1. Bloomberg Businessweek: Reform and growth: China wants both, says Li Keqiang
China’s leaders seem to want it both ways: Keep growth high while pushing economic reforms. That’s the message delivered this morning by Premier Li Keqiang. This year’s gross domestic product target is “about 7.5 percent,” unchanged from last year, said Li, while delivering the work report (PDF
)—China’s State of the Union—at the opening of the National People’s Congress on Wednesday. “In 2014, we are still in a complex environment with both favorable and unfavorable factors. The world economic recovery still faces instability and uncertainties,” warned Li. “We are at a critical juncture where our path upward is particularly steep.”
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2. Reuters: China signals focus on reforms and leaner, cleaner growth
China sent its strongest signal yet that its days of chasing breakneck economic growth were over, promising to wage a "war" on pollution and reduce the pace of investment to a decade-low as it pursues more sustainable expansion. In a State of the Union style address to an annual parliament meeting that began on Wednesday, Premier Li Keqiang said China aimed to expand its economy by 7.5 percent this year, the highest among the world's major powers, although he stressed that growth would not get in the way of reforms. In carefully crafted language that suggested Beijing had thought hard about leaving the forecast unchanged from last year, Li said the world's second-largest economy will pursue reforms stretching from finance to the environment, even as it seeks to create jobs and wealth. After 30 years of red-hot double-digit growth that has lifted millions out of poverty but also polluted the country's air and water and saddled the nation with ominous debt levels, China wants to change tack and rebalance its economy. "Reform is the top priority for the government," Li told around 3,000 hand-picked delegates in his first parliamentary address in a cavernous meeting hall in central Beijing.
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3. WSJ: China stays flexible on growth target
With an aim to grow 2014 GDP by 'about 7.5%,' finance minister says '7.3% or 7.2% would count'.
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4. WSJ: At China's NPC, proposed changes include bank deposit insurance
Policies in Premier Li's annual report would inject more risk into the financial system.
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5. Bloomberg: China targets spur speculation of more credit loosening
China’s leaders spurred speculation they will allow the country’s $21 trillion debt mountain to inflate after refraining from cutting their annual economic-growth target. Analysts at Australia & New Zealand Banking Group Ltd.
and Nomura Holdings Inc.
said authorities will need to loosen monetary policy, after Premier Li Keqiang yesterday announced a goal of 7.5 percent growth, the same target as last year. Li said China will seek an “appropriate” increase in credit. Any easing would contrast with leaders’ efforts to rein in a $6 trillion shadow-banking industry and control the build-up of local-government debt that followed stimulus measures unleashed in 2008. Li is seeking to support growth amid three money-market rate surges in eight months and the threat of defaults of high-yield investment products and corporate bonds. “I had hoped that they would pay more attention to curbing the
risks but instead they focused on growth,” said Dariusz Kowalczyk, Hong Kong-based economist and strategist at Credit Agricole SA. “They will just have to pay the price of higher leverage and once they start to deal with this in earnest, the costs of solving the issue will be bigger.”
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6. Reuters: China railway to seek private investment for growth-report
The State-owned China Railway Corporation plans to seek private investment for a railway development fund that could be launched this year, the Shanghai Securities News reported on Thursday. The move comes as the Chinese government has vowed to deepen reforms of its state-owned enterprises and to open up protected industries such as finance, petroleum, power, telecom and railway, to private investors for the first time. Details of the investment fund are still being formulated and a framework may be established by the first half of this year, Peng Kaizhou, deputy general manager of the company was quoted as saying. Peng said the company was considering setting up a national rail development fund, with a fixed rate of return, or establishing an investment fund for specific projects.
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7. WSJ - China Real Time: China plans to help companies spend nearly $100 billion abroad
China wants its companies to spend more money abroad this year — $99.2 billion, to be exact. And Beijing is making vague promises that for many of them, striking foreign deals will be much, much easier. Government officials said Wednesday at the National People’s Congress, China’s parliament, that they will streamline the process for Chinese companies to enter the global stage by improving polices for outbound investment. They say they will increase outbound direct investment for non-financial firms to $99.2 billion in 2014, up 10% from a year earlier. To help this along, they promised to simplify foreign-exchange controls and use foreign-exchange reserves to support outbound investment. The problem: They don’t offer any details on how they will do that. Still, any move to relax restrictions could be a good one for mergers and acquisitions. “Exchange restrictions, both in terms of
actual availability of currency and associated approvals, have been just one of the many brakes on mainland companies making overseas acquisitions, said Keith Pogson, financial-services managing partner for Asia Pacific at Ernst & Young. “Chiseling away at these has got
be great news for M&A activity.”
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8. Reuters: China's Xi ramps up military spending in face of worried region
China announced its biggest rise in military spending in three years on Wednesday, a strong signal from President Xi Jinping that Beijing is not about to back away from its growing assertiveness in Asia, especially in disputed waters. The government said it would increase the defense budget by 12.2 percent this year to 808.23 billion yuan ($131.57 billion), as China seeks to develop more high-tech weapons and to beef up coastal and air defenses. The increase follows a nearly unbroken run of double-digit hikes in the Chinese defense budget, second only to the United States in size, for the past two decades. "This is worrying news for China's neighbors, particularly
for Japan," said Rory Medcalf, a regional security analyst at the independent Lowy Institute in Sydney
.Those who thought Xi might prefer to concentrate on domestic development over military expansion in a slowing economy had "underestimated the Chinese determination to shape its strategic environment", he added.
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9. Reuters: U.N. says China, US climate cooperation raises hopes for global deal
Closer cooperation between China and the United States, the top two greenhouse gas emitters, on combating global warming is boosting prospects for a U.N. deal meant to be agreed next year, the U.N.'s climate chief said on Wednesday. Christiana Figueres also said a "global transformation" of the economy was needed to fight climate change and that time was
short if nations were serious about the end-2015 deadline. Little progress has been made so far in negotiations since 2012. Last month, China and the United States said that they would work together to share information and policies to plan for the 2015 deal. Together they account for about 40 percent of world greenhouse gas emissions. "I am very hopeful about the U
.S
.-China conversation and confident that both will be leaders in the agreement," Figueres, head of the Bonn-based U.N. Climate Change Secretariat, told a news conference in London.
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10. Caixin: China to grow at 7.5 percent and focus on reforms, premier says
In giving his first work report to top legislature, Li Keqiang also says lid for inflation is 3.5 percent.
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11. Caixin: Consumption will be main driver of economy, Li says
Government will work to raise income levels, premier says, and pave way for 4G and e-shopping to develop.
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12. SCMP: Li Keqiang stresses reducing reliance on fixed-asset investment for growth
Premier says leadership aims to cut economy's reliance on investment in fixed assets such as factories, and lays out financial sector reforms.
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13. SCMP: It's war on smog! China pledges to battle pollution 'for the nation's future'
The central government yesterday declared a "war on pollution" and pledged greater reforms to move the world's second-largest economy towards a more balanced growth model this year. Premier Li Keqiang outlined the initiatives as part of the State Council's annual work report to the opening session of the National People's Congress, his first since taking office. Li told the national legislature that the country would fight pollution with the same determination it
mustered over the past three decades in battling poverty. "[Pollution is] nature's red-light warning against the model of inefficient and blind development," Li said. "Efforts to protect the environment matter to people's lives and the future of the Chinese nation."
Premier Li Keqiang
delivers State Council's annual work report at the Great Hall of the People in Beijing yesterday. Photo: Xinhua
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14. SD: Xi urges city to be bold in free trade zone
President Xi Jinping urged Shanghai to continue to play its role in spearheading the country’s reform and opening-up drive. Xi made the remarks during a panel discussion with a delegation from the city during the annual session of the National People’s Congress that opened in Beijing yesterday. He encouraged officials to take bold measures in the Shanghai free trade zone, launched last year as a test bed for deepening market-oriented reforms that could be applied across the nation. “Everything is difficult at the start,” Xi told the delegation.
President Xi Jinping, flanked by Shanghai Party chief Han Zheng (right) and Mayor Yang Xiong, joins a panel discussion with the Shanghai delegation to the National People’s Congress, China’s top legislative body, in the Great Hall of the People in Beijing yesterday. — Xinhua
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15. Reuters: U.S. businessman convicted in China economic espionage case
A California businessman was convicted on Wednesday of stealing DuPont (DD.N) trade secrets to help a state-owned Chinese company develop a white pigment used in a wide range of products. In a San Francisco federal court, a jury found Walter Liew guilty on over 20 criminal
counts including conspiracy to commit economic espionage and trade secret theft. It also convicted another defendant, former DuPont engineer Robert Maegerle, on multiple counts as well. U.S.
prosecutors contended Liew paid former DuPont employees like Maegerle to reveal trade secrets that would help the Chinese company, Pangang Group, develop a white pigment called chloride-route titanium dioxide, also known as TiO2. The pigment is used to make a variety of white-tinted products, including paper, paint and plastics. Liew was ordered into custody after the verdict. In a statement, his attorney Stuart Gasner said they were "very disappointed" in the result.
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16. LAT: 'Hobbit' beats 'Robocop' at Chinese box office
“Robocop” was unable to fend off Peter Jackson’s giant dragon last week at the Chinese box office as “The Hobbit: The Desolation of Smaug” took the top spot for the second week in a row. The second installment in the “Hobbit” series has now made more than $60.1 million on the mainland.
"The Amazing Spider-Man" and "The Dark Knight Rises" are advertised in Beijing. (Adrian Bradshaw / EPA / August 24, 2012)
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17. Wu Tianming dies at 74; Chinese director shook up state-run studio
Chinese director Wu Tianming was considered the inspiration for the so-called Fifth Generation of innovative filmmakers in China, including Zhang Yimou and Chen Kaige.
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18. WSJ: Chinese firm considers investing in new Hollywood production company
China could be taking a leap into the American movie business. In what would be one of the biggest deals by a Chinese company in Hollywood, former Warner Bros.
film chief Jeff Robinov is assembling a company at which he would oversee a slate of movies with funding from Huayi Brothers Media Corp. 300027.SZ +4.40% The Beijing-based media conglomerate is in talks to join with other financiers to put hundreds of millions of dollars into about five films a year produced by Mr.
Robinov, people with knowledge of the negotiations said. The movies most likely would be released by Sony Pictures Entertainment, they said. Mr.
Robinov is expected to raise several hundred million dollars more in debt for the venture, which would provide a substantial new source of content for the Sony Corp. 6758.TO +2.64% studio following a troubled year.
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19. FT: China’s Cofco takes on global trading houses
Two
years ago China’s state-owned
grains trader announced a $10bn war chest for foreign mergers and acquisitions. It has now shown the will to act. China National Cereals, Oil and Foodstuffs Corp last week charged into South American markets with a deal to buy a controlling stake in Nidera, a 94-year-old trading house. The company known as Cofco is now in talks with Hong Kong-based Noble Group, one of Asia’s leading commodities traders, to establish a joint venture in sugar,
soyabeans and wheat. The deals will put China’s top grains importer directly in competition with global agricultural trading houses such as Archer Daniels Midland, Bunge, Cargill, Louis Dreyfus Commodities – long known as the “ABCD” companies – and
commodities powerhouse Glencore Xstrata. “This is a big deal. It transforms them into a major player, and gives them a diversified footprint that they don’t have now,” says Philippe
de Lapérouse, managing director at consultancy HighQuest Partners and a former Bunge executive.
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