Daily Archives: 07/29/2015

Business, China, Indepth, News, Opinion, World News

News Analysis: Information Silk Road brings regional enterprises closer

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BEIJING, July 19 (Xinhua) — When Damir Karcas, who markets drinks from Serbia, came to southeastern China to promote his products a month ago, he knew little about selling on Chinese e-commerce sites, an increasingly popular venue for food and beverage sales.

“I paid little attention to market information in this field before, but it seems necessary to keep yourself tuned in to changing market conditions in China,” said Karcas.

As infrastructure development progresses steadily along the China-proposed Belt and Road, a trade and infrastructure network that connects Asian, European and African countries, breaking invisible barriers of information asymmetry stands out as a key task.

Failures haunt many firms that venture overseas due to misunderstandings with local stakeholders and ignorance of the local regulatory and cultural environment.

Information asymmetry has become the top issue facing overseas investment by businesses as many firms are ignorant of possible risks, according to Jia Huai, deputy head of the economic information department of the China Council for the Promotion of International Trade.

“It is reality that information and communication gaps create differences among individuals, groups and countries and misunderstandings about specific issues or projects when there is little or incorrect information,” said Aman Ullah Khan, Chairman of the Pak-China Business and Investment Promotion Council.

Jia suggested that enterprises at home and abroad establish an information exchange platform to develop trade and investment strategies according to the target country’s political, economic, cultural and social conditions.

An open and sound information-sharing mechanism should be based on big data and include databases, business connection platforms, consulting services as well as information collection, publication, screening and other customized services to help investors gain insight and expand their influence in their targeted markets.

Chinese government organizations and media groups are working to bridge the information gap and build an Information Silk Road. The State Information Center is constructing databases of countries involved in the initiative, and Xinhua News Agency rolled out a new line of information products to help global investors form better partnerships under the Belt and Road Initiative.

China’s bilateral trade with countries along the Belt and Road Initiative remained robust amid downward economic pressure and reached close to three trillion yuan (490.2 billion yuan) in the first half of 2015, about one-fourth of total trade volume.

“To avoid misconceptions and misunderstandings and to increase trust among stakeholders, partners, and investors, there should be fair and accurate flow of information. With the passage of time, economic and financial information will be as important as investment and other projects,” Khan added. Enditem

News

Interview: Chinese economic data true to facts: vice FinMin

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LONDON, July 20 (Xinhua) — China’s economy posted 7 percent growth year on year in the second quarter of 2015, Chinese Vice Finance Minister Zhu Guangyao told Xinhua in a recent interview here, emphasizing the data was realistic and serious.

Analyzing the data released by China’s National Bureau of Statistics (NBS), Zhu pointed out that China’s economic growth was 7.4 percent last year, and the growth rate remained above 9 percent in the past for a long time. Therefore, the 7-percent growth rate shows China’s economy is facing pressures, he said.

On the international side, China is in a severe external economic environment, including a divided trend of monetary policies in different developed economies and geopolitical risks. Zhu said the complex external environment has a negative impact on China’s economy.

On the domestic side, China has to deal with the slowdown in economic growth, making it difficult to make structural adjustments, and absorb the effects of previous economic stimulus policies.

Besides, the 7-percent growth rate also reflects China’s adjustment measures are being gradually put in place, Zhu stressed. The most important thing is to adhere to the proactive fiscal policy and a prudent monetary policy.

Zhu noted that China’s report on the work of the government showed four key factors that constitute proactive fiscal policy:

Firstly, the government budget deficit for 2015 will increase modestly, which means the deficit to gross domestic product (GDP) ratio will rise from last year’s 2.1 percent to this year’s 2.3 percent.

Secondly, the government will continue to make structural tax reductions and cut fees across the board so as to further lighten the burden on enterprises, particularly small and micro businesses.

Thirdly, the government will improve the mix of budgetary spending, redouble its efforts to put government funds on hand into use, and strengthen the effectiveness of government spending.

Fourthly, the supply of public goods and services will increase.

As to the prudent monetary policy, Zhu indicated that the key is to stabilize renminbi’s (RMB) value, control inflation, and support the real economy. The RMB exchange rate has reached a balanced level, and China’s balance of payments is in an appropriate range. “We have made significant progress,” he said.

Zhu told Xinhua that in the first half of this year, China’s consumer price index (CPI) edged up 1.3 percent y-o-y, fixed-asset investment grew 11.4 percent y-o-y, retail sales of consumer goods rose 10.4 percent y-o-y, urban employment increased by 7.18 million, and the contribution of consumption toward economic growth rose to 60 percent.

“This is indeed very healthy data,” said Zhu.

Furthermore, the value added of the service sector increased to 49.5 percent of the GDP in the first half of this year, suggesting China is making progress in economic structural adjustment.

Zhu has full faith in China’s economy. “With strong macroeconomic policies, we are confident to achieve 7-percent growth target this year and keep the potential growth between 7-8 percent during the 13th five-year plan,” noted Zhu.

According to the latest forecast from the International Monetary Fund (IMF), global economic growth is projected at 3.3 percent in 2015. China’s contribution to the global economy is expected to reach 28.5 percent this year, said Zhu. Enditem

 

 

  

Business, China, Chinese circle, Exchange, Indepth, News, Opinion, World News

Xinhua Insight: A wave of startups raises tide of entrepreneurship

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   Xinhua Insight: A wave of startups raises tide of entrepreneurship

 

BEIJING, July 20 (Xinhua) — Guo Xin, 23, an undergraduate at Nankai University, feels no pressure from China’s economic slowdown. Instead, he sees positive changes encouraging startups.

“The economy is facing great downward pressure, but for entrepreneurs, the business environment has never been better,” Guo told Xinhua.

Guo is CEO of a an Internet finance company and has established a start-up each year for the past three years.

Like Guo, hundreds of thousands of young Chinese have started their own companies or projects in the past year or two as a startup frenzy grips the nation. Partly thanks to serious reforms, especially business registration reform, it is easier than ever to start a business.

China is entering a new stage of slower but more resilient growth, which President Xi Jinping has called the “new normal.” The essence of the “new normal” is an improved economic structure that relies on services, consumption and innovation.

STARTUPS SHOOT UP

China’s GDP growth held steady at 7 percent in the first half this year, but another figure — the number of newly registered enterprises — is even more impressive. New registrations jumped 19.4 percent from a year ago to 2.1 million in H1.

“Creative, entrepreneurial spirit has been stoked by business reform,” said Yu Fachang with the state administration for industry and commerce (SAIC).

By the end of June, there were around 74.2 million businesses in China, including agricultural concerns and individual traders, up 7 percent from the end of 2014, SAIC data showed.

The number of new firms registered in the service sector accounted for 80.3 percent of the increase, or 1.6 million during the first six months, 22.6 percent more than in the same period last year.

This, Yu said, reflects a better economic structure, with the service sector playing its prescribed “bigger role” in growth and job creation. The sector has become the biggest driver of growth, expanding 8.4 percent in H1 and accounting for 49.5 percent of GDP.

Wang Bao’an, head of the National Bureau of Statistics, believes that a new wave of mass entrepreneurship and innovation is in the offing, given the huge success of many startups. The drive for mass entrepreneurship and innovation along with repeated cuts to red tape are feeding creativity and market vitality, Wang told the People’s Daily last week.

CONTINUOUS REVOLUTION

Premier Li Keqiang has repeatedly promised that the government will revolutionize itself to promote mass entrepreneurship and innovation.

In streamlining business registration since 2014, China has removed minimum capital requirements, replaced annual company inspections with a reporting system and loosened site requirements for businesses. Last month, the government announced that those wishing to start their own business would only need to apply to one office for the three essential business certificates, rather than the current regime of visits to three different offices. Business licenses, tax registration certificates and organization code certificates will all now be issued by the SAIC.

Guo Xin already feels the better business environment. “Entrepreneurship and innovation are state policies and there are many new government business incubators to assist new firms or projects,” he said, adding that other changes included easier financing, clearer procedures for starting a business, a much larger number of new entrepreneurs and an easier get-out processes for those who fail.

“Encouraging mass entrepreneurship and innovation has activated hundreds of thousands of cells in the market, which helped macroeconomic stabilization,” Premier Li told a conference earlier this month.

THE FOURTH WAVE

Economist Gu Shengzu believes that lowering the threshold for starting businesses, removing restrictions and the rise of the Internet economy may have created a “perfect storm” of entrepreneurship in China.

“Entrepreneurship and innovation are twins. To the Chinese economy, they mean not only a better today, but a better tomorrow and the day after tomorrow,” Gu told Xinhua.

The innovative power of the Chinese people is an important engine for stable growth and a smooth transition to the new normal, he said, calling this “the fourth wave” of mass entrepreneurship in nearly 40 years.

The first wave began in 1978 when reform and opening-up began, with farmers setting up township enterprises and urban dwellers starting small businesses. The second wave swept China after 1992, with about 100,000 public servants resigning from their “jobs for life” to go into business for themselves. The third came when China joined the World Trade Organization in 2001.

The past three waves gave rise to numerous top Chinese entrepreneurs who rose from nobodies to tycoons, including Alibaba founder Jack Ma, Tencent’s Pony Ma and smartphone manufacturer Xiaomi’s CEO Lei Jun.

Gu said the difference between the first three waves and this fourth wave is that the government has actively worked to bring about the arrival of the fourth through aggressive policies.

Wang Bao’an, the statistics chief, wants future reform to focus on four areas: price controls, market entry, R&D and invigorating State-owned firms. He maintains that only more reforms will guarantee future growth. “The policy goals of stabilizing growth, restructuring the economy and achieving innovation-driven growth can be reached only through more reform… The key is to leave the market to allocate resources,” he said. Enditem

Business, China, News, World News

China Voice: Chinese economy on slow, steady track to target growth

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BEIJING, July 21 (Xinhua) — China has handed in its economic performance sheet for the first half of 2015. While it seems lackluster at first glimpse, a closer look reveals encouraging signs.

China’s headline GDP growth stayed flat at 7 percent in Q2 — not an impressive performance compared with the first half of 2014, leading to concerns of continuous slowdown and a possible hard landing.

However, these concerns have mischaracterized the current state of the Chinese economy.

The economy, which is in a “new normal” stage of slower but steadier growth, is showing signs of bottoming out.

The property sector, a key contributor to economic growth, saw its sales grow strongly in June and Q2, and infrastructure investment accelerated in June for the first time in three months.

Another happy surprise has been the growing role of the services sector. It expanded 8.4 percent in H1 and accounted for 49.5 percent of GDP, an outstanding sign of the country’s success in restructuring the economy and fostering new growth engines.

Chinese President Xi Jinping reassured local governments last week that the economy still enjoys a promising outlook despite downward growth pressure, and the leadership’s confidence is well-grounded.

The economic fundamentals are still sound with stable employment, prices, grain output and income growth.

High-end industrialization and urbanization remain two major drivers to power future growth as China aims to transform itself from the world’s factory into a more sophisticated manufacturer and urbanize rural areas with a current population of about 200 million.

Meanwhile, economic activity is likely to be more robust as the government’s efforts to offer policy and funding support for infrastructure, ease local governments’ financing pressures and loosen monetary and credit conditions gradually pay off in the second half of this year.

Last but not least, the optimism comes from increasing market confidence itself. China’s manufacturing PMI figures have been above the expansion/contraction threshold for the last four months and the industrial entrepreneur confidence index also remained in expansion range in Q2.

All these signs suggest the country’s GDP growth target of about 7 percent is attainable as growth picks up in the second half of this year.

The short-term outlook may still indicate structural slowdown as the economy works through a painful process of adjustment and deleveraging, but as the country’s market-oriented reform, public entrepreneurship and innovation gather steam, the Chinese economy is heading toward its target growth at a slow and steady pace. Enditem

Business, China, News, World News

China Voice: Why does a market-oriented China need a plan?

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BEIJING, July 21 (Xinhua) — The 18th Central Committee of the Communist Party of China has just decided to hold its fifth plenary session in October. High on the agenda is the 13th five-year plan for national development (2016-2020).

Neo-liberals claim that economic planning is a key characteristic of centralized economies and runs counter to the market. Why then, is the world’s second largest economy, already pledged to let the market play a “decisive” role, still clinging to such a national plan?

China’s five-year plans are basically a series of social and economic development initiatives that came into being along with the socialist regime in the middle of the last century. Concerned mainly with government development priorities and growth targets, the plans are a guide for Chinese regulators.

For market economy die hards, a government cannot “plan” an economy, and especially cannot plan how enterprises and the market will operate, but in today’s world, where the concept of free market is considered sacrosanct, no economy functions without intervention.

China has relied on a strong government steering its economy for over 60 years, so it would be unwise not to draw on a tradition that has proven effective in the last few decades, especially with the economy at a crux of upgrades and changes of emphasis.

Critics of economic planning fear that government intervention erodes efficiency, but the market is not right all the time, although it is right most of the time. The free market itself can be a cause of low efficiency, as shown by the number of modern economic recessions. If we countenance government help when the economy needs rescuing, we should, in the same light, acknowledge government support during the good times.

When we eventually see the new five-year plan, we may be pleasantly surprised. The approach may be an inheritance from the age of planning, but it will be no meticulous description of every nut and bolt.

An economic plan does not mean a backing-off from the market economy nor stronger intervention by the state. Rather than a script, it is an extensive agenda of support. The plan may be more micro and specific than the goals set by European and American governments, but such an approach suits the developing economy.

The five-year plan offers investors, home and abroad, a chance to see the government’s priorities and make better plans themselves.

As one of China’s most prominent economists and most active reform advocates Fan Gang put it, the plan “puts forward the development vision and roughs out what the government’s [rather than the market’s] tasks are.” Enditem

 

 

 

 

Business, China, News, World News

China FDI growth to pick up amid challenges: vice minister

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BEIJING, July 18 (Xinhua) — Foreign direct investment (FDI) in China will rebound in 2015 on the back of a robust expansion in the first six months, Vice Commerce Minister Wang Shouwen has said.

Wang expected the FDI in China for the whole 2015 to grow around four percent to 125 billion U.S. dollars, compared with a 1.7-percent expansion recorded in 2014.

Official data showed on Friday that the FDI rose eight percent in the first half of the year to 68.4 billion U.S. dollars, accelerating sharply from 2.2 percent in the same period last year.

Wang attributed the improvement to China’s continued efforts in widening pilot reforms in free trade areas, fewer government restrictions and active promotion of opening up in certain industries and inland areas.

However, he warned that FDI growth will probably drop in the latter half mainly due to a slow economic recovery in major FDI sources and the tapering of U.S. quantitative easing.

China became a net capital exporter for the first time in 2014 when the FDI was outnumbered by outbound direct investment (ODI).

In the first six months of 2015, China’s ODI grew 29.2 percent to 56 billion U.S. dollars, a higher speed but less volume than that of the FDI. Enditem

 

Business, China

Alibaba inks pact with Unilever to boost cross-border retails biz: report

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Alibaba inks pact with Unilever to boost cross-border retails biz: report

 

BEIJING, July 20 (Xinhua) — Chinese E-commerce giant – Alibaba Group Holding Ltd. (BABA.NYSE) has signed a strategic agreement with consumer goods giant – Unilever to cooperate in sectors including cross-border retails, reported Xinhua-run cnstock.com Monday.

As www.ce.cn reported, its partner – Unilever targeted a gross merchandize volume (GMV) of one billion yuan via Alibaba Group’s online and offline platforms in the fiscal year 2015 and making these Alibaba platforms its largest online retailer.

Meanwhile, over 40 percent of Unilever’s new products would make debut on Tmall.com in the fiscal year 2015 and no less than 300 million yuan worth of media resources of Unilever were committed to be provided to present advertisements with Tmall logo built in.

For cross-border retails, Alibaba would be Unilever’s primary partner as it was set to take charge of 70 percent of the latter’s cross-border retails.

Besides, Unilever will cooperate with Alimama.com in precision advertising, expanding rural market, and innovating logistics for fast moving consumer goods (FMCG). Enditem

 

 

Business, China

Chinese companies ink more contracts along Belt and Road

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BEIJING, July 21 (Xinhua) — Chinese companies signed 1,401 project contracts in countries along the Belt and Road in the first half of this year1, nearly half of combined overseas contract value, official data revealed.

The contracts were worth 37.6 billion U.S. dollars, up 16.7 percent year on year, and accounting for 43.3 percent of contracts in the period, Shen Danyang, the Ministry of Commerce (MOC) spokesman, said at a Tuesday press conference.

The Belt and Road refer to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, proposed by China in 2013 with the goal of boosting trade between Asia and Europe. The network passes through more than 60 countries and regions, with a total population of 4.4 billion.

Chinese companies signed overseas project contracts worth 86.7 billion dollars in the first six months, representing an increase of 6.9 percent year on year, he said. Enditem

 

Business, China

51,000 firms benefit from domestic customs reform along Silk Road belt

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QINGDAO, July 21 (Xinhua) — More than 51,000 enterprises have benefited from the unified customs clearance reform in Chinese provinces along the Silk Road Economic Belt, said customs authorities on Tuesday.

Some 1.2 million declarations have been handled by customs in the nine provinces along the Belt since the customs reform was introduced on May 1, according to statistics with the Qingdao Customs in Shandong.

An increasing number of companies enjoy more efficient service, which can cut their customs costs by 20 to 30 percent.

“The integrated customs reform has achieved expected results,” said Dong Yan, deputy head of the Qingdao Customs, while vowing to deepen the reform at a review meeting.

The reform has also boosted the rapid growth of cross-border e-commerce, he added. By the end of June, domestic customs along the Belt handled cargo valued 105 million yuan (17 million U.S. dollars) worth of cross-border e-commerce.

China launched its customs clearance reform last year to simplify formalities and reduce logistics costs in regions such as Beijing-Tianjin-Hebei and the Yangtze River Economic Belt.

All imported and exported goods enjoy simplified procedures through the regional integrated clearance system, which will require only one customs declaration.

With faster goods clearance and transportation, the move is expected to provide a strong impetus to China’s sluggish foreign trade.

Chinese President Xi Jinping proposed the Silk Road Economic Belt in 2013 as an overland network focused on boosting international trade and cooperation on infrastructure projects with Central, South and West Asian countries and Europe.   Enditem

 

Business, China, Energy, Environment, World News

China’s largest solar power tower plant starts construction

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XINING, July 22 (Greenpost) — Construction has begun on China’s largest solar power tower plant in the northwestern province of Qinghai.

Occupying 2,550 hectares of the Gobi Desert in Golmud City, the plant will have an installed capacity of 200 megawatts, and be capable of supplying electricity to 1 million households, according to Qinghai Solar-Thermal Power Group.

“Its designed heat storage is 15 hours, thus, it can guarantee stable, continual power generation,” said group board chair Wu Longyi.

Once operational, the plant will slash standard coal use by 4.26 million tonnes every year, reducing emissions of carbon dioxide and sulfur dioxide by 896,000 tonnes and 8,080 tonnes, respectively.

Using heliostats to transfer sunlight into power, the system is more efficient and boasts better energy storage than the more commonly used system.

Located 2,870 meters above sea level on the Qinghai-Tibetan Plateau, Golmud has particularly favorable conditions for the developing new energy industry, said Wu Tianxiao, Communist Party of China Golmud deputy secretary.

The plant will also be China’s first large-scale solar power plant under commercial operation, said Yu Mingzhen, vice director of Qinghai development and reform commission, heralding the project a landmark in China’s solar energy development.

China has been focusing on increasing its proportion of clean energy. By 2014, the country’s solar power capacity was 28.05 gigawatts, 400 times more than 2005, and there are plans to increase this to around 100 gigawatts by 2020. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

Business, China, Green-tech

China’s homegrown smart phone brands own over 70 pct share in domestic market: MIIT

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China’s homegrown smart phone brands own over 70 pct share in domestic market: MIIT

 

BEIJING, July 22 (Xinhua) — China’s homegrown smart phone brands boasted over 70 percent share in domestic market, noted Zhang Feng, spokesman of the Ministry of Industry and Information Technology (MIIT).

Zhang made the remarks on a Wednesday-held news briefing to introduce industrial and telecommunication industry development in the first half year.

So far, MIIT has kicked off a batch of programs for strengthening the industry basis and approved and implemented 94 special intelligent projects.

As a result, the proportion of advanced production capacity in China’s key industries rose sharply, with output value of high-end equipment manufacturing fields such as intelligent manufacturing, high-speed rail transportation, and marine engineering in gross output value of equipment manufacturing exceeding 10 percent.

In the meantime, MIIT worked actively on industrial energy saving, clean production and comprehensive utilization of resources, leading to more than nine percent drop in large enterprises’ unit added-value energy consumption in the first half year and a joint working mechanism for resources utilization in Beijing, Tianjin and Hebei Province as well as surrounding areas. Enditem

 

 

   MIIT to boost construction of industrial cloud, big data centers

 

BEIJING, July 22 (Xinhua) — China’s Ministry of Industry and Information Technology (MIIT) will boost the construction of key industrial clouds and big data centers in the future, said the ministry’s spokesperson and chief engineer Zhang Feng on Wednesday.

He said the ministry will release guidance on integration of Internet and industry, service-oriented manufacturing, industrial cloud and big data.

Zhang added the ministry will also take intelligent manufacturing as a starting point to boost Internet Plus manufacturing. He said the ministry will develop intelligent equipment, organize the implementation of major intelligent manufacturing projects, accelerate the construction of intelligent factories and workshops, organize the implementation of national manufacturing innovation center and build a group of Internet Plus public service platforms.

Besides, the ministry will establish an alliance to boost the standardization of Internet Plus and launch a comprehensive standard system for intelligent manufacturing. Enditem

 

 

   MIIT plans to establish industrial Internet industry alliance

 

BEIJING, July 22 (Xinhua) — China’s Ministry of Industry and Information Technology (MIIT) will make studies on the deployment of industrial Internet and establish an industrial Internet industry alliance, said Zhang Feng, spokesperson and chief engineer of the MIIT, on Wednesday.

Zhang said the ministry will build an experimental network for industrial Internet and formulate a network structure scheme and infrastructure construction plan.

According to Zhang, the MIIT will take the opportunity of high-speed broadband construction to improve IT infrastructure supporting level in the future. He said the ministry will implement the guidance on elevating Internet speed and lowering Internet service prices, boost the construction of full-optical network cities and 4G networks, strengthen 5G research and development, enhance and improve Internet governance, implement the safety entity responsibility of enterprises and create a safe network environment. Enditem