Must Read
Chinese News Sources
Notables
18. Bloomberg Businessweek: In China, FedEx and UPS wait for regulators to renew permits
19. Bloomberg: China on course to exceed 2015 shale target with fuling find
20. Bloomberg: Ackman says investigation finds Herbalife violates Chinese laws
21. Bloomberg: Poor nations need financing to cut carbon emissions, China says
22. MW - Craig Stephen: China’s credit reckoning draws closer
23. FP - Isaac Stone Fish: The black box of China’s military
24. FT - Luke Patey and Zhang Chun Oped: China, trade, aid and Africa
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Edited by Marc Ross
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Must Read
1. LAT: China may ease controls on interest rates within two years
China's central bank governor said Beijing also will allow wider use of the yuan, its tightly controlled currency, for trade and investment.
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2. WSJ: China will free interest rates, as it loosens state's reins
China's top central banker
put the country on course to free up interest rates on bank deposits within two years, an unprecedented move that would force the nation's lenders to compete for customers by offering the best terms. Officials have said they hope the shift, announced in a news conference Tuesday, will put money in the pockets of ordinary Chinese savers, make the banks evaluate risks more carefully, and direct lending to privately owned firms that complain of China's largest banks ignoring them. But the government move to invigorate its lumbering, state-owned banking system doesn't come without risks. Other countries have foundered in shifting their financial systems away from interest-rate restrictions, including the U.S. In the 1980s, for example, rules on the interest rates certain U.S.
lenders could pay were eased, which led to the sharp growth and then collapse of many savings-and-loan firms. China's gradual relaxing of rates is part of a broader liberalization of its economic policies, which has included giving the market a greater say in valuing the Chinese yuan and permitting more investment in China by foreigners. The market changes come even as little progress has been made on political reforms, with President Xi Jinping
instead consolidating power by, for instance, assuming duties traditionally entrusted to the country's premier.
WSJ Back to Top
3. Reuters: China central bank ready to cut bank reserves if growth falters - sources
China's central bank is prepared to take its strongest action since 2012 to loosen monetary policy if economic growth slows further, by cutting the amount of cash that banks must keep as reserves, sources involved in internal policy discussions say. A cut would be triggered if growth slips below 7.5 percent and towards 7.0 percent, they said, and would come on top of money market operations and currency intervention via state banks that traders say has already loosened monetary conditions. Apart from supporting a stumbling economy, the stronger
action of cutting bank reserves would provide a cushion against any shocks from financial reforms that the central bank is widely expected to push through this year, including a widening of the yuan's trading band to give the currency more room to rise or fall each day and allowing banks more room to set deposit rates. "The economy faces big downward pressure," said a senior economist with the State Information Centre, a top think-tank affiliated to the National Development and Reform Commission, the country's top economic planning agency.
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4. Reuters: China worries chill markets, copper slumps
A dizzying fall in copper to a near four-year low compounded increasing concern in China over its economic slowdown on Wednesday to send a wave of unease sweeping through world markets. World shares fell for
fourth day, but it was copper, often seen as a proxy for China's fortunes, that grabbed the headlines as Shanghai futures fell by their 5 percent daily limit again and benchmark prices of the metal slumped to their lowest since 2010. In Europe,
bourses from London to Lisbon
.FTEU3 tumbled in early deals and safe-haven German government bonds were in demand as the jitters compounded the geopolitical tug-of-war between Russia and Kiev and the West over Crimea. "Markets are watching what is happening in copper, with awe and trepidation," said Societe Generale head of currency strategy Kit Juckes. "It's partly ongoing concern about Chinese growth (or lack thereof) and nagging worries about the Ukraine. And partly it is just that the commodity bubble burst last year and not everyone noticed."
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5. Bloomberg: China export prowess wanes in U.S., Europe
The Made in China label is losing traction with its two biggest customers. After three decades of gains, China’s share of U.S.
imports has plateaued and in Europe it’s in decline.
The steepest losses are in the European Union, where China’s share of imports slumped to 16.5 percent in the first 11 months of last year, from a 2010 high of 18.5 percent, according to data compiled by Bloomberg News. In the U.S.
the needle has barely moved in the past five years, holding around 19 percent. China’s low-cost vantage has been blunted by rising wages and an appreciating currency, with cheaper nations including Vietnam and Bangladesh competing to sell products from T-shirts to shoes. With an unexpected drop in total exports in February
compounding the challenges, the trends underscore the need for President Xi Jinping’s government to foster competitiveness in
higher-technology items from semiconductor chips to medical-imaging equipment to airplanes.
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6. Reuters: China steps up hunt for corrupt officials overseas: state media
China will step up its hunt for corrupt officials who have fled abroad, confiscate illegal assets of overseas fugitives and stop suspect offenders leaving the country, as it intensifies the fight against graft, state media said on Wednesday, citing the country's top prosecutor. Cao Jianming, the head of the Supreme People's Procuratorate, said China will "work more closely with
judicial organs abroad to expand channels and measures to hunt those who have fled and to recover ill-gotten gains", the China Daily newspaper said. "Once evidence is sufficient, we'll initiate the confiscation procedure according to the law," Cao was quoted as saying.
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7. WSJ: China says military needs to defend national interests
President Xi Jinping says
military also must embrace country's economic reforms. President Xi Jinping called on China's armed forces to staunchly defend national interests, while warning military leaders that China would have to bear greater responsibility as its military might grows. In remarks delivered to the military delegates during an annual gathering of China's National People's Congress, Mr. Xi also said the military must embrace the wide-ranging reforms already under way across China's economy. The remarks by Mr. Xi
were reported by the official Xinhua news agency and appeared prominently on the front page of the Communist Party's People's Daily newspaper Wednesday. Mr. Xi echoed earlier calls that the military shouldn't shy away from defending China's interests. "We hope for peace, but at any time and under any circumstance, we cannot give up defending the nation's reasonable interests," Mr. Xi was quoted as saying. The latest remarks by Mr. Xi might renew fears in Japan and elsewhere in the region, where smaller countries have grown anxious over the rise of Beijing's military and strategic assertiveness. A territorial dispute between China and Japan over islands in the East China Sea has set parts of the region on edge and severely strained relations between Asia's two largest economies.
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8. WSJ - Andrew Browne: China expands into a world of peril
Beijing faces mounting vulnerabilities on the global stage.
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9. WSJ - Editorial: America's non-pivot to Asia
U.S.
friends and foes know that entitlement spending inevitably draws from
defense.
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10. NYT - Sinosphere: Outburst by prominent party official reverberates online
Online media were abuzz on Tuesday about remarks reportedly made by Wang Qishan, one of China’s highest-ranked political figures, in which he upbraided the Communist Party secretary of Jilin Province for the fault of “formalism.” The remarks, said to have been made at a closed-door discussion on Monday with officials from Jilin, in China’s northeast, offered a rare glimpse into the internal dynamics of elite party politics. Online accounts of the discussion, which was part of the annual meeting of the National People’s Congress, China’s rubber-stamp legislature, cited reports in the state-owned Chinese Business Journal and the Hong Kong-based Sing Tao Daily newspaper. The reports were soon republished by a host of other media outlets, including Ta Kung Pao, a Hong Kong-based, pro-Beijing newspaper, and Netease, a popular online Chinese news portal. According to these accounts, Mr. Wang, head of the party’s internal discipline commission and one of seven members of the party’s Politburo Standing Committee, had just delivered a speech to which the Jilin party secretary, Wang Rulin (no relation to Wang Qishan) was expected to respond.
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11. Bloomberg - Editorial: Waiting for China to speak out against Putin
The world's condemnation of Vladimir Putin's power grab in Ukraine is missing one important voice: China's. That's no surprise. Since assuming office, Chinese President Xi Jinping has put great emphasis on building up his relationship with Russian President Vladimir Putin. Both men fancy themselves strong, charismatic leaders bent on restoring their nations to greatness. But if China wants to be the world leader it claims to be, it cannot afford to sit on the sidelines this time. Xi spoke with U.S. President Barack Obama on Sunday night and, contrary to Russian claims of Chinese support, agreed on the "importance of upholding principles of sovereignty and territorial integrity, both in the context of Ukraine and also for the broader functioning of the international system." China ultimately shares the same goals in Ukraine as the rest of the world: to affirm the sanctity of international borders, avoid bloodshed and restore stability to global markets as quickly as possible. All would be accomplished much faster and more durably if China spoke out now against Putin's aggression.
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Chinese News Sources
12. Xinhua: China's top political advisory body concludes annual session, pledges help with reforms
Chinese top political advisor on Wednesday called on the Chinese People's Political Consultative Conference (CPPCC) to further its efforts to contribute to the deepening of the country's reforms in a comprehensive manner. In his address at the closing meeting of the Second Session of the 12th CPPCC National Committee, Yu Zhengsheng said that this year's session has been "a manifestation of the vitality of the socialist democracy." Yu, chairman of the CPPCC National Committee, noted that China has embarked on a comprehensive reform drive and the essence of reform is "innovation." The top political advisor called on the CPPCC to continue to coordinate relations, pool strength, make suggestions and proposals to the central leadership, and serve the overall interests of the country, in order to contribute to the deepening of the reforms. A political resolution approved at the closing meeting also noted that China had made remarkable achievements in its reform and opening-up drive and modernization process. It said China's reforms have now entered a critical stage and a "deep water zone," and called on political advisors to contribute to the deepening of reforms by conducting investigations and studies on key issues, enhancing democratic supervision, providing candid suggestions and pooling strength.
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13. Xinhua: Xi vows no compromise on national interests
Chinese President Xi Jinping on Tuesday urged the country's armed forces to courageously assume their responsibility in safeguarding national sovereignty and interests. "We expect peace, but we shall never give up efforts to maintain our legitimate rights, nor shall we compromise our core interests, no matter when or in what circumstances," Xi said while joining a plenary meeting of the People's Liberation Army delegation at the ongoing legislative session. Xi, also chairman of the Central Military Commission, called on the armed forces personnel to be firm in faith and
loyal in mission. To build a strong army, China should capitalize on strategic opportunities to deepen national defense and military reforms to resolve the institutional, structural and policy restrains, Xi said. "We should break our fixed mindset to foster a mode of thinking that is in line with our goal of building a strong army," Xi stressed, calling for the creation of a cozy environment for pressing ahead with reforms. Emphasizing the state's leading role in the process, Xi also called
for the function of the market to jointly create a highly effective development pattern that features army-civilian integration.
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14. CD: Private lenders will test the waters of financial reform
For the first time in almost two decades, the nation's banking sector is set to get an infusion of private capital with the foundation of five institutions to be formed by entrepreneurs. Regulators hope these new banks will provide more financing for cash-starved small companies and more competition for mammoth State-owned banks. Ten private enterprises will "test the waters" in Tianjin and Shanghai, plus the provinces of Zhejiang and Guangdong, said Shang Fulin, head of the China Banking Regulatory Commission, on Tuesday. The companies will establish five private-sector banks, Shang told a news conference on the sidelines of the 12th National People's Congress. Shang didn't release the names of the proposed
banks, but he said each bank will presumably be led by two participating companies. The licensed companies include Tencent Holdings Ltd and Alibaba Group Holding Ltd, both of which have aggressively rolled out wealth management products online, and two conglomerates - Fosun Group and Juneyao Group.
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15. Xinhua: China reaffirms stance on Crimea tensions
China on Tuesday reaffirmed its stance in favor of
political solution to the tensions in Crimea and called for regional peace and stability. "China has clearly stated its stance," said Foreign Ministry spokesman Qin Gang in reference to the referendum, set to be held on March 16, which will ask whether the people of Crimea would like to remain part of Ukraine or join Russia. The decision was made during a session of the parliament of Crimea on March 6. The lawmakers also voted to become part of Russia in the closed session. The mostly Russian-speaking Crimea is now the epicenter of the ongoing Ukraine crisis.
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16. SD: Honeywell sees surge in China revenue
Honeywell expects robust revenue growth — at double-digit pace — in China this year, thanks to surging demand for industrial and consumer products and related technologies in varied fields from Chinese-made jumbo jets, cars, home appliance to smart cities, the US conglomerate said yesterday. Honeywell will strengthen its consumer-oriented market in China, including opening more stores, increasing production capacity, recruiting research and development engineers and establishing an e-commerce website, covering products like air purifying machines and other intelligent family-use products, Stephen Shang, Honeywell China’s president and chief executive, said in Shanghai. “We have found plenty of business opportunities in China like smart cities, medical reform, high-end real estate and
environment improvement,” Shang said.
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17. CD: Lenovo makes guarantees to IBM strikers
As a labor strike at an IBM factory in Shenzhen continued for the ninth day, the computer giant Lenovo broke its silence on Tuesday with a statement that vowed to absorb all of the factory's ex-IBM employees. Lenovo, which purchased IBM's low-end server business in January for $2.3 billion, also promised the employees they would get nearly the same salaries and benefit packages they had before the acquisition. "We will take
in all employees from IBM's x86 server unit and be fair in our arrangements. We guarantee that their pay and benefits will not be lower than before," the Lenovo statement said. The company vowed to give equal job opportunities to the Shenzhen factory employees after the transaction. It will take in roughly 7,500 former IBM employees in more than 60 countries, including more than 1,000 workers at the Shenzhen factory who are employed in the departments of manufacturing, research, sales and marketing, according to the statement.
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Notables
18. Bloomberg Businessweek: In China, FedEx and UPS wait for regulators to renew permits
This is a good time to be in the package delivery business in China. Last year, Chinese bought 1.85 trillion yuan ($300 billion) worth of goods online. There were 9.2 billion deliveries in 2013, a 60 percent increase, worth 143 billion yuan, according to the Xinhua News Agency.
Only the express delivery market in the U.S.
is bigger. All that activity should translate into business for United Parcel Service (UPS) and FedEx (FDX). Both have been building China operations for decades, with FedEx
entering the market in 1984 and UPS following in 1988. By 2009, FedEx had 58 Chinese branches
to UPS’s 33. But the two have gone into reverse since then. Not only have they not opened new branches, but they also have had to seek
reapproval for existing operations. After a new law governing the industry was passed in 2009, the State Post Bureau decided that all carriers, local and foreign, needed new licenses. FedEx and UPS are still waiting for the regulator to grant many of theirs. Neither has official approval for domestic operations in Beijing, though they can make deliveries between some other Chinese cities. “Instead of giving us one permit for all of our branches, they said, ‘We are going to grant you individual permits for each of your branches,’ ” says Alan Turley, FedEx’s vice president for international affairs, Asia Pacific. While FedEx received permits for international service in 2010, it was 2012 before it got eight permit renewals for domestic service. They said Beijing “was too sensitive, so they did not give us a permit,” Turley says. Last July, FedEx received 29 more licenses—again, not including Beijing. It is still waiting for the remaining 21 to get back to serving 58 branches.
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19. Bloomberg: China on course to exceed 2015 shale target with fuling find
China, which sits on the world’s largest shale reserves, may exceed its 2015 output goal, as a new project in the nation’s southwest and the promise of fresh investment leave government targets looking outdated. China Petrochemical Corp., the parent of the listed company known as Sinopec, agreed last week with local government to build shale gas capacity at its Fuling site to 5 billion cubic meters a year by 2015. It suggests a national target of 6.5 billion cubic meters will be met or surpassed. “China can easily beat the 2015 target, thanks largely to the accelerated pace of development
from Sinopec’s Fuling project,” said Shi Yan, an analyst at UOB-Kay Hian Ltd.
in Shanghai.
Shi said contributions from other shale producers could lift 2015 output as high as 10 billion cubic meters.
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20. Bloomberg: Ackman says investigation finds Herbalife violates Chinese laws
Billionaire Bill Ackman, renewing his attack on the nutrition and weight-loss company Herbalife Ltd., said its investigation into the business’s Chinese operations found that they violate direct-selling laws.
Ackman’s firm, Pershing Square Capital Management LP, hired OTG Research to evaluate Herbalife within China, he said yesterday during a more than two-hour webcast. Pershing said Herbalife pays people illegally based on the number of recruits they amass. The company’s “hourly consulting pay” is key to showing that it violated laws, Pershing said, citing the OTG probe. “They defraud millions of people,” Ackman said during the presentation. “Their portrayal of their China business in their SEC filings is materially false and misleading.”
Bloomberg
21. Bloomberg: Poor nations need financing to cut carbon emissions, China says
Developing nations that have been
submitting plans to the United Nations to reduce emissions for two years have been unable to implement them because wealthier countries haven’t provided finance, according to Gambia and China. Rich countries must present concrete finance pledges, according to Pa Ousman Jarju, Gambia’s envoy to a UN climate conference that began March 10 in Bonn.
Zou Ji, from China’s National Center for Climate Change Strategy, told delegates that poorer
countries including China need support to show that low-carbon lifestyles are feasible. “We don’t want to follow the pollution path of the past,” Jarju said in an interview. Delegates need to stop informal
talks and start drafting a climate deal to be adopted next
year so finance can flow and nations can get a clear idea about how to make contributions before and after 2020.
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22. MW - Craig Stephen: China’s credit reckoning draws closer
Bond defaults, trade deficits raise new red flags.
MW Back to Top
23. FP - Isaac Stone Fish: The black box of China’s military
Beijing is spending hundreds of billions of dollars on defense, but no one quite knows what they're up to.
FP Back to Top
24. FT - Luke Patey and Zhang Chun Oped: China, trade, aid and Africa
Europe and China can learn from the other’s engagement in the continent.
FT Back to Top
