BUSINESS >> Insight

Extended railway lines give southwestern region greater access to South Asia

Improved transportation is one of the goals for integrating Southwest China’s Tibet Autonomous Region into China’s “One Belt and One Road” initiative. However, the region’s rugged, mountainous terrain poses challenges to infrastructure development. The idea is to better link the region with South Asia, specifically India and Nepal. Trade between China’s Tibet and Nepal surged by double digits in 2016, and demand for upgraded logistics services has been growing. The Global Times reporter recently traveled to Tibet to look into the difficulty of developing overland freight routes. This is the second part of a two-part story.
Source: Global Times | 2017/4/24 18:33:39

With boost in trade with Nepal, port of Gyirong county grows in importance

Southwest China’s Tibet Autonomous Region is the country’s new gateway to South Asia, which is expected to play an important role in China’s “One Belt and One Road” initiative. As trade between China’s Tibet and Nepal has grown, local authorities have stepped up efforts to integrate the autonomous region into the South Asia Economic Corridor. Domestic media has recently spotlighted a trade route between China’s Tibet and Nepal and an expansion of railway freight services to the country. The Global Times reporter recently traveled to Tibet to look into how those efforts have turned out. This is the first part of a two-part story.
Source: Global Times | 2017/4/23 20:33:39

Auto sales management to improve competition, after-sales services

On Friday, the Ministry of Commerce unveiled new auto sales management measures, stating that dealers don’t have to secure authorization prior to selling automobiles, and automakers and auto suppliers should not restrict dealers’ operations. The new measures will take effect on July 1, replacing the 2005 auto sales management system. Experts and companies said the new measures will make the relationship between market competitors more equal and could better protect consumer interests. Meanwhile, experts said the just announced measures to create a new electric vehicle sales network will help the sector develop.
Source: Global Times | 2017/4/19 19:43:39

Listed Chinese banks confront dilemma: curtail risks or retain profits?

China’s banking industry experienced head winds in 2016. With nonperforming loans (NPL) soaring, domestic commercial banks were confronted with a tough choice – either prioritize profit growth or allocate capital to hedge against NPL risks. Moreover, many banks have found that their portfolios don’t meet regulations. Some experts predict that 2017 will be a turning point for the banking industry thanks to the recovering economy. However, others disagree because cutting overcapacity could undermine the quality of banks’ assets.
Source: Global Times | 2017/4/18 17:03:39

Plans aim to integrate region in terms of tech, finance, manufacturing

In the Government Work Report delivered on March 5, Premier Li Keqiang said the central government will draw up plans for developing the Guangdong-Hong Kong-Macao Greater Bay Area, effectively elevating it to a national project. Hong Kong Special Administration Region (SAR) Chief Executive Leung Chun-ying will visit several cities in the Greater Bay Area from Wednesday to Friday. Experts believe that the area will become home to innovative finance, modern services and advanced manufacturing due to its huge economy, as well as its world-class ports and transportation network. But challenges such as tariffs, weak innovation and insufficient global understanding still need to be overcome.
Source: Global Times | 2017/4/17 18:43:41

E-commerce companies see opportunity in expanding along ‘Belt and Road’

Chinese e-commerce companies are beefing up payment and logistics services in countries and regions along China’s “One Belt and One Road” (B&R) initiative, helping to both promote the government’s plans for the initiative and expand the companies’ own customer bases. Alibaba, through its global retail site AliExpress, has been among the most active companies expanding along the B&R. Alibaba founder Jack Ma Yun proposed creating a private-sector Electronic World Trade Platform to specifically support the initiative. But just because Chinese companies are eager to expand abroad doesn’t mean that oversea countries are ready for them.
Source: Global Times | 2017/4/16 19:18:39

Regulations curb growth of housing prices in smaller Chinese cities

In March, more than 30 second- and third-tier cities in China issued regulations for their heated housing markets. Experts said that the efforts demonstrate the government’s determination to curtail speculative buying and slow the rapid growth in real estate prices. Thanks to judicious regulations, cities such as Hangzhou, capital of East China’s Zhejiang Province and Southwest China’s Chongqing have managed to maintain vibrant housing markets, even though price growth has leveled off and the number of nonlocal investors has declined. Still, local residents wonder whether the regulations will continue to be effective in the long term.
Source: Global Times | 2017/4/12 17:53:39

Manufacturers hesitate to expand capacity to meet surging start-up demand

China’s once waning bicycle manufacturing industry has experienced a revival thanks to the recent bike-sharing boom. No longer struggling with overcapacity, bike makers and bicycle parts manufacturers face a new dilemma: Should they expand capacity to meet the soaring demand of bike-sharing start-ups? Meanwhile, the price of bike parts has significantly increased and labor costs have risen. Many in the industry have recognized that the boom will not last forever. For its part, domestic biker Flying Pigeon has plans for how to succeed after the boom ends.
Source: Global Times | 2017/4/11 18:53:39

Lobster industry illustrates China and US’ interwoven economies

In the run-up to the 2017 Spring Festival holidays, online retailer Inc saw its sales of imported US lobsters surge. The tasty crustaceans have become vogue in China over the last few years. China imported $108 million worth of lobsters from the US in 2016. The lobster trade shows just how interconnected the two countries’ economies have become at a time when trade tensions are flaring. Still, experts said a trade war remains unlikely because the two economies depend heavily on one another. China surpassed Canada to become the US’ largest trading partner in 2015, according to media reports
Source: Global Times | 2017/4/10 19:48:39

Construction of China-Laos railway speeds up to beat rainy season

In a country where heavy rains can cause landslides, construction crews are redoubling their efforts on the 40 billion yuan ($5.8 billion) China-Laos railway project while the dry season lasts. The project, a joint venture between the two countries, will be the first to connect a foreign railway line with China’s domestic railway system. It is also a major strategic project that has been promoted by the top leaders of the two countries, which have both pledged close cooperation. When imported construction materials and equipment got held up in customs in March, for example, the Laos government put things right, setting up a special lane for imports related to the project. The project has also benefited communities neighboring the construction site by providing jobs and demand for local products.
Source: Xinhua | 2017/4/9 19:48:39

Company to expand sales channels to revive struggling mobile division

In less than a month, Lenovo Group hired three new executives with experience working for China’s telecom carriers. Analysts said the personnel changes demonstrate Lenovo’s desire to revive its struggling mobile phone business, specifically by bolstering sales channels through the country’s powerful telecom carriers. Still, expanded sales channels won’t be enough for Lenovo to overtake its formidable competitors in the domestic smartphone market, analysts said. Perhaps aware of the challenge at home, Lenovo has achieved some success at increasing its market share overseas.
Source: Global Times | 2017/4/4 19:43:39

Using Hyundai’s name, company wins subsidies, never finishes projects

In 2009, a South Korean company posing as a subsidiary of Hyundai Group signed a cooperation agreement with local authorities in Handan, North China’s Hebei Province. The company — Hyundai RNC Construction Co — bought at least 1,846 mu (123 hectares) of land in the city and over the next seven years received 610 million yuan ($88.69 million) in government subsidies for projects it never completed, according to domestic media reports. A Beijing-based company Onechain Group appears to have close ties with Hyundai RNC, given some overlap in management, Guangdong-based newspaper Southern Weekly reported in March. Onechain’s capital grew by 400 times over the past few years to roughly 20 billion yuan in 2017. Early in 2015, the company’s chairman, also the debtor of the Hyundai project in Handan, has reportedly absconded from creditors.
Source: Global Times | 2017/3/29 19:13:39

High employee turnover sign of transformation in P2P lending industry

Domestic peer-to-peer (P2P) lending platforms have suffered a wave of employee resignations in recent months as the industry goes through a period of reorganization in the wake of new government regulations. Since authorities issued new regulations in February 2017, many domestic P2P lending platforms have either shut down or abandoned the business. The number of Chinese P2P lending platforms fell from 3,516 in November 2015 to 2,393 in February 2017, according to industry data. Platforms will need scale, digital capacity and “special resources” to survive the ongoing reorganization, industry insiders say.
Source: Global Times | 2017/3/28 17:23:39

Burgeoning business faces questions about profitability, incoming regulation

Scan, unlock and ride – such is the simplicity of online bicycle-sharing services in China, which have grown more and more popular in major cities such as Beijing, Shanghai and Guangzhou. The companies allow almost anyone to ride a bicycle for rates of 1 yuan ($0.16) an hour or even less. With the help of investment from eager venture capital firms, these bike-sharing start-ups have put tens of millions of bikes onto city streets. However, their success has also drawn scrutiny, with many questioning if their business model is viable, especially with authorities expected to soon draft regulations for the business.
Source: Global Times | 2017/3/27 17:18:39

China supports Saudi Arabia’s economic ambitions with UAVs sales

During a recent visit by the king of Saudi Arabia to China, the two countries signed deals worth $65 billion, including a partnership for manufacturing drones, foreign media reported. In recent months, Saudi Arabia has repeatedly turned to China to buy drones. Experts said that the choice reflects the growing popularity of Chinese drones on the global market, especially in the Middle East, due to their high cost-efficiency. They also noted that Saudi Arabia needs support from China to wean its economy off oil exports.
Source: Global Times | 2017/3/26 20:33:39

Family-owned conglomerate leaves bankers in the cold in $23b telecom tie-up

One might figure that India’s $72 billion in merger and acquisition (M&A) deals in 2016 would have investment bankers scrambling to get into the country. One would be wrong, however. In a recent $23 billion tie-up between India’s Idea Cellular and the Indian subsidiary of Vodafone Group, Vodafone hired six outside advisors. Idea Cellular hired none. Rather than bringing in big investment banks for advice on such deals, India’s family-owned conglomerates have increasingly been turning to their own in-house teams of advisors. The trend, bankers said, is about bringing back control for Indian tycoons behind some of the country’s biggest companies. The result: More and more big banks are pulling out of the country.
Source: Reuters | 2017/3/22 18:28:39

Real estate agency regulation urgently needed to stabilize overheated housing market

After a new round of home-buying restriction policies were released around the country, authorities began conducting inspections of some real estate agencies to further stabilize the domestic housing market and curb speculative buying. Experts said that measures such as examining online home sales information should be implemented to better regulate real estate agents. Industry insiders said that restrictions should cool China’s overheated residential housing market, but they will spur growth in the commercial property market. Given the realities of the current housing market, the home rental market also has great growth potential.
Source: Global Times | 2017/3/21 18:33:39

Ukrainian tourism sector seizes opportunities to win over Chinese market

The number of Chinese visitors to Ukraine hit a 10-year-high in 2016 thanks to looser visa rules. The Eastern European country hopes to extend its success in drawing travelers from the world’s largest outbound tourism market by offering tours more tailored to Chinese tourists. To achieve that goal, Ukraine’s tourism industry is training a brigade of Chinese-speaking guides and forging alliances with neighboring European countries and other former members of the Soviet Union to offer packaged tours.
Source: Xinhua-Global Times | 2017/3/20 18:03:39