Feb 13

Companies and financial institutions in Shanghai’s free trade zone are now allowed to borrow from overseas in both Chinese and foreign currencies with greater flexibility, another step toward capital account convertibility in FTZ financial reforms, the Shanghai headquarters of the People’s Bank of China said yesterday.

Companies, banks and brokerages will not need to apply for administrative approval to borrow from overseas under the special free trade account system used in the zone, the Shanghai headquarters said as it released regulations regarding offshore financing and risk management.

They will be allowed to raise up to twice the value of their registered capital but the actual amount of money they can get will depend on the currency, its use and the term of the loan.

For example, companies will not be able to use their full quota if they borrow foreign currency loans on terms shorter than a year, the Shanghai headquarters said.

Previously, non-financial companies were only allowed to borrow yuan from overseas and the amount was restricted to no more than the registered capital of the company.

Banks previously were not allowed to borrow yuan from overseas.

The move is part of the authorities’ efforts to boost the economy by lowering borrowing costs for companies and banks, and is a step toward capital account convertibility as the rules set up a unified management system for offshore fundraising in local and foreign currencies, said Zhang Xin, the Shanghai headquarters’ deputy director.

The new policy could further lift Shanghai’s status as a financial center as the area of the Shanghai free trade zone is planned to quadruple to cover the Lujiazui financial area, Jinqiao development area and Zhangjiang High-Tech Park, Zhang said.

Wang Jianxin, deputy head of Shanghai Pudong Development Bank’s free trade zone branch, said the new rules will enable borrowers to get low-cost foreign currency loans within half an hour, and companies will enjoy greater freedom during cross-border trade and investment.

The annual interest rate for a foreign currency loan could be half that of a one-year loan in yuan, Wang said.

It is the first time foreign currency transactions are being allowed under the free trade account system, and the bank said it will continue to drive financial reforms including capital account convertibility and interest rate liberalization in the zone.

It said offshore fundraising regulations for companies are basically complete after yesterday’s announcement and it will consider opening up individual offshore borrowing.

Feb 13

A decline in jewelry consumption more than offset the growth in demand for gold investment and central bank buying and led to a fall in global gold consumption, the World Gold Council said yesterday.

Gold consumption worldwide fell 4 percent last year from 2013 to 3,924 tons, the WGC said in a report.

But the year ended strong as demand in the fourth quarter rose 6 percent year on year to 987 tons, helped by demand for jewelry and central bank buying.

The WGC expects China’s gold consumption to rise to between 900 and 1,000 tons this year, with jewelry contributing about 70 percent of the volume.

“2014 was a year of stabilization in the gold market, with annual gold demand down by just 4 percent after the record-breaking buying seen in 2013,” said Marcus Grubb, managing director, investment strategy at the WGC.

“It was a standout year for Indian jewelry, despite government restrictions on gold imports. Meanwhile Chinese gold demand returned to levels last seen in 2011 and 2012.”

Jewelry remained the biggest source of demand — 2,153 tons — for gold last year. But demand “unsurprisingly” fell 10 percent compared with the previous year due to the price-driven demand surge for jewelry in 2013, the WGC said.

India had its strongest year for jewelry demand since the WGC records began in 1995, up 8 percent last year to 662 tons, driven by weddings and festival buying despite government curbs on gold imports for most of the year.

Chinese jewelry demand dimmed 33 percent year on year, but it still represented the second-best year for jewelry demand in China since the WGC records began.

Investment demand rose 2 percent to 905 tons in 2014 from 885 tons in 2013.

Central bank demand climbed 17 percent from a year earlier to 477 tons as gold remained a valuable reserve to hold.

Feb 04

WITH a personal fortune of US$26 billion, solar power tycoon Li Hejun was yesterday named the richest person on China’s mainland.

According to the Hurun Global Rich List 2015, the boss of Beijing-based renewable energy firm Hanergy overtook Alibaba founder Jack Ma to become the 12th person in 16 years to take the title.

Li was one of 430 billionaires from China’s mainland to make the global ranking. The number was 72 more than last year — mostly due to the stock market boom — and cemented the country’s position as second only to the United States, which secured 537 places on the list.

At the top of the pile was Microsoft founder Bill Gates, whose personal wealth was estimated at US$85 billion.

China also claimed the title for the most “rags to riches” stories, accounting for 61 percent of the self-made billionaires, compared with just 13 percent for the US.

The mean age of the billionaires from China’s mainland was 58, a full six years lower than the global average of 64.

Five Chinese cities, including Hong Kong and Beijing, were among the top 20 “homes” of the super-rich.

By industry, most of the Chinese billionaires on the list made their fortunes from real estate. The segment was topped by Li Ka-shing from Hong Kong with US$32 billion, followed by Wang Jianlin, chairman of Dalian Wanda Group with US$25 billion, who also placed second overall for the Chinese mainland.

On a global scale, technology, media and telecoms were the key industries, said Rupert Hoogewerf, chairman and chief researcher of the Hurun Report.

The “TMT” group included 297 billionaires from around the world, of which 41 were from China’s mainland. The tech sector was the third-biggest creator of billionaires on the Chinese mainland, after manufacturing, which produced 70.

The high market valuations of China’s technology stocks played a big role in boosting wealth in the sector.

The year’s biggest gainer was Liu Qiangdong of JD.com, who saw his personal wealth quadruple to US$6.7 billion following an initial public offering.

The personal wealth of Alibaba Group founder Jack Ma and his family soared in September following the company’s record-breaking US$25 billion initial public offering in New York.

But their combined fortune of US$24.5 billion was good enough only for third place on the list of the richest people on the Chinese mainland.

Dec 08

China Watch Blog reports that social funding is expected to hold more sway in China’s major urban projects and fuel economic growth, according to a string of newly released measures worth billions in investment opportunities.

The Chinese Ministry of Finance (MOF) rolled out 30 projects on Thursday to solicit private capital in the form of a public-private partnership (PPP).

These projects, worth a total of 180 billion yuan ($29.32 billion), include water and heating supply, sewer systems, garbage disposal, underground pipe networks, medical care, sports facilities and other urban infrastructure.

It is a move to innovate the financing system and stabilize growth with more social funds, said an expert with the National Development and Reform Commission (NDRC).

Both domestic and foreign investors are allowed to take part in the construction and operation of these projects as China is striving to lower government spending and improve public service.

PPP refers to long-term cooperation between governments and private companies in infrastructure or public services. In most cases, PPP projects are funded and operated by private investors and supervised by local governments.

The MOF already approved a PPP center last week to help push such policy.

Zhang Liao, general manager of Jumbo Consulting, a Shanghai-based infrastructure consulting firm, said the PPP center will help coordinate planning, execute affairs and provide professional guidance, policy research and statistic analysis.

“Carrying out the PPP in public affairs, an area that traditionally belonged only to government investment, can stimulate the powers of market and government simultaneously,” said Wu Yaping, the NDRC’s investment expert.

Cooperation between government and the public can make up for disadvantages and lower each other’s risk, he said.

“The PPP poses a new sample,” Wu said. “Government and SOEs will be pushed to improve the efficiency of their project investments.”

However, implementing the PPP won’t be easy, calling for further researches on how to balance profit distribution, improve related legislation and tackle administrative barriers, said Ma Hongfan, a financial researcher with the MOF.

“Government’s role should be more about setting the regulatory framework and monitoring compliance and performance in a transparent way that is clearly codified and accepted in the eyes of private investors,” said Stephen Ip, partner and head of Government and Infrastructure, KPMG China.

Meanwhile, the NDRC announced Thursday to open projects of state grid, pipelines, clean energy and mineral resources to absorb more social capital.

Li Pumin, spokesman with the NDRC, said the decision is a part of the move to fully mobilize social investment and maintain the pivotal role of investment in stabilizing economic growth.

The State Council, China’s cabinet, issued a guideline on Nov 26, saying that they will further ease market access to key industries in a bid to spur investment through innovating financing and investment regimes.

Apr 19

China Watch Blog reports that Tianhe-2 has started to provide computing services to the public while in-system debugging is ongoing. The first beneficiaries are users of the previous pilot system.

Located in Sun Yat-sen University, Guangzhou, in Guangdong Province, Tainhe-2 is regarded as the world’s fastest supercomputer.

On November 18, 2013, Tianhe-2 topped the TOP500 list of the fastest supercomputers in the world. The computer beat the second-placed Titan by a margin of nearly 2 to 1. Titan is housed at the U.S. Department of Energy’s Oak Ridge National Laboratory. Tianhe-2 was built by China’s National University of Defense Technology (NUDT).

Tianhe-2 possesses 16,000 computer nodes, carries 32,000 XeonE5 main processors and 48,000 XeonPhi coprocessors, and counts a total of 3,120,000 cores. It was delivered to the National Supercomputing Center in Guangzhou (NSCC-GZ) on the east campus of Sun Yat-sen University after the completion of the first installation.

Currently, the Tianhe-2 host system is undergoing commissioning and operation trials, and providing computing services to some users. Guangzhou Supercomputing Center will hold an application promotion and make preparations to formally provide computing services.

Successful exploitation of Tianhe-2 will require a large number of professionals, especially interdisciplinary talents who possess professional knowledge and understand supercomputing.

According to personnel from the Guangzhou Supercomputer Center, there is a shortage of supercomputing professionals in China. In addition to introducing overseas supercomputing talent, an interdisciplinary supercomputer application research institute will be established in Sun Yat-sen University in the future for the domestic training of interdisciplinary supercomputing professionals.

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Dec 16

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Oct 09

China Watch Blog has learnt that the number of US-dollar millionaires in Hong Kong has hit 100,000 – up nine percent from last year, a report says.

They include over 1,100 with wealth topping US$50 million, while the richest 500 are each worth more than US$100 million.

Credit Suisse — which produced the findings — says the number of millionaires is expected to rise by 68 percent from the present level to exceed 160,000 by 2018.

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Apr 26

China Watch Blog has learnt that Oil painter Zhou Chunya tops the Hurun Art List with sales of his auctioned works hitting US$75 million in 2012, according to a report.
Zhou, 58, is the youngest artist ever to top the list compiled by Hurun Report Inc based in Shanghai.

Zhou Chunya, oil painter

The value of Zhou’s work has more than doubled from last year when he ranked eighth, according to the report, best known for its annual Hurun China Rich List.

As many as 222 of Zhou’s paintings were sold in 2012. The most expensive one was a 1994 piece with stones as its theme, which was auctioned for 29.9 million yuan, XInhua reported.

Oil Painter Zeng Fanzhi, 49, came in second with US$73 million in sales last year.
Renowned Chinese ink painter and calligrapher Fan Zeng, 75, took third place with US$69 million in sales at public auctions last year.

The total turnover of the top 100 list fell 21 percent from last year to US$1.2 billion. The threshold for artists making the top 100 fell 11 percent from last year to US$2.4 million.

The average age of the artists is 66, three years older than last year. The youngest is 37-year-old Chinese ink painter and calligrapher Ren Zhong, whose work ranked 51st with US$7 million in sales in 2012.

The list also includes six female artists, more than any previous year, including 91-year-old Chen Peiqiu who had an annual turnover of US$22.4 million last year and is ranked 11th.

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Apr 22

China Watch Blog reports that Qantas and the NSW Government have announced a new $30 million partnership to promote Sydney and regional NSW to the world.

NSW Premier Barry O’Farrell and Qantas Group Chief Executive Officer Alan Joyce signed the three-year agreement at Qantas’ facilities at Sydney Airport, marking the largest tourism and major events marketing partnership in the State’s history.

Qantas

Premier O’Farrell said the deal involved Qantas matching the NSW Government dollar for dollar to attract more international visitors particularly from the United States, United Kingdom, Continental Europe, China, South-East Asia, Japan and New Zealand.

“Nothing says Australia more than the unmistakeable red tail with the flying kangaroo and the home of Qantas is right here in Sydney,” O’Farrell said.

“This partnership with Qantas is the cornerstone of our strategy to increase tourism to NSW, providing a boost to our economy and helping to create more jobs.

“We will be aggressively targeting big spending leisure and business travellers from overseas which will be a boon for our hotels, restaurants and retail sector.

“This will build on our standing as the nation’s leader for international visitation and expenditure and the preferred destination for key emerging markets.

“We understand the importance of tourism to the State’s economy – that’s why we’re building a new convention and entertainment precinct at Darling Harbour and investing in partnerships like this with iconic brands like Qantas.”

Joyce said the time was right to elevate the partnership between Qantas and Destination NSW to a higher level.

“Qantas is Australia’s national airline, flying from Sydney to every continent on earth and to every corner of Australia,” Joyce said.

“Sydney is the gateway to Australia with more than 50 per cent of all international visitors to Australia arriving at Sydney Airport so it’s fitting this is the largest partnership we have ever entered into with a State Government.

“We have seen a fantastic and tangible response to work we have done with Destination NSW in the past and we think working more closely will result in more people visiting NSW and flying Qantas.”

The partnership – which sees both the NSW Government and Qantas invest $15 million each over the three years – will include international advertising and marketing campaigns, marketing activities around major events and joint public relations activities. There will be a strong focus on digital
platforms including online and social media.

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Mar 22

China Watch Blog reports that a woman flaunted a wad of renminbi notes to show her wealth, after her request to buy a grave for her dog was rejected by a cemetery.

“I have money!! If you think it is not enough, I can pay you more. It’s really simple, all I want to do is buy a grave in your cemetery for my dog,” a rich woman was quoted as saying to the principal of Ningbo’s Jiufeng Cemetery on March 18 by a Ningbo website.

According to reports, the lady, surnamed Li, went to the cemetery in her BMW. After her request to buy a grave in the cemetery for her pet dog was turned down by Mr. Wang, the principal of the Jiufeng Cemetery, she angrily threw a large sum of money on the desk.

“It is not just a matter of money. The cemetery was built to benefit people and your pet dog should be buried or cremated in strict accordance with the Animal Epidemic Prevention Law.” Mr. Wang explained patiently.

According to relevant departments, the Ministry of Civil Affairs has emphasized the strengthening of the public cemetery construction management to protect and improve the meeting of the basic requirements. Mr. Wang won the praise of his leaders rather than their criticism after the incident.

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