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All posts by RWZ - 3. page

Zhu Min: China’s Debt Level Is at 220 Percent

Well-known Chinese news site Sohu recently reported that Zhu Min, the former Deputy Managing Director of the International Monetary Fund (IMF) and current Director of Tsinghua University’s National Institute of Financial Research, delivered a speech on financial openness at a global finance forum conference held in Beijing. Zhu emphasized that at the core of the openness is the establishment an internationalized Chinese financial market. International investments currently have a share of 1.26 percent in China’s banking market, a share of 1.15 percent in China’s stock market, a share of 2.44 percent in China’s bond market, and a share of 6.1 percent in China’s insurance market. At the same time, China’s debt level has reached 220 percent. Japan suffered a financial crisis at 220 percent, Thailand’s financial market crashed at 180 percent, and the United States had its financial crisis at the debt level of 180 percent. China’s loan efficiency dropped 75 percent in the last five years. He called for opening up the Chinese financial market in order to improve the domestic financial system with healthy competition.

Source: Sohu, May 19, 2018
http://www.sohu.com/a/232164447_100160903?_f=index_betapagehotnews_1

Tianqi Lithium to Acquire World’s Second Largest Lithium Manufacturer

Well-known Chinese news site Sohu recently reported that China’s largest Lithium-based battery material vendor Tianqi Lithium is in the process of acquiring 24 percent of Chile’s Sociedad Quimica Y Minera (SQM) with US$4.3 billion. SQM is the world’s second largest Lithium manufacturer. Canadian fertilizer manufacturer Nutrien previously owned the shares. Tianqi already owns 2.1 percent of the shares of SQM. The additional 24 percent can allow Tianqi to name three seats in the eight-seat SQM board. SQM currently produces 48,000 tons of Lithium Carbonate annually. The expected production in 2019 is 100,000 tons. Lithium Carbonate is the primary material to make rechargeable batteries to be used in products like hybrid cars. Since 2000, the global market for Lithium Carbonate has been growing at an annual pace of 7.2 percent. The deal is still pending approval from the Chilean government, which is conducting an antitrust review.

Source: Sohu, May 17, 2018
http://www.sohu.com/a/231891205_618572

BBC Chinese: Hong Kong Reporters Were Beaten up in Mainland China

BBC Chinese recently reported that, not long ago, unknown attackers beat up reporters from Hong Kong media. One latest example was Hong Kong’s Now TV reporter Xu Junming. Five under-cover policemen beat him while he was reporting on a hearing that the Beijing Lawyers’ Association had organized. Their Discipline Committee was punishing human rights lawyer Xie Yanyi. Xie represented Falun Gong practitioners in court. Xu is fully licensed and authorized to report in Mainland China. Another example occurred four days earlier than that. Two unknown men attacked Hong Kong Cable TV reporter Chen Haohui in Sichuan Province while he was reporting on the 10-year anniversary of the 512 Wenchuan Earthquake. These incidents triggered a wave of criticism in Mainland social media. According to Reporters Without Borders, China was ranked number 176 in the Freedom of Press Index, only better than Syria, Turkmenistan, Eritrea and North Korea.

Source: BBC Chinese, May 17, 2018
http://www.bbc.com/zhongwen/simp/chinese-news-44157272

Article with Chinese Premier Li Keqiang’s Byline Published in Japan

Before his visit to Japan, Chinese Premier Li Keqiang published an article with his byline in a Japanese mainstream media. The article was titled, “Let the Sino-Japanese Peace, Friendship and Cooperation Restart.” The article started with mentioning the short distance between China and Japan. Li said he regretted that it took a long time to push the development of a better relationship. As the second and the third largest economies in the world, it will truly benefit Asia and even the world if the two nations have a healthy relationship. This year marks the 40th anniversary of the Sino-Japanese Peace and Friendship Treaty. Given the global challenges and the regional situation changes, cooperation among China, Japan and Korea will benefit the regional integration process of establishing the East Asian Economic Community. China is committed to peace and openness, which are required to ensure sustained economic growth. The economic complementarity between China and Japan is very strong. Li expected that his visit would witness the signing of a series of mutual economic cooperation agreements, as well as a local currency swap agreement. China will announce the grant of Renminbi Qualified Foreign Institutional Investor (RQFII) status to Japanese investors. Li also called for exchanges in culture, tourism and youth activities.

Source: Official Website of Chinese Central Government, May 8, 2018
http://www.gov.cn/xinwen/2018-05/08/content_5289035.htm

NBD: Lenovo Showed World’s Worst Stock Performance

National Business Daily (NBD), a Chinese national daily newspaper which reports business news, recently reported that the Hong Kong Hang Seng Index announced on May 4 that it would remove Lenovo from its index of constituent stocks. Since Lenovo was included in Hang Seng’s index of constituent stocks in 2013, Lenovo has lost 56 percent of its value. According to Bloomberg, of 171 global technology stocks, Lenovo had the worst stock performance. In the past five years, it appears the Lenovo Group could not manage to sustain a healthy growth in its core business of PC manufacturing as well as the growth of its business of mobile devices. A large number of competitors in China grew at a much faster pace. In 2017, on a global level, the U.S. company HP took back its number one PC manufacturer title from Lenovo. As the Motorola brand owner, Lenovo was China’s number one smartphone vendor in 2014. However, by the end of 2017 Lenovo had only one percent of China’s smartphone market share. Lenovo responded to press inquiries saying the company is entering a new growth era, and Hang Seng’s poor rating will not have a concrete long term negative impact.

Source: National Business Daily, May 5, 2018
http://m.nbd.com.cn/articles/2018-05-05/1214319.html

CEFC China Energy Company Failed To Make Its ROSNEFT Stock Purchase

According Russian news agency Sputnik, Glencore, an Anglo–Swiss multinational commodity trading and mining company, announced that it would stop selling the ROSNEFT shares that Glencore and the Qatar sovereign fund QIA owned jointly to CEFC China Energy Company. ROSNEFT is Russia’s national oil company. The cancelled US$9.1 billion deal would have allowed CEFC China Energy to acquire 14.16 percent of ROSNEFT. The Chinese financial news organization Caixin confirmed the news and also reported that CEFC China Energy currently faces the deep trouble of a debt crisis. Its phase-one payment on the ROSNEFT deal was not in place. CEFC China Energy’s US$400 million deposit will not be refunded.

Sources:
1. Sputnik Chinese, May 5, 2018
http://sputniknews.cn/politics/201805051025315260/

2. Caixin, May 5, 2018
http://companies.caixin.com/2018-05-05/101244298.html

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