Must Read
USCBC in the News
8. Bloomberg: China marks Consumer Day with gala that led to Apple apology
9. Mondaq: The United States & China: Twenty-first century rivals or friends?
10. Australian: Coke chief calls for shake-up in culture
11. Silicon India News: 6 Indian business executives who hold top posts in U.S. firms
Chinese News Sources
Notables
17. Reuters: China cracks down again on popular messaging app WeChat
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Must Read
1. FT: Fresh corporate default tests China’s resolve
China’s premier has warned that future defaults on bonds and other financial products are “unavoidable” underlining concerns that a wave of bad debts threatens to derail growth in the world’s second-largest economy. Li Keqiang said on Thursday that China was likely to see a series of defaults as the government accelerates financial deregulation, although he added the government would take steps to ensure they do not pose a threat to the wider financial system. In the past, the government has always stepped in to bail out
companies but Mr Li has decided to allow several small, mostly privately owned, companies to default on their debts in order to address the problem of “moral hazard” in the economy, according to people familiar with the government’s thinking. Some analysts have warned that by doing so, Beijing could trigger investor panic and prompt a “Lehman moment” in China’s increasingly debt-dependent economy.
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2. WSJ: China regulator says bond-market risks controllable
Securities
regulatory commission can't rule out
possibility of defaults, however.
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3. Guardian: China's Li Keqiang warns investors to prepare for wave of bankruptcies
World's second largest economy is facing 'serious challenges' and many companies with high debts are being forced to the wall.
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4. FT: Analysts slash China GDP forecasts, see support
Investment banks slashed forecasts for China’s GDP growth on Thursday after Beijing reported the biggest slowdown in investment for more than a decade and the slowest retail sales expansion for nine years. Confidence was further undermined by news that a well-known steel mill has failed to repay loans that came due last week. Ting Lu, China economist at Bank of America Merrill Lynch, said the bank was cutting its first quarter GDP growth forecast to 7.3 per cent from 8 per cent and the full year forecast to 7.2 per cent from 7.6 per cent previously. Nomura Securities revised down its first quarter forecast to 7.3 per cent from 7.5 per cent
previously but kept its full year prediction at 7.4 per cent. UBS revised down its full year forecast to 7.5 per cent from 7.8 per cent previously. Barclays said it was revising downward its first quarter forecast to 7.3 per cent, but did not say what its previous projection had been. However, the bank is keeping its full year forecast at 7.2 per cent for the full year. Mizuho Securities said it was cutting its first quarter forecast to 7.2 per cent, but did not give a comparative number. The slew of revisions came with several predictions that Beijing may be encouraged to take steps to support the economy. “We expect the government to start
planned investment projects and the PBoC (People’s Bank of China) to maintain easier liquidity,” Barclays said in a research note.
FT
5. NYT: China stops plans for virtual credit cards
China’s central bank has ordered the Internet giants Alibaba and Tencent to halt plans to issue virtual credit cards in partnership with a large Chinese bank, citing concern over safety risks. The People’s Bank of China wants to assess the risks that customers using the untested service may face and to ask the companies to provide more details about their plans, Feng Xinya, a central bank official, told the state-run People’s Daily on Friday. Ms. Feng declined to say how long the assessment would take. Earlier this month, the two companies separately announced plans to team up with China Citic Bank International to create the virtual cards for online transactions and for offline retailers that accept payments by scanning a bar code with their
smartphones. Alibaba, China’s biggest e-commerce company, and Tencent, which operates the country’s biggest chat service, have been expanding into financial services. They are among 10 companies selected to participate in a pilot program that allows the establishment of five private banks, as part of a program of financial overhauls pledged by the Chinese government under President Xi Jinping. Alibaba’s Alipay had planned to begin issuing as
many as one million virtual credit cards later this month. Alibaba said it would approve the creditworthiness of prospective
cardholders based on their online shopping histories. Online retail sales in China are forecast to reach $395 billion by 2015, according to a report by McKinsey & Company. Alibaba and Tencent confirmed on Friday that they had been notified by the central bank, but declined to comment further. The central bank did not answer phone or email queries. Shares of Tencent Holdings closed 4.1 percent lower in Hong Kong. Citic Bank fell 6.9 percent in Hong Kong and 8.3 percent in Shanghai. Alibaba, whose major shareholders include SoftBank and Yahoo, is privately held and is expected to list shares later this year. The Guangzhou-based 21st Century Business Herald first reported the news.
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6. WSJ: Port project raises hopes for broader Cosco-China Shipping alliance
Two old rivals make joint investment, weeks after cooperation agreement.
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7. NYT - Sinosphere: For foreign journalists in Beijing, it’s all about asking the right question
Go ahead, raise your hand and wave it back and forth like an overeager first-grader. If you think you’re going to be picked to ask China’s second most powerful leader a question, you have another thing coming. Every March, hundreds of reporters gather in the Great Hall of the People
off Tiananmen Square in Beijing for the annual spectacle of journalists, both domestic and foreign, pitching what sounds like
back-of-the-notebook questions to the Chinese prime minister. The news conference, which caps the annual political gathering known as the National People’s Congress, is carried live on television, demonstrating to the Chinese people that their leaders, like those elsewhere in the world, are modern, wise and tough enough to face the pesky overseas press. Except for one thing: The event is staged, with the complicity of some of the most respected brands in Western journalism.
Prime Minister Li Keqiang of China took questions that had been pre-approved at a news conference at the close of the National People’s Congress on Thursday. Getty Images
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USCBC in the News
8. Bloomberg: China marks Consumer Day with gala that led to Apple apology
China’s state broadcaster will tomorrow evening air its annual consumer rights program, which last year included allegations that later led Volkswagen AG to recall 380,000 cars and Apple Inc. Chief Executive Tim Cook to issue a public apology to its Chinese customers. The China Central Television program, known as the “315 Gala” because its broadcast March 15 each year to mark World Consumer Rights Day, features reporters disguised as customers or potential business partners shooting footage with hidden cameras. Companies covered in this year’s show will include those in the automotive, consumer electronics, food, e-commerce and online wealth management industries, the gala’s director said in an online briefing last month. “It’s become an annual hunt and companies are petrified,” said Shaun Rein, managing director of
China Market Research Group in Shanghai. “There’s real fear because companies feel that CCTV has the tacit support of the central government, or at least some senior people in it. These reports have a huge impact and can tarnish reputations.” This increased scrutiny has also come as more foreign companies say the country is becoming a less attractive market. A 2013 U
.S
.-China Business Council survey showed fewer U.S.
businesses ranking China as their top priority because of rising costs, competition with local companies and challenges with licensing.
Bloomberg
9. Mondaq: The United States & China: Twenty-first century rivals or friends?
The Obama Administration has referred to Sino-American relations as the most important bilateral international relationship of the twenty-first century. Obama's "pivot" to Asia, however, has created a central question: Is the pivot intended to cultivate and enhance relations between China and the United States, or does the United States seek to surround and contain expanding Chinese political, economic, and military power? There has been continuous hostility in the United States Congress toward China, mostly over trade. Complaints center on alleged
off-shoring of jobs (but there are no accompanying statistics) and currency valuations (because the Chinese Yuan is linked to the dollar). Yet, the U
.S
.-China Business Council estimates that exports to China in 2012 created more than a half-million U.S.
jobs, with around 122,000 added since 2008. Chinese currency appreciated around 24 percent. The U.S.
dollar was linked to other currencies and did not float until August 1971.
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10. Australian: Coke chief calls for shake-up in culture
One of the world's most powerful business leaders has a message for corporations and governments in Australia, the US and beyond: "The days of the Rambos, the Dirty Harrys, and going it alone are part of history." Muhtar Kent, chief executive of Coca-Cola, has been at the helm of the global consumer goods giant since 2008 and since then has been pursuing a goal of doubling revenue by 2020 with new products and innovations across more than 200 countries. Kent, the son of a Turkish diplomat and graduate from Hull University and London's Cass Business School, is chairman of the International Business Council of the World Economic Forum, a fellow of the Foreign Policy Association and a past chairman of the US-China Business Council.
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11. Silicon India News: 6 Indian business executives who hold top posts in U.S. firms
Indra Nooyi (Chairman and CEO, PepsiCo): Equipped with two MBAs-one from IIM-Calcutta and the other one from Yale School of Business, Indra Nooyi kick started her career initially with Johnson and Johnson. She worked for Boston Consulting Group, Motorola and Asea Brown Boveri before joining PepsiCo in 1994. She was named the CFO in 2001 and became the CEO in 2006.Indra leads one of the world’s largest and well-known food and beverage
company, with 2008 annual revenues of more than $43 billion. In addition to this, Indra serves as a member of the boards of U
.S
.-China Business Council, U
.S
.-India Business Council, the Consumer Goods Forum, Catalyst, Lincoln Center for the Performing Arts and Tsinghua University. She remains a famous personality to
constantly feature on the ‘Most Powerful Women List’ of distinguished publications such as the Wall Street Journal, Forbes, Fortune and Times.
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Chinese News Sources
12. SD: More economic indicators show slowing growth in China
China's economic growth moderated as indicators of industrial production, fixed-asset investment and retail sales all reported
slower expansion in the first two months of the year, data from the National Bureau of Statistics showed today. Industrial production rose 8.6 percent from a year earlier in the January-February period, down from the pace of 9.7 percent in December of last year. Fixed-asset investment increased 17.9 percent to 3.02 trillion yuan (US$491 billion) during the two-month period, slowing from a 19.6 percent rise during all of 2013.
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13. Xinhua - Commentary: China's new growth story: an uphill journey
The curtains of China's annual parliamentary meetings drew to a close, charting a clear
course as the world's second largest economy sails towards fresh waters with a reform-determined leadership at the helm. The growth targets are set. The way to the end mapped out. But what kind of journey
will China's growth experience in 2014? The story will not be the epic of the stellar growth seen during the past three decades. Gone are the days when double-digit GDP growth was easy to achieve with low-cost and abundant labor, easy credit and massive investment. The leadership has realized the necessity and immediacy to steer the country's economy from investment-led expansion
to consumption-fuelled growth.
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14. Xinhua: Chinese president to attend nuclear summit, visit Europe
Chinese President Xi Jinping is to attend the Nuclear Security Summit (NSS) to be held in The Hague, the Netherlands, from March 24 to 25. He will also pay state visits to the Netherlands, France, Germany and Belgium from March 22 to April 1, according to Chinese Foreign Ministry spokesman Qin Gang in a written statement on Friday. President Xi is to attend the third NSS at the invitation of Dutch Prime Minister Mark Rutte, Qin said. Xi will visit the Netherlands, France, Germany and Belgium, at the invitation of Dutch King Willem-Alexander, French President Francois Hollande, German President Joachim Gauck and Belgian King Philippe, said the spokesman. At the invitation of UNESCO Director-General Irina Bokova, the Chinese president is also scheduled to visit the headquarters of the United Nations Educational, Scientific and Cultural Organization (UNESCO) on March 27. He will also visit the headquarters of the European Union from March 31 to April 1, as guest of European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso, said the spokesman.
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15. Xinhua: Consumer complaints surge in China
Chinese consumers lodged 1.02 million complaints with a government-sponsored hotline and online platform in 2013, up 13.85 percent year on year, a government report said on Friday. The country's industry and commerce authorities found illegal practices involving business operations, consumer rights infringements and illegal advertising, the State Administration for Industry and Commerce said in the report. More than 400,000 cases involved companies without business licenses and 131,800 cases infringed upon consumers' rights, the report said. Meanwhile, there were other violations such as illegal advertising and fraudulent trademarks, the report said. Authorities helped consumers recover 1.3 billion yuan (211.91 million U.S.
dollars) of losses, the report said.
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16. SD: China to beat 2020 targets for nuke power
China is set to beat its 2020 targets for nuclear power, the chairman of the country’s top nuclear firm said, after getting back on track with projects that had been halted after Japan’s Fukushima disaster. China is undertaking the world’s biggest expansion of civilian nuclear power as the government aims to increase its use of cleaner energy. At the same time, China is seeking to expand its power grid by as much as 80 percent over this decade. The expansion plans were suspended in 2011 following the earthquake and nuclear disaster
at Fukushima, Japan, but are now back on track as construction
on new plants is expected to resume with approvals granted in the coming months. “Nuclear plants will play an important role in reaching the government’s 2020 goal of raising the proportion of energy produced by non-fossil fuel to 15 percent,” Sun Qin, chairman of China National Nuclear Corp, said on the sidelines of the National People’s Congress.
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Notables
17. Reuters: China cracks down again on popular messaging app WeChat
Chinese authorities have launched another crackdown on Tencent Holdings Ltd's popular social messaging app
WeChat, closing dozens of popular accounts, media reported on Friday, as China tightens its control of the Internet. China Business News and Hong Kong's South China Morning Post said some of the accounts closed were run by widely-read columnists like investigative journalist Luo Changping, some of which have hundreds of thousands of subscribers. The accounts were closed on Thursday, the newspapers said, the same day Premier Li Keqiang held a news conference in Beijing marking the end of the yearly meeting of parliament. Tencent, responding to the reports, said that the company was committed to
combat ting the transmission of pornography,
rumours and violence. "As part of the commitment to providing
quality user experience on Weixin in China, we continually review and take measures on suspicious cases of spam, violent, pornographic and illegal content," said Jerry Huang, a Shenzhen-based spokesman for Tencent, using the Chinese name for
WeChat.
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