1. Bloomberg Businessweek: With growth slowing, will China launch a stimulus?
2. Reuters: China factories struggle, adds to expectations for stimulus
3. FT: Struggling Chinese groups pad out bottom lines
4. FT: China courts EU on bilateral trade agreement
5. Bloomberg: China burns speculators as $5.5 billion lost on yuan bets
6. WSJ: China cracks down on Bitcoin
7. Bloomberg: Combat-ready China military seen as Xi’s goal in graft battle
8. NYT - Sinosphere: American first lady’s visit highlights social media’s importance in China

 

9. CD: Cut your powers, premier urges officials
10. Xinhua: Li urges central organs to make way for market
11. Xinhua: Xi says China needs to follow development path that suits its own reality
12. CD: Xi's trip builds bridge to Europe
13. CD: Weibo micro blog to list on Nasdaq
14. SD: Firms must create China national brand

 

1. Bloomberg Businessweek: With growth slowing, will China launch a stimulus? 
Is China ready to launch further stimulus? That’s the question many analysts are asking following a string of gloomy signs in the economy. The latest: Two purchasing managers’ indexes released today suggest limited improvement in manufacturing in March. That’s particularly disappointing in the month following Chinese New Year, a period that typically shows a rebound. The HSBC-Markit PMI fell to 48 last month, (below 50 shows contraction), its lowest level since July. While a separate government PMI came in slightly above expectations, measuring 50.3 in March, it was still “substantially lower than the average of 51.3 in Q4 2013,” pointed out Louis Kuijs and Tiffany Qiu, Hong Kong-based China economists at Royal Bank of Scotland, in an April 1 research note. Comments made by premier Li Keqiang last week and reported on Friday suggest that the government is ready to take steps to boost growth. “We have gathered experience from successfully battling the economic downturn last year and we have policies in store to counter economic volatility for this year,” Li said, reported the Global Times on March 30. “We will launch relevant and forceful measures according to what we have planned in our government work report,” he said.
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2. Reuters: China factories struggle, adds to expectations for stimulus 
Persistent weakness in China's manufacturing sector reinforced fears of a sharper-than-expected slowdown at the start of 2014, and some government economists think authorities have already started boosting spending to put a floor under growth. On Tuesday two surveys showed that manufacturing struggled in March, with activity at smaller, private firms contracting for a third month, adding to a run of disappointing data that has sparked speculation of imminent government-led stimulus. The official purchasing managing index (PMI) edged up to 50.3 in March from 50.2 in February, pointing to slight expansion, but some economists said even that suggested weakness given activity typically picks up more after the Lunar New Year holidays in February. The Markit/HSBC Purchasing Managers' Index (PMI), which focuses more on the private sector, fell to an eight-month low of 48.0 in March. The index has been below the 50 level since January, indicating a contraction this year. "We're still in a subdued part of the cycle," said Louis Kuijs, chief China economist at the Royal Bank of Scotland. "I still don't think the downward pressures are tremendous, but they are large enough for the government to really start to talk about the need to support growth." In March, sources told Reuters the central bank was prepared to loosen monetary policy in order to keep the world's second-biggest economy growing at the government's target rate of 7.5 percent.

An employee works at a Chinese automobile factory in Hefei, Anhui province, in this file picture taken March 15, 2014. Reuters photo.
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3. FT: Struggling Chinese groups pad out bottom lines 
China’s largest shipping company avoided a third consecutive annual loss and a mandatory delisting from the Shanghai stock exchange last week, but the reprieve for China Cosco Holdings does not mean the tide is turning for the country’s heavy industry sector. China Cosco, which eked out a profit of Rmb235m ($38m) for 2013 after losing more than Rmb20bn combined in 2011 and 2012, was bailed out by a series of asset sales to its parent company, highlighting a common theme among some of China’s largest industrial groups. “They are not improving their operations to achieve profit, but just reorganising and selling assets,” says Zhang Wenkui, deputy director of the State Council’s Enterprise Research Institute. “They are only deceiving themselves.” “The most important problem everyone is focusing on is what we do this year,” Guo Huawei, China Cosco’s board secretary, told the Financial Times. “We will work very hard to achieve a good result but sometimes men need help from heaven.”
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4. FT: China courts EU on bilateral trade agreement 
Chinese president Xi Jinping has called for the EU and China to “actively explore” a bilateral trade agreement, arguing that such a move would make the pair “the twin engines for global economic growth”. Mr Xi’s call, made during a speech on Tuesday, will be seen as a bid to build a rival to a mooted EU-US pact and other significant trade negotiations now under way around the world, the vast majority of which have left China on the sidelines. Just as US President Barack Obama did during a much briefer trip to Europe last week, Mr Xi has built much of his 11-day charm offensive around promoting trade ties with the EU. However, amid Mr Xi’s trip to a Belgian zoo to visit a pair of donated pandas, his drive has come from a much weaker position than the US president’s. “Together we make up one-third of the global economy. We must actively explore the possibility of a free trade area and the goal of bringing [annual] bilateral trade to $1tn by 2020,” Mr Xi told an audience in Bruges. “We must work to make China and the EU the twin engines for global economic growth.”
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5. Bloomberg: China burns speculators as $5.5 billion lost on yuan bets 
China is succeeding in making its currency less predictable. Investors are paying the price. Clients of U.S. commercial banks have lost about $2 billion this year on $332 billion of options betting the yuan would appreciate, while Chinese companies lost $3.5 billion on $150 billion wagered on a benchmark forwards contract, according to data compiled by Morgan Stanley and the Depository Trust & Clearing Corp. in Washington. These contracts, when including bearish bets, account for more than a third of global trading in the Chinese currency.
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6. WSJ: China cracks down on Bitcoin 
PBOC orders big banks to close trading accounts in virtual currency.
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7. Bloomberg: Combat-ready China military seen as Xi’s goal in graft battle 
China President Xi Jinping’s first public move to combat corruption in the People’s Liberation Army is the biggest step in his campaign to build it into a combat-ready force after decades in which the military served partly as a money-making vehicle. Former Lieutenant-General Gu Junshan, 57, previously deputy head of the army’s General Logistics Department, faces charges including embezzlement, bribery and abuse of power, according to the official Xinhua News Agency. Chinese media has reported that Gu amassed a fortune from kickbacks and accumulated a string of properties and even a solid gold statue of Mao Zedong. The case against Gu, the highest-ranking officer to be tried by a military court since 2006, indicates Xi’s anti-graft campaign is reaching further into the ranks of the world’s largest army by headcount. Xi, who took over as head of the Central Military Commission when he became Communist Party secretary in November 2012, is seeking to weed out corruption as he calls on China’s military to upgrade standards so it’s capable of fighting wars. “If they really get serious and defense structural reforms are successful it would make them a very potent fighting force,” Christopher Johnson, Freeman Chair in China Studies at the Center for Strategic & International Studies, said by phone from Washington. Xi “knows he has to create that sense of existential challenge or urgency in order to push through these reforms because there’s such strong resistance from the people who have benefited from the current system.”
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8. NYT - Sinosphere: American first lady’s visit highlights social media’s importance in China 
Having petted a panda and trod the Great Wall, the American first lady, Michelle Obama, left China last week after a visit filled with friendly photo opportunities but also with political messages about issues such as freedom of speech. Mrs. Obama was accompanied on her trip by her two daughters, Sasha and Malia, and her mother, Marian Robinson. Throughout the visit, she kept in touch with global audiences by writing a travel journal and by posting on Twitter and other social media outlets. To increase her visibility among Chinese readers, American diplomats in China made sure that her blog posts were translated into Chinese. China has the largest number of Internet users in the world — more than 600 million in 2013 — which means that foreign government representatives in the country have increasingly turned to social media networks as an important component of their public diplomacy tool kit. The American Embassy in China updates its social media accounts throughout the day on a wide range of topics, most of them noncontroversial, including American culture and history, news and diplomatic activities.
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9. CD: Cut your powers, premier urges officials 
Premier Li Keqiang told his colleagues in the central government on Tuesday to "pluck up the courage" to reduce their own power as China looks to cut red tape to unleash potential growth. His comments came as concerns mount among global investors over the nation's fast-cooling economy, highlighted by economic data for the first two months. Although the official Purchasing Managers Index rose slightly to 50.3 in March, the figure is unlikely to dispel concerns that the world's second-largest economy faced a slowdown in the first quarter. "China can stabilize its economy as long as the market is allowed to play its role and public innovation is being respected," Li said. He cited the example of last year when the country managed to overcome a slowdown and lack of liquidity in the middle of the year without an easing policy. Addressing delegates to the annual work conference of the central government's Party committee in Beijing, the premier again assured the market of his confidence and urged government officials to retain the determination to reform.
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10. Xinhua: Li urges central organs to make way for market 
Chinese Premier Li Keqiang has called on the central Party and government departments to resist corruption and to sacrifice power for the vigor of the market. Li made the remarks on Tuesday while meeting with the attendees of a meeting on the work of the Communist Party of China (CPC) in various central departments. According to Li, central Party and government departments directly engage in the making and implementation of major decisions and policies, and Party management has been playing a key role in the process. Li praised Party units in these departments for preventing and controlling corruption. Highlighting the arduous task of ensuring steady economic growth and improved efficiency, Li urged Party work in these departments to focus on building a "lawful, innovative and cleanhanded" government. Li urged stepping up a system to simplify procedures and delegate power to lower levels, urging these departments to "dare to reduce your own power, confront conflicts, embrace responsibilities and disregard self-interests". "Whatever should be decided by the market should be handed to it. Let the market thrive and stimulate social creativity," Li said. Since 2013, the then newly-elected Premier Li has been trumpeting streamlining administrative approval and cutting red tape to help the market function efficiently.
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11. Xinhua: Xi says China needs to follow development path that suits its own reality 
Chinese President Xi Jinping said here Tuesday that the uniqueness of China's cultural tradition, history and circumstances determines that China needs to follow a development path that suits its own reality. He made the remarks when addressing the students of the College of Europe during his state visit to Belgium. "In fact, we have found such a path and achieved success along this path," said the president. In 1911, the revolution led by Dr. Sun Yat-sen overthrew the autocratic monarchy that had ruled China for several thousand years. But once the old system was gone, where China would go became the question, said Xi in his speech. The Chinese people then started exploring long and hard for a path that would suit China's national conditions. They experimented with constitutional monarchy, imperial restoration, parliamentarism, multi-party system and presidential government, yet nothing really worked, he added. "Finally, China took on the path of socialism. Admittedly, in the process of building socialism, we have had successful experience and also made mistakes," he said, adding that "we have even suffered serious setbacks." "After the 'reform and opening-up' was launched under the leadership of Mr. Deng Xiaoping, we have, acting in line with China's national conditions and the trend of the times, explored and blazed a trail of development and established socialism with Chinese characteristics," he added. "Our aim is to build a socialist market economy, democracy, an advanced culture, a harmonious society and a sound eco-system, uphold social equity and justice, promote all-round development of the people, pursue peaceful development, complete the building of a moderately prosperous society in all respects and eventually achieve modernization and prosperity for all," the Chinese president said.
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12. CD: Xi's trip builds bridge to Europe 
Ending his European tour with a speech in the Belgian city of Bruges — derived from the old Flemish for "bridges" — President Xi Jinping said on Tuesday that he had come to Europe to build bridges of friendship and cooperation across the Eurasian continent. "We need to build four bridges for peace, growth, reform and the progress of civilization, so that the China-EU comprehensive strategic partnership will take on even greater global significance," he said. "We must uphold the open market, speed up negotiations on the investment agreement, actively explore the possibility of a free trade area, and strive to achieve the ambitious goal of bringing two-way trade to $1 trillion by 2020," Xi told dignitaries, including Belgian King Philippe, Queen Mathilde and Prime Minister Elio Di Rupo, at the College of Europe. In addition, they should study how to dovetail China-EU cooperation with the initiative of developing a Silk Road economic belt to integrate the markets of Asia and Europe, and make China and the EU the "twin engines" for global economic growth.

President Xi Jinping delivers a speech at the College of Europe in the Belgian city of Bruges on Tuesday. Xinhua photo.
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13. CD: Weibo micro blog to list on Nasdaq 
Weibo, which offers a micro blog service in China, plans to list on Nasdaq under the ticker symbol WB, according to the company's updated SEC filing on Monday. Morgan Stanley, Piper Jaffray and China Renaissance are among Weibo's underwriters. According to Weibo's filing in mid-March, the Beijing-based company plans to raise up to $500 million by going public in the United States. The social networking site owned by Sina Corp started to make a profit for the first time by bringing in $3 million in the last quarter of 2013. The company saw its monthly active users increase rapidly to 129 million in December. Alibaba Group Holding Ltd, China's Internet giant, which is also looking toward an initial public offering in the US, has about a 19 percent stake in Weibo.
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14. SD: Firms must create China national brand 
China's companies must not only develop their own brands but also create a Chinese national brand in order to fully win over foreign markets, according to a global market research firm. The key factor for the companies is to create a brand image for Chinese products as a whole, beyond price competition, over the long term, Rosie Hawkins, global head of brand and communication at international market researcher TNS, said in Shanghai yesterday. She said that while China was able to create strong brand differentiation in developing countries in South America and Africa, it was more difficult in the already saturated developed markets. “When you talk to people about Germany, they think German engineering, when you think about Scandinavia they talk about design ethics, with France the association is luxury. China needs its own brand China to be developed,” Hawkins said. She, however, cautioned that there is “a danger when you think about China that all you think about is price. We have to move away from that.”
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15. Reuters: GE recalls hundreds of baby 'warmers' in China over safety fears 
A healthcare unit of General Electric Co has recalled hundreds of incubator-like infant "warmers" in China over safety concerns as Beijing tightens oversight of the country's fast-growing medical device sector. GE Healthcare recalled 223 of the U.S.-produced warmers after uncovering a potential safety issue that could restrict oxygen supply to the child, the China Food and Drug Administration (CFDA) said in a statement on Tuesday. The cot-like warmers are used in hospitals to regulate the body temperature of tiny infants unable to keep themselves warm due to a lack of body fat. The devices also regulate airflow and monitor vital signs. The recall announcement coincides with tough messages from China's Cabinet this week that the government would increase oversight and fines in the medical device sector to address safety concerns.
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16. LAT: China visit is becoming priority for Hollywood stars touting films 
Stars are making promotional visits to China as the mainland movie market continues to soar and some Hollywood films do better there than in the U.S.
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17. WSJ: Standard Chartered names Hung greater China CEO 
Hung has been running Hong Kong operations for six years.
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18. Reuters: China's COFCO to pay $1.5 billion for majority stake in Noble agribusiness 
COFCO Corp will pay an initial $1.5 billion to buy a 51 percent stake in Noble Group Ltd's agribusiness, its second acquisition in less than two months as China's largest grain trader seeks to strengthen its position in global markets. The two companies plan to form a joint venture, in which Noble will retain a 49 percent stake, that will link COFCO's grain processing and distribution business with Noble Agri's grain origination and trading business, Noble (NOBG.SI) said on Wednesday. The move follows COFCO's purchase of a 51 percent stake in Dutch peer Nidera in late February to gain direct access to South American grain and oilseed supplies in a deal that valued Nidera at $4 billion including debt.
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19. FT - Martin Wolf: Debt troubles within the Great Wall 
Credit cannot outgrow GDP forever, even in China. The question is how it will stop.
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20. FT - Paul J. Davies: Why investors in China houses shouldn’t throw stones 
In dealing with China, companies and politicians have often overlooked its shortcomings in human and democratic rights and problems with corruption. Financiers and investors in Asia, in fact, even admire the way in which the dominant one-party regime “gets stuff done” in contrast to India’s chaotic democracy – it is one of the biggest arguments against a hard landing, or policy paralysis for the economy. Two current corporate stories highlight how efficacy and control are valued more highly in China than accountability. Investors big and small in the US and elsewhere should be careful. The fashion for tech companies having dual-class stock and the complete control of private equity-run conglomerates is taking more businesses away from shareholder control even as they own them. China may look like the most unaccountable economy in the world, but the US has already given away more democratic rights for investors than many people realise, and other countries may find it hard to resist the example of the world’s biggest economies.
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21. FT - Yukon Huang: Let China’s cities flourish free from central control 
After prolonged debate, China’s long anticipated “New-Type Urbanisation Plan 2014-2020” was unveiled in mid-March. There is much to be applauded. It rightly focuses on improving the quality of urbanisation by reining in wasteful investments, meeting the social needs of migrant workers, addressing environmental concerns and developing new financing sources. The ultimate target is that by 2020 China will be 60 per cent urban compared with 54 per cent today. Mega-cities such as Beijing, Shanghai, Shenzhen and half a dozen others have continued to grow because of the rising presence of sophisticated services including research, finance, logistics and engineering, even as their manufacturing base has shrunk. What China now needs is a more efficient urbanisation process; one where cities are allowed to evolve in response to changing conditions and not because of centralised directives. This will require financing systems and land management policies that encourage denser urban development and residency policies that facilitate rather than restrict labour mobility. If Beijing gets it right, large cities will grow even larger but so will the small and medium-sized cities. In the process China will realize the productivity gains needed to grow at a sustainable 7 per cent for the rest of this decade.
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22. WSJ: Chinese investors change face of Dubai 
Investment by individual Chinese investors nearly tripled last year.
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