China Economy Forum

[TaiShang]

China offers Switzerland US$8 bln QFII quota
Xinhua, January 22, 2015

China has agreed to give Switzerland an 8-billion-U.S.-dollar investment quota under its Qualified Foreign Institutional Investor (QFII) program.

The agreement is part of a memorandum of understanding signed by the central banks of the two countries here on Wednesday, which also includes a plan -- pending regulators' approval -- to set up the first branch of a Chinese bank in the Swiss financial hub of Zurich for future RMB clearance.

The deal is set to materialize Beijing and Bern's pledge for closer financial ties and accelerate the establishment of a Zurich offshore RMB market, which will mark a crucial step in the internationalization of the RMB, especially in Europe.

The signing came after visiting Chinese Premier Li Keqiang met in this ski resort with President Simonetta Sommaruga of the Swiss Confederation on the sidelines of the 2015 annual meeting of the World Economic Forum (WEF).

As the RMB, also known as yuan, is rapidly gaining traction in international transactions, China has established offshore RMB markets in Hong Kong and London, among other places.

In July last year, Chinese and Swiss central banks signed a bilateral currency swap agreement worth 150 billion yuan (24 billion dollars) in a bid to provide liquidity support for bilateral trade and economic cooperation.

Li is attending the WEF meeting in Davos and paying a working visit to Switzerland, his second trip to the Alpine country since he took office in 2013.

This year marks the 65th anniversary of the establishment of diplomatic ties between China and Switzerland.

The Chinese foreign ministry said earlier that Li's visit is in part aimed at reaping the "dividend" of the free trade agreement between the two countries, which took effect in July 2014.

Switzerland, famous for its precision instruments and pharmaceuticals, was the first among the world's top 20 economies to reach a free trade deal with China.

 

[TaiShang]

(2012 numbers. I guess the combined GDP is currently over 16trillion USD)



(That has also changed. China-Japan bilateral trade has grown -- first time in three years -- over 2% points in 2014).

 

[TaiShang]

China announces $7bn Jinan metro
20 January 2015

China’s National Development and Reform Commission has announced that work will begin on a metro network in Jinan, the capital of Shandong province in eastern China.
The $7bn first phase of the development will involve the construction of three lines with a total length of 81km.

The first will run for 26km through the west of the city. It will cost $2bn and contain nine stations. The 35km, $3bn second line will run from east to the west, with 14 stations and interchanges. The third will contain 11 stations and link the north and south of Jinan; it is valued at $2bn.

The trains will have the unusually high maximum speed of 120kph owing to the long distances between the stops.

Jinan has a population of a little less than 7 million people, 4.3 million of whom live in the metropolitan area. When future phases are completed, they will be served by a 331km system with 155 stations.

Construction on phase one is due to start this year and will be complete by 2019.

China is to stimulate domestic demand by fast-tracking work on $1 trillion of construction and infrastructure projects as the republic fights to keep its GDP growth rate above 7%.

It has recently announced plans to build an $11bn international airport in Chengdu.

 

[kawaraj]

How long does it take and will it take? I feel it like a million years those impotentant politicians are still sabotaging.

East Asia shall take the lead to have its own FTA, just like EU and North America, so will SAARC.

 

[BoQ77]

Could anyone estimate when the FTA has effective ? 2020 ? 2030 ? 2040 ?

 

[hans]

I think Japan is still struggling between US and east Asia.
Only when China has bigger influence to Japan than US, that Japan would join the FTA..
And it will still takes some year for China to surpass US influence in east Asia..

How long does it take and will it take? I feel it like a million years those impotentant politicians are still sabotaging.

East Asia shall take the lead to have its own FTA, just like EU and North America, so will SAARC.

 

[TaiShang]

I guess before the CJK FTA, we will see China-SK FTA, which will probably go into effect this year.

That will be a boost for Japan to seek harder an FTA.

The driver of the CJK FTA is China and South Korea. Japan seems to be the party that slows it down. But, there is the will and the history of this particular agreement does in fact not go too far. Negotiations began in 2012; so, it is not ancient history.

The CJK FTA will go into effect (maybe not in full) in three years (by 2018), in my opinion.

 

[TaiShang]

China's e-commerce trade reaches US$2.1 trln in 2014

CRI, January 22, 2015

The government says China's e-commerce transactions totaled 2.1 trillion US dollars in 2014.

The spokesman of the commerce ministry says the number represents growth of 25 percent compared to 2013.

China has the world's biggest online population, 632 million as of last year.

Online shopping has exploded in recent years as consumers turn to the Internet for cheaper products and overseas goods that are believed to be safer than domestic options, such as baby formula.

Authorities have said they hope e-commerce will become a new "engine" for growth in the world's second-largest economy.

 

[TaiShang]

Apple agree to accept China's internet security checks

CRI, January 22, 2015

Apple has agreed to allow security checks by the Cyberspace Administration of China. [File photo]

China's top internet security watchdog says Apple has agreed to allow security checks by the Cyberspace Administration of China, becoming the first foreign firm to agree to the watchdog's rules.

China has overtaken the US as the largest market for iPhones.

Several US tech giants, including Google and Facebook, have been approached by the watchdog to comply with China's cyberspace checks.

These firms have had to leave the Chinese market because of their refusals to comply.

 

[TaiShang]

Li Ka-shing buys UK's train company
CRI, January 22, 2015

Hong Kong tycoon Li Ka-shing [File Photo/Chinanews.com]


Hong Kong tycoon Li Ka-shing has bought Britain's Eversholt Rail for some 3.8 billion US dollars.

Eversholt is one of the UK's three leading rail companies.

The company owns and operates close to 30-percent of the UK's passenger trains.

Li Ka-shing's company says they're basing their acquisition on Eversholt's steady income, longer-term leases and the UK's growing number of rail passengers.

Cheung Kong Group has reportedly poured in around 50 billion dollars into the UK, making it the biggest overseas investor in the country.

 

[Shotgunner51]

By Tom Mitchell

Manufacturing expansion plans go beyond supplying the Boston subway

On a typical Beijing to Boston itinerary, a traveller might fly a Boeing 787 on Hainan Airlines’ new direct service between the two cities and then take a German subway car on the Blue Line from Logan Airport to Government Center. There a family member might be waiting in a Volvo, a car that has long been popular with drivers in New England despite the Swedish automaker’s larger travails.

Substitute a Comac C929 for the Boeing 787, a CNR Corp subway car for the Blue Line’s Siemens-made rolling stock and a Geely GC9 for the Volvo, and you have the Chinese government’s vision of a future in which long-distance travel features made-in-China planes, trains and automobiles .

Planes aside, that future could be coming sooner than many people realise. In October, CNR, one of China’s two largest rolling stock manufacturers, surprised the global rail industry by winning a $570m tender to supply more than 280 subway cars to Boston’s public transit system.

Like so many of China’s industrial advances, this one came as a bolt from the blue after years of quiet development and a steady accumulation of contracts and experience primarily in developing markets. Chinese companies are increasingly aiming for contracts in the US and other mature economies, potentially foreshadowing a reshaping of the global rail industry. But their ambitions ultimately extend far beyond Boston, and to industries far beyond rail.

To win over Boston area transport officials, CNR promised to assemble the subway cars at a new facility in Springfield, a city in western Massachusetts desperate for investment and jobs. CNR’s bid was also by far the lowest submitted, coming in almost 50 per cent below Bombardier’s $1.08bn.

In the process, Chinese executives learned a bit about community politics, Boston-style. Guided by US lobbyists and a PR specialist who previously worked for the Massachusetts Bay Transportation Authority, CNR wisely kept its cool as local activists tried to tie the contract decision, rather tenuously, to China’s human rights record.

Lu Xiwei, head of the CNR unit that will deliver the subway cars, also deftly fended off — in polite English — a pack of Boston reporters who wanted to compare the base salaries of his company’s China workforce to blue-collar workers in the US.

Separately, Mr Lu schmoozed everyone from Springfield mayor Domenic Sarno to neighbourhood groups and the editorial board of The Republican, a local newspaper. “We are not here just for one project,” Mr Lu assured them, as he outlined plans to invest $60m in a disused Westinghouse plant and create 250 jobs. “We are entering into the entire North American market from here.”

Springfield swooned, grateful at the opportunity to get back into the railway business. The city used to be home to the Wason Manufacturing Co, which supplied the funeral train that transported President Abraham Lincoln’s body back to Illinois after his assassination. Wason closed its plant during the Great Depression.

As for Chinese automobiles, most New England Volvo drivers are probably unaware that their beloved Swedish brand has belonged to a Chinese company, Zhejiang Geely, since 2009 — or that Volvo will begin small-scale exports of Chinese-made cars to the US this year.

Like Jaguar Land Rover, the UK manufacturing champion that has thrived under Indian ownership, Volvo retains its original identity. Indeed, Volvo’s own turnround can probably be credited to Geely’s willingness to give its European managers more freedom than they ever enjoyed under their previous owner, Ford Motor.

Convincing US drivers to buy one of Geely’s Chinese brands, such as its new flagship GC9 sedan, will be a much harder task. But as Bob Grace, head of JLR’s China operations, has observed, crazier things have happened before in the auto industry. “You’ve seen [Czech brand] Skoda go from being one of the bargain basement brands . . . to become very successful under the VW group,” he said in a briefing last year. “Things do change relatively in a short period of time and I think the Chinese will shorten that timeline more than most.”

Finally there is China’s vision of replacing that Hainan Airlines Boeing 787 with a C929 — Beijing’s state-funded wide-body airliner project. Even the most ambitious Chinese government officials would probably admit this remains a distant dream that is decades away.
http://www.ft.com/intl/cms/s/0/6ae9558e-a09b-11e4-8ad8-00144feab7de.html#axzz3PXevrOwS

 

[Yizhi]

so he goes after British trains now?
he could end up owning all the British infrastructure someday. i wonder how native Brits feel about this.

 

[Aepsilons]

so he goes after British trains now?
he could end up owning all the British infrastructure someday. i wonder how native Brits feel about this.

The richest in the UK are native South Asians. The Hinduja Group, with a net worth of over $13.1 Billion.

 

[cirr]

If you want to do business in China，do it in accordance with local rules、regulations and laws。

Or piss off。

 

[TaiShang]

If you want to do business in China，do it in accordance with local rules、regulations and laws。

Or piss off。

Looks like, in proportion to the Chinese market's significance to release a decent quarterly report, many companies are coming to their senses.

Conviction through strength. The only real currency in IR.