China Tech News

CHINESE e-commerce giant Alibaba is to acquire full ownership of food delivery firm Ele.me in a deal that values the Shanghai-based startup at US$9.5 billion.

Alibaba and its affiliate Ant Financial currently own 43 percent of the app-based Ele.me and said in a statement yesterday that it would acquire all remaining shares.

“Ele.me can leverage Alibaba’s infrastructure in commerce and find new synergies with Alibaba’s diverse businesses to add further momentum to the new retail initiative,” said Daniel Zhang, Alibaba Group’s chief executive.

Buying Ele.me is a major step for Alibaba to expand its local lifestyle services within its “e-commerce ecosystem” and to provide new shopper experience, Zhang said.

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CHINA’S foreign exchange reserves edged up 0.27 percent from a month earlier to US$3.14 trillion at the end of March, the People’s Bank of China said yesterday.

The increase reversed a slight drop in February. Previously, the forex reserves gained for 12 straight months between February 2017 and January.

“The foreign exchange market continued to see generally balanced supply and demand,” the State Administration of Foreign Exchange said in a statement.

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DEBT issued by Russian company Rusal has been removed from bond trading platform MarketAxess after it was included in a new round of US sanctions against Moscow.

MarketAxess, one of the largest multi-dealer platforms for bonds trading in the world, along with Tradeweb and Bloomberg, confirmed the move through a spokesman yesterday.

Russian stock indexes, the rouble and shares in major Russian companies fell sharply yesterday.

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SHANGHAI is on track to build itself into a “global exhibition capital” by 2020 as notable improvements have been achieved in various aspects over the past few years, according to government officials.

In 2017, the city held around 1,020 exhibitions and conventions which took up 17.7 million square meters, up 19.9 percent and 17 percent, respectively, from 2015 (the end of the 12th Five-Year period), said Shang Yuying, director of the Shanghai Commerce Commission.

During the whole of last year there were 36 large-scale exhibitions and conventions occupying over 100,000 square meters each, accounting for 32 percent of the country’s total. Six of them were mega-size events taking up 300,000 square meters and above.
“Shanghai has in recent years been accelerating the development of its exhibition industry, one of the key growth engines to boost the city’s economy,” Shang told a press conference yesterday. “By both number and scale of exhibitions and conventions, Shanghai is No. 1 in the country and one of the leading players in the world.”

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SHANGHAI will launch a pilot program to offer tax benefits to entice the city’s aging population to buy commercial pension insurance from May 1, said a statement by the Ministry of Finance yesterday.

Under the program, buyers of commercial pensions will enjoy tax exemption of up to 1,000 yuan (US$159) of their monthly income.

The pilot stipulates that the eligible commercial pension must be invested in low-risk or risk-free areas, and needs to be approved by the ministry, according to the statement.

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US retail sales rebounded in March after three straight monthly declines as households boosted purchases of motor vehicles and other big-ticket items, suggesting consumer spending was heading into the second quarter with momentum.

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The Commerce Department said yesterday retail sales added 0.6 percent last month after an unrevised 0.1 percent dip in February. January data was revised to show sales falling 0.2 percent instead of the previously reported 0.1 percent drop.

Economists polled by Reuters had forecast retail sales rising 0.4 percent in March. Retail sales in March increased 4.5 percent from a year ago.

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THE International Monetary Fund urged central banks yesterday to take a gradual and transparent approach to tightening monetary policy, warning that unexpected moves could shock the global economy.

The IMF cautioned that investors and financial markets expect a steady approach to monetary tightening based on the belief inflation will remain relatively tame.

But the IMF pointed to some fragilities in global finance after a lengthy period of easy money policies and low interest rates, including a flood of high-risk bonds, record-high debt levels and lofty prices for risky assets.
If conditions change abruptly that could even derail the economic recovery, the IMF warned.

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CHINESE telecom equipment maker ZTE is taking steps to comply with a United States “denial order,” the company said yesterday.

ZTE is communicating with relevant parties and is seeking a solution to the issue, the company told the Shenzhen Stock Exchange.

The statement came after the US Department of Commerce activated a denial of export privileges against ZTE for alleged violations of the US Export Administration Regulations.

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THE International Monetary Fund will systematically address corruption and its impact on economic growth with all its member countries under new guidelines launched on Sunday.

The stricter new policy also aims to tackle how rich countries contribute to corruption in the developing world by failing to prevent bribery and money laundering or by allowing anonymous corporate ownership.

“We know that corruption hurts the poor, hinders economic opportunity and social mobility, undermines trust in institutions and causes social cohesion to unravel,” IMF Managing Director Christine Lagarde said in a statement.
“We have now adopted a framework for enhanced engagement on governance and corruption that aims for a more systematic, evenhanded, effective and candid engagement with member countries.”

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APPLE Inc on Tuesday reported resilient iPhone sales in the face of waning global demand and promised US$100 billion in additional stock buybacks, reassuring investors that its decade-old smartphone invention had life in it yet.

Apple’s quarterly results topped Wall Street forecasts, which dropped ahead of the report on growing concern over the iPhone. The Cupertino, California-based company also was more optimistic about the current quarter than most financial analysts, driving shares up 3.6 percent to US$175.25 after hours.

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Volkswagen AG, the world’s biggest automaker, is in talks to form a joint venture with China’s Didi Chuxing to manage part of the ride-hailing company’s fleet of cars and help develop “purpose-built” vehicles for Didi’s services.

As part of the deal between Volkswagen and China’s biggest ride-hailing service, expected to be signed early next month, the German automaker will initially manage a fleet of about 100,000 new vehicles for Didi, of which two-thirds will be Volkswagen Group cars, said a senior executive at the carmaker.

Volkswagen will also jointly buy some new cars with Didi to allow the Chinese company to expand its fleet. The two eventually plan to collaborate to design and develop dedicated vehicles, he said, speaking on condition of anonymity as the details are still private.

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CHINA’S largest trade fair concluded its 123th session on Saturday in Guangdong Province, reporting more foreign buyers and deals.

The China Import and Export Fair, known as the Canton Fair, had received 203,346 buyers from 214 countries and regions by Thursday, said fair spokesman Xu Bing.

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THE China Banking and Insurance Regulatory Commission recently fined three commercial banks for improper practices in wealth management.

China Merchants Bank, one of the country’s biggest, was fined over 65.7 million yuan (US$10 million) for 14 violations, including guaranteeing principle on some wealth management products, the CBIRC said in an online statement on Friday.

Shanghai Pudong Development Bank was fined more than 58.5 million yuan for 19 offences including allocating too much money raised from WMPs to risky assets.

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SHANGHAI's existing housing index fell for the fifth consecutive month in April amid sluggish sentiment among home buyers.

The index, which tracks month-over-month price changes in 130 areas citywide, lost 16 points, or 0.43 percent, from March to 3,959 last month.
Some 13,550 pre-occupied homes changed hands around the city, down 22 percent from March and a drop of 9 percent from the same month a year earlier, Shanghai Existing House Index Office said in a report released yesterday.

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CHINA’S growing thirst for wine has spawned a new crop of connoisseurs, inspired prize-winning domestic producers and even attracted a top international tasting competition.

More than 300 experts from around the world gathered at a luxury hotel in Beijing last weekend to taste 9,000 wines from some 50 countries.

After sniffing, tasting and spitting the various vintages, they recorded their notes on touchscreen tablets for the 25th Concours Mondial de Bruxelles, which awards coveted gold and silver medals that producers can then tag on their bottles.

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FOREIGN direct investment into China's mainland fell in April but the FDI inflow edged up in January to April, with capital going into high technology industries growing rapidly.

FDI declined 1.1 percent year on year to 59.24 billion yuan (US$9.3 billion) last month, and the number of newly-set up foreign companies in the mainland rose 39.5 percent year on year to 4,662, data from the Ministry of Commerce showed yesterday.

In the first four months of this year, the total number of newly-formed enterprises funded by foreign investors jumped by 95.4 percent to 19,002, while foreign funds that were actually used added 0.2 percent from a year ago to 286.78 billion yuan.

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AIRBUS said yesterday it had taken steps to comply with a World Trade Organization ruling on subsidies for its A350 and A380 jets, which has seen the United States and Europe trade legal blows on behalf of Boeing and Airbus.

The move comes days after the US won a partial victory against European Union support for Airbus at the WTO, clearing the way for possible US sanctions in a 14-year-old dispute over claims of illegal handouts for planemakers.
The EU says it expects to strike a similar legal blow later this year in a parallel WTO case about US support for Boeing, raising the prospect of a tit-for-tat sanctions battle.

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CHINA is working to revise the negative lists for foreign investment as the country fulfills its promise to open wider.

The country is working on the revision of two negative lists for foreign investors, namely, a national negative list and a negative list for foreign investors in the free trade zones, said Tang Wenhong, head of the department of foreign investment of Ministry of Commerce.

China started to pilot a negative list approach in the Shanghai FTZ in 2013. All sectors are open to foreign investors except for those outlined in the negative list.

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GLOBAL rating firms are planning to set up independent branches in China as the country continues to open up its financial market.

Standard and Poor's seeks to set up a stand-alone rating firm in China, while Fitch Ratings also plans to apply to Chinese regulators for such a license, said a report from Shanghai Securities News.

China's central bank unveiled rules on inter-bank bond market credit ratings services by foreign rating firms last July, marking the first step in opening the domestic rating market to foreign players.

Previously, foreign rating agencies could only hold minority stakes in joint-venture operations in China.

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ONCE considered a risk, 40 years on, reform and opening-up in the financial sector has proven to be a risk well taken.
Critical to opening-up, a fresh push in the financial sector is providing opportunities for both domestic and global businesses.

In 1984, Shanghai Feilo Acoustics Co issued 10,000 shares at 50 yuan (US$7.80) per share. It was the first listed firm on the Chinese mainland.

Feilo remained largely unknown outside China until two years later, when a stock certificate of the company was given by Deng Xiaoping, architect of reform and opening-up, as a gift to visiting John Phelan, then chairman of the New York Stock Exchange.

Phelan then made a trip to Shanghai, home to China’s first stock exchange, especially to transfer ownership of the certificate. China's first stock exchange counter, measuring about 10 square meters, had been open to the public for just two months.

The formative years of China's equity market accompanied the transformation from a planned economy to a market economy, a journey of many twists and turns.

Changes to financial markets will bring ample benefits, and are a necessary step for economic transition, said Zhu Min, former deputy managing director of the International Monetary Fund.

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MARTIN Sorrell, who last month resigned as head of British advertising giant WPP after allegations of personal misconduct, announced yesterday plans to launch a communications company.

WPP was formed in similar fashion, when in 1986 Sorrell turned Wire and Plastic Products, which made wire baskets, into a marketing services group.

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THE US economy grew at a slightly slower pace in the first quarter as a drop in home buying offset an increase in business investment, the Commerce Department said yesterday.

More complete data on the economy show gross domestic product increased by 2.2 percent in the first quarter, a tenth of a percent lower than in the preliminary report last month.

That was still significantly slower than the 2.9 percent growth seen at the end of 2017, and farther from the White House goal of three percent expansion, despite the massive tax cut approved in December that was expected to juice the economy.

That slowdown was attributed to a decline in exports, household spending and government spending at all levels, the report said.

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INFLATION in the eurozone leaped to the ECB’s target in May, data showed yesterday, fueled by a huge increase in oil prices as the US decided to pull out of a nuclear deal with Iran.

The European Union's statistics authority, Eurostat, said inflation in the eurozone jumped to 1.9 percent in May, a sharp rise from 1.2 percent in April.

That puts inflation right at the European Central Bank’s target of close to, but just below 2 percent.
Analysts believe higher inflation will heap pressure on the ECB to end its massive stimulus program that has helped keep government borrowing prices in Europe at super low levels.

This would be especially sensitive in heavily-indebted Italy, which is hit by a political crisis and closely benefits from the ECB bond-buying program.

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CHINESE and US teams, led by Chinese Vice Premier Liu He and US Secretary of Commerce Wilbur Ross, held economic and trade consultations in Beijing on Saturday and yesterday, according to a statement issued by the Chinese side yesterday.

To meet the people's ever-growing needs for a better life and the requirements of high-quality economic development, China is willing to increase imports from other countries, including the United States, which will benefit people of both countries and the rest of the world, it noted.

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THE world's major industrial countries spend at least US$100 billion each year to prop up oil, gas and coal consumption, despite vows to end fossil fuel subsidies by 2025, a report released ahead of the G7 summit in Canada suggested.
Britain, Canada, France, Germany, Italy, Japan and the United States - known as the Group of Seven — pledged in 2016 to phase out their support for fossil fuels by 2025.

But a study led by Britain's Overseas Development Institute found they spent at least US$100 billion a year to support fossil fuels at home and abroad in 2015 and 2016.

Researchers scrutinized and scored each country against indicators such as transparency, pledges and commitments, as well as their progress toward ending the use, support and production of fossil fuels.
France was ranked the highest overall, scoring 63 out of 100 points, followed by Germany (62), Canada (54) and the UK (47), the report said.
The US scored lowest with 42 out of 100 points due to its support for fossil fuel production and its withdrawal from a 2015 global pact to fight climate change.

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With consumer price growth continuing to be mild and factory prices of industrial products slightly edging up in May, China's inflation remains benign.

The National Bureau of Statistics data on Saturday showed that China’s Consumer Price Index, a main gauge of inflation, rose 1.8 percent year on year in May.

The bureau's statistician Sheng Guoqing mainly attributed the rise to carry-over effects, with new price-rising factors contributing only 0.4 percentage points.

Food prices edged up by 0.1 percent, resulting in a growth of 0.01 percentage points in the price index. Non-food prices rose by 2.2 percent, generating a rise of 1.74 percentage points.

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SHANGHAI'S new housing market again saw zero supply while weekly transactions managed to stay above the 100,000-square-meter threshold despite a double-digit retreat.

The area of new homes sold, excluding government-subsidized affordable housing, fell 26.8 percent to 110,200 square meters during the seven-day period ending Sunday, Shanghai Centaline Property Consultants Co said in a report released yesterday.

Nanhui in Pudong New Area, where weekly sales tumbled 30.6 percent from a week earlier to 16,800 square meters, topped for the second week. Jiading District was the second most popular area after transacting 15,000 square meters, a week-on-week gain of 28.4 percent.

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During the first five months, total power generation in China went up more than 10 percent from the same period in 2017. The rising output of power plants signals a steady economy. Apart from the robust economic indicators, structural reforms were pushed forward in a faster pace.

Moody's said that resource allocation in the economy is shifting in favor of industries with high added value, such as automaking.

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CHINA'S economy enjoyed steady growth in May, largely due to solid industrial output and investment in the manufacturing sector.

The industrial output rose 6.8 percent year on year last month, 0.3 percentage points faster than the growth a year ago but 0.2 percentage points slower than a month earlier, data from the National Bureau of Statistics showed yesterday.

For the January-May period, industrial output grew 6.9 percent, flat from that in the first four months of the year.
The fundamentals of industrial production continued to improve and emerging industries were developing rapidly, said Jiang Yuan, industrial statistician at the bureau.

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COMPANIES and trade groups in the US have expressed concern over how the escalating trade spat between the world's two biggest economies could affect operations.
Beijing retaliated immediately to tariffs on tens of billions in Chinese imports imposed by US President Donald Trump on Friday. US trade groups stepped up their criticism, while some large companies such as Boeing said they were beginning to evaluate the tariffs' possible effects. Boeing garnered about 12.8 percent of its 2017 revenues from China and is frequently seen as among the more vulnerable US multinationals to a full-on trade war.

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CHINESE smartphone maker Xiaomi kicked off its initial public offering yesterday but the firm is likely to pull in about US$6.1 billion, far less than originally expected, with investors having mixed views about its main business.

Xiaomi had hoped to be the first company to list shares in Hong Kong at the same time as launching new Chinese Depository Receipts in Shanghai under new rules announced in April by mainland authorities to open up markets in the world's number two economy.

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CHINA'S central bank said yesterday that it will cut the amount of cash that some banks must hold as reserves by 50 basis points, releasing US$108 billion in liquidity, to accelerate the pace of debt-for-equity swaps and spur lending to smaller firms.

The reserve reduction, the third by the central bank this year, had been widely anticipated by investors amid concerns over market liquidity. But the 700 billion yuan (US$108 billion) in liquidity that the central bank said will result from the reduction in reserves was bigger than expected.

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The Swedish company, which has been operating in China for over 100 years, bears witness to the nation’s economic reforms initiated 40 years ago as it opened to the outside world. From there, it was no look*ing back!

Zhao Juntao, president of Ericsson China, talked with Shanghai Daily about the mo*mentous changes.

Zhao and Ericsson veterans Lars A. Stålberg and Per-Olof Björk are bringing their experiences together in a book to be pub*lished later this year. It’s entitled “Ericsson and China: A Lasting Relationship.”

Of course, Ericsson will be participating in the first China International Import Expo to be held in Shanghai in November.


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Latest technologies packed in solar-power backpacks, smart dustbins, eye-tracking VR and 3D facial modeling by a smartphone camera took the spotlight at the Mobile World Congress Shanghai yesterday.
The integration of technologies like 5G, artificial intelligence, Internet of Things, new energy and virtual reality has propelled consumers into a connected and smart society, industry officials said at the event which opened yesterday in Shanghai.

Solar-power backpacks, which can charge smartphones and computers, drew visitors to Hanergy booth at the event. Their products, including portable chargers, can charge themselves in most conditions such as cloudy days or low temperature environments.

The products offer users unlimited power supply and ease “concerns” about batteries running out of power in the digital society, Hanergy said.

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CHINA Mobile is teaming up with several partners to explore prospects in cloud, VR and smart driving sectors as the world’s biggest telecommunication carrier transforms its business and diversify its revenue.

The telco said yesterday its investment in Shanghai-based cloud service provider Ucloud will enable the two companies to cooperate on an eco-system, technology and products and share resources. Ucloud offers public cloud service for over 80,000 enterprises.

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US authorities have demanded the US arm of Glencore Plc hand over documents relating to its business in Nigeria, the Democratic Republic of Congo and Venezuela, sending shares in the parent company down more than 10 percent.

The Swiss-based commodities trader and miner received a subpoena from the US Department of Justice requesting documents and records on compliance with the Foreign Corrupt Practices Act and US money-laundering statutes.

Shares in Glencore, a major exporter of Nigerian and Venezuelan crude oil, fell as much as 13 percent, their biggest one-day fall in more than two years.

The documents requested from subsidiary Glencore Ltd relate to the group's business in the three countries from 2007 to present, Glencore said, adding it was reviewing the subpoena.

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THE US-initiated trade dispute has triggered retaliatory reactions from the country's major trading partners, casting a shadow over the business of global multinational firms.

As the country where the world's most Fortune 500 companies are based, the United States is expected to bear the brunt of escalating trade tension in its corporate sector.
The US Chamber of Commerce on Monday warned that the Trump administration's new tariffs on imports are likely to spark a global trade war, as other trading partners have announced billions of dollars in retaliatory tariffs against American products.

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CHINA will allow foreign individuals working on the Chinese mainland to open A-share accounts, the China Securities Regulatory Commission said in a statement yesterday.

Foreign employees with equity incentives working in A-share listed companies overseas will also be allowed to open a securities account to trade in A-shares, according to the CSRC which is also seeking public opinion until August 8 on the issue.

The securities regulatory body of the countries of qualified foreigners should have already established a regulatory cooperation mechanism with the CSRC, according to the statement.

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CHINA'S consumer inflation rose slightly faster in June amid higher food prices.

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The Consumer Price Index, a main gauge of inflation, rose 1.9 percent year on year in June, faster than the 1.8 percent annual growth in May, the National Bureau of Statistics said yesterday.

On a monthly basis, the CPI dipped by 0.1 percent in June, and this dip was 0.1 percentage point slower from May.
Sheng Guoqing, the bureau’s senior statistician, cited the faster consumer inflation to a 0.3 percent rise in food prices, which lifted CPI growth by 0.05 percentage points.

Prices of eggs and vegetables surged 17.1 percent and 9.3 percent respectively to add 0.27 percent to CPI growth, while pork and fruit prices fell 12.8 percent and 5.3 percent year on year respectively.

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China's economy extended its steady growth, expanding higher than expected by 6.8 percent year on year in the first half of 2018, data released by the National Bureau of Statistics showed yesterday.

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The gross domestic product rose 6.8 percent to 41.9 trillion yuan (US$6.3 trillion) in the first half from the same period of last year, the bureau said. The economic growth in the first quarter was 6.8 percent, and 6.7 percent in the second, thus maintaining a consistent growth of between 6.7 and 6.9 percent in 12 straight quarters.

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