total number of 5G sites in Shanghai.

"If without the plan, it takes about 12 months for telecom tower operators in China to find proper sites by going through the sophisticated processes of mapping sites and negotiating with property management companies for good rentals and stable power supply," Qiu said, adding that in the United Kingdom, the process could even take as long as 36 months.

But with the Shanghai plan, telecom base stations can be directly equipped to the 30,000 5G-ready poles, greatly saving time and boosting efficiency, the executive said.

Tong Jilu, chairman of China Tower Corp, which manages most of China's telecom towers, said the company has already prepared more than 10 million towers and poles for 5G by leveraging the existing resources of railway, real estate, power grid, transportation and other sectors.

"About 80 percent of micro 5G base stations nationwide will be hung on existing electric poles, light poles and other forms of towers, which will dramatically lower the costs and quicken the rollout of 5G in China," Tong said.

Foreign countries including Japan, the UK and South Korea are also jumping on to the bandwagon. In Germany, for instance, telecom operators have partnered with seven departments to draft and publish the guidelines in August on how to better open public resources including traffic lights, bus stations and road signs to the telecom sector for potential 5G sites.

Multinationals including Signify, formerly Philips Lighting, Schreder and JCDecaux Group, the largest independent outdoor advertising agency in Europe, are also responding positively to its initiative to address the challenge of sites acquisition, Huawei said.

On top of making it easier to acquire 5G sites, Huawei also has innovated a slate of simplified solutions to lower costs for telecom carriers, including reducing trouble involved in climbing poles to install base stations and offering diversified services and products to help them map network construction routes for different scenarios.

When it comes to the challenge that 5G base stations are extremely power-hungry, the Shenzhen-based company also unveiled a solution called 5G Power. By integrating artificial intelligence into the service, Huawei aims to help telecom operators cut electricity bills and offer stable power supply in a fast and efficient manner.

"5G is set to integrate with a wide range of sectors and Huawei is dedicated to offering the best site and power products to help quicken large-scale 5G deployment," Qiu said.

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2019-11-27 07:46:10
<![CDATA[Chinese online retailers scramble to open more physical stores]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525753.htm Chinese online retailers are gearing up to open brick-and-mortar stores and offer immersive, interactive and intelligent shopping experiences for consumers, hoping to cash in on the growing demand arising from consumption upgrade and the rise of middle and high-income Chinese shoppers, said industry experts.

E-commerce giant JD opened its largest offline store named "JD e-space", spanning 50,000 square meters in Chongqing on Nov 11, as part of its boundaryless retail strategy that aims to promote online-to-offline retail experiences for customers.

The store features popular and bestselling offerings in product categories from electronics, home appliances, digital accessories to health, fitness and beauty products and office supplies.

JD claimed the e-space will be the country's only major store to offer ultrafast 5G network coverage. It has dynamic price tags to ensure store prices are aligned with online prices, and robots to guide customers and introduce products.

After experimenting with these products, consumers can scan a quick response code to buy and have items delivered to their homes by JD Logistics, the logistics arm of JD, usually within 24 hours or they can complete their purchase on-site and carry home in-stock products immediately.

More than 30,000 customers had visited the store as of 12 am on Nov 11, with sales revenue surpassing 10 million yuan ($1.4 million) within an hour of the store opening, according to JD.

"JD's boundaryless retail strategy is to integrate online and offline retail, enabling customers to buy whatever they want, whenever they want, wherever they want," said Yang Zisheng, head of offline business at JD Home Appliances.

Yang said with the most advanced technologies and state-of-the-art products, the offline store provides consumers not only shopping convenience but also an immersive and interactive experience.

To further enhance the shopping experience, the store also has various themed experience areas, such as Apple's largest authorized offline experience store, Microsoft's first smart home experience area in China, GE's first omnichannel home appliance store in China, and Ninebot's first authorized offline experience store in China.

Vipshop Holdings Ltd, China's major online discount retailer, has already opened about 300 brickand-mortar stores across the nation.

In July, it purchased brick-and-mortar outlet operator Shanshan Group for 2.9 billion yuan, which represents another milestone in Vipshop's efforts to explore online and offline integration in its core business.

"Through this highly strategic transaction, we will gain presence in the offline outlet business in China, which further enhances our ecosystem and fortifies our leading position in China's discount retail segment," said Eric Shen, chairman and CEO of Vipshop.

Shanshan currently operates five outlets in Ningbo, Taiyuan, Harbin, Zhengzhou, and Nanchang, with another five outlets in the pipeline.

The company said net revenue for the third quarter of 2019 rose 10 percent year-on-year to 19.6 billion yuan, compared with 17.8 billion yuan for the same period a year ago. Its net profit stood at 1.2 billion yuan, an increase of 140.2 percent year-on-year from 500.8 million yuan in the same period a year earlier.

Chen Tao, an analyst with internet consultancy Analysys in Beijing, said the offline stores could play a complementary role in boosting sales of online retailers and help in cultivating purchase habits of consumers.

"By virtue of big data and artificial intelligence, the offline stores could better capture consumers' shopping habits and preferences, and make accurate recommendations," Chen noted.

Yitiao, a video-focused content producer and e-commerce startup, opened its first three brick-and-mortar stores in Shanghai last year. Xu Husheng, founder of Yitiao, said the company plans to open 100 offline channels in the next two years.

Mo Daiqing, an analyst at the China E-Commerce Research Center, said the offline stores will present a new opportunity for major online retailers to expand their retail channels.

"First of all, the targeted customer group should be determined, and the portfolio of products should be differentiated so as to bring about new shopping experiences. Second, online retailers must do well in supply chain management, balance the online and offline prices of products, as well as consider cost structure to gain profits," Mo said.

 

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2019-11-27 07:46:10
<![CDATA[Swire sets up refined tea making facility in Guizhou]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525752.htm United Kingdom-based John Swire & Sons Ltd has set up its first refined tea processing plant in China in Sinan, a county in the mountainous Guizhou province, to cash in on the local advantages like a subtropical climate and clean air.

Finlays, a sub-affiliate of the London-based John Swire & Sons and a major beverage supplier, established the plant in Guizhou and it started operations in late October. Built with an investment of 120 million yuan ($17 million), the plant mainly produces black tea, green tea and white tea. By 2023, it plans to achieve an annual capacity of 20,000 metric tons of tea.

Finlays said it hopes to build a sustainable and flexible purchase and supply model in Guizhou, and build an ecological tea production and marketing chain from tea trees to tea cups.

"We are bullish on the growth prospects of ecological tea produced in Guizhou, so we have built a high-quality ecological tea garden and refined tea processing plant there," said Li Jian, public relations director of John Swire & Sons Ltd in China.

The tea produced in Guizhou, China's largest tea plantation area with a long tea planting history, will be transported to Chongqing, and then to Europe by railways, or it will be transported to the ports of East China, before being exported globally. Besides, tea planted there will also be sold to various cities domestically.

Currently, the tea is exported to the United States. Starting from next year, tea made in the plant will be exported to major markets of Finlays globally, including Germany, France, Morocco, Russia, and the US. The export volume is expected to reach 3,000 tons to 5,000 tons annually from the factory.

Currently, the factory has two production lines, and they each produce sliced tea and tea in sticks. The factory manufactures tea based on the requirement of Finlays.

After a few years of research, Finlays found Guizhou to be the best source for clean tea in China and subsequently set up a unit in Guizhou.

"Unlike the production and investment models in other countries, Finlays collects tea from its cooperative small-scale local farmers in Guizhou and then refines them at the factory. At other places, the tea comes from big management suppliers," Li said.

Finlays also provides tea plantation training, such as integrated pest management without applying pesticides, yield and cost management, and the use of smart mobile technologies for local farmers.

The tea produced locally will be packed with a quick response code, and consumers can scan the code to track the producers, natural environment of origin and the condition of the use of pesticides. The tea made in Guizhou can meet or exceed the standards of the European Union, Finlays said.

"The air quality in some areas of Guizhou can be 10 to 15 times cleaner than the clean air standard proposed by the World Health Organization," said Fu Chuanyao, president of the Guizhou Tea Culture Research Association.

Some other renowned retailers, such as Nongfu Spring and A.S. Watson Group, have also set up branches in Guizhou.

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2019-11-27 07:46:10
<![CDATA[Enhanced cybersecurity urged]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525751.htm While 5G technologies seemingly bring up endless possibilities, this new era of pervasive connectivity will also pose new risks in cybersecurity.

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Experts call for united efforts to deal with potential challenges linked to super-fast 5G

While 5G technologies seemingly bring up endless possibilities, this new era of pervasive connectivity will also pose new risks in cybersecurity.

"Most of the security challenges that 1G to 4G networks pose are to personal privacy. However, 5G technologies will serve a wide range of industries, especially some key sectors closely related to the national economic and social development," said Qiao Siyuan, senior director of the strategic management division at Chinese security company Qi An Xin Group.

"Once attacked, that will pose great threats to the safety of cities and even national security."

Qiao explained that super-fast 5G technologies will not only offer faster mobile services for voice and data communication, but also provide capabilities for new technologies and serve vertical industries.

"5G networks will foster new kinds of applications and will allow people to connect more devices to the network and to each other," Qiao said, adding though that "this new era of ubiquitous connectivity may also bring new security risks."

The high-speed 5G technology is expected to revolutionize the tech world in the near future as it will be able to transmit data more than 10 times faster than 4G. Accelerated transmission speeds mean it will take on tasks that are impossible in the 4G era, such as overseeing self-driving vehicles.

Tencent Security mobile security division general manager Li Danhua agreed, saying people need to pay more attention to 5G security issues in terms of connected devices, data transmission processes, data storage and classification.

"Security needs to be built into the 5G IoT sensors and the fabric of the 5G networks, and then we are able to enable a wide range of new applications in a safer way," Li explained.

In most cases, data will be used ethically and will be useful for people. But the increased volumes and the vast variety of data makes it more tempting for hackers and criminals.

The Qi An Xin Group's Qiao called for a joint public-private effort to defend against the risks in the 5G era and maintain a reliable and safe cyberspace.

"The government, equipment vendors, security companies and operators need to work together to build a joint security mechanism," Qiao said.

No entity, whether an individual or an organization, is safe from the impact of successful cyberattacks and information leaks.

"In the near future, there will be hundreds of billions of smart devices in various fields, and we will face unprecedented security challenges," said Zhou Hongyi, chairman and CEO of 360 Security Group.

Zhou fears that cyberattacks and cybercrimes will increase in the future. To combat the threat, a growing army of professionals will be needed.

"We will see more opportunities in the cybersecurity sector in the near future," Zhou said. "There will be a need for more professionals in the industry."

Statistics from IDC showed that while China is a leading power in terms of digital economic development, it lags behind in the cybersecurity market. China occupies only 5.9 percent of the total global security market, while the US accounts for 44.2 percent of the total.

China has already kicked off the commercialization of super-fast 5G technology. By the end of this year, more than 130,000 5G base stations in total will enter into service to support the network, Miao Wei, minister of industry and information technology, said at the recent World 5G Convention in Beijing.

The country is set to become the world's largest 5G market by 2025 with 460 million 5G users, a forecast by the industry group the Global System for Mobile Communications Association said.

 

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2019-11-27 07:46:10
<![CDATA[US businesses looking forward to third CIIE]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525750.htm The US business community is already looking forward to next year's China International Import Expo (CIIE) following the successful event held in Shanghai earlier this month.

"We had a very positive experience at No 2, so we are looking forward to No 3," said Jeff Zettel, associate vice-president of Aramark Corp.

Zettel made the trip from Aramark's headquarters in Philadelphia, Pennsylvania, to attend the road show for the third CIIE at the Bank of China's New York offices in Manhattan on Monday.

Zettel signed a contract on behalf of Aramark with the China International Import Expo Bureau to participate in the third CIIE Enterprise & Business Exhibition in Shanghai from Nov 5-10, 2020. Aramark is a US food service, facilities and uniform provider to hospitals, universities, school districts, stadiums and other businesses around the world.

Zettel said in an interview that Aramark's business in China is a major reason for the company's attendance. "We have approximately 35,000 employees in China today. It's a rapidly growing part of our company. And we want to continue to do business in China across the different regions."

Zettel said Aramark has strong business ties with "many companies like Huawei. We are looking forward to broadening those relationships and opening up dialogue for new opportunities in the future."

Leo Chan, executive director of the Great Cincinnati Chinese Chamber of Commerce (GCCCC), flew from Ohio to sign up early for the third CIIE. Chan said preregistering for booth space for the last two expos was hectic because of the event's popularity.

A nonprofit organization, the GCCCC provides support services, expertise and networking opportunities.

"Currently, we are still collecting inquiries from our member companies," Chan told the China Daily. "But we have already booked 150 square meters of area for exhibition for next year's event."

CIIE deputy director general Liu Fuxue said 34 US companies have signed up to participate in the third CIIE "because of the great success the second CIIE achieved."

Liu said tentative deals for one-year purchases of goods and services worth $71.13 billion were reached at the second CIIE, an increase of 23 percent over the previous one.

A total of 181 countries, regions and international organizations participated in the event, while more than 3,800 companies participated in the exhibition. The number of registered buyers and other professional visitors exceeded 500,000.

"The expo brings huge business opportunities to US companies," said Liu. There were 191 US companies at the second CIIE, a significant increase over the level in the first year.

They included giants such as General Motors, Ford Motor, Mars, General Electric, Dell, Johnson & Johnson, Tesla and 3M. CIIE data showed the intended trade volume of US companies reached at the second expo was $12.96 billion, up more than 30 percent.

"This number illustrates that even in this hard time of the bilateral trade relationship, the business ties between China and US enterprises can still not be cut off," said Gu Chunfang, commercial counselor of the Chinese Consulate General in New York.

Bank of China USA president and CEO Xu Chen said that in talking with American business leaders and participants, he is "aware that US companies still give much priority to the Chinese market with enthusiasm, despite the current China-US trade frictions."

"Most US representatives at the subnational government levels and American businesses in the expo applauded the event," he said.

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2019-11-27 07:46:10
<![CDATA[Financial sector on a generally stable path]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525749.htm China's $42 trillion financial industry has been judged as "generally stable" in the central bank's annual examination, but supervision still needs to be tightened to prevent potential risks, especially in the banking sector, a report said.

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PBOC report says investor confidence has improved significantly in nation

China's $42 trillion financial industry has been judged as "generally stable" in the central bank's annual examination, but supervision still needs to be tightened to prevent potential risks, especially in the banking sector, a report said.

China's financial risks have been slowly resolved although some risks still exist, after accumulating rapidly in the past few years, the People's Bank of China, the central bank, said in its annual financial stability report.

The PBOC issued a draft of its assessment method for domestic systemically important banks on Tuesday, and 30 banks were on the list. A set of quantitative indices, including the amount of assets, and the degree of correlation and complexity, will be used to evaluate the "significance" of banks.

Once the banks are regarded as "systemically important", they will be asked to achieve higher regulatory standards, such as stricter requirements on liquidity and capital, the PBOC said in a statement on its website.

The assessment method is "a key mechanism" which is designed to win the battle of preventing and resolving major financial risks, and it will help to strengthen the stability of the banking sector, the PBOC said.

To prevent systemic financial risks in the future, the central bank will continually improve macro-prudential management and provide necessary liquidity. The PBOC will tailor its credit supply to better boost the economy and strike a fine balance between achieving growth and fending off risks, according to the financial stability report, which was released on Monday.

Financial stability is one of the country's priorities to achieve the overall economic stability goals. China has a three-year plan that aims to contain major financial risks by 2020.

"Regulations should focus on some key areas, including the local government contingent debt, the corporate bond market and the real estate market," an official from the central bank told China Daily.

Financial holding groups, rural financial institutions and the online lending platforms also should be paid attention to. "Abnormal fluctuations in the financial market cannot be ignored," said the official, highlighting that financial markets are highly sensitive to external shocks and the cross-sector risk contamination should be prevented.

In the third quarter, the leverage rate, or the debt-to-GDP ratio, fell to its weakest level in about three decades, the report indicated.

To control the debt level, a prudent monetary policy should continue, and the broad money supply, or the M2, should match the growth pace of the real economy. Too much easing of the monetary policy may boost irrational investment in the financial sector, said He Ping, a professor with the School of Finance at Renmin University of China.

"The central bank has taken efforts to curb potential risks, especially in the banking system. Measures included using the deposit insurance fund in time and injecting liquidity to prevent bank runs," said Xu Gao, chief economist of BOC International.

"Commercial banks are suggested to better recognize and assess potential risks. Under a marketoriented interest rate system, they need to set prices of financial products based on different risk levels," said Xu.

"A prudential management mechanism is required in banks, and they need to realize the boundary of doing business," he added, meaning that some highrisk interbank investment may not be guaranteed by the government.

China built the deposit insurance mechanism in 2015, under which a special fund was collected by the central bank to ensure depositors can get certain compensation if the bank fails.

"The usage of the deposit insurance fund has stabilized investors' confidence, which will strengthen the country's financial safety network and protect the rights and interests of depositors," said Zong Liang, a senior economist at the International Financial Institute under Bank of China.

After a full-scale examination of the banking sector, the PBOC report showed that by the end of the third quarter, the liquidity level of more than 99.2 percent of the country's small - and medium-sized banks was higher than the regulatory standards. Their net profit, which reached 448.35 billion yuan ($63.68 billion) in the first nine months, is enough to offset the risks, said the report.

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2019-11-27 07:45:44
<![CDATA[China and Belgium looking to further bilateral economic ties]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525748.htm China and Belgium are important gateways for each other in terms of economic cooperation as the European Union and China seek to work together to play a more active role in promoting multilateral trade and an open economy worldwide.

"With more reforms, internet penetration and an open environment, China has become an important gateway for Belgian and European businesses to seek opportunities in the country," said Belgian Deputy Prime Minister Didier Reynders.

Stronger ties between the two sides will help European companies and institutions to expand their footprint in China and improve their competitiveness on a global scale.

"On the other hand, Belgium is at the heart of Europe, therefore, is also the best gateway for China to the European market," said Reynders, who is also Belgian minister of foreign affairs and European affairs and defense.

He pointed out that it is a good moment for the EU to engage with an important partner like China to try possible reforms and play a more active role in promoting multilateralism and rebalance with the rest of the world amid current trade frictions.

Reynders, who was part of the Belgian economic mission led by Belgian Princess Astrid, made the remarks in Beijing during a visit to China last week. With 632 participants that also include 465 business representatives, the mission is said to be the largest ever in Belgian history.

His views are shared by Princess Astrid, who said though uncertainties are growing internationally, it also means new opportunities and that Belgium wants to consolidate its ties with China.

Belgium is now China's sixth-largest trading partner in the EU. By the end of last year, the bilateral trade volume hit $26 billion and Belgian businesses had invested $2 billion in China's chemical, pharmaceutical and electronic equipment sectors.

"As we get closer economic relations with China, we are looking for more opportunities from not only big and coastal cities including Beijing and Shanghai, but also from inland regions," Reynders said, adding that the cooperation potential between the two sides is huge in the coming years.

China is witnessing a new consumption norm, a trend featuring residents of smaller cities, who are looking more to imported goods and have a growing appetite to spend.

According to a report from Morgan Stanley, China's lower-tier cities are becoming "bigger, richer, and more eager to spend" and such consumption could triple to $6.9 trillion by 2030.

"With middle-income consumers rising in China, there will be more business opportunities from those cities, especially for Belgian small - and medium-sized enterprises," he said.

 

An exhibitor from Belgium demonstrates how to operate a mini lathe during a trade fair in Harbin, capital of Heilongjiang province. Ma Chengjun / For China Daily

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2019-11-27 07:45:44
<![CDATA[BOE boosts its presence in flexible screen production]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525747.htm BOE Technology Group Co Ltd, a leading Chinese supplier of display products and solutions, is doubling down on flexible screens mainly used for smartphones, as well as expanding its presence in internet of things, intelligent retail, vehicle-mounted systems and other emerging industries.

Chen Yanshun, chairman of BOE, said the company is banking on the flexible organic light-emitting diodes (OLED), and the shipment of OLED panels will triple to at least 70 million units next year.

Chen made the remarks at the company's annual Innovation Partner Conference on Tuesday in Beijing. He noted currently the supply of traditional liquid crystal displays (LCD) has surpassed demand, so BOE won't increase its investment in the sector in the future.

BOE has three sixth-generation active matrix/organic light-emitting diode (AMOLED) production lines. It started mass production of the flexible panels from its facility in Chengdu, Sichuan province, in October 2017. The panels have already been used by more than 10 smartphone manufacturers.

The company's second line in Mianyang, Sichuan province, started mass production in July, while work on the third facility commenced in Chongqing last year.

AMOLEDs are more flexible with faster responses, high contrast and wide visual angles, compared to traditional LCD panels.

BOE's Chengdu factory is expected to turn out 20 million flexible panels this year, accounting for 18 percent of market share worldwide, according to Chen.

As an emerging flat-panel display technology, mini light-emitting diodes (LED), which offers much better image quality and are highly efficient, will witness an explosive growth in the next two to three years and become a development direction, Chen added.

"We position BOE as an IoT company providing intelligent interface products and professional services for information interaction and human health," Chen said.

Li Yaqin, president of market researcher Sigmaintell, said the demand for flexible OLED panels is estimated to surge 140 percent next year, compared with previous year, along with the commercial application of superfast 5G technology.

"The penetration rate of OLED in the mobile market will reach 50 percent by 2024. By then, the overall shipment of global mobile panels will reach 1.6 billion units and half of them will be from OLED," Li noted, adding about 60 to 70 percent of sales revenue will be contributed by OLED.

Moreover, the market for mini LED products will grow to $689 million by 2022, said a report by LEDinside, a division of market research company TrendForce.

Mini LEDs may enter the market through high-end consumer products such as gaming notebooks, gaming monitors, monitors with special applications, as well as niche products such as high-end TVs with high resolution, high contrast and high color saturation, said LEDinside.

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2019-11-27 07:45:44
<![CDATA[Shenzhen bourse in tech pact with PSX]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525746.htm

Shenzhen Stock Exchange (SZSE) and Pakistan Stock Exchange (PSX) signed an agreement on Tuesday to provide the latter with a new trading and surveillance system, a start for China's securities technology system to go global.

According to the agreement, SZSE will combine its latest technology products and Pakistani capital market's development characteristics to formulate PSX's new technology structure.

Sulaiman S Mehdi, chairman of PSX, expressed confidence that the initiative will go a long way in the development of Pakistani capital markets and in improving the overall investment climate.

"This procurement is a testimony of our firm belief and commitment of investing in technology and in making PSX an international exchange by all standards. So, for PSX, it's a dream come true," he said at the signing ceremony in Shenzhen.

Wang Jianjun, chief executive and president of the Shenzhen bourse, believes the new system will significantly enhance PSX's capability in terms of safe operation, risk prevention and control, to make it more reliable, cost-effective and efficient.

He said the deal was the first time that SZSE's IT system has been chosen over other top competitors from across the world, marking the first global steps of a Chinese securities technology system.

Wang said the Shenzhen bourse has a technology team of about 1,000 people and had independently developed key technologies of trading, surveillance, information disclosure and financial cloud. After achieving a record 17 years of uninterrupted operation, he is confident their core technology indicators lead the world.

Established in 1990, the bourse has become the financing cradle of more than 2,100 companies with a total market value of 21.67 trillion yuan ($3 trillion) by the end of September.

The two exchanges' cooperation began in 2016 when SZSE as a member of a consortium won the bid to purchase a 40 percent stake in PSX.

Besides, SZSE also participates in transformation and renovation of the technological system in Dhaka Stock Exchange of Bangladesh (DSE) after it led a Chinese consortium to take a strategic stake in DSE last year.

This May, the Window of Bangladesh was launched by the two securities authorities as part of V-Next, an internet-based financial information service platform established by the SZSE.

The network has attracted more than 10,000 innovative high-tech firms from over 41 countries and accumulated an investment of about 35 billion yuan.

The exchange has also been making an effort on technological advancement, especially digitization transformation. The latest move is to initiate an alliance of sharing technology achievements on Monday. It involves China Securities Regulatory Commission, China Securities Depository and Clearing Corp Ltd, as well as dozens of financial companies, such as GF Securities and Southern Asset Management.

The bourse has vowed to continue market cooperation with technology as the lead and promote connection of financial infrastructures along the Belt and Road.

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2019-11-27 07:45:44
<![CDATA[Nation on track to achieve coal consumption targets]]> http://www.chinadaily.com.cn/kindle/2019-11/27/content_37525745.htm

China is capable of achieving coal consumption control goals set in the energy sector's 13th Five-Year Plan (2016-20), a senior official of the China National Coal Association said.

The goals are to cap coal consumption at 4.1 billion metric tons by 2020, and to reduce the proportion of coal in primary energy consumption to less than 58 percent by 2020 from 64 percent in 2015, cutting coal's share in the energy mix and making room for clean energy.

Zhang Hong, deputy secretary-general of the association, said at a media conference on Monday that reducing coal's share of China's primary energy consumption is achievable given that it had already dropped 1.7 percentage points year-on year for the first nine months of 2019. Coal's share was 59 percent for last year.

The fast development of new and clean energies also contributes to the decline of coal's share in the primary energy mix, he added.

From January to October, China's consumption of coal increased by 0.8 percent year-on-year, and he forecasts the total consumption this year will be slightly higher than last year's 3.9 billion tons, but will remain lower than the goal of 4.1 billion tons.

"It is certain that China will achieve the two goals on coal consumption control," he said.

The overcapacity campaign in the coal industry, which began in 2016 as part of China's ongoing supply-side reforms, has brought about impressive progress in the industry's operation and transformation, Zhang added.

Statistics from the National Energy Administration showed the country removed 100 million tons of excess coal capacity in the first eight months of 2019, having already cut a total of 810 million tons by the end of 2018.

"Cutting overcapacity has led to a rebalance of coal supply and demand. Oversupplies had haunted the industry throughout 2012 to 2015," he said.

Coal prices which are jointly decided by fixed midterm and long-term contracts and fluctuating benchmark prices have remained stable and were in a reasonable range in the past few years, he explained.

That has contributed to the increased profitability of the coal industry, based on data from the National Bureau of Statistics.

In 2015, profits of the coal industry totaled 44.1 billion yuan ($6.7 billion). Those profits in the first nine months this year now stand at 216.5 billion yuan.

The industry also recorded progress in upgrading operations and optimizing the industry's structure, thanks mainly to a reduction in overcapacity.

The total number of coal mines in China has dropped to 5,600, with the proportion of large-scale modern coal mines having increased significantly. In 2015, China had 12,000 coal mines, among which most were small mines with annual output of less than 300,000 tons.

The annual output of large and modern coal mines makes up 80 percent of China's total coal output, reversing the past dominance of medium-to-small mines in coal production, Zhang said.

The rise of modern and large-scale coal mines, equipped with advanced devices and hiring less but well-educated staff members, also largely cut safety incidents during production, he said.

But Zhang pointed out that despite national coal supply and demand staying balanced in recent years in the northeast and southwest regions, demand sometimes outstrips supply partly due to a lack of coal resources.

The upcoming the 2019 Winter National Coal Trade Fair, to be held in Rizhao, Shandong province, next month, will help sustain the balance of supply and demand. The fair is a national platform for industry people to communicate and to arrange medium-to-long-term contacts, he said.

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2019-11-27 07:45:44
<![CDATA[China leads the way over peers in talent attraction, says report]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525488.htm Companies finding it easier to hire high-tech professionals in the country

Companies are finding it easier to find skilled talent in China, an indication that China's labor market is still more robust than other 33 major labor markets amid rising global uncertainties, a new report said.

The report, released by Hays Plc, a global professional recruiting group, and Oxford Economics, said China has the least pressured labor market among 34 of the world's economies for the second consecutive year. It suggested that employers will have an easier time finding the right-skilled talent in China than in 33 other major economies.

"In recent years, China's local labor market has increasingly been able to meet the hiring demands of employers, represented over the past five years by a steadily decreasing overall index score," said Simon Lance, managing director of Hays China.

The overall index score is an average of the seven indicator scores, a score closer to 0 indicates the labor market is less pressured whereas a score closer to 10 indicates it is more pressured.

Within this year's overall index, China scored 3.7, the lowest in 34 of the world's major labor markets and in its own record low since 2012. The average score of all 34 markets this year remains unchanged from last year's 5.4.

"Workers in high-skilled industries, scientific activities in particular, saw strong wage growth last year, widening the pay gap with those in low-skilled sectors," Lance said.

Wages in the information, computer service and software industry grew by 9 percent, the highest among China's industries, he said.

He also noted key skills in demand in China include data scientists, clinical physicians, e-commerce managers, senior engineers in research and development, and digital finance experts, and sectors like life sciences and engineering are the most sought-after for high-skilled professionals.

Businesses are paying a premium for highly-skilled professionals across a number of industries, as wages in highly-skilled industries are outpacing those in lower skilled industries. The widening pay gap suggests China's rising appetite for top talents to propel its economic transition from export-oriented to tech-driven, the report said.

China's economy has maintained overall stability. The country's GDP expanded 6.2 percent year-on-year in the first three quarters of 2019, data from the National Bureau of Statistics showed. Investment in high-tech manufacturing and high-tech services rose 14.5 percent and 13.7 percent year-on-year.

At the same time, the research found talent mismatch, a key indicator to measure the gap between the skills businesses are looking for and the skills available in the labor market, bothers China less than most of other major labor markets.

China's lower talent mismatch score is driven by the falling unfilled job vacancies rate in the index, Lance said.

"Employers are becoming more selective in their hiring decisions, and focusing greater attention on soft skills, culture fit and aptitude for ongoing learning. Various new technologies and heightened consumer expectations continue to bring about unparalleled changes across retail banking, which indicates transformation within the sector is far from complete," he said.

However, he added there are exceptions to this trend, where skills shortages have the potential to hamper business operations, and these are typically within high-tech sectors and STEM (science, technology, engineering and math) job functions.

Chinese e-commerce giant JD is continuing to enlarge the scale of employment. According to its financial results for the third quarter, the number of its employees excluding part-time and interns reached 200,000, increasing by 25,000 compared with same period last year.

Moreover, it has accelerated efforts in technology investment and the expenditure on research and development amounted to more than 13 billion yuan ($1.8 billion) in the first three quarters of this year, surpassing the 12.1 billion yuan it spent in the same period of 2018.

In February, JD Logistics, the logistics arm of JD, said it will hire 10,000 employees mainly as front line staff and first-line managers.

JD Logistics will introduce outstanding experts and tech talents from sectors like artificial intelligence algorithms, the internet of things, big data and autonomous driving this year, to continuously enhance its strength in logistics and unmanned business. In addition, it will also recruit talents with huge potential, including top fresh graduates.

Baidu Research, a world-class research institute affiliated to internet search giant Baidu Inc, has been continuously attracting world-class artificial intelligence talents, injecting strong talent and technology potential into Baidu and promoting the long-term development of AI.

Zhang Chewei, head of the Institute of Population and Labor Economics at the Chinese Academy of Social Sciences, said: "University graduates now make up around half of the newly increased labor force in China."

The quality and structure of the Chinese labor force has changed fundamentally as more than half of the newly increased labor force had an educational level below the junior high school in the past, he said.

Li Qiang, executive vice-president with Zhaopin, an online recruitment platform headquartered in Beijing, said that 5G will be widely used in different business scenarios and integrated with cloud computing, big data, artificial intelligence and other technologies, all of which have a higher requirement for talents.

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2019-11-26 08:05:37
<![CDATA[Credit is fast becoming king in rapidly growing consumption market]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525487.htm The post-90s generation will dominate Chinese and global consumption trends in the next five to 10 years, with credit products or online installment products being the favored spending choice of the tech-savvy generation, according to industry experts.

According to a recent report released by global market consultancy Nielsen, the penetration rate of credit products is 86.6 percent among the younger generation, but 42.1 percent paid off their full balances in the same month without incurring any interest charges, which means 44.5 percent of them have actual debts.

The report said consumer credit is the major credit product used. About 43.3 percent of the young generation believe that credit products are a smarter way of consumption. Online installment products account for 16.9 percent of the young people's monthly incomes, while credit cards account for 13.7 percent.

Over 60.9 percent of the young consumers use online installment products, such as Ant Financial's Huabei, JD Baitiao and Fenqile, compared with credit cards' 45.5 percent. Most of them are of the view that online installment products are convenient.

"In the next five to 10 years, the post-90s will become the backbone for China's middle-income consumption. They have higher demands for consumption upgrade as they grew up during China's economic boom," said He Xin, director of consumer insights at Nielsen China.

"It is noteworthy that young people using installment consumption and credit cards are more confident and optimistic about their future employment and income, compared with those without any loans," He said.

The survey interviewed more than 3,000 consumers aged from 18 to 29 across the nation in September and October.

Zhang Xiao, 26, an employee from a tech company in Beijing, said she bought an iPhone 11 priced at 5,999 yuan ($856) during the Singles Day shopping extravaganza.

"I am using Huabei to pay for the new smartphone, and just need to pay 499 yuan every month without any interest under the 12-month installment plan. It is very convenient," said Zhang.

On Fenqile, an installment e-commerce platform under Nasdaq-listed LexinFintech, its gross merchandise volume topped 100 million yuan within the first 10 minutes of Nov 11, taking only half the time it took last year, during the Singles Day shopping festival this year.

According to Fenqile, China's installment consumption growth is moving from coastal regions to inland regions. Young consumers in the western and central parts of China have surpassed their peers in the first-tier cities in the use of installment consumption.

"Installment consumption is enjoying rising popularity among young people, and fast becoming a new engine for China's consumption growth," said Xiao Wenjie, CEO of LexinFintech.

Xiao added as the country's post-90s and post-95s generations are interested in getting hold of the most high-tech smartphones, the latest fashions as well as international and domestic holidays, installment consumption is gaining ground.

The total number of registered users on Fenqile reached 50.2 million as of the second quarter of 2019, up 71.7 percent from a year ago. Seventy percent of the participants of the shopping festival on Fenqile are the post-95s generation.

Moreover, installment payments are shifting from the one-off purchase of bigger items, to smaller purchases. In the past, installment payments were used predominantly for high-priced consumer goods, such as computers and smartphones, according to Fenqile.

However, installments are no longer limited to these traditional categories, and are increasingly involved in all aspects of life, ranging from a lipstick to a T-shirt.

China's per capita disposable income grew 6.1 percent year-on-year to 22,882 yuan in the first three quarters of 2019, according to data from the National Bureau of Statistics.

Digital credit platform Huabei is also a popular service among the younger generation as they know how to make the most out of the credit service while avoiding overspending, according to a report by fintech firm Alipay based on surveys of its wealth management services. Statistics from iResearch Consulting Group showed that 33 percent of the post-90s generation use Huabei.

He Jianhua, a research fellow at the Shanghai Academy of Social Sciences, a think tank, said the younger generation are independent and smart with their money, along with the rapid development of internet and abundant applications.

Yu Fenghui, a well-known Chinese columnist on finance and economics, said the consumer credit market still has huge potential.

"The blooming of internet finance has injected new vitality to the consumer credit. A batch of internet credit products such as Huabei and JD Baitiao has become the main force of consumer credit in China."

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2019-11-26 08:05:37
<![CDATA[Medical device maker eyes bigger presence with new clinical training center]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525486.htm Medtronic Plc is setting up a world-class clinical training center in China next year, as the global medical device maker looks to further tap into the growing Chinese market.

The clinical training center will be in Chengdu, Southwest China's Sichuan province, and will be the company's second in the country after one in Shanghai, which was set up in 2005.

The clinical training center in Chengdu aims to offer a platform for medical technology clinical training and research and development for medical practitioners in Sichuan and other regions in central and western China.

"We are fully aware of the role that grassroots-level doctors have in furthering the popularization and innovation of medical services. Medtronic is looking to support Chinese physicians' capability enhancement, and help them better adapt to medical technology advancement, so that they can serve more patients with stronger professional abilities, and the goal of a healthy society can be achieved sooner," said Omar Ishrak, chairman and chief executive officer of Medtronic.

The clinical training of China's medical professionals had been enhanced in recent years. However, the training is still insufficient in some regions, especially in central and western China. A survey conducted by People's Daily showed that due to training differences, the average maturity period for Chinese doctors is 10 years more than that of the doctors in developed countries.

According to Medtronic, after being put into operation, within five years, the clinical training center in Chengdu will start training 7,000 medical professionals every year. Meanwhile, combining efforts from the company's other training centers worldwide, it will boost academic exchanges and joint innovation among medical institutions and professionals.

Liu Liedong, vice-mayor of Chengdu, said: "Chengdu has been actively incubating medical innovation and building an open and practical innovative environment. We look forward to having more international platforms in Chengdu, to transform clinical applications and technologies into more valuable medical services."

"In the foreseeable future, China is set to become the largest healthcare market in the world. Medtronic is committed to alleviating pain, restoring health and extending lives of people in China. This is also the reason why we have launched the clinical training centers in China," said Alex Gu, Medtronic senior vice-president and president of Medtronic China.

This year marks the 30th anniversary of Medtronic in China. Over the past three decades, the company has introduced more than 500 innovative medical technology products that address the needs of Chinese physicians and patients.

During the recent China International Import Expo in Shanghai, Medtronic launched the world's smallest leadless pacemaker. Less than 10 percent of the size of a conventional cardiac pacemaker and weighing only 2 grams, the device for arrhythmia patients makes it possible for a pacemaker to be implanted directly into the patient's heart via an applicator inserted into the upper leg, and without a chest incision or scars, a blessing for Chinese arrhythmia sufferers.

"China holds the promise to become a primary source of many next-generation medical technologies. Medtronic is determined to capture the opportunity through continued investments in local R&D capabilities and technology partnerships, as we believe technology has greater potential in addressing unmet medical needs - which will therefore drive our business presence," said Gu.

Currently, Medtronic has a Medtronic Innovation Accelerator in Shanghai, which was designed as a platform to help medical technology startups speed up conversion of their innovative ideas to marketable products. Its Medtronic-SJTU Joint Laboratory, the first Medtronic technology partnership with a top Chinese university, was set up in March, aiming at advancing research in medical application of artificial intelligence.

"We are committed to working with our partners to accelerate innovation and expand healthcare access in China, and ultimately help more Chinese patients," Gu said.

Consultancy firm Boston Consulting Group said in a report that the Chinese medtech market, buoyed by the strength of the overall healthcare sector, will post a compound annual growth rate of 14 percent between 2013 and 2020, expanding from $22 billion in annual revenues to $55 billion. Almost all product categories will experience double-digit growth, with some - such as orthopedics and minimally invasive surgical devices - growing even faster.

According to Medtronic's report on the fiscal year of 2019, which ended on April 26, revenue from emerging markets, including China, was $4.7 billion, up 12.7 percent year-on-year.

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2019-11-26 08:05:37
<![CDATA[Carriers increase flights to Japan]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525485.htm Airlines set to boost capacity as demand from Chinese travelers keeps surging

With a growing number of Chinese travelers taking trips to Japan, Chinese and Japanese carriers are launching more flights to connect the two countries.

During the winter-spring flying season from Oct 27 to March 28 of next year, there will be a total of 1,406 flights connecting China and Japan. That is 224 flights more than the past summer flying season, according to the Ministry of Land, Infrastructure, Transport and Tourism of Japan.

Shanghai-based China Eastern Airlines plans to launch new three-times-a-week round trip services between Wuhan, Hubei province, and Tokyo, starting from Jan 4 next year.

The carrier said it will increase the capacity and launch more flights from Wuhan to other Japanese cities to meet the demand of residents flying for business, travel and to study abroad.

China Eastern will add to the frequency of its flights from Kunming, Yunnan province, to Osaka and make it a daily round-trip service from Jan 15 next year. The company is optimistic about the travel demand for those flights.

Shanghai-based Chinese budget carrier Spring Airlines has launched several new flights connecting China and Japan since Oct 27 when the flying season changed.

They include new flights between Xi'an, Shaanxi province, and Ibaraki, Xi'an and Saga, and Shanghai and Narita International Airport in Tokyo. Spring said it has also added to the frequency of flights that connect Xi'an and Osaka.

"Next year, Japan will hold the Summer Olympic Games in Tokyo, and we expect the travel demand from China to Japan will continue to grow," said Zhang Wu'an, vice-president and spokesman for Spring Airlines.

At this time, flights connecting Japan and China account for 27 percent of total international flights in Japan.

In comparison, carriers from Japan and South Korea recently canceled 501 flights and there are now 778 flights a week between the two nations. The number of South Korean travelers has declined following trade disputes between the two countries, said Japan's business newspaper Nikkei.

"The increasing capacity put in the routes between China and Japan will increase competition between airlines and pull down their profits. The flying rights between the two countries are scarce resources and carriers would like to grab them first. The profit-making is expected to get better in the next few years," said Lin Zhijie, an aviation industry analyst.

"For passengers, there will be more flight options and the flight ticket prices are likely to become cheaper. The number of travelers going to Japan is expected to continue to grow significantly," he added.

All Nippon Airways, Japan's largest airline, said it plans to launch new daily round-trip flights that connect Tokyo Haneda International Airport with Shenzhen and Qingdao from the summer of 2020. The flight to Shenzhen will be the first non-stop service from a Japanese airline.

"There is a growing demand of travelers visiting Japan and ANA will increase its international service. Haneda Airport will also expand to adapt to inbound Japanese tourism," said Seiichi Takahashi, senior vice-president of ANA.

From January to August, the number of Chinese travelers who visited Japan reached 6.58 million, up 13.6 percent year-on-year, the Japan National Tourism Organization said.

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2019-11-26 08:05:37
<![CDATA[Nation may hit carbon emission target in 2025]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525484.htm

The peak in China's carbon emissions is estimated to be hit around 2025, five years ahead of its 2030 Paris Agreement target, thanks to efforts made in energy transformation, an industry expert said.

"I hope that with the 14th Five-Year Plan (2021-25), China will bring its carbon emissions goal forward. That will be a big step for the world. China is credible. It makes a plan and usually achieves it," Lord Nicholas Stern, chair of the Grantham Research Institute under the London School of Economics and Political Science, said.

The former chief economist at the World Bank noted that in the past five years, strong technological changes have taken place in China and the country has demonstrated a deeper understanding of the danger of unmanaged climate change.

"I believe that achieving the goal ahead of 2030 is more than possible," Stern said.

During the 2015 Paris Climate Summit in France, President Xi Jinping delivered a speech at the opening ceremony, with a promise that China's carbon emissions will peak by 2030, when its forest stock is estimated to be 4.5 billion cubic meters more than the level of 2005, and that China will strive to achieve the goal as early as possible.

A report released by the Ministry of Science and Technology showed that in 2017, China's carbon intensity per unit of gross domestic product decreased by 46 percent from the level in 2005. The growth rate of its carbon emissions has posted nearly zero growth since 2013.

The report said that between 2010 and 2017, the global carbon dioxide concentration climbed and its growth rate also increased.

The Chinese government has taken active steps such as promoting clean energy projects and major ecological initiatives, achieving remarkable results in reducing carbon emissions.

"China has already fulfilled its promise to cut carbon emissions by 40 percent to 45 percent compared to the level of 2005, three years earlier than planned," said Ma Aimin, deputy director of the National Center for Climate Change Strategy and International Cooperation under the Ministry of Ecology and Environment.

Stern said China now leads the world in many aspects such as rail transport and digital systems. The next step is to take advantage of those aspects to manage the energy system better.

"China has created in the past 20 years many potential advantages, and it is starting to use some of them. But I think it can use those advantages much more quickly and strongly, particularly in the energy sector. China is in a good place to put these advantages to work," he said.

Industry experts said energy efficiency in electric power is maximized through technology and there is still a lot of room in that field.

China is making progress saving energy through its railways. Data from China Railway showed that in 2018, the national railway energy consumption converted to standard coal reached 16.2 million metric tons, 25,700 tons lower than the level in 2017.

Railway chemical oxygen demand emissions were 1,878 tons, down 0.7 percent year-on-year. Sulfur dioxide emissions fell 39.7 percent year-on-year to 9,836 tons.

The 14th Five-Year Plan will underscore the importance of the clean and efficient use of fossil fuels. It will require that by 2030, non-fossil energy will account for 20 percent of primary energy consumption.

"Through the 14th Five-Year Plan, China can step into the absolute reduction of carbon emissions, find new ideas and alternatives, and lay the foundation for a long-term goal," said Wang Yi, deputy head of the Institutes of Science and Development under the Chinese Academy of Sciences.

"The plan is critical for China's carbon emissions goal. It is important that China's carbon emissions will start to decrease during the plan period," Stern said.

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2019-11-26 08:05:37
<![CDATA[Huawei turns to Japan for components]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525483.htm Firm eyes partnerships with more suppliers to avoid US restrictions

Japan is likely to surpass the United States as the largest supplier for Huawei Technologies Co, as the Chinese tech giant scrambles to deepen partnership with other global suppliers amid US government restrictions.

Meanwhile, Huawei is also ratcheting up efforts to buy more components and technologies from European suppliers, so as to reduce reliance on US technologies and deepen its multi-vendor strategy to ensure sustainability in business development.

Liang Hua, chairman of Huawei, said in a recent interview with Japanese media that parts procured from Japanese companies are set to total 1.1 trillion yen ($10 billion) in 2019, marking a 50 percent jump from the previous year.

Liang said in an interview in Tokyo that Japanese manufacturers have "various strengths" in components and materials used in telecommunication base stations and smartphones, according to a report by Japanese news agency Kyodo News. He added that Huawei expects to see a further growth in the procurement of parts from Japanese firms next year.

In comparison, Huawei procured about $11 billion products from US suppliers last year and the number is expected to drop significantly in 2019, after Washington prohibited the Chinese company in May this year from purchasing US technologies without special government approval.

The world's largest telecom equipment maker is also deepening its ties with European companies. Hu Houkun, deputy chairman of Huawei, said in an interview with French media in October that Huawei has about 3,500 suppliers in Europe and over the next five years, it plans to procure products worth $40 billion from European companies.

"That was the forecast before the US restrictions," Hu said, adding that as the US curbs continue, Huawei will spend more to purchase from European companies.

Already, the Shenzhen-based company has started shipping US component-free 5G base stations to the world, and it has devoted several thousand employees to work on its in-house operating system Harmony, amid concerns that updates of Google's Android operating system will continue being unavailable to it.

That would mean a big loss for US companies which have been Huawei's core suppliers for years, said Xiang Ligang, director-general of the telecom industry association Information Consumption Alliance.

"Huawei's push for US-component-free base stations showcases the company's technological prowess and its capabilities to quickly integrate global supplier resources," Xiang said.

But Huawei also highlighted that it is still a staunch supporter of globalization. Gan Bin, vice-president of 5G product development at Huawei, said in an earlier interview that Huawei is now capable of designing all the core parts of base stations, but one base station contains more than 10,000 components and it demands global partnerships to achieve that.

That is in line with comments made by Ren Zhengfei, founder of Huawei, who said that the company would rather buy less of its own components, and buy more from others. "This is to sustain globalization. We will not become a closed company."

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2019-11-26 08:05:08
<![CDATA[Chinese tech giant steps up presence in tablet products]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525482.htm Huawei Technologies Co on Monday made a big push in the internet of things sector with a new premium tablet that can boost productivity of consumers.

The move came as Huawei outgrew Apple Inc to become the largest vendor of tablets in China in the third quarter of this year.

Yu Chengdong, CEO of Huawei's consumer business group, said the company is leveraging technological revolution to inject bigger value into tablets, which are increasingly used by enterprises and students to help with their work and studies.

"We are transferring the technological edge of our Mate computers to the new tablet MatePad Pro. Our biggest advantage lies in software that can support multi-device interactions," Yu said.

Priced from 3,299 yuan ($469) in China, MatePad Pro comes with a pen and has a strong computing performance. The 5G version of MatePad Pro will be available in the first quarter of next year.

The move came after Huawei posted a 24.4 percent year-on-year growth in domestic tablet shipments in the third quarter of this year, grabbing a market share of 37.4 percent, according to data from market research company International Data Corp.

The numbers eclipsed Apple, which had been long-term champion of tablets in China. But in the third quarter, the US tech giant secured only a 12.2 percent growth in tablets from a year earlier, and accounted for 33.8 percent of the China market, IDC said.

The product launch is also part of broader efforts by Huawei to further enrich its non-smartphone consumer businesses, which will account for an increasingly bigger share of the company's revenue in the future, Yu said.

So far this year, Huawei has posted more than 210 percent year-on-year growth in personal computers, and 270 percent year-on-year growth in smart wearables this year, with more than 10 million units of smartwatches sold, the senior executive said.

The company has already shipped more than 7 million units of Mate 30 series, its latest smartphone model in just 60 days. "If not for the US government restrictions, we are likely to be the largest smartphone vendor this year," Yu said.

According to him, before Washington slapped a ban on it, the Shenzhen-based company saw faster growth in overseas markets than in the domestic market. "Many said that we are driven forward by patriotic buying, but obviously, that was not the case in overseas markets. We win foreign consumers through product quality and good experiences," Yu said.

On Monday, the company unveiled a high-end smart speaker Sound X in association with French brand Devialet. Franck Lebouchard, CEO of Devialet, said he expects the partnership to help bring quality loudspeakers to more consumers.

 

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2019-11-26 08:05:08
<![CDATA[Alibaba Hong Kong share issue sees huge investor interest]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525481.htm Alibaba Group Holding Ltd said its Hong Kong share issue was oversubscribed multiple times thanks to massive investor interest, ahead of its listing in what could be the world's largest initial public offering in 2019 so far on Tuesday.

In a statement to the Hong Kong Exchanges and Clearing Ltd on Monday, the e-commerce giant said a total of 215,598 valid applications have been received pursuant to the Hong Kong public offering for roughly 530 million Hong Kong offer shares.

This translates into"42.44 times of the total number of 12.5 million Hong Kong offer shares initially available for subscription", it said.

As the over-subscription represents 20 times or more of the total number of offer shares initially available under the Hong Kong public offering, the reallocation procedure in the prospectus has been applied and 37.5 million offer shares have been reallocated from the international offering to the Hong Kong public offering, it noted.

The company added that the final number of offer shares for retail investors under the Hong Kong listing has been increased to 50 million, representing 10 percent of the total number of offer shares initially available under the global offering, and they are being allocated to 195,710 successful applicants.

Separately, the Hong Kong bourse said it would roll out options and futures contracts for the stock when Alibaba makes its trading debut on Tuesday. The shares can also be available for short-selling.

Alibaba will trade under stock code number 9988, in lots of 100 shares. On the same day, the HKEX will roll out Alibaba options at 500 shares per lot, with maturities ranging from one to 10 months. The futures contracts will be offered at durations of one to seven months, it said.

The listing in Hong Kong could give people in the Chinese mainland the possibility to invest directly in Alibaba shares due to the Hong Kong-Shanghai Stock Connect, an investment channel that connects the Hong Kong and Shanghai bourses, said Dickie Wong, head of research at Kingston Securities.

"An IPO in Hong Kong would also provide a diversification of funding for Alibaba in terms of geography and types of investors and a buffer to the shares listed on the New York Stock Exchange in case of global turmoil due to Sino-US trade friction," wrote Matteo Giovannini, a finance professional at Industrial and Commercial Bank of China in Beijing and a member of the China Task Force at the Italian Ministry of Economic Development, in a latest opinion piece published on the website of China Global Television Network.

Alibaba, which raised $25 billion in the world's biggest initial public offering when it listed in New York five years ago, was riding on a positive momentum after it raked in a record $38 billion on Nov 11, its annual shopping extravaganza.

 

A logo of Alibaba Group is seen during Alibaba Group's Singles Day global shopping festival at the company's headquarters in Hangzhou, Zhejiang province. Reuters

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2019-11-26 08:05:08
<![CDATA[Mengniu to buy dairy company in Australia for $407m]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525480.htm

China Mengniu Dairy Co Ltd is buying Australia's Lion Dairy and Drinks from Japan's Kirin Foods for A$600 million ($407 million), making it the second acquisition by the Chinese dairy giant in Australia after it acquired infant formula milk provider Bellamy in September.

Kirin Holdings Co Ltd and its subsidiary Lion Pty Ltd said on Monday that Kirin Foods Australia Holdings Tty Ltd, a 100 percent subsidiary of Lion, has entered into an agreement with China Mengniu Dairy under which all the shares in Lion Diary and Drinks Pty Ltd will be transferred to Monday Smoothie Pty Ltd, a Mengniu Dairy subsidiary.

Lion CEO Stuart Irvine said that the sale includes all white milk, milk-based beverages, yogurt, juice and water ice brands and assets.

It also includes Lion Dairy and Drinks' International business, and its share in joint ventures Vitasoy Australia Products and Capitol Chilled Foods Australia and the licensing agreement for the Yoplait yogurt brand.

Mengniu said the deal is a major part of its internationalization process and will enhance its layout in Australia while providing a more complete, competitive and efficient global supply chain to offer products for consumers in China, Southeast Asia and Australia.

"Our aim throughout has been to ensure that both Dairy and Drinks and the Lion business are ideally positioned for growth - with the right people, assets and investment behind their respective strategies," said Irvine.

He said they believe that Mengniu Dairy, a specialty dairy player, is an ideal owner to take Dairy and Drinks forward, given its track record of investing in the Australian dairy industry, together with its global reach and deep capabilities.

"Bringing the businesses together will help drive Mengniu Dairy's growth in the Australian domestic market, while also accelerating Dairy and Drinks' aspirations in South East Asia and China," said Irvine.

In addition, Dairy and Drinks will benefit from access to leading-edge dairy research and development capabilities and further investment as part of the Mengniu business, he said.

Lion Dairy and Drinks forms part of the broader Lion Group - a leading beverage and food company with a portfolio that includes many of Australasia's favorite brands in beer, wine and dairy products.

The portfolio includes Dairy Farmers, Pura, Dare, Farmers Union, Yoplait, Daily Juice, Juice Brothers and Berri. Lion has the license to sell and market the Yoplait brand in select South East Asian markets.

Earlier in September, Mengniu said it had made a buyout offer for Australian infant formula producer Bellamy in a deal valued at $1 billion, to further penetrate the infant formula and food market while expanding its reach overseas. This month, the Australian government approved Mengniu's takeover of Bellamy's Australia Ltd.

China's dairy industry has been expanding its reach in global markets in recent years, with Inner Mongolia Yili Industrial Group, the largest dairy producer in China and Asia, prioritizing global dairy resource security capacity and a management team with global vision.

In August, Yili acquired New Zealand's second-largest dairy cooperative Westland Cooperative Dairy Co Ltd after finally clearing all the regulatory hurdles. Yili acquired Oceania Dairy Group of New Zealand in 2013. It has since invested approximately $660 million in establishing milk powder, infant formula and UHT production lines for the Oceania region.

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2019-11-26 08:05:08
<![CDATA[Shanghai remains top destination for real estate investors]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525479.htm

Shanghai remains the most important real estate investment destination in the Chinese mainland and a gateway city for international investors, a major report said.

As China's financial hub, Shanghai has maintained its standing as a favored destination for investors by concluding the most cross-border deals in the country, a real estate forecast report called Emerging Trends in Real Estate Asia-Pacific 2020 jointly published by the Urban Land Institute (ULI) and PwC said.

Despite concerns over trade tensions between China and the US, overseas investors are flocking to Chinese real estate markets. Shanghai in particular is viewed as a gateway destination by global institutions which believe they must have a presence there in diversifying their portfolios.

The commercial real estate transaction volume in China hit a record high of $25 billion in the first six months of the year. Shanghai alone contributed $10.9 billion of the total, which made the city the fourth most liquid worldwide after New York, Tokyo and Paris, the report said.

The significant increases in the number and size of transactions are in stark contrast to a few years ago, when foreign investors often had trouble landing deals in China's major cities.

Sino-US trade friction and Beijing's regulatory tightening on domestic bank and non-bank lending have led to foreign funds finding prices that are now lower and assets are more available, giving a further boost to foreign investors, said Sally Sun, PwC China Assurance Partner.

This is a sharp reversal from the situation of only a few years ago, when foreign funds could not compete with domestic capital which viewed the local market through a different prism from a risk or reward perspective. In 2018 and 2019, the majority of prime commercial property deals in the city involved a foreign buyer.

In terms of investment and development prospects though, Shanghai has fallen behind Shenzhen in this year's report. The southern city ranks sixth while Shanghai ranks seventh.

The report said the central government continues to push forward its template for development of the Guangdong-Hong Kong-Macao Greater Bay Area. This is a megalopolis consisting of 11 cities which includes Hong Kong and Guangzhou. It has already seen massive investment in its infrastructure and increased the importance of Shenzhen.

"It (Shenzhen) is one of the most dynamic cities in the world, and it is well positioned within the GBA because of its new focus on software and finance and its improved transport links to other cities in the area," said Albert Chan, chair of ULI Chinese mainland and director of development planning and design with Shui On Land.

Another southern Chinese city expected to be a major beneficiary of the GBA is Guangzhou in Guangdong province, which has seen its ranking at ninth in terms of investment and 13th in development prospects this year.

With its integration helped by new high-speed rail links to Hong Kong to the south and to Beijing and Shanghai to the north, Guangzhou has seen benefits from all the infrastructure investment in the area, the report said in citing one investment adviser.

The Chinese office sector has been the asset class hit hardest by the trade friction although investors continue to selectively target assets in the biggest destinations.

"We prefer to invest in the first-tier cities, where we tend to see higher levels of growth, greater levels of liquidity, and larger opportunities. Cities that have the most innovative companies, particularly oriented toward the technology sector, are where you have the highest growth," a fund manager was quoted as saying by the report.

Singapore, Tokyo, Ho Chi Minh City, Sydney and Melbourne are ranked as the top five markets for investment prospects, reflecting investor preference for regional markets that are large, liquid and defensive.

Ho Chi Minh City is the only exception in the top five markets as an emerging market being viewed favorably due to its strong economic growth as it absorbs Chinese manufacturing capacity moving offshore.

"Affected by external factors such as a slowing economy, concerns over ongoing trade friction, and a tighter regulatory environment, we need to be a little bit more cautious in investing in the Asia-Pacific. However, China, especially first-tier cities, still remains favored destinations for foreign investors," said Sun with PwC.

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2019-11-26 08:05:08
<![CDATA[Wumart, Dmall, Metro tie up to benefit all]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525478.htm Retailers and wholesaler's cooperation to increase product diversification, bolster food quality and safety standards

It is a common practice for retailers to check out the stores of their competitors to compare prices, layouts and payment systems.

But for Wumart Technology Group Co Ltd, a Beijing-based retail giant, and Metro Group, a German wholesaler, who announced last month that they will form a joint venture, such visits have provided a valuable learning experience.

Claude Sarrailh, CEO of Metro China, who is as tall as an NBA basketball player, was highly visible at the Wumart Lianxiangqiao store during his visit to Beijing recently.

 

Zhang Wenzhong (fourth from right), founder and chairman of Wumart, visits Metro's Wanquanhe Store in Beijing in October, accompanied by Claude Sarrailh (right), CEO of Metro China. Photos Provided to China Daily

 

The booth of Metro at the second China International Import Expo in Shanghai in November.

 

Sarrailh and his Metro team have shown enthusiasm for the digitalization of Wumart stores and the application of Wumart's Dmall digital platform. Constantly inquiring about delivery costs, fresh goods, and storage use, Sarrailh is interested in the details for further exchange of resources and personnel.

Meanwhile, at Metro's Wanquanhe store, Zhang Wenzhong, founder and chairman of Wumart, was impressed by the sales revenue of Metro's imported wine collection, how fresh meat was processed in the back kitchen - which is visible to customers - and how clear Metro's FSD (food service delivery) routes are.

It looks like a mutually beneficial deal for both parties.

On Oct 11, Metro said it would sell its entire stake in the Chinese operations and hold a 20 percent stake in the new joint venture to be formed with Wumart. The transaction value of Metro China is estimated at about 1.9 billion euros ($2.09 billion).

The move is expected to further consolidate Wumart's position as a national retailer and fuel Metro's growth in brick-and-mortar stores and its digital transformation.

Why find a partner?

Sarrailh told China Daily that the decision to keep a 20 percent stake in Metro China shows confidence in the growth of the business in China.

"The market is full of opportunities in China and will grow much faster as long as we stay true to what we are and to our mission - which is to guarantee food quality and safety," he said.

Sarrailh said the collaboration will increase the diversification of the assortment of products and enhance its business with digitalization and expansion in terms of stores.

Having entered the Chinese mainland since 1996, Metro has 97 stores in 59 cities in China, with more than 17 million registered customers, mostly middle-income consumers.

A profitable business in the country - with a 5 percent earnings before interest, taxes, depreciation and amortization margin for fiscal year 2017-18 - the company has also been a leader in the FSD market as well as in seasonal gifts and welfare solutions.

Its FSD sector has grown at more than 20 percent annually. With 600 professional sales managers, Metro offers one-stop food solutions to more than 33,000 professional customers, mostly Chinese restaurants and canteens.

Its welfare and gifting sector, which has grown 25 percent annually, involves more than 400 professional sales personnel, serving more than 39,000 customers including medium - and large-sized enterprises, government institutions and State-owned companies.

Its business-to-business sector takes up about 40 percent of its sales, but is growing much faster at 20 to 25 percent annually.

While Metro's global focus is on becoming a fully-fledged wholesaler, it has adapted locally to expand its business-to-consumer model in China. This sector has remained flat in terms of growth but accounts for 60 percent of the company's sales due to the rising number of affluent families.

The CEO, who has been in China for one and half years, was candid about why a profitable company was being sold.

"It is a good asset with some limits in scale. At our speed of growth, for a European company, it is fast; for a Chinese company, it is slow," said Sarrailh.

"We recognize we need to find a new partner to grow fast. But it is an important market. we definitely want to profit from the growth here."

Meanwhile, the savvy digitalization of the retail market in China could be applied to their European market as well, said Sarrailh on incentives to keep the 20 percent stake in China.

Gains for Metro

Wumart's abundant capital and its leadership in digital operations as well as its local sourcing capacities have made it a strong suitor among many competitors.

"We have to increase our scale in the buying department, enhance digitalization and accelerate our number of stores," said Sarrailh.

Slow digitalization, due to the expense, has held the German retailer back in China.

Currently e-commerce is only 1 percent of Metro China's business while the ratio is about 14 to 15 percent on average at Wumart stores.

For example, he said, Dmall has 800 engineers while Metro only has 30.

Dmall's mix of payment system and membership information has created a data mining capacity that offers individual customers products they care about, said Sarrailh.

Through a collaboration with more than 80 retailers and over 10,000 brick-and-mortar stores in China, Dmall, which was founded by Zhang Wenzhong, has become the country's largest online-and-offline fresh food retailer since 2017.

By October 2019, the number of Dmall's registered users had increased to 75 million. The number of monthly active users reached over 15 million.

"First, we will be able to make a good jump by adopting their digital know-how once the deal is finalized," said Sarrailh, adding they are eager to make personnel exchanges with Wumart to enhance the digital experience in Metro.

Second, in China's vast retail market, the capacity to source locally, particularly fresh vegetables, is a challenge for European companies such as Metro. Wumart's strength in local assortment offers a solution, said the CEO.

Further, Sarrailh said it is Wumart's track record in integrating international companies including South Korea's Lotte Mart and Britain's B&Q and making them successful that convinced Metro. A successful consolidator in China's retail industry, Zhang and Wumart acquired B&Q China (which is now called B&T Home) from Kingfisher, the United Kingdom-based home improvement retailer, and turned it around from a $300 million loss to profit within 12 months of acquisition by applying the omnichannel new business model.

Wumart Chairman Zhang Wenzhong's international DNA - he is a postdoctoral graduate from Stanford University School of Engineering - can be seen in his willingness to develop the group in China and leverage Metro while keeping it independent and growing the two together.

Sarrailh said with Wumart's investment, it is expected that Metro China will expand stores quickly nationwide and penetrate into third-and fourth-tier cites where more consumers are valuing food safety and quality.

Last year the company opened only five stores. This year the momentum will be driven up, he said.

Nationwide growth

If any of Metro's assets in China attracted Zhang Wenzhong, a renowned entrepreneur, the most, it probably would be the German retailer's high food quality and safety standards.

"The two companies are complementary and will be able to reach a larger scale if combined," said Zhang.

"We respect Metro's food safety and quality standards. They will help raise our food safety and quality levels, which will meet the upgrade of consumption trend in China."

Sarrailh agreed. He said the fact that Wumart started as a retailer, rather than an e-commerce player, has set the tone for their talks.

"They are interested in consumers and they understand developing business and supply chains in a sustainable way," said Sarrailh. He said retail businesses cannot be sustainable economically if they rely mostly on giving out vouchers, a popular practice by online retailers.

First, Wumart's joint venture with Metro will allow it to become a nationwide retailer. Second, the German brand will further improve Wumart's status as a reliable retailer among consumers.

Zhang said they have to learn Metro's strict processes to reinforce their food safety awareness.

Wumart and Dmall's digital capacity will boost Metro's efficiency in terms of both its business-to-business model and business-to-consumer model.

Meanwhile, Metro will also provide access for Wumart to its global sourcing capacities and supply chains to enrich Wumart's product assortment by increasing imported goods at fair prices.

Metro's business-to-business model is also part of what Wumart is interested in developing but has not been able to maximize its potential for years.

After announcing the Metro deal, Wumart organized a forum on digital retail in Beijing where hundreds of retailers and CEOs of top consumer goods firms have gathered.

With annual sales of 50 billion yuan ($7.1 billion) and more than 1,500 stores, Wumart has offered digital solutions or platforms for Chinese small-and medium-sized retailers with its Dmall alliance, which is centered on Dmall's OS system serving Chinese hypermarkets and small-sized formats.

Xu Shaochuan, chief operating officer of Wumart, set the goal to increase online sales by 20 percent to contribute 20 percent of total revenue by 2020 through digitalization, upgrade of its online and offline integrations and a return to smaller format stores.

"The deal with Metro will bring out the best from the synergy of the two leading retailers," Zhang said.

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2019-11-26 08:05:08
<![CDATA[Senior citizens, smaller families, urbanization reshaping consumption]]> http://www.chinadaily.com.cn/kindle/2019-11/26/content_37525477.htm An affluent aging population, accelerating urbanization and smaller families will be growing consumption engines in the next decade in China, which will use new technologies including 5G for retail development, said top industry leaders.

Pei Liang, president of the China Chain Store and Franchise Association, said during its annual retailing convention in Qingdao between Nov 7 and 9 that consumers in China will be a changing factor and the decision-makers in the next decade of the retail market in the country.

Pei estimated that in the next 10 years, about 258 million people, or 17.8 percent of the total Chinese population, will be aged above 65, and that they will be the beneficiaries of the opening-up and reform policies.

"The new senior citizens will be a vast gold mine for retailers, which means that the coverage areas for physical stores will become smaller, pushing retailers to adapt their formats and create room for health products and services for elderly people," said Pei.

"The urbanization rate in China is expected to rise from the current 59.6 percent to 71 percent in the coming decade, resulting in a natural move for deepening penetration to third-and fourth-tier cities," he said.

According to the research of the association, regarding online channels, the consumer penetration rate in third-and fourth-tier cites is 30 to 40 percent lower than in first-and second-tier cities, which have a penetration rate exceeding 80 percent online.

How to transform online volumes into brick-and-mortar stores in lower-tier cities has remained a challenge, said Pei. Online consumption is mainly the preserve of those under 35 years old, but it may change with the development of fresh food e-commerce and omnichannels.

Meanwhile, the increasing number of younger and smaller Chinese families present immense opportunities for instant and ready-to-eat foods and meal replacements, according to the association's research.

The association said it remains a question whether the slowdown in GDP growth also means slower consumption growth, but the contribution of consumption to the overall economy is rising.

At present, consumption in China contributes to 36 percent of overall GDP, while the figure is 63 percent in the United States, which means a lot of potential to grow. However, retailing in China takes up 44 percent of GDP, which is higher than the United States. Therefore, despite the big potential of consumption to grow, it is not necessary for retail to grow at the same time, Pei said.

"Looking ahead, mobile payment technology and its penetration rate is one of the major driving forces of the world-leading digital retail development in China," said Pei, which will be further enhanced by 5G technology and blockchain.

Meanwhile, digital applications, which are led mostly by marketing systems, are gradually expanding to take up all business sectors, and retail enterprises will respond quickly with more satisfying solutions, he said.

Zhang Wenzhong, founder and chairman of Wumart Technology Group Co Ltd, a major national retailer and a digital solution provider for Chinese retailers, said at the conference that the reform of traditional retailers' IT systems through digital mindsets and technology to enhance operational efficiency to better serve customers is the key to the digitalization for brick-and-mortar retailers.

The digital transformation is no longer a job for individual companies. It has to be achieved through alliance and cooperation, he said.

Wang Jianguo, chairman of Fivestar Holdings, a conglomerate involved in retailing home appliances, and maternity and infant products, said at the conference that information technology has empowered users to take control of their consumption, making their consumption behavior more personalized and diversified.

Meanwhile, the foundation of today's retail industry no longer merely relies on stores, storage and employees. It has expanded to rely largely on internet, big data and artificial intelligence to facilitate the integration of online and offline business.

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2019-11-26 08:05:08
<![CDATA[Policy support key to manufacturing sector]]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525195.htm I recently visited Columbus, Indiana, a small city of about 47,000 people in America's agricultural heartland. In many ways, it is a typical Midwestern small town, although it's known for modernist architecture and it happens to be the hometown of US Vice-President Mike Pence. However, the first thing that will strike any visitor is the high level of prosperity. I don't mean the people are rich - just that the city-center stores are all occupied, lots of workers are downtown, the streets are clean, and the buildings are maintained. This may have been common for American small towns a generation or two ago. But, it is far from typical today.

What's different about Columbus? It's the headquarters of Cummins Engine Company, a manufacturer of large engines and turbines for large trucks and construction equipment, helicopters, power plants, and factories. Within easy walking distance of the center of Columbus, you can find research facilities, a manufacturing plant, and the headquarters building. This means there are jobs available for skilled factory workers, engineers, and managers.

China's government reasserted the importance of manufacturing in the Oct 28-31 Fourth Plenary Session of the 19th Communist Party of China Central Committee - especially calling for modernization of the industrial chain and of applying science and technology to upgrading of the manufacturing sector. And, during a visit in September to the Zhengzhou Coal Mining Machinery Group Co, President Xi Jinping underlined the importance of developing the real economy through bolstering manufacturing to enhance high-quality economic growth. Xi said that while China has the world's largest manufacturing industry, efforts are still needed in realizing industrial transformation and upgrading through technical and industrial innovation to move the nation's manufacturing up the industrial chain.

I have had the opportunity to visit several times the city of Changsha, capital of central China's Hunan province. With about 7 million inhabitants, it is much larger than Columbus, but both cities are centers for manufacturing heavy equipment. The companies Zoomlion and Sany, both builders of large and sophisticated construction machines, are both centered in Changsha. Both companies give many job opportunities to managers, engineers, and skilled factory workers. I was told that the average pay for a factory floor worker there is more than twice that of a recent university graduate.

Sadly, many American small towns are more like Port Clinton, Ohio - the hometown of Harvard professor Robert Putnam which he discusses in his book Our Kids: The American Dream in Crisis. He describes the city as a great place to grow up when he was young in the 1960s. Jobs were plentiful, crime was low, and the people saw themselves as part of a community. Today, none of these things are true - partly because of changes in the culture and partly because industry went out of business or moved away.

Research by Andrew Foster and Mark Rosenzweig, professors at Brown University and Stanford University respectively, concluded that factory jobs are essential to raise poor rural people out of poverty. In the Indian villages they studied, factory jobs provided both higher pay and more secure employment than any other opportunities. A study by David Atkin of Yale University showed that Mexican women who are able to get a factory job have children who are taller and healthier than women who work in retail, food services, or transportation.

I have a lot of sympathy for President Donald Trump's overall goal of reducing what he calls "American devastation" by encouraging manufacturing jobs, but he certainly won't be able to achieve that goal by tariffs or other economic measures against China.

The decline of manufacturing in the US is primarily caused by domestic political and economic decisions - not by China or Mexico or any other country. Essentially, the US government has not prioritized policies that support manufacturing. There has been a lot of vague talk about the new economy, knowledge-workers and "symbolic manipulators" without sufficient attention to the jobs needed by most people.

Research published in 2014 by the Information Technology and Innovation Foundation wrote that "American largely dithered and allowed the policy environment supporting the competitiveness of its manufacturing industries to wane... Through a combination of inaction and inattention, America's investments in R&D languished over the past decade and a half, as its tax code grew ever less competitive, its industrial commons eroded, and its talent base weakened".

This contrasts with countries such as Germany, Japan, South Korea, the Netherlands, and China that "worked feverishly throughout the 2000s to bolster their science, technology, and innovation ecosystems that underpin the competitiveness and innovation potential of their private sector enterprises", the report concluded.

The financial reforms of the 1980s and 1990s were a major factor. Previously, banks concentrated on corporate and small business lending. Now, banks' business models concentrate on consumer lending - causing the long-term decline in US savings rates.

Forty or 50 years ago, America's corporations were largely run by engineers who had a deep knowledge of their products and of the underlying technologies. Now, top managers are usually finance experts who have a short-term perspective. Many reports argue that the mistakes that led to the Boeing 737 Max disasters were caused by the fact that there was not a single engineer on the Boeing board.

Another key problem is that the US has developed a political and economic elite that has no connection to manufacturing. The type of work rewarded by a society is an indicator of what it values.

The wealth of the US used to be concentrated in the manufacturing centers of the Midwest and Pennsylvania where people made things. It is sometimes argued that the concentration of wealth in the US is just a reward to highly productive people. But, now, six of the 10 richest counties in the US are suburbs of Washington and the remaining four are New York City suburbs, which are occupied by bankers, lawyers, and lobbyists - hardly paragons of productivity-enhancement.

The US education system also does not value people who can work with their hands or make things. The Cummins website tells the story of a young man who started working as a bicycle mechanic at age 13. Eventually, he was able to go to university to become an engineer and got a job at Cummins. But, such stories are rare.

No nation and no company can just sit back and enjoy past glories. Future competitiveness depends on continuous innovation by companies and scientists, which must be enabled by supportive government policies.

The coming decade will see a transformation of manufacturing, as the 5G, AI, robotics, and the internet-of-things technologies are applied in factories. Companies around the world will have to compete both domestically and internationally in order to prosper during this change. No government can protect the companies from the need to compete. However, China's commitment to creating an open, competitive market and a good business environment combined with the kinds of investment in R&D and infrastructure that can only be done by the government, are essential to maintaining a healthy manufacturing sector. Unlike others, China's leadership has repeatedly stressed the importance of industrial upgrading and has developed serious plans to enable it.

 

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2019-11-25 08:02:13
<![CDATA[Chinese regulators go the whole hog to stem pork prices]]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525194.htm

Runaway pork prices in China receded last week, bringing much relief to consumers. Although it is still too early to claim that they will continue to fall and stabilize, it at least shows that the efforts by the regulatory authorities to stabilize pork prices have started to bear fruit.

And as the number of pigs is expected to rise next year, the current price spikes may only be cyclical.

The average wholesale price of pork dropped by 5.96 percent from a week earlier to 48.13 yuan ($6.85) per kilogram on Nov 15, according to the Ministry of Agriculture and Rural Affairs. The decline widened significantly, compared with a decrease of 2.33 percent week-on-week on Nov 8.

Before that, surging pork prices had pushed up the inflation rate in China above 3 percent. The country's Consumer Price Index, a main gauge of inflation, rose 3.8 percent year-on-year in October, following an increase of 3 percent in September, according to the National Bureau of Statistics.

In October, pork prices rose 101.3 percent year-on-year, contributing nearly two-thirds of the CPI growth over the same period.

The continuous increase in pork prices and the CPI raised an alarm among the authorities. In its third-quarter monetary policy implementation report released on Nov 16, the People's Bank of China, the central bank, stressed that the CPI growth was mainly driven by a rapid increase in food prices, especially pork prices, whereas the prices of other goods and services remained generally stable.

The PBOC pointed out that the drop in the Producer Price Index widened in recent months mainly because of the base effect, and this did not suggest significant deflationary pressure on China's industrial products.

However, there is no foundation for continued inflation or deflation, said the report, which also noted that the follow-up monetary policy should highlight the importance of guiding market expectations and being alert to the diffusion of inflation expectations.

The government has taken multiple measures to stabilize pork supply. The State Council, China's Cabinet, decided on Aug 21 to step up efforts to stabilize hog production and ensure pork supply. The Ministry of Agriculture and Rural Affairs and several other ministries jointly launched a set of supporting measures, such as selecting a good opportunity to release emergency reserves of frozen pork.

As people will soon welcome the arrival of the Chinese New Year, ensuring stabilized pork prices has become a major task.

A decrease in pork supply due to outbreaks of African swine fever sparked the latest round of spike in pork prices, which has structural and cyclical features.

Considering that it takes a while for pork supply to recover in China, the authorities concerned should ramp up policies, such as providing pig farmers subsidies, funding support and insurance protection, to ensure that they will increase pig breeding as soon as possible.

In the meantime, China also needs to expand pork imports. The country imported 1.33 million metric tons of pork in the first three quarters of this year, up 43.6 percent year-on-year, while beef imports increased 53.4 percent to 1.13 million tons, according to the General Administration of Customs.

As pork supply increases, pork prices will stabilize, so will the prices of some other food products that are affected. Consequently, there is no need to worry about a hike in consumer product prices in the long run. The current rise in consumer prices is only a temporary market disruption, rather than inflation.

The core CPI which excludes goods with high price volatility, such as food and energy, rose 0.1 percent month-on-month and 1.5 percent year-on-year in October, according to the NBS.

Profit on self-supporting pig farming reached 3,000 yuan per head in November. Moreover, the central and local governments launched policies to encourage and subsidize pig farming. Analysts estimate that China's hog production capacity will recover gradually at the end of this year.

That means, if things go smoothly, pork supply will improve in the second half of next year, which will bring down pork prices.

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2019-11-25 08:02:13
<![CDATA[When products take 'huge leaps in creativity']]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525193.htm For Marc Pritchard, a seasoned salesman and chief brand officer of Procter & Gamble Co, China is the market to be in right now.

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Marc Pritchard aligns P&G with consumption upgrade, disruptors, lifestyle choices

For Marc Pritchard, a seasoned salesman and chief brand officer of Procter & Gamble Co, China is the market to be in right now.

Chinese households are paying more attention to digitalized consumer products and high-end cosmetics. What's more, they are less price-sensitive now.

The scene was different until recently. Large stores, major brands and mega cities characterized the market. But all of them have lost their luster as Chinese consumers have more options to choose a lifestyle. This shift in consumer power has given P&G a lion's share of lifestyle products market.

"We have worked with consumers across China. It's one of the reasons why we are working with domestic partners such as Alibaba Group and JD, who are reaching consumers deeper and deeper every day," said Pritchard, who has been working with the company for more than three decades.

As consumers feel empowered to make informed choices, business opportunities emerge in different market segments, be it electric toothbrushes or facial creams, he said. They all help define the lifestyles that Chinese consumers would prefer.

Pritchard said Chinese consumers are increasingly buying premium products amid consumption upgrade. So, P&G has been focusing on designing the right products for China.

Chinese consumers value a product's good appearance, and they would likely buy good-looking items, Pritchard said. So, P&G has adjusted elements relating to product design and packaging, besides building in China its biggest digital innovation center in Asia.

P&G has also upgraded its counters at various stores in China and enhanced packaging across its entire Olay range of beauty and personal care products.

As a newcomer to the second China International Import Expo held in Shanghai from Nov 5 to 10, P&G showcased 30 of its well-known and latest products.

"The first CIIE showed a clear commitment of the Chinese government to continue its integration with the global economy," said Pritchard. "The second one demonstrated its intention in continuing import promotion, creating opportunities for businesses and consumers in China and around the world," he said.

The Ohio-headquartered group began its China business with a joint venture in Guangzhou, South China's Guangdong province, to produce Head & Shoulders, a type of anti-dandruff shampoo in 1988. To date, it has over 8,000 employees across the country and operates eight plants, 11 distribution centers and several innovation facilities in cities such as Beijing, Chengdu, and Dongguan across China.

With its country headquarters based in Guangzhou, P&G runs businesses for more than 25 brands across 10 categories nationwide, including Pantene, Head & Shoulders, Olay, SK-II, Safeguard, Ariel, Oral-B and Crest. Several of its other global brands are also available to Chinese consumers via its e-store on Tmall, an e-commerce platform owned by Alibaba.

As China has offered a number of policies to spur consumer spending and offer more market access to global companies, P&G has expanded its innovation capacity in China and has been able to build its brands under an increasingly transparent regulatory environment, Pritchard said.

This has reinforced P&G's commitment to providing quality products and services to the China market, he said.

To further diversify its sales channels and communications with Chinese customers, the company's advertising methods also need to change, because the reach of traditional TV is declining, trust in digital media is eroding and e-commerce continues to expand, Pritchard said.

Besides, retailers are creating new media and entertainment services, and new platforms start up every day.

"It's time for us all to lead disruption. It's time to reinvent advertising. There are so many sources of creativity available today, and more coming in the future, so there is tremendous opportunity for huge leaps in creativity," he said, adding the advertising sector has separated from other creative industries for many years.

Agreed Guo Xin, a marketing professor at Beijing Technology and Business University. She said the younger generation also tend to identify with recommendations from internet celebrities and makeup bloggers online, and such an upgrade is not only about what they are shopping for, but also the production process of everything they shop for, which is very much about individuality and pop culture.

"Chinese consumers are demanding and looking for an upgrade and they are more willing to spend money on cosmetics and skin care products, and more people are paying attention to the quality of products," she said.

In addition to middle-income earners and millennials, more growth points have emerged in China. Young consumers in lower-tier cities and small towns, and senior citizens are also displaying strong purchasing power for quality products and services, offered by both Chinese and global retailers, Pritchard said.

On a personal note, the father of three said he enjoys playing basketball, outdoor recreational activities and spending time with his family during his spare time.

 

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2019-11-25 08:02:13
<![CDATA[Xi'an International Trade and Logistics Park sets out to lead by example]]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525192.htm To further promote sustainable development and accelerate opening-up to the outside world, the Xi'an International Trade and Logistics Park in Shaanxi province is aiming to build itself as a global demonstration zone for inland ports, trade and industries by relying on solid economic foundation and favorable policies, according to local officials.

Located in the northeastern part of Xi'an, the park, covering some 120 square kilometers, is surrounded by the Chanhe, Weihe, Bahe and Jinghe rivers. The area was once the trading and logistics center during the Han (206 BC-220 AD) and Tang (618-907) dynasties.

Since its establishment in 2008, the park has always adhered to the mission of "opening up the ports" in China's inland areas and witnessed a robust growth for economic development.

The park's GDP in recent years has achieved an average annual growth rate of more than 30 percent. In 2018, the fiscal revenue of the park reached 830 million yuan ($118 million), 41.5 times that of 2008. The fixed assets investment totaled 22.98 billion yuan, 58.48 times that of 2008.

Sun Yimin, director of the administrative committee of the Xi'an International Trade and Logistics Park, said they will make great efforts to build the park into the largest international hub under the Belt and Road Initiative.

In 2013, the park launched the China-Europe Chang'an freight train routes, serving as an efficient and high-quality development model for international logistics trade in China. The routes cover 10 lines from Xi'an to Central Asia and Europe. From January to October this year, the Chang'an freight train routes traveled more than 1,700 times.

"We will continue to improve the efficiency of Chang'an freight trains by enhancing industrial integration, cooperating with State-owned enterprises and boosting innovation," said Su Guofeng, deputy director of the Xi'an International Trade and Logistics Park.

He added that it is necessary to enhance strategic cooperation with enterprises such as COSCO Shipping Group and China Merchants Logistics Group, consolidate the supply base and deepen relations with neighboring cities in Shaanxi.

Nowadays, the supply from 29 provinces in the country is distributed in Xi'an inland port. More than 70 percent of the inbound and outbound goods are assembled in Xi'an to Europe and Central Asia.

Industrial development

The park has formed industrial clusters of trade, logistics, e-commerce, finance, port-based industries, sports and health industries.

In the past three years, the e-commerce transaction volume of the park has exceeded 300 billion yuan, accounting for nearly 80 percent of online retail sales in Xi'an, which accounts for 56 percent of such sales in Shaanxi.

The park is home to many renowned logistics enterprises including China Merchants Group, American Anbo and e-commerce giants such as Alibaba, JD, Netease, Honey Bud Baby, Suning and Gome. The number of e-commerce companies has amounted to some 1,700 with over 20,000 employees.

In 2018, 49 technology-based processing and manufacturing enterprises settled in the park, creating 5,000 jobs and achieving an annual output value of about 50 billion yuan.

The park also is intended to promote industrial agglomeration and trade development. One example is the establishment of the Shaanxi Processing Trade Industry Transfer Center on May 28.

To date, 18 processing trade and cross-border e-commerce projects have been settled there with a total investment of some 2 billion yuan and an annual output value of 10 billion yuan.

The industrial chain of electronic processing trade in Shaanxi has laid a vital foundation for the function of the park's export-oriented economy.

Green concept

The Xi'an International Trade and Logistics Park has set high-level standards for urban development and completed the planning of the 14.6-square-kilometer surrounding area around the Xi'an Olympic Sports Center.

Adhering to a people-oriented concept, the center plays a key role in helping build Xi'an as an international metropolis for sports, tourism and a high-quality life.

The center will build public cultural and sports, high-end commercial, leisure and entertainment facilities as well as park plazas with international standards. It is striving to create a slow and continuous greenway system by constructing a 15-minute circular leisure area with a good living environment.

Miao Ji, deputy director of the Xi'an International Trade and Logistics Park, said, "The Xi'an Olympic Sports Center is a landmark project for Xi'an's efforts in boosting overall development under the Belt and Road Initiative. It is also key to expanding its influence for holding sports events."

 

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2019-11-25 08:02:13
<![CDATA[Brand-building in the time of trade row]]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525191.htm Huawei, Xiaomi, Haier, TCL, DJI, Vivo, Oppo, OnePlus, ICBC, Air China, Tsingtao, UnionPay - the list of internationally known Chinese brands is getting longer as more and more successful domestic companies expand by going global, in the process realizing that top-notch branding is not a nice-to-have option anymore but the key to survival.

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Local labels work on their visibility, strive to go global despite competition

Huawei, Xiaomi, Haier, TCL, DJI, Vivo, Oppo, OnePlus, ICBC, Air China, Tsingtao, UnionPay - the list of internationally known Chinese brands is getting longer as more and more successful domestic companies expand by going global, in the process realizing that top-notch branding is not a nice-to-have option anymore but the key to survival.

If global brands such as Apple, Adidas, Nike, Uniqlo, Zara, and Converse could capture consumer imagination and loyalty in China, isn't it time that Chinese brands, too, should go global to command similar adulation in overseas markets?

Driven by such sentiments, Chinese companies, marketing gurus aver, are pulling out all the stops to complement their tangible strengths - massive scale of manufacturing, financial muscle, innovation capability and the mega opportunity to serve the world through the Belt and Road Initiative - with the soft power of brands.

A recent Ogilvy report based on the survey of chief marketing officers (or the equivalent) of 40 high-profile Chinese companies revealed as much.

"We believe Chinese brands have tremendous growth potential globally," said Chris Reitermann, Asia and China CEO of global marketing agency Ogilvy. "An early commitment and focus on a brand strategy that guides all overseas efforts will enable Chinese brands to develop a more sustainable business abroad."

The Ogilvy report identified the key drivers for Chinese enterprises' outbound expansion. They are seeking new markets for growth, to survive in spite of stiff domestic competition and to acquire advanced technologies.

Yet, except for the already famous Chinese brands such as Huawei, Haier and Xiaomi, newcomers from China on the global stage initially tended to rely not on branding but on distribution, manufacturing, even mergers and acquisitions.

But now, branding is increasingly becoming a game-changer in shaping consumer perceptions, especially as a growing protectionist sentiment looms over the global economy, making any outbound decisions more prudent, said Reitermann.

"I do think a lot of companies have underestimated the value of a clearly defined brand in getting people to understand who this company is, what this company does, and what its values are," he said.

The transformed macroeconomic environment is pushing companies to shift from the traditional M&A route to growth to more organic, green-field investment, and that makes a "clearly-defined brand" a necessity, he said.

Agreed Deng Delong, global president of consultancy Trout & Partners, which specializes in brand positioning. He believed the global distribution of assets will be conducive to world economy at large, and also accords with Chinese companies' goals of seeking new growth opportunities.

But instead of expanding recklessly overseas, brands should first identify local needs, position themselves accordingly and prove their relevance, he said.

"Especially amid economic uncertainties, a strong and unique brand proposition will entitle companies unparalleled pricing power. This would put them in an advantageous position even amid trade disputes," Deng said.

Realizing that branding calls for deep pockets, many Chinese companies are taking a gradual approach by working with overseas partners first to make an impact.

For instance, K Boxing, a Shanghai-based manufacturer of menswear, hosted three major garment shows overseas. It is looking to tap into local industry players abroad, supply chain partners, and get the attention of international media, said the company's CEO Hong Boming.

"We don't want to just 'rush' into the global scene before we are fully prepared, especially on the branding front," said Hong. "Branding isn't simply about helping sell products to a global audience. It's about conveying the brand DNA, concepts and our unique characteristics."

Other endeavors include teaming up with world-renowned design teams from Italy and the United Kingdom, and rolling out limited-editions, co-branded products, in conjunction with Marvel, the global comics and movie brand, he said.

"To influence is to engage... And it's not a one-off campaign but something ingrained in our business strategy."

That's a lesson young Chinese brands are learning from the more experienced ones.

Prophet, a global branding and marketing consultancy, recently compiled its latest Brand Relevance Index, which stated that phone and telecom equipment maker Huawei, drone king DJI and tech giant Xiaomi are among the strongest-performing Chinese brands on the global stage.

"Huawei has made some smart moves with sponsorships (Leica), marketing (leveraging global celebrities in advertising), and products (focusing on camera leadership)," said Jay Milliken, senior partner and Asia regional lead at Prophet.

"We've seen strong performance of Huawei outside China this year, with the branding achieving No 37 in Germany."

According to Milliken, ideally a brand should focus on being relevant to its core consumer target. The biggest challenge for Chinese companies going global in the future is going to be more about "Brand China" than the individual company's brand.

Meanwhile, given the current trade frictions between China and the United States, Chinese brands will need to take a thoughtful approach to global expansion - that is, they should choose countries or regions where consumer perception of Chinese brands is higher and where geopolitical tensions are lower.

"Xiaomi is a good example of this strategy. It has made a concerted effort to grow its mobile phone business in India and now enjoys the largest share of that market," said Milliken.

All in all, Chinese businesses have made great attempts to build brands globally, which is reflected in their adjusted setup of marketing functions, and the increasing sophistication of business leaders in their understanding of branding. Nevertheless, they still have a long way to go before they could even think of outshining their global competitors.

Respondents in the Ogilvy survey identified local policy, cultural differences and lack of talent as the top three challenges facing their overseas operations. While different in nature, these challenges all stem from one overarching cause: lack of brand-building investment.

Reitermann underscored the value of building a consistent brand platform to secure license to operate, establish trust with local stakeholders and foster a corporate culture that attracts top local talent.

"The gap still lies in the discrepancy between the grand vision held by senior executives and various entities within the organization handling day-to-day businesses, he said.

Experts also pointed out that Chinese brands should consider the amount of localization they need to undertake to be successful outside of their home market.

"Western brands that have entered China have learned that they need to tailor their business and brand strategy to the China market and the same will hold true for Chinese brands that want to go global," said Milliken.

He referred to possible paths to success. One is the so-called dual-brand strategy, meaning that companies operate under different names in domestic and overseas markets.

A case in point is technology media firm Bytedance, which runs short video app dubbed Douyin in China but TikTok outside of China. This leaves much autonomy for the overseas team to carry out locally relevant operations.

Another approach is to forge partnership with trusted overseas partners, which is best reflected in Huawei's tie-up with Leica and DJI's collaboration with Microsoft.

But brand-building is bound to be a long-term cause, said Reitermann. "It will probably take Chinese companies another 10 years to get there."

A huge billboard advertises Huawei's mobile phone at the famous Spanish Plaza in Rome. Provided to China Daily 

 

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2019-11-25 08:01:18
<![CDATA[Q: What's in a name? A: Brand's future]]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525190.htm

Reusable cups turn into art installations. Used plastic morphs into new bags. Paintings materialize out of paper straws.

I was immediately drawn into this magic at a downtown Shanghai mall as I walked past a pop-up stand of HeyTea, the country's cheese-topping milk tea chain.

Under a campaign dubbed "HeyTea Inspirational Lab", some 1.7 million plastic straws have been saved to fashion 15,000 single-use cups in four months.

The eco-friendly endeavor is a cause championed by the startup, and reflects China's efforts at plastic reduction. It also sates enlightened consumers' new-found craving for environmental protection.

Brands like HeyTea are seeking "green credentials" that they believe would be in line with the value system of their target audience - the younger generation. After all, nearly half of consumers worldwide expect manufacturers to take the lead in battling the use of plastics, according to consultancy Kantar. Positive brand image is conducive to delivering positive business results.

Mention "branding" and several words or phrases that can be used interchangeably surface in the mind: brand, brand identity, brand image, brand equity... While the world's top business schools say you can never overstate the importance of branding, it is just as abstract as it is important.

In essence, branding is an effective way for any organization to gain a competitive edge in an increasingly crowded marketplace, through the unique manner in which a corporation, a company or a business presents itself to the public. The overarching purpose of branding is to tell a company's story in a way that creates awareness, excitement and loyalty.

Paths to achieving effective branding vary. Apart from using creative marketing campaigns, a good branding sometimes starts simply with the name. It is a differentiating, but sometimes ignored, factor in reshaping consumer minds and boosting sales. After all, names can be persuasive and consumers could assume names have literal meanings.

Brands like iPhones are self-explanatory themselves. The lowercase letter "i" indicates internet while phone suggests the category.

Some experts said one common factor barring Chinese companies from a genuine global fame is their names, such as Haier or Xiaomi, even if they are already highly-recognized on a global scale.

I asked several Western friends and they agreed these names are generally difficult to pronounce in countries that use the Latin alphabet. This is a seemingly valid point though people living in China (including me) might take the names for granted.

This is unfortunately backed by facts. According to Kantar's data, while revenue that Chinese brands gain from overseas has increased significantly over the past five years, Western consumers' awareness of, and familiarity with, them remain relatively low. In other words, competition against indigenous brands was not at parity or premium prices.

While a global brand does not necessarily have to be an English word, it has to "sound right" in that language, as in the case of Nokia and Sony. But being easy to pronounce is not the only requirement - having the right connotations is critical too.

According to international marketing guru Al Ries, Snow Beer, the largest-selling Chinese beer brand, is one such example. While it is easy to spell and pronounce, nobody in the English-speaking world wants to drink "snow", which means frozen water.

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2019-11-25 08:01:18
<![CDATA[Building infrastructure for the world]]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525189.htm China Harbor Engineering Co, a State-owned enterprise specializing in building port, marine engineering, dredging, railroad and airport construction projects, will begin building the Bogota Metro Line 1 project in April 2020.

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Rail transit, housing, ports... CHEC gains strength with projects worth $30 billion

China Harbor Engineering Co, a State-owned enterprise specializing in building port, marine engineering, dredging, railroad and airport construction projects, will begin building the Bogota Metro Line 1 project in April 2020.

In addition to CHEC, the largest single project in Colombia will involve domestic and Canadian partners.

CHEC, a subsidiary of China Communications Construction Co, formed a consortium with companies such as China Railway Rolling Stock Corp, Xi'an Metro and Bombardier Inc to win the bid for the Bogota project, whose contract value is $5.02 billion. The Colombian government announced the contract award in mid-October.

Lin Yichong, chairman of the Beijing-headquartered CHEC, said this investment project is the largest contract in capital volume, dominated by CHEC, and also the first breakthrough of the group in integrated services of the whole life cycle of the rail transit sector.

"The bidding organization of this project gives full play to CHEC's ability to allocate, dominate and coordinate global infrastructure resources and the company's competitiveness in the infrastructure field, which is in line with the country's efforts in advancing reform of State-owned enterprises and enriching the content of SOEs' 'go-global' strategy," he said.

Bogota Metro Line 1 is almost 24 kilometers long with 16 stations. CHEC will construct the project through the model of "integration of investment, construction and operation".

The project comprises mainly of investment, financing, design, construction, procurement, operation and maintenance, and its franchise period is about 28 years.

After its completion, the Bogota Metro Line 1 project will become the trunk line of Bogota's public transportation and the main artery of passenger transport. It will provide great convenience for commuters in Bogota, and have a far-reaching impact on the future urban layout as well as long-term development of Bogota, according to Lin.

"This big-ticket project will drive the development of CHEC in the whole industrial chain of rail transit projects, and enhance the company's brand influence in the Americas and other parts of the world," said Li Jin, chief researcher at the China Enterprise Research Institute in Beijing.

After completing an expansion project for Namibia's Walvis Bay port in August, CHEC sealed a deal to build an indemnificatory housing project to build 1,650 houses in five phases with the Jamaican government earlier October.

Apart from building infrastructure projects in many parts of the world, CHEC signed a $629 million financing agreement with the China Development Bank to build Lekki Deep Sea Port facility, about 60 kilometers from Lagos, a major city in Nigeria.

The loan will provide CHEC, and Singapore-based retail and industrial conglomerate Tolaram Group, with the funds needed to build the project. The port will have a water depth of 16.5 meters and two berths of 680 meters in length each. It will have sufficient room to accommodate container ships of up to 18,000 TEU(twenty-foot equivalent units).

In addition to the funding from the State-owned CDB, CHEC has committed to an equity investment of $470 million. It will operate the facility under a 45-year concession agreement, after the port's completion.

Once the port is completed, it will raise the container handling capability of the region surrounding Lagos, alleviate the port congestion, cut logistics costs of international trade in the region, said Lin from CHEC.

It is also practical to build a flexible investment environment, convenient logistics and transportation networks in West Africa, he said.

The project will drive a large number of domestic infrastructure project providers and heavy equipment manufacturers to build and enlarge their market presence in Africa, and further promote international industrial capacity cooperation between China and Nigeria, said Zhou Lisha, a researcher at the research division of the State-owned Assets Supervision and Administration Commission.

"The government previously paid more attention to the scale of SOEs' revenue, but for the next stage, more attention will be placed on SOEs' returns in areas such as net assets, revenue margin, development in overseas markets, debt elimination, investment in research and development, and the level of securitization to support the national economy," she said.

In all, 11,028 SOEs have built a presence in 185 countries and regions across the world with 7.6 trillion yuan ($1.08 trillion) of assets by the end of 2018.

Thanks to business and market channel diversification, their sales revenue and profit amounted to 5.4 trillion yuan and 131.89 billion yuan respectively in 2018, SASAC data showed.

Peng Huagang, secretary-general of the SASAC, said SOEs have gradually expanded their overseas projects from resource development and infrastructure construction to industrial cooperation and other types of investment packages, especially in economies participating in the Belt and Road Initiative.

For the next step, the government will continue to support SOEs to study and flexibly use international rules, and improve their transnational management capacity, as well as raise their safety awareness and risk prevention capabilities, he said.

Supported by over 15,000 Chinese and foreign employees, CHEC to date has built a presence in over 100 countries and regions, with a total contract value of $30 billion for projects under construction.

 

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2019-11-25 08:01:18
<![CDATA[Chinese-made trains transform Cuba's transportation]]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525188.htm HAVANA - Cuban engineer Jose Gordillo, who travels to the central Cuban city of Ciego de Avila from time to time to visit his elderly parents, now finds his trip more convenient and comfortable with new Chinese-built trains.

"For family reasons, I have been back and forth twice to Ciego de Avila and have always had a quiet and even a pleasant trip," Gordillo said.

Gordillo is not the only one who benefits from the new trains. Three months after being put into service, the four 12-railcar Chinese-built trains have carried around a quarter of a million Cubans along the key route linking the easternmost town of the southeast province of Guantanamo with Cuba's capital Havana.

"Since the launch of the new national trains on July 13, 233,107 passengers have been transported," said Luis Roses, director of the Business Division at Cuba's National Passenger Trains company.

Long, narrow and mostly flat, Cuba is ideally suited to rail systems. The Caribbean island was the first country in Latin America, and one of the first in the world, to have rail service beginning in 1837 with a 27-km line built to serve Cuba's sugar industry.

As part of a program to modernize Cuba's aging railway network, the four Chinese trains are now offering nationwide service to the local people, and more and more Cubans have relied on these trains as their key means of cross-country transportation.

These four trains have almost doubled the passenger capacity of the previous seven trains, which were acquired secondhand and have been retired after four decades of service.

And more Chinese-built trains are on the way. Thanks to a soft loan from China payable over 15 years, Cuba purchased a total of 240 railcars, which are to be delivered in batches of 80 each year through 2021.

Each train, built particularly to meet local conditions and needs, as well as international transportation standards, can accommodate up to 720 passengers, a feature new to Cuba.

Zhao Jun, vice-president of the China National Machinery Import and Export Corporation (CMC), the manufacturer of the new trains, said the company has been working with Cuba's Ministry of Transportation for several years to help modernize Cuba's rail system.

"We are willing to help Cuba modernize the system and improve the quality of the country's transportation," said Zhao.

CMC has also provided spare parts, specialized equipment for repairs and technical assistance to Cuba.

"Thanks to cooperation ties with China, today Cuban transportation can enjoy the operation of these trains," Cuban Deputy Transportation Minister Marta Oramas said.

 

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2019-11-25 08:01:18
<![CDATA[Experts link brand success to impact on mind]]> http://www.chinadaily.com.cn/kindle/2019-11/25/content_37525187.htm Despite technological breakthroughs that are rewriting certain retail rules, masterminding consumer minds remains the top priority for brands as they seek to navigate the increasingly sophisticated and stratified consumer markets, according to a seasoned branding veteran.

To succeed, enterprises need to use "Outside-In" thinking and coordinate all the resources around their designated strategic positioning, said Deng Delong, global president of Trout & Partners, a global consultancy in marketing and brand positioning.

"The answer to success is winning the prospect's mind and making people realize your value in an over-communicated society with jammed messages," Deng said during a recent event in Shanghai commemorating the 50th anniversary of the "Positioning Theory".

Core to the theory is providing an explanation of why some brands outstrip their peers even if their products are of similar quality. The short answer is: to be the defining performer in a unique category.

"Instead of focusing on the product per se, brands should be aware that consumers use categories to store brands in their minds, and the winning recipe lies in creating a new category and becoming the leading brand in that category," Deng noted.

The theory has helped groom and revitalize a number of Chinese companies. It also helped them to either gain an early foothold and carve out a unique niche or reinvigorate as consumer preferences evolved overtime.

The power of the prospect's mind drives the division of labor, while positioning stimulates resource allocation in an enterprise, said Zhou Qiren, a professor with the National School of Development at Peking University.

"While expanding the study of Positioning Theory, people started realizing the crucial importance of the prospect's mind and shifting the main focus from internal operations to external perceptions," Zhou said.

The Positioning Theory has withstood the passage of time, as new technologies bring sweeping changes of traditional commerce. Deng said technological upgrade perfectly represents these changing mindsets and consumer needs; it is imperative that a brand's adjusted positioning reflects such changes. "Still, it's as simple as 'differentiate or die'."

Kuaigou Hailing, an internet-based cargo hailing app, is a recent case echoing such sentiment. According to Chairman Chen Xiaohua, the company has decided to change its name from "58 Express Delivery" to "Kuaigou Hailing", allowing for people's immediate reference to 'hailing', a subcategory of all transportation types.

"Upon the name change, we've noticed multiple times jump in the number of online searches," he said. "This wouldn't have been realized if we maintained the old name, even if we had multiplied our advertising budget by five to 10 times."

Agreed Deng on the importance of names, saying a name is usually the very first thing people experience or encounter about a brand, making it one of the most important assets, in terms of identity.

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2019-11-25 08:01:18
<![CDATA[Digital tech to boost healthcare industry]]> http://www.chinadaily.com.cn/kindle/2019-11/24/content_37525008.htm

Firms eye cutting-edge solutions to better serve patients and physicians

With every walk of life getting a digital makeover, China's healthcare sector is hastening the pace of technological advances in the hope of serving patients better and empowering physicians in remote parts of the country.

Guided by a so-called Omni-Protection concept, French vaccine maker Sanofi Pasteur unveiled last week 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 Shanghai, 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.

It also pledged to develop an intelligent clinic through a tie-up with an affiliated company to the Chinese Academy of Sciences. This was done in the hope of streamlining the entire process and better managing the safety of vaccines. The key functions include online reservation, facial recognition, smart cold chain delivery, and an intelligent observation area.

"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.

Based on an agreement with the Shenzhen municipal government, the company even wants to turn Shenzhen into a hub to explore a new model for accelerating the launch of globally leading vaccines, improve the influenza vaccination rate, employ big data to establish a vaccination evaluation system, and delve more deeply into relevant research.

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 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.

Physicians also stand to benefit from the digitalization wave.

Siemens Healthineers, the healthcare unit of German conglomerate Siemens, showcased its latest 5G-powered ultrasound solutions during the second CIIE.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 heavily lacks physicians especially in entrance-level healthcare institutes, primary hospitals and rural healthcare institutes. In the meantime, the journey for ultrasound physicians to improve their skills is not easy," 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, in which it has fast CT scanning and an angiography system in one room.

Digitalization can assist the entire cycle of clinical trial, regulatory compliance, to the commercialization of drugs, said Tal Rosenberg, senior vice-president of IQVIA Global Technology Solutions, a US-based company serving the combined industries of health information technology and clinical research.

"Around 80 percent of clinical trials today are being delayed due to lack of patients. Digital transformation can help expand the reach of patients that are not in proximity, or arriving at the site," he said. "You can contact them, get data on a daily basis, and find even more patients."

The portfolio of life science companies has significantly evolved from primary care to specialty businesses. Therefore, a number of stakeholders other than the physicians needed to be engaged.

That's when holistic digital platforms kick in, as exemplified by IQVIA's latest product called OCE.It connects sales, marketing, medical and related functions in life science companies to transform commercial models.

The company also joined hands with Chinese healthcare marketing firm SocialMED to form a digital medical sales representative operating center in a bid to reach pharmacies, physicians, and patients in a much more efficient way with lower costs.

"Digital addresses the critical issue of how the industry uses data analytics to actually drive efficiencies and deploy resources in a smart way," said Yan Guowei, general manager of SocialMED.

hewei@chinadaily.com.cn

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2019-11-24 09:47:28
<![CDATA[Nestle launches new high-end milk powder products for adults in China]]> http://www.chinadaily.com.cn/kindle/2019-11/24/content_37525007.htm The increasing demand for family nutrition and slower growth in the infant and baby milk formula market are part of the reasons behind the push by food and nutrition manufacturers to burnish the appeal of milk powder products for adult consumers in China.

Global food and nutrition giant Nestle recently rolled out high-end milk powder products for Chinese family consumers. The milk powder product, named Shu Chun, part of Nestle's Joyful Vitality series which targets family nutrition, is designed to improve digestion and the absorption of proteins for middle-and-high income families.

The milk powder products are made from milk collected directly from cows at dairies in the city of Shuangcheng in Heilongjiang province in Northeast China, Nestle said.

 

Nestle employees work at the company's booth during a dairy exhibition in Beijing. Provided to China Daily

The marketing of milk powder for families has been on the rise despite the strong demand for liquid milk. Henry He, marketing director of the Dairy Business Unit of Nestle China, said the online market for family milk powder products has grown quickly.

Nielsen China statistics showed that online milk powder sales have reached 1.8 billion yuan ($256.2 million), while the level offline stood at 1.5 billion yuan in the past 12 months.

Nestle's dairy unit has developed three kinds of milk power for families. They include full cream, skim milk and Nido, which is an organic product, accounting for 25 to 30 percent of its overall dairy products.

The milk powder for adults is for middle-aged and senior consumers as well as maternity nutrition products.

Ausnutria in October added an adult milk powder business. In August, Yashili International launched its own line of milk powder for family consumers.

Compared with the milk formula sector for infants and babies, the adult category is still in its early stage in terms of market scale and profitability.

Data from Euromonitor International showed that the milk formula market which includes standard, follow-on, growing-up and special milk formula has reached 175.5 billion yuan in 2019 in the country and the market's size is forecast to reach 216.3 billion yuan by 2024.

Song Liang, an independent dairy analyst, said the domestic milk powder market for adults ranges in value from 6 to 8 billion yuan. Its market size has remained unchanged in recent years and gross profits are low, mainly as a result of a lack of consumption awareness among consumers.

"Our data shows that demand for adult milk powder has been growing consistently for the past three years but from a small base," said Jason Yu, general manager of Kantar Worldpanel. "Year-on-year growth was 12 percent up to Sept 2019, higher than the dairy sector average."

A lot of growth is expected in this category, particularly among elder families and consumers with specific nutrition demands such as pregnant women.

The senior population in China makes up about 17.9 percent of the total population in total and the ratio is expected to rise and reach a quarter of the population in six years.

wangzhuoqiong@chinadaily.com.cn

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2019-11-24 09:47:28
<![CDATA[Robotics firms wait for the next wave]]> http://www.chinadaily.com.cn/kindle/2019-11/24/content_37525005.htm Companies bank on tech advantage, more R&D efforts to carve a niche in global arena

Though China's robotics market is experiencing short-term contraction, companies' consistent efforts to hone their technological prowess and beef up research and development on premium products will drive the industry into a new phase of high-quality growth, analysts said.

The comments came after the country's top industry regulator is reportedly working on a new 2035 development plan for the domestic robotics industry.

Song Xiaogang, executive vice-president of the China Robot Industry Alliance, said China's robotics market had grown at an average growth rate of 35 percent from 2010 to 2017, compared with the global average of above 15 percent.

 

Children watch performing robots at the 2019 World Sensors Summit in Zhengzhou, Henan province. Liu Xu / For China Daily

But for the first time, last year, China recorded a 1.73 percent year-on-year decline in sales of industrial robots despite being the world's largest market for the same since 2013. The global robotics sector also saw its growth slow down to about 1 percent, according to data from the alliance.

Song said the Ministry of Industry and Information Technology is now working on a new 2035 development plan for the robotics industry and relevant officials have been conducting investigations into robotics companies and supply chains in four regions across the country for more than two months.

"Their mission is to find out the key bottlenecks and shortcomings of the robotics sector," Song said.

Ren Shunying, chief investment officer at Siasun Robot Investment Co Ltd, said the decline of China's industrial robots is partly the result of the shrinking automotive sector, which has been among the largest users of industrial robots in plants.

"But as robots become increasingly smart with the help of artificial intelligence, the market for service robots will grow exponentially. The demand for companion robots and healthcare robots will be huge in the future, given China's growing pool of senior citizens," Ren said. According to him, robots will also see wider application in sectors featuring nonstandard products.

The market size of China's robotics sector is expected to hit $8.68 billion this year, the Chinese Institute of Electronics forecast in a report.

Specifically, the market for industrial robots will be worth $5.73 billion this year, and the market for service robots will be worth $2.2 billion, the report said.

The China Robot Industry Alliance also forecast that China's market for industrial robots may see a year-on-year growth of 5 percent in sales this year, with domestic brands seeing about 15 percent growth.

Song from the alliance said there is no need to worry about the long-term contraction in the Chinese robotics market. The country's graying population, rising worker salaries and its sprawling manufacturing plants will all boost demand for robots.

Also, as domestic robot makers continue their R&D investment, they are moving up the value chain. Collaborative industrial robots, known as "cobots", for instance, are expected to become a growth engine for the industrial robots sector, and China will take center stage in the new trend, experts said.

Cobots are designed to physically interact with humans in a shared workspace, in contrast to most industrial robots used nowadays, which are often seen sitting behind safety barriers at factories. Cobots' ability to collaborate with humans is more suitable for meeting the needs of industries with more specific, flexible or personal requirements.

In 2016, Siasun, for instance, showcased China's first homegrown seven-axis collaborative robot, which performed tai chi with a human master. Last year, the company took a step further by displaying a hybrid cobot at the Hannover Industry Fair in Germany to demonstrate two-robot synchronous technology.

Susanne Bieller, secretary-general of the International Federation of Robotics, said in an earlier interview with China Daily that "Chinese suppliers are strong in exploring industry sectors beyond automotive and electronics, which opens up a potentially unlimited market, and makes the robotics industry less susceptible to any risks caused by weaker phases in single industries".

Miao Wei, minister of industry and information technology, also said earlier this year that the global robotics sector has seen slower growth this year due to the complex international environment.

"But as an important application of the new-round of technological revolution and its integration with manufacturing, robots remain the key driver of high-quality development. The sector will also achieve fast development in the future with expanding application scenarios and quick technological improvements," Miao said.

The official also highlighted that China will step up efforts to achieve breakthroughs in crucial robotics technologies and promote the use of industrial and service robots in industrial plants and daily lives.

masi@chinadaily.com.cn

 

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2019-11-24 09:47:28
<![CDATA[AI gaining ground with more parents for early stage education]]> http://www.chinadaily.com.cn/kindle/2019-11/24/content_37525004.htm On a typical Saturday afternoon, Li Nan, a 38-year-old housewife, is busy taking her son for extracurricular lessons at a school in Beijing's Haidian district. There is a difference though. Rather than the Maths Olympiad courses one would typically expect, her son is busy attending a robot programming class.

"My eight-year-old son has been taking this class for two years. Kids are taught how to program and design their own robots. I think it is necessary to expose my kid to some artificial intelligence enlightenment courses at this age," she said.

By 2020, China's AI market is expected to reach 99 billion yuan ($14.1 billion), and penetrate all age groups, said a recent report. The report, issued by the Shenzhen Artificial Intelligence Industry Association, showed that China's AI market is growing on a yearly basis, with a compound annual growth rate of 54.6 percent during the past three years, surpassing the global level of 36 percent.

 

Chen Liming, president of IBM China, teaches an artificial intelligence course at a primary school in Beijing. Provided to China Daily

The popularity of the sector is reflected in its growing choice for early stage education. In July 2017, the State Council issued an action plan for the setting up of AI courses in elementary and secondary schools. Currently, key elementary and secondary schools are all promoting AI labs and programming labs.

Last year, China's first middle school textbook on AI was introduced. Currently, 40 schools in China have adopted the textbook, becoming the first batch of AI education pilot schools.

Sun Chuang, a teacher from the STEAM (science, technology, engineering, arts and mathematics) teaching and research group at the Beijing National Day School, said: "Education is a systematic project, and so is the process of cultivating talents. Therefore, it is necessary to include AI education courses into primary education."

Industry experts said that with the rapid development of AI, uncertainties about the future have aroused parents' anxiety. Parents make their kids learn various courses at a very young age, so that kids can be fully equipped to cope with a constantly changing future. Therefore, the current AI education tends to be focused at the lower ages.

With the government's favorable policies and rising market demand, AI education has the most potential after Maths Olympiad education and English education, they said.

According to a recent report by 1hjqr.com, a research institution on the robot industry, China's STEAM education market in 2018 achieved revenue of 27 billion yuan, and the future market growth will be mainly driven by the increase in market penetration rate.

A 1-percent increase in the penetration rate will result in increased market space of nearly 15 billion yuan.

"There is a huge growth potential in China's STEAM education market, and the penetration rate in the sector is set to grow constantly. The government's favorable policies will promote the transition from examination-oriented education to quality education," said the report.

Enterprises are stepping up efforts to meet market demands. On Oct 16, United States-based high-tech company IBM launched a volunteer activity in Beijing, encouraging its employees to teach STEM courses in primary and secondary schools of China.

According to the company, during the current fall semester, IBM employees are giving STEM lectures to 50,000 students nationwide in cities such as Beijing, Shenyang, Guangzhou and Shenzhen in Guangdong province, Shanghai, Chengdu, Xi'an, Wuhan and Fuzhou.

"Based on the characteristics of Chinese students' education, scientists from IBM have developed a set of AI enlightenment courses, including AI introduction, design thinking, engineering, digital intelligence, and agile practices. Schools can select several courses according to their own teaching plans, as a supplement to school-based curriculum," said Chen Liming, president of IBM China.

"We are glad to walk into the schoolyard to think about future technologies with kids. We hope that they can have a correct understanding of AI at an early age, so that in the future, they can create a better life," he said.

zhengyiran@chinadaily.com.cn

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2019-11-24 09:47:28
<![CDATA[Canon eyes China for new growth prospects]]> http://www.chinadaily.com.cn/kindle/2019-11/24/content_37525003.htm Japanese camera and imaging equipment maker Canon Inc will increase its investment in China and accelerate localization efforts by strengthening cooperation with Chinese partners in the fields of big data, cloud computing and artificial intelligence, in a bid to unlock further business potential.

"China has become one of our most important markets around the world, and we always attach great importance to our development here," said Howard Ozawa, executive vice-president of Canon and the president and CEO of Canon China.

He said the Chinese market, which still shows huge growth potential, contributed the most in Canon's product sales among all the countries and regions in Asia. For instance, the sales of digital cameras in China topped the list worldwide in the January-June period this year.

"The whole Asian market, especially China, has become an important engine to drive Canon's cameras business growth globally," Ozawa said, adding he is confident of the company's prospects in China, and aspires to seize the opportunities provided by China's new round of high-level opening-up strategies.

He said that though the Chinese economy is slowing, the country is still a high-speed growth market in the world.

According to Ozawa, Canon plans to launch new companies in China, improve and strengthen its businesses spanning research and development, production, sales and services, as well as introduce more state-of-the-art imaging products, technologies and standards to various industries.

The company also foresees huge development opportunities in the medical equipment market under the guidance of the Healthy China 2030 Initiative, which aims to boost the market for healthcare services to 16 trillion yuan ($2.3 trillion) by 2030.

Industry data showed that the medical equipment sector in China earned a revenue of 530.4 billion yuan in 2018, up 19.86 percent from the level in 2017. In 2020, the market size is expected to reach 760 billion yuan.

In 2016, Canon agreed to buy Toshiba Corp's medical equipment unit for nearly $6 billion to enter the high-margin medical devices sector.

"With the industry and consumption upgrading, domestic high-end manufacturing and high-tech service sectors have a fast-growing demand for overseas products, such as important equipment and key components, as well as high-end electronic products. These are precious opportunities for Canon to further expand its presence in China," he said.

Ozawa pointed out that China is at the forefront of developing cutting-edge technologies, which will give birth to new industrial applications and innovation. Technologies like 5G seem like a revolution in the data industry and will have deep integration with industrial facilities, medical equipment and transportation, he said.

Liang Zhenpeng, a consumer electronics analyst said it is an inevitable trend that the camera market is shrinking and traditional camera makers have to seek new growth points, expand product chains and move toward diversified portfolios.

fanfeifei@chinadaily.com.cn

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2019-11-24 09:47:28
<![CDATA[Sino-US trade tensions seen adding to global uncertainties]]> http://www.chinadaily.com.cn/kindle/2019-11/23/content_37524958.htm Experts urge two nations to resolve technology sector confrontation and agree deal

The trade tension and confrontation in the technology sector between China and the United States will hurt the two economies and have a negative effect on the global economy, economists and experts warned on Friday.

They called for the world's two largest economies to reach a trade deal as soon as possible and jointly find a resolution to their trade friction and technological confrontation.

Zhu Min, head of Tsinghua University's National Institute of Financial Research, said that the contraction of bilateral trade volume between China and the US is hitting both economies and the trade tariffs the US levied on Chinese imports will eventually become a tax burden on US companies and consumers.

Tariffs will push the prices of intermediate goods imported from China higher, which will increase the cost for US companies at the downstream of the industrial chain and force them to cut jobs, Zhu said on the sidelines of the 2019 New Economy Forum in Beijing.

Zhu, who is the former deputy managing director of the International Monetary Fund, said that he hoped Beijing and Washington could reach a trade deal as China-US trade tension has been the biggest negative factor for the global economy.

"One of the biggest side effects of China-US trade friction is the increased uncertainty in the global economy. Resolution of the trade tension will bring big benefits to the global economy," he said.

Gary Cohn, a former economic adviser to the US president, said that he was optimistic about China and the US reaching a phase-one trade deal, in which the two countries are expected to make agreements on trade of agricultural products.

The two sides may need to make more efforts to reach a phase-two or a more comprehensive deal to address issues including technology and intellectual property rights protection, Cohn, who is also a former director of the US National Economic Council, said at a panel discussion of the forum.

Cohn said there is still common ground for the two countries to reach a consensus over IPR protection as China is also willing to strengthen IPR protection as the nation has started to develop cutting-edge technology.

Hu Zuliu, founder and chairman of Primavera Capital Group, said that the technological competition between China and the US should not be seen as a zero-sum game, as both sides could benefit from each other's technological progress.

Hu hoped that the two sides could reach the phase-one trade deal as early as possible, bringing more certainty to the global economy and laying the basis for a comprehensive trade deal.

Contact the writers at lixiang@chinadaily.com.cn

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2019-11-23 06:26:33
<![CDATA[Reforms to foster new economic growth drivers]]> http://www.chinadaily.com.cn/kindle/2019-11/23/content_37524957.htm

Reforms in China to improve the business environment will continue, including to further reduce companies' tax burden, fostering new drivers of growth and promoting greater innovation to offset economic slowdown risks, according to officials.

This year, China is expected to achieve more than 2.3 trillion yuan ($327.2 billion) in tax and fee reductions, higher than the target of 2 trillion yuan set in March, Finance Minister Liu Kun said at a forum on Friday.

The government will continually take targeted new measures to improve the business environment and enhance the implementation of reform policies. "There is still room for China to catch up with the world's best practices and to follow the international prevailing rules," the minister said.

In the first three quarters, total tax and fee cuts were around 1.78 trillion yuan. Cutting taxes and fees will continually bolster the business investment in the corporate sector, support the development of small and medium companies and stabilize economic growth, according to Liu.

China's business environment showed one of the strongest improvements worldwide in the 12 months ending May 1 thanks to its robust reform agenda, according to the World Bank Group's Doing Business 2020 study issued in late October.

China has now been in the top 10 fastest reforming Doing Business countries around the world for two years in a row, mainly due to several business reforms. It has moved up in the ranking by almost 50 places in the process. Its rank this year climbed to 31st place in terms of ease of doing business, up from 46th a year earlier and 78th in 2017, the study showed.

"Development is like riding a bike: you cannot stand still because you will fall," Yang Shaolin, managing director of the World Bank, said at the same forum on Friday. "Continued reforms are needed."

For that to happen, a more dynamic enterprise sector is key, said Yang. "Regulations that facilitate the entry and exit of firms, ensure a level playing field, and encourage entrepreneurship and innovation are vital ingredients of a competitive business environment," he suggested.

The World Bank Group has been aware of China's efforts on implementing substantial reforms in protecting minority investors by imposing liability on controlling shareholders for unfair related-party transactions and clarifying ownership and control structures. "This is an important reform that will support further development of robust and efficient capital markets," according to Yang.

More measures that can help the world's second largest economy continually improve business environment, such as improving the legislative system including at the local government level, and opening up key service industries, Yang added.

chenjia@chinadaily.com.cn

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2019-11-23 06:26:33
<![CDATA[Tech executives call for greater bilateral trust]]> http://www.chinadaily.com.cn/kindle/2019-11/23/content_37524956.htm

Senior tech executives on Friday called for an open, cooperative and win-win approach to embrace 5G technologies while underlining the fact more efforts are needed to build trust between China and the United States.

Li Zixue, the chairman of ZTE Corp, a major Chinese telecom equipment maker, said at a panel discussion of the New Economy Forum in Beijing that 5G technologies will reshape a wide range of sectors and bring changes to global telecom supply chains.

"Only with an open mindset and building our core competence in an open environment, we can survive the fierce competition," Li said. At such a critical period, it is of utmost importance to entertain an open attitude.

His views were echoed by Sanjay Mehrotra, president and CEO of US memory chip heavyweight Micron Technology Inc. The senior executive said 5G is not just about one country. Instead, it will be ubiquitous.

For the whole semiconductor industry, it is important to fully get the benefits of scale. Both China and the US are important markets, and more cooperation is needed, Mehrotra said.

At the forum, Gary Dickerson, president and CEO of Applied Materials, a US tech giant that provides semiconductor materials engineering solutions, also highlighted that firms and countries that grow the fastest are those that cooperate with others the most.

No companies or countries can build their own ecosystem just by themselves and he does not see that happening in five or 10 years, Dickerson explained.

Lenovo Group chairman and CEO Yang Yuanqing said US-China technology and supply chain decoupling will hurt the interests of the two countries and is not feasible.

"Technology should serve all the people around the world. It is not only a moral thing, but also in accordance with the laws of economics," said Yang, while noting that openness and sharing of technological innovation will remain the direction of the industry going forward.

"Lenovo has always adhered to the strategy of combining 'globalization' with 'localization' on its path of international development ...We respect local users and comply with local laws and regulations when we do businesses," Yang said.

Jerry Yang, the founding partner of AME Cloud Ventures and co-founder of Yahoo, said China-US tech decoupling will challenge core innovative capacities.

China and the US need to carry out cooperation in the field of innovation and build a certain degree of mutual trust in a bid to benefit the people of the two countries, he added.

Contact the writers at masi@chinadaily.com.cn

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2019-11-23 06:26:33
<![CDATA[Robotics firms wait for the next wave]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524836.htm Companies bank on tech advantage, more R&D efforts to carve a niche in global arena

Though China's robotics market is experiencing short-term contraction, companies' consistent efforts to hone their technological prowess and beef up research and development on premium products will drive the industry into a new phase of high-quality growth, analysts said.

The comments came after the country's top industry regulator is reportedly working on a new 2035 development plan for the domestic robotics industry.

Song Xiaogang, executive vice-president of the China Robot Industry Alliance, said China's robotics market had grown at an average growth rate of 35 percent from 2010 to 2017, compared with the global average of above 15 percent.

But for the first time, last year, China recorded a 1.73 percent year-on-year decline in sales of industrial robots despite being the world's largest market for the same since 2013. The global robotics sector also saw its growth slow down to about 1 percent, according to data from the alliance.

Song said the Ministry of Industry and Information Technology is now working on a new 2035 development plan for the robotics industry and relevant officials have been conducting investigations into robotics companies and supply chains in four regions across the country for more than two months.

"Their mission is to find out the key bottlenecks and shortcomings of the robotics sector," Song said.

Ren Shunying, chief investment officer at Siasun Robot Investment Co Ltd, said the decline of China's industrial robots is partly the result of the shrinking automotive sector, which has been among the largest users of industrial robots in plants.

"But as robots become increasingly smart with the help of artificial intelligence, the market for service robots will grow exponentially. The demand for companion robots and healthcare robots will be huge in the future, given China's growing pool of senior citizens," Ren said. According to him, robots will also see wider application in sectors featuring nonstandard products.

The market size of China's robotics sector is expected to hit $8.68 billion this year, the Chinese Institute of Electronics forecast in a report.

Specifically, the market for industrial robots will be worth $5.73 billion this year, and the market for service robots will be worth $2.2 billion, the report said.

The China Robot Industry Alliance also forecast that China's market for industrial robots may see a year-on-year growth of 5 percent in sales this year, with domestic brands seeing about 15 percent growth.

Song from the alliance said there is no need to worry about the long-term contraction in the Chinese robotics market. The country's graying population, rising worker salaries and its sprawling manufacturing plants will all boost demand for robots.

Also, as domestic robot makers continue their R&D investment, they are moving up the value chain. Collaborative industrial robots, known as "cobots", for instance, are expected to become a growth engine for the industrial robots sector, and China will take center stage in the new trend, experts said.

Cobots are designed to physically interact with humans in a shared workspace, in contrast to most industrial robots used nowadays, which are often seen sitting behind safety barriers at factories. Cobots' ability to collaborate with humans is more suitable for meeting the needs of industries with more specific, flexible or personal requirements.

In 2016, Siasun, for instance, showcased China's first homegrown seven-axis collaborative robot, which performed tai chi with a human master. Last year, the company took a step further by displaying a hybrid cobot at the Hannover Industry Fair in Germany to demonstrate two-robot synchronous technology.

Susanne Bieller, secretary-general of the International Federation of Robotics, said in an earlier interview with China Daily that "Chinese suppliers are strong in exploring industry sectors beyond automotive and electronics, which opens up a potentially unlimited market, and makes the robotics industry less susceptible to any risks caused by weaker phases in single industries".

Miao Wei, minister of industry and information technology, also said earlier this year that the global robotics sector has seen slower growth this year due to the complex international environment.

"But as an important application of the new-round of technological revolution and its integration with manufacturing, robots remain the key driver of high-quality development. The sector will also achieve fast development in the future with expanding application scenarios and quick technological improvements," Miao said.

The official also highlighted that China will step up efforts to achieve breakthroughs in crucial robotics technologies and promote the use of industrial and service robots in industrial plants and daily lives.

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2019-11-22 07:52:16
<![CDATA[AI gaining ground with more parents for early stage education]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524835.htm On a typical Saturday afternoon, Li Nan, a 38-year-old housewife, is busy taking her son for extracurricular lessons at a school in Beijing's Haidian district. There is a difference though. Rather than the Maths Olympiad courses one would typically expect, her son is busy attending a robot programming class.

"My eight-year-old son has been taking this class for two years. Kids are taught how to program and design their own robots. I think it is necessary to expose my kid to some artificial intelligence enlightenment courses at this age," she said.

By 2020, China's AI market is expected to reach 99 billion yuan ($14.1 billion), and penetrate all age groups, said a recent report. The report, issued by the Shenzhen Artificial Intelligence Industry Association, showed that China's AI market is growing on a yearly basis, with a compound annual growth rate of 54.6 percent during the past three years, surpassing the global level of 36 percent.

The popularity of the sector is reflected in its growing choice for early stage education. In July 2017, the State Council issued an action plan for the setting up of AI courses in elementary and secondary schools. Currently, key elementary and secondary schools are all promoting AI labs and programming labs.

Last year, China's first middle school textbook on AI was introduced. Currently, 40 schools in China have adopted the textbook, becoming the first batch of AI education pilot schools.

Sun Chuang, a teacher from the STEAM (science, technology, engineering, arts and mathematics) teaching and research group at the Beijing National Day School, said: "Education is a systematic project, and so is the process of cultivating talents. Therefore, it is necessary to include AI education courses into primary education."

Industry experts said that with the rapid development of AI, uncertainties about the future have aroused parents' anxiety. Parents make their kids learn various courses at a very young age, so that kids can be fully equipped to cope with a constantly changing future. Therefore, the current AI education tends to be focused at the lower ages.

With the government's favorable policies and rising market demand, AI education has the most potential after Maths Olympiad education and English education, they said.

According to a recent report by 1hjqr.com, a research institution on the robot industry, China's STEAM education market in 2018 achieved revenue of 27 billion yuan, and the future market growth will be mainly driven by the increase in market penetration rate.

A 1-percent increase in the penetration rate will result in increased market space of nearly 15 billion yuan.

"There is a huge growth potential in China's STEAM education market, and the penetration rate in the sector is set to grow constantly. The government's favorable policies will promote the transition from examination-oriented education to quality education," said the report.

Enterprises are stepping up efforts to meet market demands. On Oct 16, United States-based high-tech company IBM launched a volunteer activity in Beijing, encouraging its employees to teach STEM courses in primary and secondary schools of China.

According to the company, during the current fall semester, IBM employees are giving STEM lectures to 50,000 students nationwide in cities such as Beijing, Shenyang, Guangzhou and Shenzhen in Guangdong province, Shanghai, Chengdu, Xi'an, Wuhan and Fuzhou.

"Based on the characteristics of Chinese students' education, scientists from IBM have developed a set of AI enlightenment courses, including AI introduction, design thinking, engineering, digital intelligence, and agile practices. Schools can select several courses according to their own teaching plans, as a supplement to school-based curriculum," said Chen Liming, president of IBM China.

"We are glad to walk into the schoolyard to think about future technologies with kids. We hope that they can have a correct understanding of AI at an early age, so that in the future, they can create a better life," he said.

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2019-11-22 07:52:16
<![CDATA[Canon eyes China for new growth prospects]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524834.htm Japanese camera and imaging equipment maker Canon Inc will increase its investment in China and accelerate localization efforts by strengthening cooperation with Chinese partners in the fields of big data, cloud computing and artificial intelligence, in a bid to unlock further business potential.

"China has become one of our most important markets around the world, and we always attach great importance to our development here," said Howard Ozawa, executive vice-president of Canon and the president and CEO of Canon China.

He said the Chinese market, which still shows huge growth potential, contributed the most in Canon's product sales among all the countries and regions in Asia. For instance, the sales of digital cameras in China topped the list worldwide in the January-June period this year.

"The whole Asian market, especially China, has become an important engine to drive Canon's cameras business growth globally," Ozawa said, adding he is confident of the company's prospects in China, and aspires to seize the opportunities provided by China's new round of high-level opening-up strategies.

He said that though the Chinese economy is slowing, the country is still a high-speed growth market in the world.

According to Ozawa, Canon plans to launch new companies in China, improve and strengthen its businesses spanning research and development, production, sales and services, as well as introduce more state-of-the-art imaging products, technologies and standards to various industries.

The company also foresees huge development opportunities in the medical equipment market under the guidance of the Healthy China 2030 Initiative, which aims to boost the market for healthcare services to 16 trillion yuan ($2.3 trillion) by 2030.

Industry data showed that the medical equipment sector in China earned a revenue of 530.4 billion yuan in 2018, up 19.86 percent from the level in 2017. In 2020, the market size is expected to reach 760 billion yuan.

In 2016, Canon agreed to buy Toshiba Corp's medical equipment unit for nearly $6 billion to enter the high-margin medical devices sector.

"With the industry and consumption upgrading, domestic high-end manufacturing and high-tech service sectors have a fast-growing demand for overseas products, such as important equipment and key components, as well as high-end electronic products. These are precious opportunities for Canon to further expand its presence in China," he said.

Ozawa pointed out that China is at the forefront of developing cutting-edge technologies, which will give birth to new industrial applications and innovation. Technologies like 5G seem like a revolution in the data industry and will have deep integration with industrial facilities, medical equipment and transportation, he said.

Liang Zhenpeng, a consumer electronics analyst said it is an inevitable trend that the camera market is shrinking and traditional camera makers have to seek new growth points, expand product chains and move toward diversified portfolios.

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2019-11-22 07:52:16
<![CDATA[Digital tech to boost healthcare industry]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524833.htm

Firms eye cutting-edge solutions to better serve patients and physicians

With every walk of life getting a digital makeover, China's healthcare sector is hastening the pace of technological advances in the hope of serving patients better and empowering physicians in remote parts of the country.

Guided by a so-called Omni-Protection concept, French vaccine maker Sanofi Pasteur unveiled last week 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 Shanghai, 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.

It also pledged to develop an intelligent clinic through a tie-up with an affiliated company to the Chinese Academy of Sciences. This was done in the hope of streamlining the entire process and better managing the safety of vaccines. The key functions include online reservation, facial recognition, smart cold chain delivery, and an intelligent observation area.

"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.

Based on an agreement with the Shenzhen municipal government, the company even wants to turn Shenzhen into a hub to explore a new model for accelerating the launch of globally leading vaccines, improve the influenza vaccination rate, employ big data to establish a vaccination evaluation system, and delve more deeply into relevant research.

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 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.

Physicians also stand to benefit from the digitalization wave.

Siemens Healthineers, the healthcare unit of German conglomerate Siemens, showcased its latest 5G-powered ultrasound solutions during the second CIIE.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 heavily lacks physicians especially in entrance-level healthcare institutes, primary hospitals and rural healthcare institutes. In the meantime, the journey for ultrasound physicians to improve their skills is not easy," 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, in which it has fast CT scanning and an angiography system in one room.

Digitalization can assist the entire cycle of clinical trial, regulatory compliance, to the commercialization of drugs, said Tal Rosenberg, senior vice-president of IQVIA Global Technology Solutions, a US-based company serving the combined industries of health information technology and clinical research.

"Around 80 percent of clinical trials today are being delayed due to lack of patients. Digital transformation can help expand the reach of patients that are not in proximity, or arriving at the site," he said. "You can contact them, get data on a daily basis, and find even more patients."

The portfolio of life science companies has significantly evolved from primary care to specialty businesses. Therefore, a number of stakeholders other than the physicians needed to be engaged.

That's when holistic digital platforms kick in, as exemplified by IQVIA's latest product called OCE.It connects sales, marketing, medical and related functions in life science companies to transform commercial models.

The company also joined hands with Chinese healthcare marketing firm SocialMED to form a digital medical sales representative operating center in a bid to reach pharmacies, physicians, and patients in a much more efficient way with lower costs.

"Digital addresses the critical issue of how the industry uses data analytics to actually drive efficiencies and deploy resources in a smart way," said Yan Guowei, general manager of SocialMED.

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2019-11-22 07:52:16
<![CDATA[Nestle launches new high-end milk powder products for adults in China]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524832.htm The increasing demand for family nutrition and slower growth in the infant and baby milk formula market are part of the reasons behind the push by food and nutrition manufacturers to burnish the appeal of milk powder products for adult consumers in China.

Global food and nutrition giant Nestle recently rolled out high-end milk powder products for Chinese family consumers. The milk powder product, named Shu Chun, part of Nestle's Joyful Vitality series which targets family nutrition, is designed to improve digestion and the absorption of proteins for middle-and-high income families.

The milk powder products are made from milk collected directly from cows at dairies in the city of Shuangcheng in Heilongjiang province in Northeast China, Nestle said.

The marketing of milk powder for families has been on the rise despite the strong demand for liquid milk. Henry He, marketing director of the Dairy Business Unit of Nestle China, said the online market for family milk powder products has grown quickly.

Nielsen China statistics showed that online milk powder sales have reached 1.8 billion yuan ($256.2 million), while the level offline stood at 1.5 billion yuan in the past 12 months.

Nestle's dairy unit has developed three kinds of milk power for families. They include full cream, skim milk and Nido, which is an organic product, accounting for 25 to 30 percent of its overall dairy products.

The milk powder for adults is for middle-aged and senior consumers as well as maternity nutrition products.

Ausnutria in October added an adult milk powder business. In August, Yashili International launched its own line of milk powder for family consumers.

Compared with the milk formula sector for infants and babies, the adult category is still in its early stage in terms of market scale and profitability.

Data from Euromonitor International showed that the milk formula market which includes standard, follow-on, growing-up and special milk formula has reached 175.5 billion yuan in 2019 in the country and the market's size is forecast to reach 216.3 billion yuan by 2024.

Song Liang, an independent dairy analyst, said the domestic milk powder market for adults ranges in value from 6 to 8 billion yuan. Its market size has remained unchanged in recent years and gross profits are low, mainly as a result of a lack of consumption awareness among consumers.

"Our data shows that demand for adult milk powder has been growing consistently for the past three years but from a small base," said Jason Yu, general manager of Kantar Worldpanel. "Year-on-year growth was 12 percent up to Sept 2019, higher than the dairy sector average."

A lot of growth is expected in this category, particularly among elder families and consumers with specific nutrition demands such as pregnant women.

The senior population in China makes up about 17.9 percent of the total population in total and the ratio is expected to rise and reach a quarter of the population in six years.

 

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2019-11-22 07:52:16
<![CDATA[Innovation set to underpin China's future development]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524831.htm Global efforts are needed to tackle challenges of protectionism and unilateralism

China will focus on innovation-driven development and contribute to building an open, fair and balanced global growth model that will enable all countries to enjoy the benefits of globalization, Vice-President Wang Qishan said on Thursday.

Wang called for greater global collaboration to address problems of unbalanced and insufficient development and challenges posed by rising protectionism, unilateralism and populism.

The vice-president made the remarks during the opening ceremony of the New Economy Forum in Beijing co-organized by the China Center for International Economic Exchanges and Bloomberg.

 

Jin Liqun (center), president of the Asian Infrastructure Investment Bank, speaks at the New Economy Forum in Beijing on Thursday. Wang Zhuangfei / China Daily

"We should focus on development and stick to innovation-driven growth, coordinated actions, fairness and inclusiveness, to build an open, win-win cooperation model ... and to enable people from all over the world to enjoy the benefits of economic globalization," he said.

The vice-president also called for joint exploration for new ways and methods among countries to address problems such as "governance deficit" and called for efforts to build a more reasonable and fair global governance system with the United Nations at the core.

Wang's remarks were echoed by other participants at the forum who called for greater cooperation among countries to promote innovation and application of technological breakthroughs and better protection of intellectual property rights.

"Innovation is the primary driver of development. Countries should promote the application of innovative ideas amid rising uncertainties and risks facing the global economy," said former vice-premier Zeng Peiyan, who is now chairman of the China Center for International Economic Exchanges.

Xie Fuzhan, president of the Chinese Academy of Social Sciences, said that technology and innovation is crucial for China's goal of modernizing its economy and enhancing its competitiveness.

"For China to maintain healthy and stable development, the key is to keep deepening reforms, pushing further opening-up and encouraging innovation so that we can spark the enthusiasm of State-owned enterprises, private businesses and foreign companies and fully unleash the market potential," Xie said.

He said that the next phase of China's reform will focus on improving its economic system and governance as well as its top-level policy planning capacity.

Jin Liqun, president of the Asian Infrastructure Investment Bank, said at a panel discussion that China and the United States, the world's two largest economies, have a broad space to work together to improve the well-being of the rest of the world.

"We should look beyond the trade dispute," Jin said, calling for more international attention to jointly resolve problems faced by the world, such as climate change and development imbalance.

While China and the US are negotiating for a deal which hopefully could bring the ongoing trade frictions to an end, the growing rivalry and frictions in the technology sector between the two countries have also generated concerns among experts.

Zhang Yansheng, a senior researcher with the China Center for International Economic Exchanges said that the China-US friction in the technology sector and the US actions like putting Chinese technology firms onto its "entity lists" have seriously jeopardized global technology development.

"What China should do is to seek wider cooperation with scientists, professors, and businesses from the US, Europe, Japan and other parts of the world who are willing to see more global technological exchanges and cooperation," he said.

Zhang said that China should have enough historical patience, strategic willpower and rational thinking and join hands with international partners to bolster innovation.

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2019-11-22 07:51:49
<![CDATA[Nation's economy on stable growth track]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524830.htm

Despite short-term headwinds, China's economy is heading for long-term steady growth on the back of its highly competitive and vast domestic market as well as its growing capacity for technological innovation, officials and experts said.

"The potential of the Chinese market lies in competition", as the market not only features a vast size but also the vitality brought by intense competition, Ning Jizhe, vice-minister of the National Development and Reform Commission, said on Thursday.

He cited that the fourth national economic census, which was released on Wednesday, provided evidence of China's large group of market entities by global standards, as the total number of legal entities in the secondary and tertiary industries, and some small businesses had surpassed 100 million by the end of last year.

These market entities, no matter State-owned, privately owned or foreign-funded, all compete with each other intensely in the country, Ning said, adding that most Chinese SOEs have established modernized institutions amid domestic competition, making them capable of competing on the global arena.

He made the remarks at a panel discussion of the New Economy Forum, held in Beijing by the China Center for International Economic Exchanges and Bloomberg.

The growing consumption power of the Chinese people will be the key to China's transition toward high-quality growth, Ning added.

As China is undergoing the transition from old to new growth models and has recently encountered rising external uncertainties, downside pressure has grown over the course of this year.

Year-on-year expansion of the economy stood at 6.2 percent for the first three quarters, versus 6.3 percent in the first half of the year. Growth of industrial output, fixed-asset investment and retail sales in October all slowed from the previous month, official data showed.

For the Chinese economy to maintain healthy and steady growth, the key is to comprehensively deepen reforms, further high-level opening-up, and push ahead technological innovation, Xie Fuzhan, president of the Chinese Academy of Social Sciences, said.

Technological innovation is still a weak link in China's endeavors to achieve modernization, Xie said, calling on the nation to continue fostering innovation as an engine of economic transition and restructuring.

China's innovation ability has strengthened in recent years, whose rank in Global Innovation Index climbed to the world's 14th this year from 17th in 2018, according to the World Intellectual Property Organization.

Khaldoon Khalifa Al Mubarak, group chief executive officer of Mubadala Investment Company, said China is moving toward a technology-based economy and is on track to achieve steady growth in the long run despite short-term ups and downs.

China is a "fascinating" place for global investors, which has rich investment opportunities in tech-related sectors and has been more open to foreign investors in recent years, he said.

In terms of macro adjustments to combat short-term economic challenges, the world's second-largest economy still has room for monetary policy expansion, Zhou Xiaochuan, former governor of China's central bank, said at a separate panel of the forum on Thursday.

The country's interest rates are not as low as in many advanced economies, but it is still necessary to preserve the room of monetary easing, according to Zhou.

It requires cooperation with fiscal policy and structural reforms for monetary policy to be effective and successful in supporting growth and preventing crisis from happening, he said.

 

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2019-11-22 07:51:49
<![CDATA[Urbanization injecting new impetus for global trade and investment]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524829.htm Urbanization is leading innovation, unleashing productive social forces, and injecting new impetus to global trade and investment, said experts and business leaders at a panel discussion of the New Economy Forum in Beijing.

The forum, which opened on Thursday, is co-organized by the China Center for International Economic Exchanges (CCIEE) and Bloomberg.

Huang Qifan, former mayor of Chongqing and vice-chairman of CCIEE, said that China's urbanization rate has risen to 65 percent from 18.6 percent in the past 40 years, with the urban population increasing from 260 million to 800 million in the same period.

"China's urbanization is related to rural dwellers' flocking into cities, the innovation of real estate market, as well as infrastructure construction, which has been an important driving force for China's urban development in the past 40 years," Huang said.

Huang said the country's reform and opening-up has brought about changes to the rural labor force. "They swarmed into the cities, where property developers are building stores, residential and office buildings."

Huang called for the household registration system reform, which will help eliminate concerns about inequity in social security and provide the same benefits to both rural workers and urban residents.

Urbanization in China started to speed up since 1978, an important year in China's economic development. The country has been actively promoting a new people-centric path to urbanization, which has greatly improved the level and quality of urbanization, and provided great opportunities for China's urban development and international capital flows.

Yu Liang, chairman of real estate developer Vanke, said that China's metropolis could learn the experience from Tokyo, the capital of Japan, and make efforts to develop the public rail transport system and enhance the land utilization ratio, in an attempt to solve issues in the path to urbanization.

In addition, Yu said the housing problems directly affect the influx of talents, and thus have an impact on the economic development and the innovation of big cities.

Egyptian Tourism Minister Rania Al-Mashat said that energy-saving technologies are crucial for the sustainable development of popular tourist destinations like Cairo, the Egyptian capital city.

According to a report from consultancy firm KPMG, nearly two-thirds of the world's population will reside in cities by 2030. Urbanization is creating significant opportunities for social and economic development and more sustainable living, but is also exerting pressure on infrastructure and resources, particularly energy.

While most urban growth will occur in developing countries, ensuring growing cities are properly managed will also be a priority for governments in developed countries as they strive to maintain competitiveness in the face of growing global competition, the report said.

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2019-11-22 07:51:49
<![CDATA[Walmart to open 500 stores, depots in Chinese mainland over next 5 years]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524828.htm Global retail giant Walmart is planning to open more than 500 new stores and depots (smaller warehouses) in China during the next five to seven years and revamp 200 existing stores in three years, according to a top company official.

The US firm's expansion plan comes at a time when foreign retailers like France's Carrefour and Germany's Metro Group have exited the Chinese mainland amid an increasingly tough retail environment. Walmart, on the other hand is looking to add more smaller-sized stores, enhance integration of online and offline shopping experience, said James Ku, senior vice-president of China Realty at Walmart.

Ku said the company was confident about the Chinese market and will continue to enhance its investment.

The new stores will focus on smaller formats including hypermarkets in commercial properties, supermarkets serving community complexes as well as depot warehouses for online shoppers.

Walmart China operates more than 50 depot warehouses in China to enhance the shoppers' online-and-offline experience. It is also running eight community-based supermarkets in Guangdong province, which has been tested for about a year.

The smaller and community-based format - covering 30,000 to 40,000 residents within a radius of 500 meters - has shown bright results, according to Ku, a growth of 20 percent in terms of revenue and the number of visitors in the third quarter, if compared with that of the first quarter this year.

Li Haibo, manager of one of its community-based supermarket store in Shenzhen, said that the store has reduced its stock keeping unit numbers from 8,000 to 6,500 in the past year after reviewing the purchasing habits of consumers living nearby. The store has an online SKU of more than 5,000 products, accounting for about 35 percent of its sales.

The company is also eyeing to quickly expand its Sam's Club footprint by operating or building 45 clubs by 2022 and more in the future. Growth in fresh food and omni-shopping experiences has propelled a double-digit compounded annual growth rate for Sam's Club in China.

The company's plan also shows a much more ambitious expansion pace for the retailer, which has opened more than 400 retail units in more than 170 cities in China in the past 23 years.

Earlier this year, Walmart's said net sales grew 6.3 percent year-on-year in China during the third quarter along with a 3.7 percent surge in comparable sales, the best results for Walmart China in the last five years with Sam's Club the main contributor.

"Chinese consumers are shopping across seven different store types and we believe there are still opportunities for brick and mortar retailers," said Jason Yu, general manager of Kantar Worldpanel China. The key is how the retailers adjust to the changes in China and revise their store formats and accelerate digitalization.

Yu said small stores are still growing in China, and on the back of online to offline platforms such as JD Daojia, Walmart and Sam's Club can be closer to consumers and achieve cost efficiency. In China, if a retailer wants to grow its shopper base, it will have to open more stores to reach more consumers, he said.

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2019-11-22 07:51:49
<![CDATA[More firms setting up regional headquarters in Shanghai]]> http://www.chinadaily.com.cn/kindle/2019-11/22/content_37524827.htm Multinational companies have accelerated the pace with which they have set up their regional headquarters and research centers in response to the Shanghai government's resolution to further develop its economy.

The municipal government granted certificates on Wednesday to 35 multinational companies based in Shanghai to acknowledge the establishment of their regional headquarters and research centers in the city. It is the 31st time that the government has granted such recognition since 2002.

Among the 35 companies, 24 specialize in manufacturing, while the remaining 11 are modern service providers.

A total of 14 Fortune 500 companies and big names in the industry can be found among the newly released recognition list. They include Japanese trading company Itochu, the world's largest foreign exchange company Travelex, and beverage giant Coca-Cola.

In addition, four of the newly recognized companies have set up their Asia-Pacific headquarters in Shanghai. Of the 11 research and development centers receiving recognition on Wednesday, three are the global R&D centers of multinational companies.

So far, a total of 710 multinational companies have set up their regional headquarters in Shanghai while another 453 firms have built their R&D centers in the city, the Shanghai Municipal Commission of Commerce said.

Over the first 10 months of the year, a total of 12 companies have set up their R&D centers in Shanghai while another 40 have set up their regional headquarters in the city, of which 26 are headquarters for the Asia-Pacific region, according to the commission.

Travelex set up its regional Asia-Pacific headquarters in the China (Shanghai) Pilot Free Trade Zone in December last year.

The company's Asia-Pacific commercial director, Cameron Hume, said China's relaxed foreign exchange controls, increasing number of outbound Chinese travelers, and Shanghai's position as a global financial center are the major reasons to place the firm's regional headquarters in the city.

While Travelex provides foreign currency exchange services for outbound Chinese tourists and remittance services for overseas individuals living in China, the company sees its Chinese business accounting for 3 percent of its annual global turnover.

Hume expects the figure will rise to about 8 percent in the next few years.

Travelex's Shanghai headquarters for the Asia-Pacific is also in charge of the business in mature markets such as Japan, Singapore and Australia. Hume explained it is crucial to have a presence in China given its huge market size which is conducive to the development of more products.

Shanghai rolled out the first batch of favorable policies to attract the regional headquarters of multinational companies 17 years ago. In July this year, 30 new policy measures were introduced to further attract those multinational companies.

The Shanghai facility of German heating and sun roof solutions provider Webasto now works as the company's regional management headquarters and R&D center.

Zhang Lihua, deputy president of Webasto Roof Systems China Ltd, said the company's sales revenue in China has increased more than 500 times between 2001 and 2018.

While the production function of the Shanghai venue will be gradually moved to other neighboring cities, Webasto will continue its investment in China, especially in the R&D sector, to secure an annual turnover growth rate of about 5 to 10 percent, said Zhang.

At this time, the company is working together with its clients for the development of luminous glass, the first time that China will lead in the development of a product, he added.

"Shanghai working as a hub for both management and technology talents is one of the major reasons for settling down the regional headquarters here," he said.

Italian marine and certification service provider RINA S.p.A. set up its China subsidiary in Shanghai in 2009 and upgraded it into the firm's regional headquarters earlier this year. The Shanghai headquarters is RINA's largest overseas branch.

Andrea Turco, RINA's senior director for the Asia-Pacific region, said the global economic slowdown and the contraction in the growth of the shipping industry worldwide has not affected its business in China, as almost all the shipyards he has visited in the country are "fully occupied".

Despite the economic uncertainties, RINA will continue to invest in China given its huge market size and robust growth rate, he said.

US automotive components and parts supplier BorgWarner Inc has also decided to place its regional headquarters in Shanghai. Tan Yuesheng, the company's president in China, explained that Shanghai has a significant advantage in terms of industrial capacity, investment and trade. No more than 3 percent of the products made in its China facilities are for export.

"It is for the best that we develop and produce in China. With appropriate investment, effective management and quality products, companies are sure of registering sustained growth in the country," said Tan.

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2019-11-22 07:51:49
<![CDATA[Change more than cosmetic in Shenzhen]]> http://www.chinadaily.com.cn/kindle/2019-11/21/content_37524523.htm The past 15 years have brought significant changes to Huaqiang North Street in Shenzhen, where electronics vendors have changed their long-standing business model as the nation has grown to become the world's major consumer market.

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Retailers in shopping area famous for electronics shift to beauty products

The past 15 years have brought significant changes to Huaqiang North Street in Shenzhen, where electronics vendors have changed their long-standing business model as the nation has grown to become the world's major consumer market.

In a small shop on Huaqiang North Street - an area known locally and nationally as a shopping paradise for electronic products - a vendor is surrounded by packaging, but rather than the latest Apple smartphones or bizarre gadgets. It contains something quite different.

Huaqiang North, tucked away in one of the city's most popular commercial enclaves has emerged from a massive four-year face-lift offering cosmetics and skin care products.

Facial masks, creams, lotions and lipsticks have squeezed out handsets, tablets and laptops at five markets along Huaqiang North Street and the transformation is by no means complete.

The change under way in Shenzhen points to the opposite growth trends facing the two industries nationwide. Experts say Huaqiang North is on the right track in its new pursuit of prosperity, but its reputation for shanzhai - counterfeit consumer goods - has overshadowed its development.

Ming Tong Commercial City - a marketplace housing more than 4,000 shops - started the area's transformation.

Opened in 2005, the complex used to be China's largest trading center for communication devices in terms of scale. But, with the exponential advent of e-commerce and sluggish sales of digital devices, slumping profits forced many tenants to shut up shop.

The downturn spread to other shopping precincts along the street. According to a Shenzhen Evening News report, rents at SEG Electronics Market - one of the district's most popular markets - were reduced four times in 2016.

The dramatic fall forced Ming Tong Commercial City to make an abrupt turn in 2017 to focus on cosmetics following a thorough market investigation and survey.

From digital devices to cosmetics

The new approach was initially applied only to the first floor of the building, but it succeeded in attracting so many new tenants that almost the entire marketplace has now shifted to dealing in cosmetics.

Some vendors have set their sights on the most sought-after products, including affordable and brand names, while others concentrate on one segment, such as cotton pads, or products imported from a particular country such as Japan.

The beauty products have found their way to more than a dozen provincial-level regions across the China. Ming Tong says it aims to become the largest collection and distribution center for cosmetics in the country.

The market's delivery system and cross-border trading experience, accumulated from its decades of trading in electronic gadgets, have fueled the success of the transformation.

Several other prominent markets in Shenzhen, such as Manhar Digital Plaza and Yuanwang Digital Mall, have also entered the fray, with advertisements for cosmetics tenants adorning their buildings in place of banners for electronics shopping malls.

Shop rents at Ming Tong have gone up to about 600 yuan ($85) per square meter a month, while those at other markets that have jumped on the bandwagon still stand at about 400 to 500 yuan per square meter.

Former electronics vendors have changed their store names and products, determined not to miss the boat. "I could sell hundreds of boxes (of cosmetics products) every day now," said a vendor surnamed Zheng, who used to sell electronics components at Ming Tong complex, but switched to cosmetics last year.

She has an ace up her sleeve - low prices that are half of those charged by official stores on the mainland, online or offline. A facial mask from Japan, for instance, goes for about 140 yuan on Alibaba's Tmall, but it costs about 80 yuan at Ming Tong - almost the same as in Hong Kong.

"Our products are imported directly from our exclusive suppliers overseas," said Zheng. Her clients are mostly small retailers in third - and fourth-tier cities or online sellers.

Some former electronics sellers have adopted a more conservative approach. A vendor, Xu Zhi, said he could no longer survive focusing on just one sector, so he decided to take on cosmetics as well as electronic devices.

Some customers may question if a computer dealer is able to deal in cosmetics, but Xu said it isn't a problem. "I have my connections after eight years of trading in the market," he said.

His approach is simple. He began offering cosmetics items on his personal WeChat account in addition to digital products, and opened an online cosmetics retail store.

The business model is the same. The quoted prices are relatively transparent although they do fluctuate, and buyers need to pay an extra percentage according to the purchase volume. After receiving an order, his supplier at Ming Tong sends the products directly to his clients.

But, there's still a group of sellers who are sticking to the traditional business. Deng Lipeng, a computer shop owner at SEG Electronics Market, said that, as far as he knows, no shop there has switched to the cosmetics business yet.

But, he said people would trade in whatever they deem to be the most profitable. He tried his luck in cryptocurrency mining machines two years ago, but decided it wasn't for him.

Vendors on Huaqiang North Street are seen as being agile and sensitive to market trends. The cosmetics trade is booming in China, while the handset business has cooled.

According to data from market research firm Canalys, the Chinese mainland's smartphone market contracted by 3 percent in the third quarter of this year compared to a year ago.

In comparison, according to the latest figures from the National Development and Reform Commission, total retail sales of all cosmetics products in China reached 215 billion yuan in the first nine months of this year - up a whopping 12.8 percent from a year ago, the second-fastest speed of growth among all products in the country. At the same time, China imported $6.6 billion worth of cosmetics products - up almost 40 percent.

Huaqiang North Street has also attracted a cluster of comprehensive shopping malls to its fold during its spectacular shift, with their cosmetics departments posting an upsurge in business.

Authenticity vital to success

Yang Zhiliang, investment director of chain shopping mall Maoye Commercial Company, said the company's store on Huaqiang North Street is one of its largest in southern China, dealing in about 39 cosmetics brands, and the number is expected to reach 50 next year.

The store has registered a 50-percent growth in sales so far, said Yang, shrugging off competition fears from Ming Tong and other rising distribution centers across the street, explaining they are targeting different segments.

Zhang Yi, chief analyst at consultancy iiMedia Research, applauded the street's transformation. "It could be a new path for Huaqiang North, allowing it to take off again," he said.

With rising living standards in China and consumers of various age groups with a penchant for beauty, demand for cosmetics is reaching a crescendo, especially for foreign brands, he said.

Besides, e-commerce plays a crucial role in cosmetics sales nationwide, and Ming Tong is a key supplier for small - and middle-sized e-retailers. A survey showed that cosmetics items accounted for 45 percent of the entire consumption of goods purchased through cross-border e-commerce, while about three quarters of overall cosmetics retail was conducted online.

But Zhang warned that fake products have surfaced due to high-profit margins, and tough measures to curb smuggling have been taken by customs authorities.

He argued that a brick-and-mortar store can provide some degree of guarantee of product quality. This is also one of the reasons for the success of Huaqiang North Street's transformation.

Nevertheless, he warned that the key is whether managers on Huaqiang North Street could maintain the authenticity of their products in the market.

One media report claimed that although Ming Tong Commercial City has offered assurances that all its products are authentic and pledged to pay compensation 10 times the value of any counterfeit product sold, many stores there have failed to produce official authorization certificates.

As a supplier to many daigous - cross-border personal shoppers who buy products overseas and resell them in China - vendors at Ming Tong go out of their way to provide special delivery services by sending products directly to daigous' clients from Huaqiang North, but alter the consignor address to whatever is required in order to avoid association with the cradle of shanzhai products.

There are also seemingly authentic stores bearing names of well-known chains and it is difficult for customers to distinguish the real ones from the fakes, which is something electronics markets were notorious for in the past.

 

 

Employees of a cosmetics shop arrange commodities at Ming Tong Commercial City in Shenzhen's Huaqiang North Street commercial area. Liu Youzhi / For China Daily

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2019-11-21 07:38:03
<![CDATA[Covestro covers bases with its CSR efforts]]> http://www.chinadaily.com.cn/kindle/2019-11/21/content_37524522.htm German polymer and plastics manufacturer Covestro has vowed to fulfill more corporate responsibilities to serve major social challenges including the issue of China's aging population, by using its knowhow in new materials development.

Covestro partnered with sports flooring manufacturer Jiangmen Changhe Chemical Industry Group to repaint the floors of the laundry room and outdoor corridor at Shenjiang Nursing Home in Shanghai, free of charge, in October.

The two areas, covering nearly 300 square meters, are the most frequently used by elderly people in the house. The newly painted floors not only created a safer and healthier environment for those living there, but also made the 252-bed facility look better, said Gu Jieren, president of Shenjiang Nursing Home.

Covestro China has long been committed to creating corporate social responsibility projects in China to provide support to different groups of people. For instance, Covestro partnered with Zhelin School in Caojing township of Shanghai to teach students regular science lessons. It also provided support to Shanghai Qingcongquan Training Center for Children with Special Needs, a nonprofit organization for children with autism.

"This nursing home flooring project is not only another practical action of Covestro to actively implement corporate social responsibility in China, but also a concrete measure for us to take advantage of our material expertise to help improve the quality of life and give back to society," said Holly Lei, president of Covestro China.

The floor coatings used in the Shenjiang Nursing Home are the result of cooperation between Covestro and Changhe. Covestro's polyurethane coating technology, known as Pasquick, was used to produce the floor coatings, according to the company.

"As a fast-curing technology, Pasquick allowed us to finish construction quickly, minimizing inconvenience for the elderly. Pasquick-based coatings have little odor, good abrasion resistance and higher friction, which make it an ideal material to provide a safe environment for the elderly to live in," said Zhong Xiaobin, senior vice-president of business unit coatings, adhesives and specialties at Covestro Asia Pacific.

Zhong also revealed that Pasquick has already been used in many key projects in China, including in the parking lot of Beijing's brand-new Daxing International Airport, which opened in September.

The new floor coating is an outcome of Covestro's long-fostered "open innovation" concept, according to Lei. Under this concept, all of Covestro's external partners from academia, startups and industries are welcome to partner with the company to promote product research and development.

"The key feature of open innovation is all partners are involved to use their professional knowledge either in identifying new demand or serving the demand. It will help to save time and reduce waste of resources in research and development," Lei said.

In October, Covestro introduced the concept of an "open innovation hub" at its Asia-Pacific Innovation Center in Shanghai, aimed at accelerating the translation of innovative ideas into industrial breakthroughs and to inject new impetus into its growth in China.

"China is setting the pace for technologies in many areas that address future trends, and we see tremendous potential to engage with different innovation partners," Lei said. "With the hub concept we take a step forward in implementing our 'in China, for the world' innovation strategy."

Covestro partnered with Changhe to repaint the floors of the laundry room and outdoor corridor in Shenjiang Nursing Home in Shanghai in October. Photos provided to China Daily 

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2019-11-21 07:38:03
<![CDATA[Equities to get boost from reforms]]> http://www.chinadaily.com.cn/kindle/2019-11/21/content_37524521.htm The latest measures by policymakers to shore up economic growth and to push further reform and opening of the capital market will help boost investor sentiment and offer solid support to the A-share market, analysts said on Wednesday.

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Opportunities emerging for investors eyeing mid - to long-term returns

The latest measures by policymakers to shore up economic growth and to push further reform and opening of the capital market will help boost investor sentiment and offer solid support to the A-share market, analysts said on Wednesday.

The Chinese stock market has been suppressed by market concerns about slower economic growth and uncertainties surrounding China-US trade frictions.

But opportunities are emerging for investors who are eyeing mid-to long-term returns, analysts said, as policymakers have acted swiftly with targeted measures to stabilize growth and push for high-quality development, now a top priority of the central leadership.

The benchmark Shanghai Composite Index declined by 0.78 percent to close on Wednesday at 2911.05 points. On an intraday basis, the last time the index traded above 3000 points was on Nov 5.

The startup ChiNext index in Shenzhen also retreated by 0.54 percent after surging by 2.77 percent in the previous session.

"While some investors are still concerned about slower economic growth and external risks, buying opportunities are emerging for those who are planning for long-term equity allocation," Wang Jianhui, an analyst at Capital Securities, said in a research note.

The People's Bank of China, the central bank, has lowered interest rates and pledged to step up the counter-cyclical policy adjustment to boost economic growth. The one-year loan prime rate came in at 4.15 percent on Wednesday, down from 4.2 percent a month earlier. The above-five-year LPR stood at 4.8 percent, slightly under the 4.85 percent seen last month.

"The central bank has sent a clear signal about its intention to stabilize growth with monetary easing. This will help stabilize market expectations and boost investors' sentiment," analysts at Guoxin Securities wrote in a separate research note.

China's top securities regulator has also vowed to deepen capital market reform to improve the quality of the listed companies and give foreign investors bigger market access.

The regulator will also accelerate the launch of the pilot registration-based system for new share sales on the ChiNext board to encourage more technology companies to raise funds in the stock market.

Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, said that improving fundamentals institutions of the capital market is a crucial precondition and a key guarantee for its healthy development and achieving high-quality economic growth.

That would be in line with the goals laid out by the recently concluded fourth plenary session of the 19th Central Committee of the Communist Party of China.

Dong said that investor confidence is on the rise amid stepped-up efforts to push for high-quality growth and refine the fundamental market system. The market vitality unleashed by further opening of the capital market "should not be underestimated".

"The market just lacks a trigger (to start a sustainable recovery)," he said, adding that rising economic downside pressure this year has weighed on the A-share market but the pressure is likely to ease next year.

Looking ahead, ongoing market reforms including the expansion of the registration-based share sales system and strengthening supervision on information disclosure are expected to gather speed, which will in turn help boost the A-share market, he added.

 

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2019-11-21 07:38:03
<![CDATA[Closer Sino-German ties urged in digital sector]]> http://www.chinadaily.com.cn/kindle/2019-11/21/content_37524520.htm China and Germany have great cooperation potential in the forefront of digital technologies, as China has become one of the biggest players in digital innovation, an industry insider said.

"China now plays a critical role in the global digital landscape. The majority of future digital innovations in the coming years will come from China and Silicon Valley," said Arndt Groth, former president of the Bundesverband Digitale Wirtschaft, Germany's leading digital marketing association.

"Huge cooperation potential remains to be tapped between China and Germany in areas including 5G, artificial intelligence and mobile marketing," said Groth, who is also CEO of advertising company Smaato Inc.

China is at the forefront of 5G technology, Groth noted, adding it is definitely an area where the two countries can strength their partnership.

"One of the ways we will see 5G improving the quality of life across the globe will be in the form of smart cities. Upgrading to 5G will allow entire cities to handle data from millions of the internet of things devices," he said.

"By installing low-power sensors within IoT-driven devices, we will be able to lower electricity costs, reduce the light pollution in large urban areas, and have infrastructure that can last years without needing a replacement," he added.

Groth said he is also amazed by how major social media platforms like WeChat have been embedded with all their different Mini Programs, an area in which Western social media leaders are seeking to catch up.

"For instance, I am impressed by how an app like Didi is seamlessly integrated with WeChat and makes travel in China so easy," he said.

Another significant shift in the past year is that companies like Alibaba Group are building delivery centers in countries like Spain where they are now selling their products, showcasing the prowess of the country's e-commerce giants.

In addition to the big names, he added that many more Chinese brands have become known worldwide with their global presence.

"China has leaped into the next stage of the mobile world while a lot of transactions are done mostly on desktops among European economies," Groth said, adding that it is another area where the countries can deepen their cooperation.

He pointed out that China's mobile marketing is an innovation that has changed communications and how companies and advertisers are communicating with users.

Faced with global trade uncertainties, he said the Germany government has already come to a conclusion that 5G equipment from Chinese tech giant Huawei Technologies Co is safe to use and has no backdoors.

Despite the economic friction, Groth noted that Smaato will continue to beef up its presence in the country. Smaato is an eBay-like advertising and marketing platform with 90,000 mobile publishers and app developers worldwide.

"We are going to partner with a Chinese company, maybe a joint venture, to be better localized in the country," he said.

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2019-11-21 07:38:03
<![CDATA[Financial stability to rule economic goals]]> http://www.chinadaily.com.cn/kindle/2019-11/21/content_37524519.htm The creation of a modern, central banking system and ensuring financial stability will be the key objectives of China's macroeconomic goals, along with the ongoing efforts to further facilitate supply-side structural reforms, according to officials and economists.

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Building modern, central banking system and lower systemic risks to be key priorities

The creation of a modern, central banking system and ensuring financial stability will be the key objectives of China's macroeconomic goals, along with the ongoing efforts to further facilitate supply-side structural reforms, according to officials and economists.

The Fourth Plenary Session of the 19th Central Committee of the Communist Party of China (CPC), held late last month, emphasized the necessity of building a modern central banking system, improving the base money issuance mechanism, and enhancing the marketoriented interest rate system.

It also stressed the need to strengthen capital market fundamentals, improve the modern financial system to one that is highly adaptable, competitive and inclusive, and effectively prevent and resolve financial risks.

The People's Bank of China, the central bank, has already included the essence and spirit of the fourth plenary session in its key work tasks for 2020, according to a statement on the bank's website. The PBOC will focus on improving financial, macroeconomic management, as well as enhancing macro prudential regulations in next year's plan, it said.

Accelerating financial supplyside structural reform and continually deepening high-quality financial opening-up are among the major targets for next year, it said. During that process, systemic financial risks should also be prevented, the central bank said.

Economists expect the market-oriented interest rate reform to further deepen in the following months, featured by the new loan prime rate (LPR) mechanism that reflects the reported loan rates from 18 representative banks' best clients. As of September, about 46.8 percent of the new loans in the country are using the LPR as reference, the PBOC said.

On Wednesday, the central bank cut its one-year LPR to 4.15 percent from 4.20 percent in October. The five-year LPR was lowered by the same margin to 4.80 percent from 4.85 percent.

PBOC Vice-Governor Liu Guoqiang said the central bank will encourage banks to increase the use of the LPR. Banks should take prompt measures as required to improve their information systems and update contract texts relating to lending rate pricing, and start using the LPR as the major pricing reference for new loans.

"It is foreseeable that after the current round of LPR reforms, the monetary policy price adjustment mechanism may become a 'double lever, double pathway' system," Cheng Shi, chief economist, managing director and head of the research department of ICBC International, told China Daily.

The market-oriented interest rate reform would target the signal conflicts and marching toward a mature system in the future, said Cheng. "A continuous interest rate marketization process, accompanied with an accelerating improvement of interest rate corridor efficiency, would inhibit the liquidity stratification (between the large and small banks) fundamentally."

"Innovation of monetary policy tools and an expansion in the scale of institutions capable of issuing base money are necessary for improving the base money issuance mechanism," said Ming Ming, a senior analyst with CITIC Securities.

Ming said foreign exchange rate reforms will accelerate, with the yuan's opening price for each trading day to be determined by the market, with a broader trading band. Currently the onshore yuan is allowed to move up or down from its central parity rate, or the daily trading reference price, by 2 percent.

Financial stability could also be strengthened under the modern central banking system, said experts. But this would require quick responses from monetary authorities to strains within the financial system, deft approaches to systemic risks and having a more macro-prudential approach.

On Tuesday, Yi Gang, governor of the People's Bank of China, held a meeting with executives of financial institutions. A statement issued after the meeting said banks should enhance countercyclical adjustments to strengthen economic growth, especially through higher credit support.

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2019-11-21 07:37:40
<![CDATA[Increased effort urged to integrate 5G with more sectors]]> http://www.chinadaily.com.cn/kindle/2019-11/21/content_37524518.htm Telecom leaders are calling for more efforts to promote cross-sector cooperation and better integrate 5G into a wide range of industries, in order to fully tap into the potential of the new-generation superfast wireless technology.

The comments came as a new study predicted that China will have the most 5G connections of any nation by 2025, having the highest 5G penetration by that year.

Yang Zhiqiang, vice-president of China Mobile's research institute, said 5G is not a faster 4G, and it is not a simple technology or a system.

"It is a platform that can empower traditional industries to re-innovate themselves and give them new vitality to grow. As a result, cross-sector cooperation is vital to ensuring the success of 5G," Yang said.

According to him, cloud gaming, industrial internet and smart automobiles are some of the most promising commercial 5G cases. "Now, at least 16 national pilot zones for smart connected vehicles have appeared across China, signifying the mounting industrial enthusiasm toward it," Yang added.

China kicked off the commercialization of 5G services on Oct 31, with China Mobile and two of its smaller rivals rolling out their 5G data plans. In just 10 days since then, Beijing has accumulated more than 40,000 5G subscribers.

In October, China shipped 2.49 million 5G smartphones, marking a 400 percent surge compared with the previous month, according to a report by the China Academy of Information and Communications Technology.

On top of consumers' growing eagerness to embrace 5G, companies from healthcare, agriculture, transportation, energy and other sectors also have high expectations. In March, for instance, a patient with Parkinson's disease underwent China's, and possibly the world's, first 5G-based remote surgery on a human brain, with technological support from China Mobile and Huawei Technologies Co.

Yang Tao, vice-president of Huawei's China carrier business group, said in one to three years, 5G will bring concrete commercial value to the media, education, logistics and energy sectors.

But it will take three to five years to make smart manufacturing and smart healthcare viable business cases, Yang said.

A study from global telecom industry association GSMA forecast that China will have 600 million 5G connections by 2025, compared with 209 million in Europe, 188 million in the United States, 98 million in Japan, and 41 million in South Korea.

Frank Meng, chairman of Qualcomm China, said the US chip giant is pleased to join hands with industry partners to accelerate the 5G era in China.

The emergence of Chinese companies in the 5G era have drawn global attention and they will greatly accelerate and change the global landscape of 5G, Meng said.

China had contributed 34 percent of patents essential to 5G standards in the world by March, according to German patent data company IPlytics.

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2019-11-21 07:37:40
<![CDATA[Swarovski sparkles in China with innovative strategy]]> http://www.chinadaily.com.cn/kindle/2019-11/21/content_37524517.htm Swarovski, one of the world's leading fashion jewelry brands, is meeting Chinese consumers' evolving demands through sparkling innovation, while keeping its founding principles and passion for mastery, design and craftsmanship at its core.

"We are very proud to be a brand operating in China," said Robert Buchbauer, chairman of the executive board and CEO of the consumer goods business at Swarovski. "Even when there are dips in certain markets around the globe, China consistently performs strongly for us. In fact, at this point in time, it is our leading growth market."

The first of its kind to enter China in the 1970s, Swarovski has reported strong annual sales revenue growth over the past 30 years.

"We enjoy a nice single-digit growth in many markets like the United Kingdom, the Nordics, Australia, and other emerging markets," Buchbauer said. "However, the China market is the only one in the world that shows a double-digit growth at the moment."

Stable growth in the China market can be attributed to China's urbanization plans, online channel development, first mover advantages and professional local distributors, according to the company.

The brand, which was established in 1895, will further seize opportunities in China and will "bring a broader and more compelling offering" to local consumers, from millennials to those with more mature profiles, according to Buchbauer.

Omni-channel strategy

At a time when the generation gap is widening and marketing landscapes are becoming increasingly complex, Swarovski, which always takes a consumer-centric approach, has decided to place greater emphasis on omni-channel development in China.

In recent years, Swarovski has partnered with major Chinese online retailers like T-mall, JD and Xiaohongshu, and opened an official account on the communication platform WeChat. It also operates a large number of physical stores in big cities to give consumers the chance to experience the products in-person before they make the decision to purchase.

"Many companies talk about the omni-channel, but 'omni' means everywhere," Buchbauer said.

Swarovski's online sales in China is growing "at a very fast pace", according to the company.

"More than 20 percent of our revenue has come from online businesses in the China market this year," said Buchbauer. "It's one of the highest rates in the world." This exponential growth puts the development of digital channels at the center of Swarovski's future strategy in China.

Despite strong online sales, Swarovski believes that physical stores will still play an irreplaceable role in its retail strategy. The brand will continue to upgrade its bricks-and-mortar stores and create showrooms and experiences that center on Swarovski's collections.

"I think that the growth we have seen in the online market will lead to a change in the physical stores and the role they play, but I definitely don't see them disappearing," Buchbauer said. "They will need to co-exist, and synergize, which is why we have developed our new Crystal Studio store concept. The Crystal Studio elevates our retail strategy and redefines the consumer experience through a truly immersive environment."

Swarovski opened this new store concept, also known as the fourthgeneration stores, in Beijing on Nov 9, in response to the evolving demand of younger generations. Swarovski will open another such store in Shanghai on Nov 26. The Crystal Studio stores in Beijing and Shanghai represent the third and fourth to open in the world, according to the company, demonstrating the significance of the China market. The first Crystal Studio launched in Milan, Italy in September this year.

Designed to create an immersive shopping experience and to satisfy the new target consumers of Swarovski, encompassing millennials and generation Z, the architecturally focused stores are revolutionary in the services and experiences they provide, as well as their color schemes. For instance, there are spaces for consumers to take selfies on the devices provided, and send them to their friends. Finally, there are dedicated stylists to offer fashion tips, helping them to build a genuine connection with the consumers.

"I believe that the 360-degree omni-channel approach that we have implemented in these stores is the next step in retail strategy. Any brand which cannot achieve this next level will have difficulties in the long run," Buchbauer said.

Constant innovation

Apart from the store upgrades and online development, Swarovski will undertake more innovative marketing activities in China, which has always been a crucial part of the brand's global expansion plan. For example, more exclusive collections that incorporate Chinese cultural elements will be launched in the China market. They will help the brand to stay relevant and fulfill the demand of local consumers, according to Buchbauer.

"While we have done this before, we will be bringing an even broader and more compelling offering to Chinese consumers, with a focus on China-exclusive collections," he said. "We appreciate the heritage of Chinese culture and we want to embrace and interpret it in our products."

In 2020, when Swarovski will be celebrating its 125th anniversary, the brand will continue its mission to adapt to the ever-changing market, in order to retain relevancy. It will do this through the manufacturing process and the craft of polishing the crystals and stones, to create sparkles and positive emotional reactions from those who admire the brand, not just in China, but around the world - as it has done since it was founded.

"We've transformed loose stones into finished objects, collectables, home-decoration, jewelry, watches, pens and accessories. All in all, we offer a lot when it comes to product categories," Buchbauer said. "Swarovski represents the sparkling lifestyle and brings energy to consumers."

The company, which is present across five continents and has over 3,000 stores in 170 countries, will continue its mission to honor and preserve its traditions, paired with its passion for mastery, design, innovation and craftsmanship.

"It's a fact that for over 125 years we have managed to evolve and innovate, and it's crucial that we continue to do this, because our consumers are getting younger and younger as time passes by," Buchbauer concluded.

 

Swarovski opens a fourth-generation store concept, known as Crystal Studio, the first of its kind in Asia-Pacific, in Beijing on Nov 9.

 

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2019-11-21 07:37:40
<![CDATA[China helps Nigeria create power transmission network]]> http://www.chinadaily.com.cn/kindle/2019-11/21/content_37524516.htm A total of 60 engineers from Nigeria are learning power transmission techniques and equipment manufacturing in Northeast China's Liaoning province, to further Africa's indigenization efforts and promote bilateral cooperation with China.

"These engineers are seeds of the localization of electrical equipment production in Nigeria and even in Africa. Nigeria will be able to build, manufacture and maintain its own grid. We will help Africa build and upgrade electricity infrastructure in the next 10 to 20 years," said Ma Liming, chairman of the Liaoning Huaye Group.

Ma disclosed that Chinese and Nigerian engineers will cooperate to build a large power transmission equipment manufacturing industrial park in Nigeria. This will include three transformer plants and one high voltage testing laboratory.

Nigeria and other African countries have a strong desire for industrialization. In 1989, the United Nations General Assembly decided to designate Nov 20 as Africa Industrialization Day in order to mobilize international engagement.

Unfortunately, Africa's dream of industrialization has not been realized due to political, economic and even geographic reasons. Its proportion of manufacturing industry has declined from 3 percent in 1970 to less than 2 percent in 2014.

"The premise of economic development in Africa is to strengthen infrastructure construction represented by the power network because the lack of energy infrastructure will lead to frequent power outages and high electricity prices. This has seriously dragged down the development of the African economy," said Zhou Jinyan, an assistant researcher from the Institute of West Asia and Africa at the Chinese Academy of Social Sciences.

The 2018 Beijing Summit of the Forum on China-Africa Cooperation put forward eight initiatives and paid special attention to production capacity cooperation.

Nigeria's $300 million power transmission and transformation equipment manufacturing park is one in the package which aims to set up its own electrical equipment production base.

Huaye is a professional electrical equipment producer with a 25-year history and has done business in African countries including Mali and Ethiopia.

Nigerian presidential spokesperson Garba Shehu said the country has suffered from a long-term deficit in power supply, which is a major obstacle in the nations' goal of economic diversification, according to Xinhua News Agency.

More Nigerian technicians will come to China for training in the next four years and Huaye would also send its own experts to Africa for on-site training, according to Ma.

"We are not only going to help Nigeria get on the industrialization path. We will also escort them into the future. Nigerian engineers are learning the most advanced technologies and will work with us to achieve technology upgrade. We hope that Africa can build, manufacture and maintain its own grid," Ma explained.

Huaye was entrusted by Nigeria to organize experts from universities, industry associations and leading enterprises to formulate national electrical standards in Nigeria that are based on its own needs and finally "light up" the future of local and even African independent industrialization.

"China's greatest contribution to Africa is helping Africa transform to an investment hot spot. Africa will achieve the power of reshaping its status and dialogue with the outside world on an equal footing," said Zhou.

Zhang Hongchen contributed to this story.

 

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2019-11-21 07:37:40
<![CDATA[Pork prices to stabilize in long term on fresh supplies]]> http://www.chinadaily.com.cn/kindle/2019-11/20/content_37524239.htm The prices of pork, which accounts for more than 60 percent of China's meat consumption, are expected to remain high for some time due to the busy sales season during the New Year's day and the Spring Festival, but will remain stable in the long term with little room for further growth, an industry expert said.

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Rates set to taper down in China after year-end, festive demand, says expert

The prices of pork, which accounts for more than 60 percent of China's meat consumption, are expected to remain high for some time due to the busy sales season during the New Year's day and the Spring Festival, but will remain stable in the long term with little room for further growth, an industry expert said.

The average wholesale price of pork was 48 yuan ($6.9) per kilogram on Nov 15. That is down from 50 yuan per kg in the week earlier, but still higher by over 150 percent from a year ago, according to the Ministry of Agriculture.

An African swine fever outbreak has resulted in a shortage of more than 10 million metric tons of pork, or at least 20 percent of China's total pork output this year. It will take about six months for a recovery in the pig production capacity and breeding new pigs.

"The recent drop in pork prices is a result of several reasons. Some of the pigs that were fostered earlier are ready for slaughter, while more frozen pork products are exiting warehouses. Besides, farmers tend to sell when prices are falling and they stop keeping the stocks," said Zhu Zengyong, a pork analyst at the Chinese Academy of Agricultural Sciences.

"In the fourth quarter, poultry products are expected to witness a better growth rate, while beef and mutton output will grow steadily," he said.

More frozen pork will be put on the market as a leverage to stabilize pork prices. Higher pork imports are also expected to guarantee domestic supplies. In addition, more than 20 provinces and municipalities have introduced policies to ensure adequate pork supplies, such as offering subsidies and easier financing to pig farms.

"Before the end of the year, pig production capacity may stop dropping and begin to rebound, buoyed by government policies and market stimulus," Zhu said.

Traditional pig industry players are increasing their production by various measures, such as speeding up the construction of pig breeding projects and starting full-load production to increase pork supply and curb surging prices in China.

Guangdong-based Wens Foodstuff Group Co Ltd, China's largest pig breeder, is expanding its breeding scale, and aims to accelerate slaughtering, food processing and fresh meat sales to increase pork supply, it said.

In October, the company sold 894,300 pigs, up 0.71 percent month-on-month, but down 52.87 percent year-on-year. Wens said the sales decline was mainly attributed to an adjustment of seedling growing and sales in the first six months of the year. This month, producer is increasing the selection of breeding sows and the weight of pigs.

Last month, sales of pigs by Wens reached 3.86 billion yuan, expanding 36.36 percent month-on-month and 27.15 percent year-on-year. Its average sales price stood at 36.19 yuan per kilogram, adding 25.97 percent month-on-month and 153.79 percent year-on-year, the company said.

"The sales growth is mainly due to the tight domestic supply pigs and the increase of the average sales price of our own pigs. Facing the current situation, we have taken various measures to improve the local supply of pork and chicken," the company said.

Shares of Shenzhen-listed Wens fell by 0.06 percent to 36.6 yuan per share on Tuesday.

Henan-based Muyuan Foods Co Ltd, a major pig breeder, said in recent months, the company is accelerating the production of some idle sows in the early stage, and a large number of sows will be reserved for the expansion of production next year.

Besides, to increase supply, Muyuan has taken measures to increase the weight of commercial pigs in a reasonable range. Shares of Shenzhen-listed Muyuan edged up by 3.36 percent to 95.68 yuan per share on Tuesday.

A pork vendor at a market in Dalian, Liaoning province. Liu Debin / For China Daily 

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2019-11-20 07:33:05
<![CDATA[Ireland eyes uptick in beef exports]]> http://www.chinadaily.com.cn/kindle/2019-11/20/content_37524238.htm

Beef exports from Ireland to China are expected to reach 35,000 metric tons by 2020 after 14 Irish beef processors got the necessary approval from the Chinese government for product shipments last month, agribusiness officials from Ireland said on Tuesday.

With the current approval, the total number of Irish beef processors who have got export clearance for China stands at 21, said Tara McCarthy, CEO of the Irish Food Board, or Bord Bia, the promotional agency for food products of the Irish government.

All export categories including dairy, pork, beef and seafood delivered excellent results in China last year and are on target for further growth this year, she said.

"Our beef exports to China amounted to 163 million yuan ($23.2 million) between January and August this year and we are confident of seeing a similar positive trajectory in driving the market growth in China, alongside seafood, dairy and pork products," said McCarthy.

Following several years of high-level engagement, Irish beef got the green light from China in 2018, making Ireland the first major beef exporter from Europe to get the recognition.

With the expanded beef access, Bord Bia announced that it will launch a series of marketing initiatives aimed at raising awareness about Irish beef among businesses and consumers across China in 2020.

Ireland is a major food exporter in the world. Its food exports to China were valued at 5.78 billion yuan in 2018, up 6 percent year-on-year. The European country's food exports to China jumped by 17 percent year-on-year in value terms to 4.66 billion yuan in the first eight months of 2019, data from Ireland's Department of Agriculture, Food and the Marine show.

China is now among the top five largest markets for Irish food exports and accounts for more than 6 percent of the European country's food exports. The country mainly ships dairy, meat and seafood to China.

China is Ireland's second-largest export market for pork and its third-largest market for dairy products, after the United Kingdom. Its seafood exports to China, primarily shellfish, have also grown strongly in recent years, said James O'Donnell, Bord Bia's director for Asia.

Because of rising feed prices, limited grazing land and the breeding cycle, China's cattle-raising sector lags behind consumer demand, resulting in higher beef and lamb prices over the past decade, said Zhao Ping, director of the international trade research department at the China Council for the Promotion of International Trade.

"As China has found it impossible to grow all of the food it needs and has consequently formed closer ties with the world food market, demand for beef, mutton, pork, fruit, wine and dairy products will certainly provide many opportunities for major exporters of agricultural products such as Spain, Ireland, Chile, Brazil, Argentina, the United States and Australia," she said.

 

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2019-11-20 07:33:05
<![CDATA[Government seeks to expand non-tax revenue]]> http://www.chinadaily.com.cn/kindle/2019-11/20/content_37524237.htm

China's 2 trillion yuan ($281 billion) tax and fee cut plan continued to pull down government income in October, pushing officials to expand non-tax revenue and maintain stable fiscal spending to support economic growth, according to the Ministry of Finance.

The central and local governments' budgeted income rose 3.8 percent from a year earlier to 16.7 trillion yuan in the first 10 months of this year, slower than the 7.4 percent growth rate in the January-to-October period in 2018, the ministry reported on Tuesday.

By comparison, fiscal spending reached a total of 19.06 trillion yuan from January to October, up by 8.7 percent from a year earlier, and 1.1 percentage points higher than the growth rate in the same period in 2018, the official data indicated.

To offset economic slowdown risks and maintain stable spending, the central government has increased the budgeted deficit, and increased the usage of a special fund that was set up to stabilize the budget, according to a document from the Ministry of Finance.

Local governments, which collected 8.7 trillion yuan in the first 10 months, have taken measures to increase nontax income including selling some assets, the document said.

Several provincial-level governments, including Hubei and Jilin, have cut the budgeted fiscal expenditure, mainly because of the reduction of tax income, it showed.

Finance Minister Liu Kun said at a news conference in September that China will be able to achieve its annual fiscal budget goals this year, and the total tax and fee reduction may exceed 2 trillion yuan.

Experts said that the tax and fee cuts may continue in 2020, maintaining a measure to increase companies' profit and encourage their investment, but not as strong as 2 trillion yuan, given the financial difficulties the government is facing.

This year, the targeted deficit-to-GDP ratio was set at 2.6 percent. "It is not necessary to largely adjust the fiscal deficit ratio in 2020, and the benefits of the tax cut will gradually appear," said Tang Jiqiang, a professor at Southwestern University of Finance and Economics.

In October, China's tax income dropped around 4 percent year-on-year. It was the fifth consecutive month that recorded a negative rate compared with a year ago, the Ministry of Finance said. Among the different taxes, individual income tax declined the most, at a rate of 28.6 percent in October from a year earlier. The growth rate of the value-added tax was 3.2 percent, slower than 10.3 percent in October 2018.

However, China's fiscal position would remain significantly stronger than those of most developed economies, said Yu Yongding, a senior economist with the Chinese Academy of Social Sciences.

China has the space to implement a policy package to tackle the risks of a continued growth slowdown, especially on the fiscal front, while the side effects and limits of such a package should also be taken into account, said Yu.

To further spur the economy, China has eased the restrictions on infrastructure construction financing, allowing many fixed-asset investment projects to lower the capital ratio. The authorities also permitted local governments to use part of special-purpose bonds as project capital to support major national infrastructure projects.

 

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2019-11-20 07:33:05
<![CDATA[Maker's Shirt debuts its flagship store in China]]> http://www.chinadaily.com.cn/kindle/2019-11/20/content_37524236.htm Japanese apparel brand Maker's Shirt is hoping to capture a slice of China's fashion market, opening its Chinese flagship store in Shanghai on Nov 7.

The Shanghai opening marks the company's 26th anniversary and follows flagship stores in Tokyo and New York.

Maker's Shirt, sometimes branded as Kamakura Shirts, is known for its excellent quality and high degree of tailoring at an affordable price.

The name Kamakura Shirts stems from the historic Japanese city Kamakura located to the south of Tokyo, where the brand's founder Yoshio Sadasue and his wife Tamiko first opened a small shirt store in 1993, with the aim of offering high-quality products at affordable prices.

Maker's Shirt cuts out the multiple middle stages between production and retail, and sells products directly to customers at lower cost. The company uses high-quality fabrics, extensive sewing techniques and revised shirt patterns.

The Shanghai store is located downtown in the city's Jing'an Kerry Center and has a sales area of 133 square meters, which is even larger than its flagship store in Tokyo.

It also marks the first time Maker's Shirt has opened a workshop inside a store, offering on-site services of shortening trouser legs and modifying sleeve lengths. Such services are not available in its Japanese stores.

Customers can also order tailor-made shirts via its made to measure service.

"Maker's Shirt pays attention to every detail during the whole production process," said Sadasue. "We have won acclaim from Japanese customers with our precise craftsmanship and high quality. Now we would like to better serve Chinese customers as part of our internationalization strategy."

Maker's Shirt first tested the water in the Chinese market by opening a flagship store on Alibaba's Tmall in January.

The online store has performed impressively with average monthly sales of 1 million yuan ($142,560), which has increased the company's confidence in the Chinese market.

According to Sadasue, the bestselling products on the Tmall store are shirts with a yarn count of 200.

"E-commerce in China has developed at a very fast pace. We opened the offline store in the hope of linking up with our online stores, which is expected to achieve better sales in the future," he said.

According to Maker's Shirt, online sales during China's annual Singles Day shopping extravaganza on Nov 11 reached 1.8 million yuan.

Products at Maker's Shirt's online and offline stores are kept consistent with one another. The Shanghai store will update its product lines at the same time as the Japanese market, Sadasue said.

Entering the Chinese market has come after careful consideration, according to the company.

"As early as 15 years ago, we had a chance to enter the Chinese market, but at that time we thought that if we could not get a foothold in New York, we would not be able to successfully win the Chinese market," Sadasue said.

In 2012, Maker's Shirt opened its first store outside Japan in New York, and in the following years gained positive recognition.

Maker's Shirt's products have received excellent reviews on website Yelp, winning the People Love Us On Yelp award in 2017.

"China is ahead of the rest of the world economically. I hope it can also be in line with international standards in terms of style," Sadasue said. "We enter the Chinese market, hoping to spread the knowledge we have accumulated over the years."

Maker's Shirt has expanded at an average rate of one store per year, with 30 stores worldwide so far. The prices of its garments are about half to two-thirds the cost of products of similar quality on the market, according to the company.

Sadasue said the company aims to continue its slow and steady development across China and the rest of the world.

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2019-11-20 07:33:05
<![CDATA[Study: Nation to lead in super-fast connections by 2025]]> http://www.chinadaily.com.cn/kindle/2019-11/20/content_37524235.htm China will have the most 5G connections of any nation by 2025, while Europe will lag behind South Korea, the United States, Japan, and China in terms of 5G penetration by that year, according to a new study.

The London-based international mobile trade association GSMA forecasts that China will have 600 million 5G connections in five years' time, compared with 209 million in Europe, 188 million in the US, 98 million in Japan, and 41 million in South Korea.

These five economies will account for more than 70 percent of global 5G connections in 2025. In terms of unique subscribers, or individuals who might account for more than one connection, there will be around 450 million 5G users in China by 2025, the study said.

5G is the fifth generation of network technology. It is expected to bring unprecedented speeds to internet users, with some operations running 10 times faster than on 4G networks. 5G is also expected to unlock potential in a host of new services, including artificial intelligence, robotics, self-driving cars, and the internet of things.

GSMA noted that China's three major mobile operators - China Unicom, China Mobile, and China Telecom - are already moving ahead with 5G deployments. While most nations will roll out 5G by updating existing infrastructure, the study noted that China also plans on building part of its 5G networks from scratch.

"One of the major distinguishing factors between Chinese operators and those in the rest of the world is an intention to deploy brand new stand-alone 5G networks," said GSMA. "The high cost underlines China's seriousness about paying whatever it takes for the gold standard."

South Korea will lead the world in terms of 5G penetration by 2025, when 66 percent of the nation's total connections will be 5G, according to GSMA. This compares to 50 percent in the US, 49 percent in Japan, 36 percent in China, 30 percent in Europe, and a global average of 18 percent.

Out of the five economies leading on 5G, Europe will have the lowest penetration by 2025, as the region is moving more slowly in rolling out its 5G networks.

The GSMA says that the European Commission is "eager to spearhead the development of 5G", with the objective of regaining technological leadership ceded to the US and China over the last 10 years.

"However, business sentiment remains challenged by a combination of low growth, political uncertainty and stubbornly punitive regulation," the report said.

In the United Kingdom, mobile operators have warned that a mooted ban on network equipment from Chinese telecommunications company Huawei could lead to an 18 to 24-month delay to the widespread availability of 5G and cost the economy between 4.5 billion pounds ($5.8 billion) and 6.8 billion pounds.

The UK is under pressure from the US to boycott Huawei over alleged security concerns. Earlier this month, UK Digital Secretary Nicky Morgan said the government will delay its decision on Huawei restrictions until after the nation's general election on Dec 12.

 

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2019-11-20 07:33:05
<![CDATA[5G smartphone shipments quadruple as demand gains momentum]]> http://www.chinadaily.com.cn/kindle/2019-11/20/content_37524234.htm China's 5G smartphone shipments quadrupled in October as 5G handsets are expected to drive the whole electronics industry amid expectations of large-scale shipments in the country next year.

China has shipped 2.49 million 5G smartphones in October, having soared over 400 percent compared with the previous month. The total 5G smartphone shipments in the first 10 months hit 3.28 million units, according to a report by the China Academy of Information and Communications Technology.

The rise in 5G smartphone shipments took place against the slight drop of overall smartphone shipments in October, which saw a 6.7 percent year-on-year slide to 35.96 million. Altogether, the nation has shipped 323 million smartphones by October, a decline of 5.8 percent year-on-year.

Industry insiders said that strong demand of 5G smartphones will pull the shipments and the electronics sector to a new high and that the era of 5G handsets will soon take off in the country next year.

"China has already commenced rolling out the 5G networks and the massive market scale it brings for the entire industry will make 2020 the breakout year for 5G," said Peter Richardson, research director at Counterpoint Research.

A CITIC Securities report predicted that more than 100 million 5G smartphones will be shipped in China in 2020.

Guotai Junan Securities said that a large number of consumers will switch to 5G handsets next year.

The pace of 5G adoption is being accelerated with Chinese smartphone vendors and telecom carriers pushing hard to launch handsets and mobile services.

Lei Jun, the founder and CEO of Xiaomi Corp, disclosed on Tuesday that Xiaomi will launch its first dual-module 5G smartphone next month and at least 10 types of 5G handsets in 2020.

A total of 20 new 5G smartphones came into the market in the first 10 months this year, according to a report by the CAICT.

China Mobile, the nation's largest mobile carrier, said on Friday it aims to attract 70 million 5G subscribers and sell 100 million 5G smartphones next year.

With 5G services already available in 50 cities, the firm said it will invest 20 billion yuan ($2.8 billion) next year to build a robust ecosystem for 5G commercialization.

China is set to become the world's largest 5G market with 460 million 5G users by 2025, according to a forecast by the Global System for Mobile Communications Association, a global telecom association.

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2019-11-20 07:33:05
<![CDATA[Online retailers expand into lower-tier markets]]> http://www.chinadaily.com.cn/kindle/2019-11/19/content_37524047.htm Move marks next wave of consumption demand as shoppers in smaller cities seek high-quality and imported products

China's next big wave of consumption is likely to occur in the lower-tier cities, as consumers living there put more emphasis on high-quality and imported products, along with improvements in living standards and rising disposable incomes.

Major Chinese online retailers are accelerating efforts to expand their presence into the country's lower-tier markets to further unleash consumption potential, partly owing to the flattened growth of online shopping in first-and second-tier cities, said industry insiders.

Chinese e-commerce giant JD said its orders from third-tier cities and below surged 60 percent year-on-year during this year's Singles Day shopping spree from Nov 1 to Nov 11, and more than 70 percent of new users placing orders on JD came from lower-tier cities.

 

Employees of a logistics company sort packages in Weifang, a third-tier city in Shandong province. Zhang Chi / For China Daily

Xu Lei, chief executive officer of JD Retail, said the user growth rate from third-to sixth-tier cities is higher than that from first-and second-tier cities.

JD launched a social e-commerce platform named Jingxi in September, providing coupons and incentives on team purchases to target users. Shoppers can share an item with friends to gain major discounts, or simply join an ongoing group buying deal on the app. It also offers flash sale deals and goods at bargain prices.

Jingxi is an upgrade from its predecessor JD Pingou, which mostly targets Chinese female consumers and small-city shoppers with low-priced items.

From Oct 31, Jingxi users could access the service through WeChat, Tencent's popular social media platform. Nearly 60 million products were sold on the first day. Female consumers accounted for 62 percent, and the new users from third - to sixth-tier cities made up about 74 percent of the total new users.

In addition, quicker delivery and improved infrastructure have helped to improve the efficiency of transporting goods. JD Logistics, the logistics arm of JD, is beefing up its presence in lower-tier cities to offer fast and efficient delivery services.

"We will continue to open our logistics services to third-party clients and enter more fourth - to sixth-tier cities and townships, where orders can be delivered right to the customers' homes within 24 hours," said JD Logistics CEO Wang Zhenhui, while noting the improvement of logistics efficiency will give a big boost to the wholesale and retailing of its products.

Wang added along with the enhancement of logistics and infrastructure, the consumption in these lower-tier cities will rise further. Moreover, the cost of logistics is also dropping due to the company's fast expansion into these cities, especially the grouping of a large number of third-party orders, he added.

In April, JD spent 1.27 billion yuan ($181 million) to buy a 46 percent stake in Chinese home appliance retailer Five Star, which operates a chain of more than 220 brick-and-mortar stores in China, with its online stores focusing on second-to fourth-tier cities.

The company also announced in July that it will buy a 9 percent stake in Beijing Digital Telecom, better known as Dixintong, which operates more than 3,000 physical stores that sell phones, computers and other consumer electronics in China. This move will expand JD's offline presence across the nation, especially in lower-tier cities.

At present, JD has more than 12,000 JD home appliance stores, over 2,000 exclusive stores and more than 160 computer and digital products stores in smaller cities.

According to global data analytics company Nielsen, there are 953 million people living in third-tier cities and below, far surpassing the 427 million people in the first-and second-tier cities. It shows that smaller cities have huge untapped consumption potential.

The per capita disposable income for China's rural residents continued to grow at a faster pace than that of the country's city dwellers in the first three quarters of 2019, according to the National Bureau of Statistics.

The inflation-adjusted year-on-year growth of per capita disposable income in rural regions was 6.4 percent in the January-September period, compared with 5.4 percent for urban areas.

"With continuing urbanization, development of industry, and strong employment policies, consumers in smaller cities are becoming more affluent. At the same time, these lower-tier cities are growing in importance for retailers and manufacturers looking for China's next wave of growth," said Andy Zhao, president of Nielsen China.

Zhao added that they see strong consumer willingness to spend and high demand for quality of life products and services. This is both an opportunity and a challenge for retailers and manufacturers.

Online discounter Pinduoduo Inc has already gained a foothold in the lower-tier markets. It offers users deeper discounts on mostly generic products if they buy in groups, and encourages them to share purchases through messaging app WeChat.

E-commerce behemoth Alibaba Group Holding Ltd is banking on Juhuasuan, its group-buying and flash-sale online platform, in an attempt to grab more market share in lower-tier cities and towns across the country.

In September, Alibaba held a Super Bargain Day starting from Sept 1, offering as much as 50 percent discounts on more than 1 million products, coupons and incentives. More than 28 million orders were placed during the 10-day event, surging 500 percent compared with the same period last year.

Liu Bo, general manager of Juhuasuan, said it has seen massive growth in lower-tier cities, which is an engine of future growth.

"Some brands at Juhuasuan have witnessed sales growth from fourth - to sixth-tier cities that is three times higher than that from first-and second-tier cities since last year," said Chen Hao, general manager of Juhuasuan's brand operation department.

Furthermore, Juhuasuan announced new strategies to further increase traffic to the website. It aims to help foster as many as 100,000 brands, create 1 million sought-after items and nurture 10,000 digital platforms. It also plans to build new supply centers in lower-tier cities aimed at connecting farmers and manufacturers with online merchants.

In the quarter ended June 30, Alibaba reported that 70 percent of its new annual active users came from less developed areas across the nation.

Chinese commercial giant Suning.com Co Ltd has accelerated the expansion of its brick-and-mortar stores in lower-tier cities. It has opened more than 4,400 cloud stores across 31 provinces, municipalities and autonomous regions in the country.

Zhang Jindong, chairman of Suning, said the lower-tier cities and towns are a huge blue sea market, which has become a new track for various industries, and is ushering in the best period of entrepreneurship.

Suning has also established about 1,000 customer service centers, which provide the distribution, installation, cleaning, maintenance and recycling of home appliances in counties and towns. This figure is expected to reach 1,500 by the end of this year, covering more than 95 percent of counties and towns in China.

Chen Tao, a senior analyst from market consultancy Analysis, said people in smaller cities and towns are seeking high-end products, along with the rising e-commerce penetration rate in these lower-tier cities.

Cao Lei, director of the China E-Commerce Research Center, said e-commerce players are seeking new growth points from smaller cities and below this year, as online shopping in major cities is slowing down.

"Not only for social e-commerce platforms, but also for comprehensive online marketplaces like Taobao and JD, the third-to fifth-tier cities and rural areas have become a new source of new customers," Cao added.

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2019-11-19 07:28:30
<![CDATA[Small-town youth expected to become big e-commerce growth driver]]> http://www.chinadaily.com.cn/kindle/2019-11/19/content_37524046.htm As e-commerce development in China's first-and second-tier cities nears a plateau, young people in the nation's smaller cities and towns are shaping up to be the next impetus driving growth.

This is one of the findings in McKinsey's latest survey depicting the latest digital trends in China, where a large pool of younger consumers in China's lower-tier cities and townships are poised to be the next driver of growth.

"Living costs are lower in these cities, allowing them to enjoy a much more relaxed lifestyle than consumers in larger cities," said Wang Wei, a senior partner at McKinsey based in Hong Kong. "They have a lot of time on their hands as they spend a lot less time commuting to and from work than their counterparts in larger cities."

Small-town youth, which initially derived from an internet catchphrase, is loosely defined by the Central Committee of the Communist Youth League of China in a recent report as people aged 18 to 35 years old who live in prefecture-level cities, counties and towns.

 

Students receive packages at a logistics center in Zaozhuang University in Zaozhuang, a fourth-tier city in Shandong province. Liu Yinhong / For China Daily

According to the McKinsey report, online platforms have provided lower-tier cities accessibility to brands that lack presence in their area, especially premium and luxury brands that have yet to enter these regions.

"In some product categories, where access to physical stores is more limited, the online purchasing rate of small-town youth can be higher than consumers in higher tier cities," Wang said.

Data released by e-commerce platform Tmall following the June 18 discount gala showed a 50 percent increase in young shoppers aged below 25 purchasing luxury goods, with 70 percent of them living in smaller cities and towns.

While younger consumers in smaller cities are also price sensitive, contrary to conventionally-held perceptions, they tend to be less discount-driven.

"They value social engagement, which could come in the form of referral programs or endorsement by Key Opinion Leaders or Key Opinion Consumers and special edition products," said Wang.

For instance, 13 percent of those residing in major cities said they would favor new releases or limited editions, as opposed to 28 percent of small-town youth respondents, McKinsey's report found.

In addition, 28 percent of those from rural areas said social engagement such as referral by online influencers would affect their purchasing decisions, whereas only 12 percent of first-tier city dwellers said those factors count as levers of influence.

Due to the relative abundance of time, short-video apps such as Douyin and Kuaishou give the group a glimpse of the outside world. They also embrace social commerce, through which they can buy products, socialize with friends and learn about the latest fashion trends, said Jason Yu, general manager of consultancy Kantar Worldpanel China.

"The gap between young people in lower-tier cities and those in metropolises has narrowed greatly," Yu said. "Small-town youth now have broader horizons, are well-informed, and some have even started to lead less conventional lifestyles."

There were estimated to be about 112 million people identified as small-town youth in China last year, according to mobile internet industry consultancy iiMedia Research.

Xing Ziqiang, chief economist with investment bank Morgan Stanley China, said this age group will be a major driver of the consumption upgrade in the next decade, with consumption in third - and fourth-tier cities expected to reach 45 trillion yuan ($6.42 trillion) in 2030, compared with 15 trillion yuan in 2017.

"But serving these consumers requires understanding how they are different from their top-tier city counterparts, and then crafting offers that meet their needs," said Wang of McKinsey.

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2019-11-19 07:28:30
<![CDATA[Foreign investment outlook 'optimistic']]> http://www.chinadaily.com.cn/kindle/2019-11/19/content_37524045.htm FDI seen growing steadily, with more big-ticket projects in high-end sectors

China is "optimistic" about meeting the goal of stably attracting foreign investment in the mainland through the year, as the January-October figures were sound, the Ministry of Commerce said.

Zong Changqing, director-general at the ministry's department of foreign investment administration, said it is expected that FDI flowing to the Chinese mainland will remain stable for the whole year.

So far this year, FDI has been growing steadily, with more big-ticket projects in high-end sectors, Zong said at a news conference on Monday.

 

A German engineer adjusts equipment at the production line of a gear manufacturing plant in Taicang, Jiangsu province. Xinhua

The ministry's data showed FDI into the Chinese mainland amounted to 752.41 billion yuan ($107.28 billion) in the first 10 months, up 6.6 percent year-on-year.

A total of 33,407 new foreign-funded enterprises were established in the market between January and October, the data showed. In October alone, FDI climbed 7.4 percent year-on-year to 69.2 billion yuan, according to the data.

"This year, there have been more than 1,300 foreign-funded projects, with investment of more than $50 million. The number has increased by 5.4 percent, compared with the same period last year," Zong said. "In the meantime, the structure of FDI has been optimized."

In January, German chemical giant BASF signed a framework agreement with Guangdong provincial government to further clarify the planning details for its $10 billion Verbund chemical complex. The site would ultimately be the third-largest BASF site worldwide.

Also in January, Tesla Inc's Shanghai gigafactory, the largest foreign-invested manufacturing project in the city, broke ground. It has started trial production ahead of schedule.

China has rolled out a series of measures to stabilize foreign capital, such as renewing the negative lists, promoting the Foreign Investment Law and establishing new pilot free trade zones.

Early this month, the State Council issued a guideline on better using foreign investment, with a focus on safeguarding the national treatment of foreign-funded enterprises.

Ye Wei, deputy director-general of the department, said the commerce ministry has been working with relevant departments to work out supporting regulations for the Foreign Investment Law, which will come into force in January. The draft of the law is available online for public comment, and judicial interpretation is also being formulated, he said.

The ministry has also been training local offices in understanding the significance of the law, so as to provide a foundation for its implementation, he said.

In October, MAXAM, a provider of energetic materials and blasting solutions, opened its first plant in Shandong province. Jose Fernando Sanchez-Junco Mans, company chairman and CEO, said China's economy is now on its strategic transformation trajectory to sustainable and high-quality growth, which provides tremendous business opportunities for the company.

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2019-11-19 07:28:30
<![CDATA[Central bank cuts key liquidity rate for first time since 2015]]> http://www.chinadaily.com.cn/kindle/2019-11/19/content_37524044.htm The People's Bank of China, the central bank, lowered a key interbank interest rate on Monday, the first such easing in four years as policymakers signaled their intention to enact necessary steps to ensure sufficient liquidity and prop up growth.

The PBOC cut the seven-day reverse repurchase rate, a liquidity tool used as an open market operation, was reduced to 2.5 percent from 2.55 percent, the first such cut since October 2015. The central bank also injected 180 billion yuan ($25.74 billion) into the interbank market at the new rate.

Analysts said the move is more of a policy fine-tuning, aimed at strengthening the market's confidence on liquidity, instead of the aggressive stimulus or high-profile monetary easing.

The reverse repurchase rate was lowered two weeks after the PBOC cut the borrowing cost on its medium-term lending facility (MLF) loans - another monetary policy tool indicating the central bank's lending price to commercial banks, by the same margin. It also injected $29 billion of medium-term funds on Friday.

A series of monetary policy operations, especially through coordination of open market and MLF tools, will work together to ensure sufficient liquidity in the financial sector, sending a message that the PBOC is increasing countercyclical adjustments to spur economic growth, said Wen Bin, chief researcher at China Minsheng Bank.

A similar policy stance was evident in the PBOC's third-quarter monetary policy, which was released on Saturday. The report said monetary policy should properly handle the short-term pressure, although the scope for policy maneuvers is limited. The policy should also prevent the spread of inflation expectations.

Monday's cut of the reverse repurchase rate has cheered the bond market, indicated by a more than 0.4 percent increase of delivery of the bench mark 10-year treasury futures. However, allowing the interbank interest rate to influence the bank loan rates may be not that easy, said Zhang Xu, an analyst with the Everbright Securities.

"The separation between the interbank market and the bank loan market may reduce the efficiency of the transmission of the monetary policy," he said.

The PBOC plans to release the one-year loan prime rate (LPR) on Wednesday. The LPR is a newly established bench mark to better indicate the real lending cost to companies. Analysts expect a similar adjustment in LPR. The rate for the one-year fixing currently stands at 4.2 percent, while the five-year rate is 4.85 percent.

"The next reporting of LPR on Wednesday - the fourth time since the new interest rate mechanism was introduced, will be significant, which will show the transmission scheme between the MLF rate and the LPR rate," said Wen, who predicted that the one-year LPR will be lowered to 4.15 percent.

Beside the recent rate adjustments, the second phase of the scheduled targeted reserve requirement ratio (RRR) cut for some city commercial banks announced on Sept 6 became effective on Friday, injecting another 40 billion yuan of liquidity into the system, according to the PBOC.

Chinese monetary authorities face the dilemma of growth slowdown risks amid a rise in consumer inflation, but in order to stabilize growth, the policy markets are expected to do more to bolster growth, according to a research note from the Nomura Securities.

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2019-11-19 07:28:30
<![CDATA[Stock connects fueling capital flows via mainland, HK bourses]]> http://www.chinadaily.com.cn/kindle/2019-11/19/content_37524043.htm Bourses in Shanghai, Shenzhen and Hong Kong have been able to forge strong ties through the various stock connect programs, with higher capital inflows and renewed market vitality being the key takeaways, experts said.

The Shanghai-Hong Kong stock connect, the first such mechanism of its kind, celebrated its fifth anniversary on Sunday. The Shenzhen-Hong Kong stock connect program was opened in 2016. As of Nov 15, overseas investors held more than 882.8 billion yuan ($125.9 billion) worth of Chinese mainland shares via the stock connect program between Shanghai, Shenzhen and Hong Kong, according to Shanghai-based market tracker Wind Info. That number accounted for 1.45 percent of the total Chinese stock market value, up from the 0.16 percent registered five years ago.

Northbound investment, or the total trading volume made by overseas investors via the stock connect programs in the Chinese mainland market, topped over 8.47 trillion yuan by Nov 15, taking up 7.58 percent of the total market trading volume, according to Wind Info. That ratio was only 0.23 percent in 2014.

"The stock connect program has become an important channel for overseas capital inflows. Although there were some fluctuations in the trading volume over the past five years due to the ups and downs in the stock market, the trading volume has been increasing steadily, which is also in line with market expectations," said Yang Delong, chief economist with Shenzhen-based First Seafront Fund, a private equity general partner firm.

Ronald Wen, president of the Hong Kong-based Partners Capital International Ltd, said the stock connect programs have helped in the internationalization of A-share listed companies by further optimizing their market cap. It has also helped Chinese mainland investors acquire a more mature investment style, as value investment is becoming increasingly prevalent.

The Hong Kong bourse has also been boosted by the stock connect program. According to Hong Kong Exchanges and Clearing Market (HKEX), the operator of the Hong Kong bourse, southbound trading volume - investment made by Chinese mainland investors in the Hong Kong stock market - has been valued over HK$8.7 trillion ($1.1 trillion) cumulatively as of Oct 31. The Chinese mainland investors held about HK$999.5 billion worth of Hong Kong shares via the program, up from the HK$13.1 billion in 2014.

HKEX Chief Executive Charles Li Xiaojia said the stock connect programs between Shanghai, Shenzhen and Hong Kong have gained increasing favor among investors in all markets, as it has helped the markets to reach for maximum effectiveness with minimum systemic costs. Based on its success, the bond connect mechanism was launched in 2017, he said.

More importantly, the stock connect program has introduced to the world a new two-way opening-up model of the capital market. Not only can Chinese investors make diversified overseas asset allocations, international investors also get access to a trustworthy, highly efficient and convenient channel to tap the Chinese mainland market, said Li.

Hong Hao, head of research at the securities and asset management company Bocom International, said southbound investment accounts for 10 percent of the total trading volume at the Hong Kong stock market. However, price difference can still be noticed for companies which are listed in the Chinese mainland and the Hong Kong stock market at the same time. In this sense, there is still huge potential for the stock connect program, he said.

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2019-11-19 07:28:30
<![CDATA[PetroChina eyes major role in oil pricing]]> http://www.chinadaily.com.cn/kindle/2019-11/19/content_37524042.htm

Chinese oil and gas giant Petro-China's partnering with some of the world's biggest energy companies to launch a new crude oil futures exchange in the Middle East, is an important move for the company to better leverage the international crude oil trading mechanism to gain profits and hedge losses, analysts said.

Abu Dhabi's state oil producer, Abu Dhabi National Oil Co, or Adnoc, recently said it had teamed up with Intercontinental Exchange Inc, and nine energy-market behemoths, namely BP, Total, Inpex, Vitol, Shell, Petro-China, South Korea's GS Caltex, Japan's JXTG and Thailand's PTT, to launch a new futures exchange in the United Arab Emirates and set up the world's first Murban crude oil futures contract.

Murban crude oil is a flagship crude oil product from the region. It is also the first time that PetroChina is being part of an overseas crude oil futures exchange.

Analysts, including Han Xiaoping, chief researcher at industry and energy website china5e.com, said the listing of Murban futures contracts is a move by the oil producers and traders to rival well-established crude oil bench marks such as Brent and West Texas Intermediate.

Qu Xinrong, senior supervisor of the index research and development department, Shanghai Petroleum and Natural Gas Exchange, said PetroChina's decision to be part of the new bourse will help it gain more insights into the crude oil pricing mechanism, and thus avoid losses, apart from probably getting a share of the exchange's profits.

"Without an accurate understanding of the operating mechanism and the pricing logic of crude oil futures contracts, such as Brent and WTI, it is easy to lose in the market without knowing why, like what happened to China Aviation Oil (Singapore) Co Ltd," he said, referring to the company's loss of $550 million from oil derivatives trading in 2004.

He also said it would be some time before it can be gauged whether the Murban futures contract can rival other mainstream crude oil bench marks.

Yet PetroChina's share in the new exchange will have no direct influence over China's presence in international crude oil pricing mechanism, because if China wants to have a higher say in global crude oil prices, it is more important to build up capabilities of Chinese marketplaces to have a strong presence in the global market, rather than trying to influence global pricing, he said.

"The most important thing to do is to create an agreeable business environment supported by a vigorous financial market with quality service providers, so that international players will recognize and cannot operate without the future contracts market in China," he said.

China is increasingly gaining a greater presence in the global crude oil market in recent years, due to the internationalization of its currency, the launch of yuan-denominated oil futures, and easier access to the global crude oil market for domestic buyers, he said.

The Murban futures contract, to be hosted on the new exchange named ICE Futures Abu Dhabi, will allow global buyers to hedge risks and gain more value from the company's oil output, Adnoc CEO Sultan al-Jaber said during an energy forum, according to Reuters reports.

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2019-11-19 07:28:30
<![CDATA[Non-hospital prescription drug sales set to expand sharply]]> http://www.chinadaily.com.cn/kindle/2019-11/19/content_37524041.htm

China's market volume of prescription drug sales non-hospital is estimated to reach 250 billion yuan ($35.6 billion) by 2020 thanks to the country's medical reforms, industry experts said.

Wan Quan, deputy director of the research office of the Development Center for Medical Science and Technology at the National Health Commission, said non-hospital sales will become the next major outlet for the Chinese pharmaceutical retail market.

Since the government put forward a policy in nation to slash drug prices and broaden reforms in the healthcare sector, the price of the drugs chosen from the tender process has dropped sharply. With the advancement of drug consistency evaluation, there will be 200 to 300 types of drugs included in the national centralized procurement, market insiders said.

The policy is a national centralized procurement pilot program in late 2018 in four municipalities and seven local cities, or better known as "4+7".

As a result, drugs are no longer a profit center for hospitals, and all province-level localities are exploring a shift of prescription drug sales away from hospitals, the industry experts said.

Chu Shitao, executive deputy director of the primary care research institute at the China Medical Pharmaceutical Material Association, said that "currently, pharmacies are closely following the drugs that have passed the consistency evaluation, but did not win a bid in the national centralized procurement. These drugs must find new distribution channels, and the Direct to Patient (DTP) model, or other outside-of-hospital sales channel, is an inevitable choice.

"As long as the price is reasonable, pharmacies are well-positioned to grow their sales," he said.

Several years ago, the DTP model was not expected to undergo significant growth, as many hospitals tried to retain prescription drug sales within their own pharmacies.

The gradual reform of China's medical sector and the decision to separate medical services and drug sales meant non-hospital prescription drug sales in pharmacies became an inevitable trend.

In May 2017, the State Council released guidelines on comprehensive medical reform, clearly stating that medical institutions should not attempt to retain prescription drug sales.

They should explore the interconnection and real-time sharing between the prescription information of medical institutions, medical insurance settlement information and drug retail consumption information.

The policy gave the green light to the DTP business. Pharmacies such as JIANKE.com, LBX Pharmacy, and Yifeng Pharmacy, successfully stepped into the sector.

Jianke launched its first DTP pharmacy as early as in September 2016. It has now signed strategic partnerships with more than 1,000 domestic and international pharmaceutical enterprises. Currently, Jianke offers 680,000 stock keeping units, with 170,000 drug stock keeping units, including conventional drugs, newly approved drugs, specialty, and rare disease drugs.

"We have built a supply chain with direct access to pharmaceutical companies and wholesalers, which is vastly superior to the traditional multi-tiered supply chain. Pharmaceutical enterprises only need to supply drugs to our platform, where we can sell drugs directly to patients in accordance with their prescriptions. The online DTP model, or eDTP model offers drug availability to patients without geographic limitations, and at an affordable price," said Jianke CEO Xie Fangmin.

Physical drugstores are also aiming to grab their share in the boom. According to physical drugstore LBX Pharmacy, its sales of prescription medicine took up over 50 percent of its total sales, which was already a high ratio.

Data from market research firm IQVIA showed that at present, the growth rate of the sales of prescription medicine in retail pharmacies overtook that of hospitals and primary medical institutions.

In 2018, prescription medicine sold in retail stores surged by 6.9 percent year-on-year to more than 130 billion yuan, accounting for nearly half of the total retail drug sales.

As promising as the future is, many challenges remain for outside hospital prescription drug sales. Xie said new business models for retail pharmaceutical drugs must be developed.

As the previous hospital-based distribution system is gradually dismantled, establishing new outside hospital distribution channels for the logistics industry also takes time.

"Social medical insurance is another key issue. Currently, reimbursements for patients mostly occur at hospitals. As patients move to purchase drugs outside of hospital pharmacies, social medical insurance will be opened more broadly to other channels."

"Social medical insurance is increasingly seeking to impose cost controls on drugs, which is more easily accomplished in the public hospital setting. But as patients look for wider selection outside of hospital pharmacies, this goal may be more difficult to accomplish. The key is to balance the interests of all stakeholders to come up with comprehensive solutions," he said.

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2019-11-19 07:28:30
<![CDATA[A PROUD, PROFITABLE TAKEOFF]]> http://www.chinadaily.com.cn/kindle/2019-11/18/content_37523997.htm Over the next 20 years, joint venture partners Avicopter, the helicopter branch of State-owned aircraft giant Aviation Industry Corp of China, and Airbus Helicopters, the French aircraft-maker's subsidiary, expect to sell about 800 to 1,000 AC352 choppers worldwide, including 300 in China, with profits to be split equally.

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Chinese-made helicopters ride revolutionary tech, cost benefits, promise to transform global aviation industry

Over the next 20 years, joint venture partners Avicopter, the helicopter branch of State-owned aircraft giant Aviation Industry Corp of China, and Airbus Helicopters, the French aircraft-maker's subsidiary, expect to sell about 800 to 1,000 AC352 choppers worldwide, including 300 in China, with profits to be split equally.

Profits from sales of indigenously manufactured choppers are expected to be substantial - not just for the joint venture but other Chinese companies on the back of their new-age aircraft such as the Z-20, which are seen revolutionizing the global aviation industry spanning the civilian and military sectors.

Chinese-developed affordable, game-changing copter designs topped off by low operational and maintenance costs are already in the market, and newer models are in the pipeline. They are expected to confirm China's stature as a growing power in helicopter technologies, spawning a multibillion-dollar business with implications for defense, civil and general aviation, and innovation - electric helicopters are within the realm of possibility.

In the foreseeable future, Chinese-made copter models are tipped to figure in a wide range of activities: maritime search-and-rescue missions, disaster aid, medical air services, maritime patrols, offshore oil rigs' transport operations, tourism, business aviation, news coverage, freight, offshore industries' operations, and police aviation squadrons - again, not just in China but the world over, experts said.

In China, locally made military-grade choppers are expected to be used in special warfare and antisubmarine operations.

The latest and brightest harbinger of the shift in the global helicopter market dynamics appeared during the grand National Day parade in Beijing on Oct 1. To commemorate the 70th anniversary of the founding of the People's Republic of China, more than 80 helicopters developed and built by AVIC flew past the Tian'anmen Square.

Eye-catching achievement

The massive display of Chinese-made helicopters has been seen as evidence of the remarkable achievement made by the country's aviation industry over the past several years. The display's highlight was the public debut of the Z-20, China's first domestically developed medium-lift utility helicopter.

Ten days after the parade, several Z-20s from the People's Liberation Army Ground Force's aviation units were sent to the fifth China Helicopter Exposition in Tianjin and were shown on the ground and in the air, making them the biggest attraction at the expo.

The Z-20 is one of the best of its kind in the world, according to project insiders at AVIC.

Chen Guang, deputy manager of Avicopter, is the in-charge of the Z-20 project. He said in a recent interview with China Daily that the Z-20 is a twin-engine, multipurpose helicopter designed and built by Chinese researchers on their own. The aircraft, he said, is able to operate in all landforms, including plateaus, and can fly in difficult weather conditions.

Powered by two advanced Chinese turboshaft engines, the helicopter is mainly tasked with transportation missions and can be conveniently refitted to execute other types of operations, he said.

Chen noted that every part on the Z-20 was developed and made in China.

Li Linhua, chief technological specialist at the China Helicopter Research and Development Institute in Jingdezhen, Jiangxi province, said the Z-20 features a streamlined aerodynamic structure, and new anti-icing technologies.

"One of the helicopter's technological edges is its (cutting-edge) fly-by-wire flight control system," Li said. "The adoption of such technology substantially reduced the Z-20's overall weight and makes it easier for pilots to drive the helicopter."

Wang Xibao, chief engineer at AVIC's Harbin Aircraft Industry Group in Heilongjiang province that produces the Z-20, said the rotorcraft is capable of fitting in different environments, including the sea, so can also be deployed on ships.

Fang Bing, a retired researcher from PLA National Defense University, said the Z-20 will be one of the key elements in the PLA Ground Force's transformation effort because it is badly needed by the Ground Force to carry out high-mobility air and land operations.

"Air-enabled deployment of troops and weapons relies on utility helicopters such as the Z-20. Besides conventional functions, they can be equipped with some weapons to conduct combat tasks," the researcher said. "In addition to the Ground Force, the Z-20 will be useful in the Air Force and Navy as it is suitable for many tasks like search and rescue, special warfare and anti-submarine operations. It will be deployed in the military on a large scale."

According to Cui Yiliang, editor-in-chief of naval equipment magazine Modern Ships, the Z-20 will strongly improve the combat capability of PLA Navy's surface fleets.

"It is capable of fulfilling a wide range of missions that other Chinese helicopters have difficulties executing, including anti-submarine and anti-ship combat, signal relay for ship-launched missile and special assault," Cui said.

Bullish forecast

In the civilian helicopter sphere, AVIC's products are gaining popularity in the market.

The latest in the company's civilian product portfolio - the AC352 medium-lift utility helicopter - is on the want list of many domestic clients, said Sun Qingmin, another deputy manager of Avicopter.

The company has received initial orders for more than 10 AC352s from domestic buyers such as CITIC Offshore Helicopter, a leading Chinese general aviation services provider, and expects to sell at least 300 in China over the next 20 years.

"Though the airworthiness certification process is still underway, we have been working hard to promote the helicopter in the market, especially to existing users of our products in the government such as the public security and transportation authorities," Sun said during a recent interview.

"We are optimistic about the AC352's market prospects in China because the Ministry of Public Security has plans to set up more than 300 police aviation squadrons across the country in the near future and will consequently need a lot of utility helicopters like our AC352."

He also said China has long coastlines and many offshore industries, and that can lead to solid demand for advanced long-range helicopters such as the AC352 to conduct a variety of operations, including transportation and maritime search and rescue.

"Many of our targeted clients told us that they urgently need the AC352 and that as soon as its airworthiness certification is done, they will place orders," Sun said.

Lu Weijian, the AC352's chief designer at Avicopter, said: "Potential users told me that they are attracted by the helicopter's good economy and low operational and maintenance costs. They said the helicopter will be useful in rescue missions, medical air services, maritime patrols and offshore oil rigs' transport operations."

The AC352, China's first 7-metric-ton-class helicopter, was co-developed by Avicopter and Airbus Helicopters in 2006. It made its first flight in December 2016 in Harbin, Heilongjiang province.

The European model, which Airbus Helicopters refers to as the H175, made its maiden flight in December 2009 in France and was certified in January 2014 by the European Aviation Safety Agency. Deliveries to buyers began in December 2014, according to Airbus Helicopters.

The helicopter has a maximum takeoff weight of 7.5 tons, a maximum carrying capacity of 3 tons and a cruising speed of 275 kilometers per hour. It can fly up to 850 km in a single operation, according to Avicopter.

It said the AC352 is one of the most comfortable and environmentally friendly medium-sized helicopters in the world, adding that, in addition to two pilots, it can transport up to 16 passengers.

Heavyweight cooperation

China and Russia are working together on the research and development of a new type of heavy-lift helicopter, a major joint endeavor between the two countries in the aviation sphere.

Bilateral talks are close to completion with terms waiting for review and approval by governments, according to sources close to this program.

Sources said the aircraft's design work and assembly will be in China while the production of some key parts will be in Russia.

The aircraft will become the first helicopter jointly designed and built by China and Russia, and will be competitive in the international market, said Huang Chuanyue, deputy chief engineer at Avicopter.

"Russia has rich experience in the field of large, heavy-duty helicopter while China has advantages in medium-and small-size civilian helicopters. There are bright prospects in the bilateral cooperation on the research and development of helicopters," Huang said recently.

According to specifications published by AVIC, the helicopter will have a maximum takeoff weight of 38.2 tons and a maximum cruising speed of 300 km/h. It will be capable of flying at altitudes up to 5,700 meters and have a range of 630 km.

It will be more powerful than all of the other helicopters in China in terms of carrying capacity - it will be capable of taking 10 tons of cargo, or more than 100 people inside the cabin, or carry 15 tons of freight via an external sling. By comparison, the AC313, the currently mightiest type, can carry 4 tons inside the cabin or lift 5 tons outside the body.

Wu Peixin, an aviation industry observer in Beijing, said heavy-lift helicopters can transport a large amount of cargo or heavyweight items in and out of poorly accessible areas in an efficient manner, so will bring great convenience to people living there.

He said that such helicopters are indispensible in emergency response or disaster aid operations in these regions.

AVIC estimates that China will need at least 200 heavy-lift helicopters within the coming three decades.

Innovation to fly high

Besides building traditional models, Chinese designers have started preliminary research of an electric helicopter and are working toward developing a technology demonstration prototype.

Deng Jinghui, chief designer at the China Helicopter Research and Development Institute, said that researchers and engineers have carried out ground-based technology demonstration of an electrically driven tail rotor. They are making preparations for the device to be used on a 2-ton helicopter for flight test, he said.

Engineers will remove the aircraft's original tail rotor, which is driven by the helicopter's engine through the transmission gear like such part does in all helicopters, and also get rid of related transmission instrument, and then install an electric tail rotor that generates the driving force by itself rather from the engine, according to the designer.

"Replacing a conventional tail rotor with an electrically driven one is our first step in exploring and verifying the technical feasibility of an electric helicopter," Deng said.

He said engineers plan to use about two years to test how the electric tail rotor will work on the helicopter and if everything goes well, they will replace the same helicopter's engine and the conventional main rotor with an electric generator, an electric motor and an electrically propelled main rotor for further tests.

Within the coming decade, Chinese aviation engineers will strive to build an all-electric helicopter and the keys to this goal are the high-power density motor and high-performance battery, which will take the place of engine and electric generator.

Wang Yanan, editor-in-chief of Aerospace Knowledge magazine, said that compared with a conventional helicopter, an electric model features multiple advantages such as simpler structure, better control, less pollution and reduced operational cost.

 

 

A visitor takes pictures of a Z-20, China's first domestically developed medium-lift utility helicopter that can be used for both military and civil purposes. It was on display at the fifth China Helicopter Exposition in Tianjin on Oct 10. Liu Yang / For China Daily

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2019-11-18 07:25:10
<![CDATA[Helping mainland firms expand in Africa]]> http://www.chinadaily.com.cn/kindle/2019-11/18/content_37523996.htm Chinese companies and financial institutions are making remarkable contributions to fostering sustainable and eco-friendly economic growth in the Middle East and Africa, said Standard Chartered executives.

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StanChart solutions strengthen BRI projects in the Middle East as well

Chinese companies and financial institutions are making remarkable contributions to fostering sustainable and eco-friendly economic growth in the Middle East and Africa, said Standard Chartered executives.

"We see an increasing level of awareness of sustainability and green development across the board in our region, and I would say that Chinese companies are playing a pivotal role in developing that," said Sarmad Lone, regional co-head of global banking in Africa and the Middle East at Standard Chartered, on the sidelines of a recent meeting with Chinese financial institutions and companies in Beijing.

As mandated lead arranger for the financing of a $4.3 billion, 950-megawatt hybrid concentrated solar power and photovoltaic power plant in Dubai, Standard Chartered joined hands with a consortium of seven other Chinese and regional lenders, such as Industrial and Commercial Bank of China Limited, the largest State-owned commercial lender by assets in China.

Participants in the project include ACWA Power, a Saudi Arabian developer and operator of power generation and water desalination plants, the EPC (engineering, procurement and construction) contractor Shanghai Electric Group Co Ltd, and the Spanish renewable energy company Abengoa.

They collaborated closely to create a high-quality project that meets environmental, social and sustainable development standards.

Supporting the Dubai Clean Energy Strategy that aims to provide 25 percent of Dubai's energy from clean energy sources by 2030 and 75 percent by 2050, the project will deliver clean energy to 320,000 residences and will reduce carbon emissions by 1.6 million metric tons a year.

Similarly, an independent water and power project in Bahrain has attracted a range of global investors and the Chinese contractor SEPCOIII Electric Power Construction Co Ltd.

Standard Chartered is the mandated lead arranger and documentation bank to a consortium to finance the project, which entails the development, financing, construction, operation and maintenance of a 1,500-MW power plant and a seawater reverse osmosis desalination plant with production capacity of 50 million imperial gallons per day.

The project is of great significance for promoting local economic growth and improving people's livelihoods.

In June, China's Silk Road Fund, a State-owned investment fund established to facilitate the Belt and Road Initiative, signed an agreement to purchase a 49-percent stake in ACWA Power Renewable Energy Holding Ltd. This renewable energy platform of ACWA Power has a massive pipeline of renewable energy projects across the region.

The BRI, together with China's rising middle-income group, joint ventures and new infrastructure projects, are expected to be key drivers of bilateral trade and investment between China and the United Arab Emirates, said Hamad Buamim, president and CEO of the Dubai Chamber of Commerce and Industry, in an interview with China Daily earlier this year.

Bilateral trade between the two countries is estimated to reach $70 billion by 2020, up from $45.92 billion in 2018.

Since the BRI started, Standard Chartered has increased its partnerships with Chinese banks and companies to drive the initiative.

"As a bank, we believe in responsible business. We focus on environmentally sustainable principles and ensure that our partners also do the same ... Our partnership is beyond just transactions. It also includes shared values and principles of banking," said Bola Adesola, senior vice-chairman for Africa at Standard Chartered.

With outlets in 47 BRI markets, the bank has operated in 26 of them for more than 100 years. It has set up China Desks providing 24/7 Mandarin language banking services in up to 20 BRI economies to support the business expansion of Chinese companies.

The BRI has created huge opportunities for countries in the Middle East and Africa. Most of the airports in Africa have been renovated - in some cases, built afresh or expanded - by Chinese companies.

"It used to take more than 2.5 hours to get from the airport to the city center of Kampala, the capital of Uganda, until China Communications Construction Company built an expressway from the airport to the city center, which has cut the commuting time down to 30 minutes," said Tejinder Singh, regional head of global subsidiaries in Africa at Standard Chartered.

In Kenya, it was difficult to travel from Nairobi to the coastal city of Mombasa. Therefore, a lot of the tourism was focused on overseas tourists coming into the country as opposed to domestic tourists. With the completion of a 457-km standard-gauge railway, of which the prime contractor was China Road and Bridge Corporation, one can now go from Nairobi to Mombasa in 4.5 hours.

Standard Chartered offered the project participants a range of solutions including issuance of performance guarantees, collection and payment solutions, and digital banking platforms.

"A lot of domestic Kenyans are now traveling to the coast, which has also provided a huge lift to the economy of that particular coastal region. Today, hotels are full and we are seeing a lot more infrastructure development taking place along the coast, thanks to the communication links and affordable travel having been enabled," Singh said.

Despite the risks of investing in emerging markets, such as the risks associated with policy, geopolitics and foreign exchange, Standard Chartered still encourages its clients to take a long-term view in the countries where they operate.

"What we do is, we partner with the clients end-to-end once they enter a market - from contract negotiations all the way to repatriation of investments. We help them identify and mitigate the risks, and clarify rules and policies that apply to the business for them," said Adesola.

"We found that Chinese companies do not just come in and go out. When they come into a country and are involved in a project, they are there for the long term. The longer they are in that type of situation, the more they benefit the community and uplift livelihoods in those countries."

 

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2019-11-18 07:25:10
<![CDATA[Yale's Chinese entrepreneurs build food biz as cultural symbol]]> http://www.chinadaily.com.cn/kindle/2019-11/18/content_37523995.htm NEW YORK - When Zhao Yong was pursuing his PhD at Yale University in the early 2010s, he was frustrated to learn that some local Chinese restaurants he frequented would no longer be there in the near future due to low profit margins and increasing labor costs.

"Most of them were run by families of the older generations of Chinese immigrants, and the owners had told me their children would not follow in their footsteps," said the environmental science major from northeastern China's Liaoning province.

Zhao craves the taste of home. So, he and six of his college-mates from China saw a big opportunity through this looming crisis, which was to establish a fast-casual chain that could represent the new generation of Chinese restaurants and redefine Chinese food in the United States.

In 2015, the first Junzi Kitchen was opened in New Haven, Connecticut, just across the Yale campus. The menu was mainly composed of chun bing, or flour wraps, and noodle bowls, with a variety of options for customizing by adding meats, vegetables and sauces.

Today, the chain has expanded to five restaurants, three of which are located in Manhattan, New York City.

"As Americans' knowledge and understanding of modern China keeps developing, here lies a huge market for a new generation of Chinese food to grow in America," Zhao, now CEO of Junzi, said in the chain's midtown Manhattan restaurant.

"The Chinese culinary culture is just way too profound for ordinary Americans to appreciate all the dishes," Zhao explained. "Although most of them love Chinese cuisines, they don't go to an ordinary Chinese restaurant everyday, especially for those who live in small cities and the countryside."

That's why Junzi keeps its flavors simple, which means accessible to as many Americans as possible, while staying authentic to Chinese taste buds. Similarly simplified is the way of cooking, as most ingredients are prepared beforehand and laid out for customers to create their favorite combinations, just like in a kitchen.

The interiors of Junzi's five locations also look different from their traditional peers. Designed by some of the co-founders who studied arts and architecture at Yale, they are all simple, clean, bright and chic, or just as Instagrammable as the food.

Zhao believed their strategy of running Junzi could be the trend for promoting Chinese food in the world. The chain is rated 4.5 out of 5 on Yelp, a major online review forum, much higher than other decades-old Chinese food chains.

Grebla has been working in the food industry for 30 years. Though most of the staff members of Junzi are non-Chinese, she said they haven't encountered any cultural shock with the managerial level.

"This is honestly the best company I've worked for as far as how they care about their people," she said. "It's just great to work for a company that has that much passion for what they do, and they want their team to have that passion too."

The Yale-educated entrepreneurs share an ambitious goal of making their brand the world's largest modern Chinese food chain with over 1,000 locations, and are quite confident about Junzi's prospects.

"I think we are not just running a restaurant brand, we are actually building a new cultural symbol of China through food. I think this could be quite meaningful," Zhao said.

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2019-11-18 07:25:10
<![CDATA[Fujian leads seafood trade with Indonesia]]> http://www.chinadaily.com.cn/kindle/2019-11/18/content_37523994.htm

FUZHOU - Lin Ming, 48, developed the habit of studying the map of Indonesia ever since he first set foot in the sprawling archipelago 20 years ago.

It is a treasure map for him. In a lush village in suburban Semarang, the capital and largest city of Indonesia's Central Java province, his company's freshwater prawn farm, which covers an area of 333 hectares, produces over 35,000 metric tons of prawns per year.

The farm is located in Terboyo industrial park, which also harbors the company's seafood processing plant that boasts cold storage of 5,000 tons and can process 200 tons of fish and prawns each day. About half of its products processed in Indonesia are shipped to China.

The company's footprint has expanded to Central Sulawesi where they run a giant tiger prawn farm and to North Sulawesi where they plant konjak, a perennial plant with an edible corm.

Lin and his friends started their seafood processing business in Fuzhou, capital of East China's Fujian province, in the 1990s. When they traveled to Indonesia to look for seafood suppliers, Lin smelt a business opportunity when local fishermen rushed to the Chinese for ice and refrigeration equipment.

They built a processing plant and cold storage warehouse in Semarang in 2002, and started a joint venture with local villagers to farm prawns.

"Local fish farming methods were very primitive, so we started with cementing the pond to prevent microbes from contaminating the water," said Lin, executive director of Chasun Corporation. "Then we introduced modern facilities such as automatic feeders, oxygen concentrators and water monitoring systems."

As the business grew in the country, Chasun reached an agreement with the local government to invest 1.76 billion yuan ($250 million) to expand its prawn farm and the processing plant.

"Aside from creating 800 jobs for locals, we have brought modern aquatic farming and processing techniques that will support the sustainable development of the local economy," Lin said.

Chasun is one of the many Chinese companies ramping up their presence in Indonesia as the two countries look to strengthen trade and economic ties.

As Southeast Asia's largest economy, Indonesia has strengthened ties with China. The two sides have been making continuous efforts to upgrade bilateral relations.

In April, the two countries signed important cooperative documents such as the guidelines on the construction of the regional comprehensive economic corridor in Indonesia.

Indonesia's policy packages to attract foreign investment have been applauded by Chinese companies, especially those from Fujian, home to millions of Indonesian Chinese. The coastal province established a sister province relationship with Central Java in 2003.

Indonesia is Fujian's important trading partner and largest source of imports in Southeast Asia. Statistics show that Fujian's trade with Indonesia amounted to 50.7 billion yuan in 2018, up 27.3 percent year-on-year.

The archipelago has received around $3.69 billion in investment from 82 Fujian enterprises, while its Fujian-bound investment has reached $540 million.

Several Chinese developers, including CSCEC Strait Construction and Development Co Ltd, are looking to expand their property businesses in Indonesia.

In 2015, CSCEC Strait tapped into the Indonesian market and thus far it has undertaken five projects.

As Chinese enterprises expand their overseas footprints, locals have benefited from more job opportunities and improved infrastructure.

CSCEC Strait has created 2,200 jobs for Indonesians with another 1,500 forecast in the near future, according to Lou Xianfeng, general manager of the company's Indonesian branch.

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2019-11-18 07:25:10
<![CDATA[Lessons for the world in China's war on poverty]]> http://www.chinadaily.com.cn/kindle/2019-11/18/content_37523993.htm When it was announced in October that Abhijit Banerjee, Esther Duflo, and Michael Kremer had won the 2019 Nobel Prize in economics for their experimental work in alleviating global poverty, I eagerly turned to reading their works, hoping to glean policy recommendations about steps governments should take.

However, I must say I have been disappointed so far in this search for implementable policy guidance. Although China has had the most success in reducing poverty, the institutions and government programs that made this possible have, in my view, not been properly considered by international poverty scholars.

China's investments in building infrastructure even in remote areas may appear uneconomic to outsiders, but it has been an essential way of providing opportunities to hundreds of millions of people.

China's State-run banking system is criticized for being inefficient, but it has given many millions the opportunity to save conveniently and safely. China's long-term emphasis on manufacturing gave young people the steady incomes they needed to invest in themselves. And, local government officials who are graded on economic growth and poverty reduction have a strong incentive to help people escape poverty.

China accounted for nearly 75 percent of the world's reduction in people living in extreme poverty from 1990 to 2010, according to 2014 research by the United Nations.

In those years, China's rate of extreme poverty tumbled from 60 percent to 12 percent. By 2018, only 1.7 percent of China's people were living in extreme poverty, and they are expected to be out by 2020. China's definition of poverty is higher than the World Bank's global standard.

The Nobel committee described Banerjee, Duflo and Kremer's work as "new approach to obtaining reliable answers about the best ways to fight poverty. In brief, it involves dividing these issues into smaller, more manageable questions - for example, the most effective interventions for improving educational outcomes or child health. They have shown that these smaller, more precise, questions are often best answered via carefully designed experiments among the people who are most affected".

Many of the issues dealt with in these studies could better the lives of the poor, but policies based on them are unlikely to be transformative. For example, in his book Small Changes, Big Results: Behavioral Economics at Work in Poor Countries, Michael Kremer describes a Mexican government program that increased the enrollment of girls in secondary schools by 14.8 percent by giving their families $20 per month in cash transfer.

Other studies look at how to encourage poor people to disinfect their drinking water using cheap chlorine tablets or to add micronutrients to their children's food. Much of the research focuses on ways to use psychology-based behavioral economics to "nudge" people to take steps to become healthier or more productive.

There is an ongoing debate in economics about the value of micro-studies designed to mimic the blind trials used in medicine. In social sciences, including economics, the results are often not reproducible in subsequent studies and also are vulnerable to slight changes in statistical assumptions.

The Chinese approach of trying out new policies in local areas may at first appear to be less scientific because it does not