BUSINESS >> Insight

Risks mount as local govts skirt rules to take on greater implicit debts

Despite central government controls, implicit local government debts, assumed through methods such as Public-Private Partnership projects and government investment funds, are growing in China. Experts noted that there are several reasons for the growth of implicit local government debts, including a central government-imposed cap, an evaluation system for officials that encourages local governments to amass debt, as well as a lack of accountability.
Source: Global Times | 2017/6/5 17:13:39

SOEs, financial institutions line up to invest in new economic zone

Two months after the birth of China's new economic zone – ­Xiongan New Area – on April 1, the local government is on its way to drawing up development plans. So far, several State-owned enterprises (SOEs), financial institutions and other entities have pledged to support construction in Xiongan, in North China's Hebei Province, highlighting its potential for infrastructure construction and as a harbor for innovative industries. Although authorities have suspended real estate transactions in Xiongan, analysts predicted that it will become a testing ground for innovations in the housing market and local residency policy.
Source: Global Times | 2017/6/4 17:33:39

Digital currency's price surges past $2,784 in China, only to slump 20% in following week

After soaring to a record high of 19,084 yuan ($2,784) on May 25, the price of a Bitcoin in China had tumbled more than 20 percent by Wednesday as investors took profits, an analyst said. Since the beginning of 2017, the price of Bitcoin has skyrocketed more than 130 percent, driven by higher transaction prices overseas, a Bitcoin scaling agreement and the promise of the cryptocurrency's underlying blockchain technology. Although some industry insiders were optimistic about Bitcoin's prospects, they advised investors to be cautious because of its wild price swings. Still, industry insiders predicted that Bitcoin may become a popular payment method, once problems like high service fees and slow transfer times are overcome.
Source: Global Times | 2017/5/31 17:38:39

In daigou market, dishonest agents can fake both products and where they come from

More and more Chinese consumers are running into counterfeit products when they order goods through overseas purchasing agents known as daigou. In Putian, East China's Fujian Province, a comprehensive industry chain has emerged for agents willing to sell counterfeit products. Companies and factories in the city not only offer high-quality knockoff products but also phony documentation that shows the products were purchased abroad. These services have allowed dishonest daigou to earn profit margins above 70 percent in some cases, according to industry insiders, cutting into the business of legitimate purchasing agents. Analysts noted that e-commerce platforms also bear responsibility for the counterfeit problem because of their poor oversight.
Source: Global Times | 2017/5/30 17:33:39

China's booming cosmetic treatment industry belies rail-thin profit margins

China's cosmetic treatment market has been booming in recent years, thanks to the country's growing middle class and a generation of young people keen on looking as good as possible. But industry insiders pointed out that the industry's net profit margins are slim because of rising marketing costs. Still, venture capital firms and large companies in other industries have been more than willing to pour money into the business.
Source: Global Times | 2017/5/24 17:18:39

AI 'God of Go' beats Chinese grandmaster

Chinese Go grandmaster Ke Jie, the world's top-ranked player, lost the first game on Tuesday of a three-game match against Google's AlphaGo AI as part of a five-day Go event in Wuzhen, East China's Zhejiang Province, adding another footnote to the computer program's virtual invincibility in the ancient Chinese board game.
Source: Global Times | 2017/5/23 23:38:40

Traditional bike makers see chance to grow as new industry emerges

Since 2016, China's bike-sharing start-ups, with their brightly hued bicycles, have added a lot of color to the streets where they operate. With the emergence of bike sharing, the country's bicycle-manufacturing industry sees new business opportunities. On a recent trip to the suburbs of North China's Tianjin, a major manufacturing hub for bikes, the Global Times looked into how bike-sharing companies have effected this traditional industry.
Source: Global Times | 2017/5/23 18:33:40

Chinese, foreign financial institutions open slew of branches to support initiative

Banks say they play a significant role in offering financial support to projects under the Belt and Road (B&R) initiative. Nine Chinese banks had established 62 primary affiliates in 26 countries and regions along the B&R route by the end of 2016, according to the China Banking Association.
Source: Global Times | 2017/5/22 19:03:40

Chinese investors betting on South Asian country's real estate market, despite challenges

Many aspects of China and India have often been compared, such as the size of their populations and the pace of growth of their economies. Recently, many of the comparisons have dealt with their real estate markets. Is India's current real estate market similar to the one in China decades ago that helped the Chinese economy become the second largest in the world? The answer remains to be seen, but an increasing number of Chinese developers and investors are betting on the affirmative.
Source: Global Times | 2017/5/21 18:28:40

Under B&R initiative, Chinese firms changing how they invest in continent

Chinese companies have been rapidly increasing investment in Africa in recent years thanks to the China-proposed Belt and Road (B&R) initiative. The initiative has brought about significant changes in the investment and financing models used in projects in the region. In addition, production capacity has emerged as a highlight of cooperation between China and African countries. However, experts also warned that Chinese firms need to be aware of risks such as foreign exchange controls and political instability.
Source: Global Times | 2017/5/17 18:33:39

Encouraged by B&R initiative, firms build up advanced industries in northwestern region

Northwest China's Xinjiang Uyghur Autonomous Region sits in the heart of the Silk Road Economic Belt, one of components of the China-proposed Belt and Road (B&R) initiative. The region's advantageous location – combined with strong government support – has turned the region into a lodestone for companies in advanced industries such as heavy machinery and software. These companies also see the region's location as a convenient jumping-off point for reaching new markets in Central Asia and beyond.
Source: Xinhua | 2017/5/16 17:53:39

Despite cooling market, developers spending more on real estate

Tighter restrictions on home buying in many big Chinese cities have taken some of the heat out of the domestic real estate market, yet developers are snatching up land at a greater pace. This is largely a result of local governments putting up more land for auction in 2017. Land reserves also serve as a gauge for a developer's strength. Still, at least one expert cautioned that there are risks to acquiring land too quickly. A significant drop in home prices, for example, could leave developers holding land that is too expensive for the market to bear
Source: Global Times | 2017/5/15 17:43:39

China's sharing economy start-ups vault into variety of ventures

The sharing economy has taken off in China. The industry has branched out from ride-sharing and bike-sharing platforms to new ventures that offer to share umbrellas, portable battery chargers and basketballs. The industry has received its share of cheerleading over the last year or two, but at least one expert believes that a bubble has emerged. Concerns about blind investment have led to calls for government oversight.
Source: Global Times | 2017/5/14 17:48:39

With bike sharing's success, cities grappling with sprawl of cycles clogging the sidewalks

China's bike-sharing companies have found that success breeds its own set of challenges. As bike-sharing's popularity has skyrocketed, Chinese cities have strained to deal with the sprawling masses of shared bicycles that surround many bus and subway stations at rush hours, blocking pedestrian and vehicle traffic. Bike-sharing companies have hired workers to organize their bicycles. Several cities have instituted regulations to deal with the problem. Yet the situation has left some wondering if bike sharing can be regulated without killing the convenience that has made it a success.
Source: Global Times | 2017/5/10 19:33:39

Fighting for profits

On April 28, a video emerged showing 37-year-old former mixed martial arts (MMA) fighter Xu Xiaodong knocking out self-proclaimed tai chi master Wei Lei in about 20 seconds. The video quickly went viral on Sina Weibo. Later, Xu proclaimed that he had exposed what he called “fake martial artists.” The video has drawn attention to the state of traditional Chinese martial arts. The Beijing News reported on Friday that Shaolin Temple, the famous birthplace of one of China's martial arts, has broadened its business interests beyond teaching martial arts into martial arts performances, tourism and medicine. Other traditional Chinese martial arts have tried to follow its example, but have had less success. Given the early stage of the development of traditional Chinese martial arts, industry experts said that there are no clear business models for martial arts at present.
Source: Global Times | 2017/5/9 19:03:39

Sewer systems leave many newly built wastewater treatment plants with idle capacity

China plans to spend 564.4 billion yuan ($81.79 billion) on the country's sewer systems and wastewater treatment facilities during the 13th Five-Year Plan period (2016-20). Rapid infrastructure investment during the 12th Five-Year Plan period (2011-15) greatly improved the country's sewage treatment capacity in cities, yet much of that capacity has gone unused because local sewer systems lack the capacity to deliver the wastewater. The situation is worse in rural areas where sewer system development has lagged behind that of cities. To rectify this issue, the central government has made up a plan to increase the amount of installed sewer pipeline by 42.5 percent from 2015 levels by the end of 2020.
Source: Global Times | 2017/5/8 18:58:39

Boosted by passenger train, Chinese city aims to attract travelers to Mongolia

One important goal of the China-proposed “One Belt and One Road” (B&R) initiative is facilitating the exchange of people. As the initiative gathers momentum, the city of Erenhot, North China's Inner Mongolia Autonomous Region, and a neighboring city on the other side of the China-Mongolia border are doing what they can to boost local and cross-border tourism
Source: Global Times | 2017/5/7 17:43:39

At train station on China-Mongolia border, seamless transition of freight boosts to trade between countries

Under the “One Belt and One Road” (B&R) initiative, the notion of connectivity refers to efforts made to ensure the seamless connection of trade and transportation. It can also be referred to as improved exchanges between neighboring peoples. The Global Times visited the Erlian Railway Station in Erenhot, North China's Inner Mongolia Autonomous Region, to see what connectivity really means at the ground level.
Source: Global Times | 2017/5/3 19:43:39