It’s time to forget the central bank’s encouraging words for China’s burgeoning online finance industry and get ready for tough regulation.
The People’s Bank of China last week concluded consultations with big banks on a draft policy that would put a tight cap on transactions made through online third-party payment accounts, according to various Chinese media reports. Read more
A Chinese corporate bond was heading on Tuesday for default, potentially puncturing some of the optimism that has galvanised a booming $12tn corporate debt market.
Shanghai Chaori Solar Energy Science & Technology Co.,Ltd, a Chinese maker of solar cells, announced late on Tuesday that it will not be able to repay the Rmb 89.8m interest on a Rmb1bn bond issued on March 7th 2012. Read more
China’s annual National People’s Congress (NPC) has started with an interesting focus on online funds.
Zhou Xiaochuan, governor of the People’s Bank of China, and two other central bank officials were cornered by Chinese journalists on the second day of the NPC after some delegates from the financial sector urged stricter supervision of the online funds. Read more
China’s traditional banking sector is leading a counter-attack against the runaway success of online funds launched by internet companies such as Alibaba.
The China Banking Association, with 362 member banks, says deposits made in the funds should not be regulated in the same way as deposits by financial institutions, as at present, but as regular deposits, Chinese media have reported. Read more
In a country of rapid growth, high-speed trains and fickle tastes, Esprit, the German fashion firm, is centering its Chinese turnaround strategy on the simple concept of speed.
Taking a leaf out Zara’s book, Esprit is trying to shorten the time needed to move fashion from the design phase to clothes shops from 9 to 11 months to 3 to 4 months. Read more
China’s crackdown on prostitution may have a broader impact on the country’s economy, just like the anti-corruption campaign did last year, according to one economist.
The Ministry of Public Security has launched a national crackdown on prostitution after a high-profile raid in the southern city of Dongguan on February 9 – the so-called the “sex city” of China. State broadcaster CCTV ran two reports to expose the city’s prostitution industry and kicked off the national campaign. Read more
China’s anti-corruption campaign hit hard last year: sales of Maotai liquor are down, luxury sales are on the slide, and the number of high-end clubs and restaurants shrank. Everything, it seems – except Macau’s casinos.
With the start of the Year of the Horse, a new influx of mainland gamblers will rush into the former Portuguese colony, now the only legal place to gamble in China. The turnaround from a year ago is remarkable. Read more
Still depositing your money in the bank? In China, you would be laughed at by your friends, who are either buying wealth management products or rushing into the online currency funds offered by the three internet giants – Alibaba, Tencent and Baidu.
In response, the “big five” national banks – Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of Communications – have had to raise savers rates to the upper limit set by the central bank in an attempt to keep their depositors’ money. Read more
Imagine you are bidding for an item on eBay, and the lowest bid wins while the highest bid loses. Impossible? That is what is happening in the world of Chinese initial public offerings. Read more
China’s IPO season has officially reopened. Five companies said on Tuesday they had received approval from the China Securities Regulatory Commission to issue new shares, bringing China’s longest ever IPO drought to an end. Read more
Smog isn’t new in China – but 2013 was an especially bad year for the thick stuff. Beijing may get the headlines, but smog has affected 104 cities of 20 provinces in China, from Shanghai to Chengdu and even Sanya, so-called China’s Hawaii.
As a result, Chinese are getting their wallets out. Around Rmb870m ($142m) has been spent in facial masks, air purifiers and other anti-smog appliances so far this year, according to a ‘smog bill’ released by Taobao, China’s biggest online shopping platform. The real number will be even bigger as that’s only one online sales figure. Read more
The end of a year-long freeze on stock market listings in China might sound look good news for investors but for several reasons Chinese stocks fell on Monday, the first day of trading since the weekend announcement, with the ChiNext Composite index – representing China’s answer to the Nasdaq exchange – plunging 8.26 per cent, its biggest single day decline in its four-year history. Read more
These days in China, it seems, no matter what business a company is in, its priority is: get into banking. To name a few: Tencent, operator of instant messenger QQ and WeChat; Suning, an electrical appliance retailer; Midea and Gree, electrical appliance manufacturers; Hongdou and Baoxiniao, textile brands; New Hope Group and Yurun Group, a feed manufacturer and pork processing company – all have filed statements or been the subject of reports that they were in the process of obtaining a banking license, according to the People’s Daily. Read more
58.com may be frequently dubbed China’s answer to Craigslist, the pioneering US classified site. But its founder isn’t keen on the comparison. He has a bigger ambition: to be like Alibaba.
Jinbo Yao, founder and chief executive of 58.com, tells beyondbrics that he was initially inspired by Craigslist to found the company in 2005: “But we are different in terms of our business model. We hope 58.com will become a company like Alibaba, to connect merchants and users in the area of daily life services.” Read more
China’s reform plan released after the Communist Party’s Third Plenum has been hailed as ambitious and bold. It certainly has far more in it than just the one-child policy reform and abolishment of labour camps. Here is beyondbrics’ summary of the plan, grouped by category. Read more
Baidu, China’s dominant search engine, started its online financial service on Monday in an attempt to compete with rivals such as Alibaba, who have already pushed aggressively into Chinese financial sector. It wasn’t exactly smooth running.
Baidu’s financial services platform made its debut on October 28, introducing a financial product in conjunction with China Asset Management, which was offering an 8 per cent annual return in its original promotional material. However, the ad fell foul of the financial regulator, and the site was overwhelmed with traffic. The missteps show how much of a rush the big internet companies are to get into online finance. Read more
Building big in Sichuan
While Beijing is trying to transform China’s economy from investment driven to consumption driven, local governments want to keep things going the good old way.
The government of Sichuan, a southwestern province known for its spicy food, spiced up its investment in a high-profile press conference on October 22. The Sichuan government official website said that Sichuan would invest Rmb4.26tn ($700bn) on 2,336 projects in 2013-14, including Rmb1.48tn ($243bn) on infrastructure. It’s not alone, either. Read more
China’s State Council this week set out a five year plan to tackle its long standing overcapacity problem. It’s another message the new government wants to get out before the awaited party meeting in November, when more economic reforms are expected.
The State Council released on Tuesday “Guidelines to Resolve Severe Overcapacity Problems” on its webpage. The five sectors targeted are steel, cement, electrolytic aluminium, sheet glass and shipping. New projects will be blocked and current projects may be reappraised. Read more
When Gao Hucheng, China’s minister of commerce unveiled the Shanghai free-trade zone (FTZ) in a low-key inauguration ceremony on September 29, those who had been overexcited by the prospect were tempered, and those who were afraid of it felt relieved – at least for the time being.
Why? The lack of big names at the event. Read more
China’s government has come up with a novel idea to tackle the problem of an ageing population: it will try to persuade the elderly to pledge their homes for their pensions. Given currently high property prices, it sounds innovative and makes sense. But there’s a big chance it won’t be well received. Read more