By Gordon French, HSBC
China’s “Belt and Road” infrastructure investment drive will help boost the flow of physical goods across large swathes of Eurasia, southern Asia and even parts of Africa and the Middle East. Less obvious is the impact that the vast amount of spending linked to the initiative will have in the financial arena – in the currency and bond markets in Asia and beyond.
First announced in 2013, the “Belt and Road” initiative is an essential part of China’s domestic economic rebalancing, and of its outbound ambitions. The initiative entails ploughing billions of dollars into the hardware – railways, highways and ports – that links mainland China and the dozens of countries to its west and south. The goal is to encourage more cross-border trade while putting excess capacities to work. Read more
By Dominic Jephcott, Vendigital
The Chinese Government’s decision to embark on a fresh round of industry consolidation as part of a move to strengthen state-owned enterprises (SoEs) and increase their global competitiveness has been a long time coming. It is an understandable response to the slowdown in economic growth, over-capacity in many sectors and poor returns on huge capital investments over the last ten years.
The Made in China 2025 initiative, which was outlined last week at the National People’s Congress, is a 10-year plan for transforming the country’s disparate manufacturing sector in order to create a smaller number of large-scale businesses capable of competing internationally in the higher added-value and strategic industries. Calls to address the endemic inefficiencies of China’s SoEs and increase their global competitiveness are nothing new, of course, but this time it seems there is a clear commitment to make sure it happens. Read more
By Andy Rothman, Matthews Asia
China’s housing market is one of the most important parts of its economy, and also one of the most misunderstood. This sector is important because residential real estate together with construction last year accounted directly for about 10 per cent of GDP, 18 per cent of fixed-asset investment, 10 per cent of urban employment and more than 15 per cent of bank loans. It is also misunderstood because few observers appear to grasp the structure of China’s residential market. Read more
By John Zhu, HSBC
China has been a favoured destination for foreign direct investment since its economy opened up more than three decades ago. However, the country’s own investments abroad will soon overtake inflows. This is good for China and the rest of the world: China stands to make better returns on its foreign reserves while generating demand for its exports, while countries in need of investment can tap into a new and fast-growing source of funding.
How China exports its excess savings abroad will be a major theme driving flows into different countries and sectors. Read more
China invented printing several centuries before Gutenberg’s mechanical press in Germany. Now a Chinese company in Shanghai appears to have stolen a march over Europe in the race to build the world’s first 3D printed house.
A Shanghai company, Shanghai WinSun Decoration Design Engineering Co, says it made 10 3D printed houses (see photos) each costing $4,800 each in less than 24 hours, according to 3ders, a 3D printing industry website. Read more
A Chinese company broke ground this week on the world’s tallest skyscraper only to stumble at the first hurdle when the government halted the project, saying building permission hadn’t been obtained.
The wild ambitions of Broad Group, which wanted to complete the skyscraper in less than a year, and the administrative edict blocking it make for a good story in their own right. But they also serve as a parable about the distorted development of the Chinese economy. Read more
A seasonal gift from Beijing for canny, or lucky, investors in Hong Kong. China Machinery Engineering Corporation (CMEC), the state-owned contractor, saw its shares leap by as much as 19 per cent as it made its HKSE debut on Friday.
With Asian markets generally weak on Washington’s failure to reach a fiscal cliff deal, CMEC’s soaraway $500m initial public offering was a surprise bonus on an otherwise dull day. Read more
Hong Kong’s market for new stock listings has taken a sickly turn as concerns about the eurozone and a sharper than expected slowdown in China have rattled nerves. IPOs for Graff of London and several Chinese companies including car dealers China Yongda have been pulled in the past few days.
One sector seems especially unlikely to achieve its hoped-for HK listings: the construction machinery business. Read more
Buying Putzmeister, the former market leader in concrete pumps, was a statement of intent by Sany, the Chinese construction equipment maker. In an interview with Tang Xiuguo, Sany president, the FT’s Peter Marsh examines the implications of the deal for the company, the industry and manufacturing at large.
Hengqin Island used to be known for one thing, and one thing only: oysters. But today, its many oyster shacks and fish farms are being demolished to make way for highways and skyscrapers.
The Chinese island located next to the casino town of Macao is being transformed into a special economic zone offering business concessions not found anywhere else in the country. Read more