Asia-Business

News from China

Reforms in FTZ to be deepened

26th July 2017

SHANGHAI will deepen reforms in the free trade zone and accelerate construction of a technology and innovation center as it sets out the city’s government’s tasks for the second half of the year, Mayor Ying Yong said yesterday.

The free trade zone will be a trial zone for reforms that combine opening-up and innovation to become a test zone for risks within an open economy, and a pilot zone to enhance government capability, Ying said in a government report at a meeting of the Standing Committee of Shanghai Municipal People’s Congress.

The free trade zone is also a frontier for companies to expand overseas as part of China’s One Belt One Road initiative, which was put forward in 2013, as well as to revive eco-nomic ties and connectivity between China and countries across Asia, Europe, and Africa.

Reforms in the free trade zone should be aligned closer to Shanghai’s economic reforms, construction of an international financial center as well as a technology and innovation hub, Ying said.

In accelerating construction of the technology and innovation center, efforts will be focused on building up the Zhangjiang comprehensive national scientific center, according to Ying.

The government will also construct a platform for development and research, and encourage mass entrepreneurship.

Ying also reiterated that the government will continue to crack down on speculation in the housing market and build a real estate market that balances home purchase and rent.

The government will ensure that the housing market grows steadily, ensure home prices are stable, and work toward improving the structure of residential property.

Source: Shanghai Daily, July 26, 2017

China’s FMCG sales post rebound in Q2

25th July 2017

SALES of fast moving consumer goods in China in the second quarter rebounded from a sluggish performance in previous quarters to 3.2 percent from a year ago, as retailers sought to diversify shopping channels available for consumers.

Sales through modern trade, including hypermarkets, supermarkets and convenience stores, jumped 3.5 percent, according to a latest quarterly report by Kantar Worldpanel.

Overall spending on household consumer goods added just 3 percent in 2016, the lowest level in five years, as sluggish market growth and slower price hikes impacted overall consumer goods market growth. In the first quarter of 2017 spending grew just 1.7 percent annually.

Sun Art Retail Group, which operates Auchan and RT Mart brands, remains the leader with 8.2 percent market share, followed by Vanguard Group’s 6.3 percent and Walmart’s 5.1 percent.

E-commerce spending surged 28.2 percent from a year ago and contributed 6.9 percent of overall FMCG market in the second quarter

Source: Shanghai Daily, July 25, 2017

No gain to diesel car ban

24th July 2017

BANNING diesel cars in European cities could hamper automakers’ ability to invest in zero-emission vehicles, the European Union’s commissioner for industry has warned the bloc’s transport ministers.

In a letter seen by Reuters, Commissioner Elzbieta Bienkowska said there would be no benefit in a collapse of the market for diesel cars.

“While I am convinced that we should rapidly head for zero-emission vehicles in Europe, policymakers and industry cannot have an interest in a rapid collapse of the diesel market in Europe as a result of local driving bans,” she said.

“It would only deprive the industry of necessary funds to invest in zero-emissions vehicles,” she said in the letter, dated July 17.

Source: Shanghai Daily, July 24, 2017

China’s forex capital flows most balanced in 3 years

21st July 2017

CHINA’S forex regulator said yesterday the country was seeing its most balanced forex market supply and demand in three years due to improving economies at home and abroad as well as an intensified crackdown on irregularities.

The improvement in the domestic economy and business expectations helped stabilize China’s cross-border capital flows in the first half of 2017, Wang Chunying, a spokesperson for the State Administration of Foreign Exchange, told a press conference.

Commercial banks bought 999.5 billion yuan (US$148.1 billion) worth of foreign currency in June, and sold 1.14 trillion yuan, resulting in a net forex settlement deficit of 142.5 billion yuan, according to SAFE. The deficit for the first half of the year fell 46 percent year on year to US$93.8 billion.

Wang expects the cross-border capital flows to stay stable in the future.

She said the impact of the US Federal Reserve’s interest rate hikes on China’s cross-border capital flows had diminished, expecting the risks of large-scale capital outflows from China to notably ease.

The government will continue to support authentic and rational outbound investment by Chinese businesses but will keep a close eye on overseas investment in sectors such as real estate, entertainment and athletic clubs, Wang said.

China will further improve its management system to facilitate cross-border investment and fund-raising, while guarding against risks, she said.

With China’s outstanding external debt-to-GDP ratio of 13 percent at the end of 2016, well below the international warning line of 20 percent, the risks of China’s external debts remained controllable, Wang said.

China has seen steady increases in the volume of its external debts for four consecutive quarters, with the total reaching US$1.44 trillion at the end of March, up 1.2 percent from the end of 2016.

Wang said that China’s foreign exchange reserves were expected to remain stable as cross-border capital flows as well as the forex market supply and demand would become more balanced, following the country’s improving economic development and financial market opening-up.

China’s economy grew 6.9 percent in the first half year.

“There is no doubt that the economy will reach the full-year growth target and continue to run within a reasonable range,” Wang said.

Source: Shanghai Daily, July 21, 2017

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