1. Reuters: China confident of making 2014 trade target-commerce minister
China is fully confident of achieving its target of 7.5 percent growth in total trade this year, the commerce minister said on Friday, citing an improving global economic environment and strong fundamentals in emerging markets. The minister, Gao Hucheng, also told a media briefing on the sidelines of China's annual parliament session that China will take more measures to improve the environment for foreign investment. "We think the recovery in the global economy in 2014, especially the recovery in
developed economies as demand rebounds, will help China's exports," Gao said.
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2. NYT - DealBook: Bond market in China may see first local default
Chinese companies have been selling record amounts of bonds on the domestic market in recent years. But in a sign that market forces have not been at work, analysts have been quick to point out, none of them have ever had a default. That may be about to change. A small company in Shanghai has said it is unlikely to meet a Friday deadline for an annual interest payment, putting it at risk of becoming the first company to default in China’s domestic bond market, which could have broader ramifications. The Shanghai Chaori Solar Energy Science and Technology Company, which makes solar cells and panels, issued a stock exchange announcement on Tuesday saying that “due to various uncontrollable factors” the company was unlikely to be able to meet the payment of 89.8 million
renminbi, or $14.6 million, on a bond of one billion
renminbi that it sold to domestic investors in 2012.
Chaori said it had come up with only about 4 million
renminbi, meaning that unless it receives a bailout or generates fresh cash, it will default.
NYT Back to Top
3. FT: China suffers first corporate bond default
China experienced its first domestic bond default in recent history on Friday after a small Shanghai-based solar power company failed to pay out interest on a security it sold two years ago. Shanghai Chaori Solar said on Friday it had only managed to pay investors a tiny fraction of the Rmb89.8m ($14.6m) interest they are owed on their investment before a deadline of 3pm, when China’s domestic bond markets closed. “We were not able to deliver full interest payment by
today but we will still try in the future to make payments [to investors],” Liu Tielong, board secretary for
Chaori, told the Financial Times. He acknowledged that
Chaori was now officially in default.
FT Back to Top
4. WSJ: China's yuan bounces back
Currency Rebounds as Beijing Moves Toward Allowing Greater Trading Swings. China's yuan is set for its biggest weekly gain in 2½ years, rebounding from an unprecedented tumble since mid-February that has been steered by authorities in Beijing seeking to kick out speculators. The roller-coaster ride for the normally steady currency comes as China says
its wants bigger swings and to allow more market-oriented movements as the country moves forward with financial reforms. Premier Li Keqiang said Wednesday at the nation's annual legislative session that the 1% daily trading band would be expanded.
A 100 yuan banknote. Reuters
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5. NYT: Chinese governor signals crackdown on separatists
A government leader in the western region of
Xinjiang said Thursday that officials would “rigidly crack down” on separatist groups in the area and that “foreign forces” were behind the separatist activities. The remarks by Nur Bekri, governor of Xinjiang, signaled that the Communist Party would tighten security measures throughout the region in reaction to a knife attack that killed 29 people last weekend in a train station in the southwestern city of Kunming. The attack was carried out by a group of eight who also wounded more than 140 people, according to state news media reports. Xinhua, the state news agency, said evidence pointed to “terrorists from Xinjiang.”
NYT Back to Top
6. Economist: China’s restless West - The burden of empire
After a brutal attack in China, the Communist Party needs to change its policies towards minorities.
Economist Back to Top
7. NYT - Sinosphere: Censors hit delete on a party chief’s censorship remarks
The question runs through the minds of many Chinese
microblog users: What catches the eye of an online censor on any given day? It seems that comments on
microblogs about Internet censorship, even by senior Communist Party officials, can fall prey to the delete button. On Thursday, the
microblog account of Caijing, a respected news magazine, posted a statement that Zhang Chunxian, the party chief of Xinjiang, the troubled western region, had made to journalists in Beijing earlier that day. Mr. Zhang had been asked by reporters after a meeting of the National People’s Congress about the rising number of violent episodes in Xinjiang, often involving ethnic Uighurs, who are Turkic-speaking Muslims, and the majority ethnic Han. Mr. Zhang said that 90 percent of “violent terrorists” use a VPN, a virtual private network, to get around China’s Internet censorship system and watch videos that inspire them to carry out attacks. The censorship system, often called the Great Firewall, blocks a wide range of websites, including ones with political content deemed sensitive, but it can be circumvented.
NYT Back to Top
8. Reuters: China starts work on $50 billion Asia infrastructure bank
China has begun preparations to set up a multilateral bank to fund infrastructure projects in Asia, the finance ministry said on Friday, looking to tap into demand for infrastructure growth as regional economies develop. In a statement, the ministry said the planned Asian Infrastructure Investment Bank would have a capital of $50 billion, paid for by its members. It would have a mandate to fund infrastructure projects in the region, complementing the work of other such entities, like the Asian Development Bank. "The AIIB will mainly focus on infrastructure construction in Asia to promote regional connectivity and economic cooperation," the statement quoted Finance Minister Lou Jiwei as saying.
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9. Economist: China’s parliament - The smog of war
The prime minister opens parliament by declaring pollution the enemy.
Economist Back to Top
10. WSJ: China needs industry to enlist in 'war on pollution'
Measures to curb smog will raise manufacturing costs, may lead to shakeout.
WSJ Back to Top
11. Reuters: China voices 'deep concern' to North Korea over plane near-miss
China has expressed its "deep concern" to North Korea after a Chinese airplane crossed the path of a rocket launched by the isolated state, China's foreign ministry said on Friday. On Thursday, South Korea's defense ministry said a Chinese civilian plane had "passed as the ballistic missile (from North Korea) was in the course of descending". The plane was flying from Tokyo's Narita airport to the northeastern Chinese city of Shenyang on Tuesday, the ministry said. "On this issue, we have already contacted the North Korean side to convey our deep concern," Chinese Foreign Ministry spokesman Qin Gang told a daily news briefing.
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12. Reuters: U.S., China agree Ukraine's territorial integrity important: White House
China agrees with the United States that the sovereignty and territorial integrity of Ukraine must be respected in its dispute with Russia, the White House said in
statement on Wednesday after top-level contacts between the two countries. In comments posted on its website, China's Foreign Ministry said that State Councilor Yang Jiechi had urged all sides to exercise restraint and said the crisis must be resolved through political and diplomatic means. The legitimate rights and interests of all ethnic groups in Ukraine must be taken into account, added Yang, who spoke to President Barack Obama's national security adviser, Susan Rice.
Reuters Back to Top
13. SD: City’s free trade zone on target to produce nationwide innovations
Shanghai’s pilot free trade zone will have reached operational maturity by 2016, and three batches of innovative systems tested in the zone will be in use elsewhere in China, Shanghai’s Party Secretary Han Zheng said yesterday. The city has a three-year timetable to test all kinds of new systems and laws in the zone that could be applied across the nation, Han told reporters at a press conference for the world’s media on the sidelines of the annual session of National People’s Congress in Beijing. Han said the city government would be announcing an evaluation of the first six months of FTZ operations in October, when it will also produce the first batch of institutions and mechanisms for nationwide application. He said that “whether they can be applied elsewhere” was the main criteria for policies tested in the FTZ. Shanghai would be working in cooperation with Hong Kong on free trade zone matters, he said. The last round of cooperation between Hong Kong and the city concerned the World Expo in 2010.
The Shanghai delegation to the National People’s Congress take part in a discussion in the Great Hall of the People in Beijing yesterday. Shanghai Party chief Han Zheng (third left) said the city’s free trade zone will have reached maturity by 2016. — Xinhua
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14. SCMP: VAT may drive China’s mobile operators to cut costs, including smartphone subsidies
The value-added tax that Chinese telecom companies face later this year might force the mainland’s three wireless operators to cut their expenses, including subsidies promoting
smartphone usage, analysts say. China will use the VAT to replace the existing business tax in several service industries, including the telecom sector, Premier Li Keqiang reiterated this week. A trial of the VAT has been conducted since 2012 in certain sectors, including public transportation, in several mainland cities. Business tax is about 3 per cent of revenue, said Ricky
Lai, a Hong Kong-based analyst at Guotai Junan Securities. He said the VAT is expected to be at least 6 per cent of revenue, weighing on the earnings of telecom firms. The new tax system may reduce the annual net income of China Mobile, China Unicom (Hong Kong) and China Telecom by as much as 9 per cent, Lai said.
Last year, China Mobile alone spent 27 billion yuan on handset subsidies. Photo: Reuters
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15. SCMP: US accuses China of unfair subsidies on hi-tech steel exports
The United States has accused China of unfairly
subsidising exports of hi-tech steel, potentially escalating a spat over trade of the
speciality metal product. The US Department of Commerce estimated a subsidy rate of 49.15 per cent on imports of grain-oriented electrical steel from Baoshan Iron & Steel Co and other Chinese exporters. An official of the Baosteel Group, China's largest steel producer, said the product only accounts for a small part of their output. "While we
make quite a large amount, this product does not account for much of our sales," He Wenbo, general manager of the Shanghai state-owned steel maker, told the South China Morning Post on the sidelines of a panel discussion at the National People's Congress meeting. He said sales of the grain-oriented electrical steel accounted for 11 per cent of total sales.
Annual output of the
speciality steel would reach 300,000 tonnes. According to the website of Baosteel's rival, the Wuhan Iron and Steel Group produced 400,000 tonnes of the
speciality metal in 2012.
SCMP Back to Top
16. FT: IBM workers strike in China over terms of Lenovo takeover
More than 1,000 workers went on strike at an IBM factory in southern China to object to the terms of their transfer to Lenovo as part of its $2.3bn acquisition of the US technology group’s x86 server business. Chinese workers are challenging multibillion-dollar deals involving their
employers with increasing frequency, injecting an element of risk into large cross-border mergers and Last year, employees at a Cooper Tire factory in eastern Shandong province seized their plant, ejected managers and withheld financial information when the Ohio-based company agreed to be bought out by Apollo
Tyres of India. The industrial action helped wreck what would have been the largest Indian acquisition of a US company. One worker, who asked not to be identified, said that protests began on Monday and production remained suspended at the IBM manufacturing facility in Shenzhen, the industrial
centre bordering Hong Kong. The factory will be taken over by Lenovo as part of the Chinese company’s planned purchase of IBM’s low-end server business, announced in January. The worker added that the factory’s more than 1,000 employees were acting independently of the government-sanctioned All China Federation of Trade Unions. “The [official] union has never done anything to help protect our rights,” the worker said. “We don’t trust it or the [government]
labour bureau.” Independent unions are banned in China.
FT Back to Top
17. Reuters: Walt Disney, Shanghai Media Group to develop Disney-branded movies
Walt Disney Studios has signed an agreement with Shanghai Media Group Pictures to develop Disney-branded movies, the latest move by a U.S.
studio to grow its presence in China's entertainment business. U
.S
.-based writers will team up with local writers and filmmakers to develop stories and scripts that incorporate Chinese themes in Disney movies, the studio said in a statement. The studio said the multi-year partnership with Shanghai Media will expand training opportunities between Chinese and American writers and filmmakers. Tony To, the studio's executive vice president of production, will oversee the co-development program, which could allow for easier releases of English-language films in China. A 37-member Film Censorship Committee vets every movie in China for nudity, violence and politically sensitive scenes. Western films in addition must meet the committee's "amendment opinions" to be one of the 34 Hollywood films permitted in China each year. Last year, Disney's superhero film "Iron Man 3" debuted in China and included a top Chinese actress and footage shot in China, additions that helped the film ease past strict censors and often confusing rules for Western films.
Reuters Back to Top
18. LAT: China's Huayi Brothers to invest in Jeff Robinov's new film company
Beijing-based film production company Huayi Brothers Media Corp.
plans to invest up to $150 million in a new movie company from Jeff Robinov, the former president of Warner Bros. Pictures Group. The deal would be one of the highest profile partnerships between Chinese and Hollywood film entities.
Robinov departed Warner Bros.
in summer 2013 after leading Hollywood's biggest movie studio since 2007.
Huayi Brothers said in a statement that it would invest $120 million to $150 million in Robinov's Studio 8, and distribute the company's movies in China. An official agreement has not yet been signed. According to a source with knowledge of the matter, Robinov would like to raise a total of $250 million to $300 million in equity financing for Studio 8.
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19. Economist: Business in emerging markets - Emerge, splurge, purge
Western firms have piled into emerging markets in the past 20 years. Now comes the reckoning.
Economist Back to Top
