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SPIC: Still Evaluating Westinghouse’s Bankruptcy

Well-known Chinese news site Sina recently reported that the Chairman of China’s State Power Investment Corporation (SPIC) visited Japan and had a discussion with its parent company Toshiba about the future of Westinghouse. He told the media that SPIC was still evaluating Westinghouse’s ownership structure. SPIC has not yet made a decision on whether to acquire it. China’s third generation nuclear power plants use Westinghouse’s AP1000 nuclear technology. Based on U.S. media reports, the Trump administration has been very much concerned about the potential possibility of Chinese capital acquiring Westinghouse. Westinghouse, with its 130 years’ history, is widely recognized in the world as the original inventor of nuclear power generation. SPIC paid a lot of attention to Westinghouse’s bankruptcy before it was even filed. SPIC said the restructure of Westinghouse should not concern the U.S. government, since it has already been sold several times previously. However, sources revealed that the U.S. Secretary of Energy Rick Perry has taken actions to seek the elimination of any Chinese connection among the potential buyers. Westinghouse owns a large number of military technologies as well.

Source: Sina, April 8, 2017
http://finance.sina.com.cn/roll/2017-04-08/doc-ifyecezv2467689.shtml

Briefings | | |   Economy/Resources US-China Relations

Former Shanghai Mayor’s Role Highlighted in Xi Jinping’s Grand 1000-Year Plan

Ta Kung Pao, a Beijing affiliated Hong Kong daily newspaper, reported that former Shanghai mayor Xu Kuangdi was shown on CCTV, China’s state television, on February 23, interacting closely with Xi Jinping during Xi’s visit to the Xiongan New Area.

CCTV‘s footage was not publicly released until this past weekend, when Beijing announced the planning and construction of the area, which is said to be part of the 1000-year plan that Xi set forth showcasing “world vision, international standards, Chinese characteristics, and high goals.”

Xu Kuangdi currently serves as the chief advisor for the Beijing-Tianjin-Hebei integration. He was mayor of Shanghai from 1995 to 2001, and supervised the city’s transformation into a center for international investment and trade with the establishment of the Pudong New District.

According to Radio Free Asia‘s commentator Paul Lin, he was asked to resign from the mayor’s position to make room for Chen Liangyu, a favorite of then Party secretary general Jiang Zemin. In 2006, Chen was disgraced because of corruption charges and dismissed from all positions including being a member of the Politburo.

Xu, who held several academic positions before becoming mayor of Shanghai, recommended that the construction of the Xiongan New Area should focus on technological and innovative industries and that the region should attract high-end innovative talent and resources. The new district covers the counties of Xiong, Rongcheng, and Anxin and is currently a poor, rural area. Xu said it was chosen because the “low density of its population, the low level of development, and plenty of space for future growth.”

Sources: Ta Kung Pao, April 4, 2017
http://news.takungpao.com/mainland/focus/2017-04/3438214.html
Radio Free Asia, December 13, 2001
http://www.rfa.org/mandarin/pinglun/72194-20011213.html

Briefings | | |   Economy/Resources Government/Politics

China News: Many Companies Faked Air Quality Monitoring Data

China News recently reported that the Chinese Ministry of Environmental Protection issued its report on inspection results from 18 critical cities that have air quality concerns. This was a joint effort among the Ministry and six provinces. The Ministry sent 18 inspection teams to the cities and counties. The teams inspected over 8500 organizations and companies and found 3119 had problems. The joint inspection effort made several key findings. First is that response plans for heavy air pollution events were unrealistic. Second is that committed air pollution remediation plans did not get implemented. Third is that companies continued to ignore air pollution laws. The fourth finding is that many companies faked air quality monitoring data. The fifth finding is that the lack of dust control remains a common practice. The inspection effort also found that various levels of government branches did not take much action on their environmental protection responsibilities.

Source: China News, March 31, 2017
http://www.chinanews.com/gn/2017/03-31/8188173.shtml

Briefings | | |   Economy/Resources Government/Politics

China Has Become World’s Largest Purchaser of Companies in Chemical Industry

Well-known Chinese news site Sina recently reported that industrial consulting company A.T. Kearney recently released its report on global chemical industry mergers. The A.T. Kearney Report estimated the potential mergers in 2017 globally will be worth US$300 billion. Three quarters of this total will cover four major unfinished deals: Dow – DuPont, Bayer – Monsanto, ChemChina – Syngenta, and Praxair – Linde. Each of the four may reach US$40 billion to US$70 billion. Each is worth two to three times the total of any single deal in the past decade in that industry. China’s share of the global chemical industry mergers has been growing steadily and it has become the largest buyer of chemical companies in the world. China now accounts for a quarter of the world’s mergers in the chemical industry.

Source: Sina, March 27, 2017
http://finance.sina.com/gb/economy/sinacn/20170327/23261578584.html

Briefings | | |   Economy/Resources

Xinhua: China to Set up Xiongan New Area Special Economic Zone in Hebei Province

Xinhua recently reported that the Central administration announced on April 1 that it will set up a new special economic zone in Hebei Province, 100 kilometer (62 miles) southwest of Beijing. It will be called the “Xiongan New Area” and will be situated in the region where Beijing, Tianjing, and Baoding are located. It will cover 100 square kilometers (25,000 acres) at the start of its development, grow to 200 square kilometers (49,000 acres) in the second phase, and 2,000 square kilometers (494,000 acres) in the final phase. According to Xinhua, Xi Jinping visited An Xing County in Hebei Province on February 23 and hosted a development planning forum during his visit. According to Radio Free Asia, Xiongan New Area will help to ease the population, transportation, and environmental stress in Beijing while promoting economic development in the inner provinces such as Hebei and Henan provinces. The Xiongan New Area will become the third special economic zone following the Shen Zhen special economic zone and the Pudong New Area in Shanghai.

Source:
Xinhua, April 1, 2017
http://news.xinhuanet.com/politics/2017-04/01/c_1120741571.htm
Radio Free Asia, April 1, 2017
http://www.rfa.org/mandarin/yataibaodao/jingmao/hc-04022017133455.html

Briefings | | |   Economy/Resources

Business Tycoon Cancelled Transaction Due to China’s Currency Control

Pan Shiyi, Chairman of the Board of SOHO China stated that his company had to cancel its plan to sell a property due to China’s currency control. Pan made the statement on March 23, at the SOHO China’s news conference to release 2016 financial data.

SOHO China is a large real estate developer in China.

SOHO China sold its SOHO Century Plaza in Shanghai for 3.3 billion yuan (US$ 470 million) on July 29, 2016, at 76,700 yuan per square meter. Pan said that the company would sell another three non-core business projects: Lingkong SOHO, Hongkou SOHO, and SOHO Tianshan Plaza.

SOHO China even reached an agreement on the price to sell Hongkou SOHO to a famous company. Pan planned to use the proceeds to buy an overseas investment. However, due to China’s currency control, the company realized that it could not exchange the Renminbi proceeds for a foreign currency in order to buy an overseas investment. However, in China, holding Renminbi is not as safe as holding real estate (Renminbi deflates but real estate prices keep rising). So his company cancelled the sale.

SOHO did not sell any of those three properties.

Source: The Paper, March 23, 2017
http://www.thepaper.cn/newsDetail_forward_1646200

Briefings | | |   Economy/Resources