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All posts by RWZ - 199. page

Global Times: Chinese Bank Loan Write-Downs Increased Significantly

Global Times recently reported that the five largest banks in China had a 127 percent increase in loan write-downs last year. This demonstrated a clear slow-down in growth with high pressure in the financial sector. These five banks own more than half of all of the loans in China. They wrote down a total of RMB 59 billion (around US$9.5 billion) worth of loans that would never be paid back. This level of write-downs is also the highest in ten years. In addition to the dramatic number of loan write-downs, in March, the Chinese financial market also suffered the first default in the corporate bond segment, two instances of near-default “shadow bank” investment products, as well as a run on the bank in Jiangsu Province. Data also showed that the first quarter economic slow-down turned out to be more severe than expected, which may indicate the slowest year of growth for the Chinese economy since 1990.
Source: Global Times, March 31, 2014
http://finance.huanqiu.com/view/2014-03/4942861.html
Briefings | | |   Economy/Resources

Xinhua: Peruvian Government Called Temporary Halt to CHINALCO Copper Project

On March 31, Xinhua reported that the government of Peru has recently shut down a China Aluminum Corporation (CHINALCO) copper mine development project temporarily, citing environmental violations. CHINALCO controls the Toromocho Copper Mine located in central Peru. The development is to construct one of the largest copper mines in the world, with the level of its capacity at 10-million tons. The Toromocho project is also China’s largest copper project overseas. The Peruvian environmental protection agency OEFA ordered the temporary shut-down due to the fact that the copper waste being discharged into the nearby lakes violated environmental protection codes. This was discovered around mid-March. The CHINALCO spokesperson refused to confirm the news because of the “lack of details.” China Aluminum Corporation is a multinational aluminum company headquartered in Beijing. It is the world’s second largest aluminum producer (and the only producer in China).
Source: Xinhua, March 31, 2014
http://news.xinhuanet.com/fortune/2014-03/31/c_126334845.htm
Briefings | | |   Geo-Strategic Trend

HSBC’s March Chinese Manufacturing PMI Reached Eight-Month Low

Well-known Chinese news site NetEase recently reported that the newly released HSBC March Chinese Manufacturing PMI (Purchasing Managers Index) number showed an eight-month low, at 48.0. The Manufacturing Output sub-index reached 47.2, which is the lowest it has been in 28 months. The sub-indexes for New Orders, Import Prices, and Export Prices fell to 46.5, 46.8 and 40.7, respectively. Qu Hongbin, the HSBC Chief Economist for the China Region, commented that the Chinese manufacturing PMI confirmed a very weak domestic demand level. He expected first quarter GDP growth to be slower than the annual goal, set at 7.5 percent. HSBC expressed the belief that the Chinese authorities will start economic policy adjustments sooner rather than later. PMI is an indicator of financial activity reflecting the purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: Netease, April 1, 2014
http://money.163.com/14/0401/09/9OO4GBUF00253B0H.html
Briefings | | |   Economy/Resources

People’s Daily: Volume of Swiss Watches Exported to China Fell

People’s Daily recently reported from the Basel Watch Fair, the World Watch and Jewellery Show that is taking place from March 27 to April 3 in Messe Basel, Switzerland. It is the largest watch fair in the world. The Swiss Exhibitors Committee Chairman, F. Thiebaud, reported the statistics for the Swiss watches that were exported to Mainland China. He stated that the total value of the exports in 2013 was 1.2 billion Euros, which represents a 12.5 percent decline from the previous year. The exports to Hong Kong were 3.4 billion Euros, a decline of 5.6 percent. All other key export markets enjoyed growth. China is the primary market for Swiss watches and jewelry, and China is also a primary partner in the Fair. Since last year, the Chinese government has been vigorously cracking down on corruption, which is widely recognized as the key force behind the luxury watch sales in mainland China. However Ms. Ritter, the Chief Executive of the Basel Watch Fair, pointed out that China still remains a very important market even after the “adjustments to the consumer structure.”
Source: People’s Daily, March 29, 2014
http://lady.people.com.cn/n/2014/0329/c382558-24770444.html
Briefings | | |   Economy/Resources

BBC Chinese: China and Britain Signed Agreement on RMB Settlement

BBC Chinese recently reported that the British government signed an RMB Clearing and Settlement Agreement with China. This is the first agreement of its type outside of Asia. It further strengthened London’s position as the primary RMB exchange center in the Western world. After Hong Kong became the first offshore trading center for the Chinese currency (RMB) in 2009, several other cities such as Singapore and Tokyo competed to be the second primary RMB trading market. The Chinese government is trying to make the RMB a key player in the competition to challenge the U.S. dollar as the dominant currency in the global economy. The Bank of England signed a currency exchange agreement with the People’s Bank of China in June last year; that agreement expires in three years.
Source: BBC Chinese, March 26, 2014
http://www.bbc.co.uk/zhongwen/simp/uk/2014/03/140326_china_uk_rmb.shtml
Briefings | | |   Geo-Strategic Trend

WTO Ruled against China on Rare Earths Export Restrictions

Well-known Chinese online news site Sina recently reported that the World Trade Organization (WTO) ruled against China on China’s quota-based rare earths export restrictions. This ruling was based on a complaint filed jointly by the United States, the European Union, and Japan. This is the second time China has lost in WTO filings on natural resource export restrictions. China’s quota-based export management system may be approaching its end. Experts from the Chinese Ministry of Commerce suggested that one-third of the WTO experts assigned to this case supported China’s position, while some other members, such as Russia, also sided with China. However some legal experts expressed the belief that the probability is low that China’s would win the case on appeal. Officials from the China WTO Research Organization called for establishing a protection system for China’s strategic natural resources.
Source: Sina Net, March 27, 2014
http://news.sina.com.cn/c/2014-03-27/012929799448.shtml
Briefings | | |   Economy/Resources

People’s Daily: Russian Banks May Switch to UnionPay

People’s Daily recently reported that Anatoly Aksakov, Deputy Chairman of the Russian State Duma Financial Markets Committee, suggested Russian banks under U.S. and European sanction may switch to China’s UnionPay credit card system, replacing the Western payment networks such as Visa and MasterCard. UnionPay is the only domestic bank card organization in China. Established in 2002, UnionPay has grown into the second largest payment network after Visa. UnionPay is now accepted in 141 countries in the world, including United States. Visa and MasterCard stopped the payment services for two Russian banks after the sanctions imposed on Russia after its invasion of Crimea. Aksakov said that even Iran has survived the financial sanctions. Russia’s participation in UnionPay will only hurt Visa and MasterCard.
Source: People’s Daily, March 21, 2014
http://world.people.com.cn/n/2014/0321/c1002-24705197.html
Briefings | | |   Geo-Strategic Trend

BBC Chinese: Chinese Authorities Ordered National Investigation of Nursery Schools

BBC Chinese recently reported that the Chinese government has started a nationwide investigation into incidents caused by nursery schools illegally feeding children unnecessary medication. The investigation was directly triggered when two nurseries in Hubei Province were found to be feeding all children antibiotics without permission and without any prescription. Parents said they were never told anything about these activities. Not long ago, it was discovered that nurseries in Xi’an, Shanxi Province had been illegally feeding children similar drugs for over three years involving 54,600 pills. Some nurseries in Jilin Province were reportedly found doing the same to all children in attendance regardless of whether they were sick or not. Media reports have been widely criticizing the government’s lack of monitoring and action on this issue.
Source: BBC Chinese, March 21, 2014
http://www.bbc.co.uk/zhongwen/simp/china/2014/03/140321_china_kindergarten_drugs.shtml
Briefings | | |   Social Stability