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BEIJING - China's biggest auto exporter will invest millions of dollars to build a world-class research and development (R&D) center in the next five years, the company's management told Xinhua on Wednesday.
Chery Automobile Co exported 110,000 cars last year, marking its 12th consecutive year as the country's biggest exporter of cars. The automaker, founded in 1997 and headquartered in southern China's Anhui Province, has sold over one million vehicles worldwide since its first car rolled off the assembly line in late 1999.
"If you want to take the driver's seat in the global market, brand and quality are the key," said Yin Tongyue, chairman of Chery.
The company has invested more than 7 percent of its sales revenue each year in R&D over the past decade, with investment reaching 10 percent in some years.
Chery made its first overseas sales to buyers in Syria in 2001 and went on to cooperate with global counterparts to develop and manufacture parts.
"We have established partnerships with Bosch, Bayer and ten other industrial giants to develop engine technology, new materials, interiors and other links along the industrial chain," Yin said.
A landmark step for Chery's global strategy was the opening of its first wholly owned plant outside China in 2014. Chery set up automobile and engine factories in Brazil and invested $22.3 million to build an R&D center in the South American country.
"About 70 percent of our employees are locals and we will expand our presence along the industrial chain to make it a more localized multi-national company," said Peng Jian, general manager of the Brazil branch.
Brazil is the world's fourth-largest automobile market and the sixth-largest auto manufacturer. Major automotive enterprises such as General Motors have built production plants in the country.
The Brazil branch is expected to be a springboard for Chery to expand its presence in the South American market.
The Chinese carmaker has entered markets in Asia, Europe, Africa and Latin America, and its products can be found in more than 80 countries and regions. Chery has established 16 overseas manufacturing bases, more than 1,100 dealership branches and 900-plus service stations.
China's commerce ministry said last Thursday that it will release guidelines to offer policy and financial support for global cooperation in sectors such as railways, nuclear power, automobiles, shipbuilding, the chemical industry and metallurgy.
"Going global is not enough for a company to be an international brand. You have to go in and move up the global value chain to impress customers with your quality," said Yin.
BEIJING - The Chinese government approved a new area in central China's Hunan province to stimulate regional growth and accelerate the opening up of the country's interior.
The Xiangjiang New Area, the first of its kind to be approved in central China, is located on the west bank of the Xiang River and comprised of several districts of Changsha City. It covers an area of 490 square kilometers, according to a statement released Saturday on the website of the central government.
The approval brought the total number of "state-level new areas" to 12. Shanghai's Pudong New Area, the first new area in China, was established in 1992, and the others are scattered across Tianjin, Chongqing, Zhejiang, Gansu and Guangdong, among other regions. China uses the new areas to test reforms, pilot opening-up policies and experiment with other innovations.
The government aims to build the new area into a high-tech manufacturing and innovation base, which will aid the development of central China and the Yangtze economic belt, the statement said.
KUALA LUMPUR - Being a member of Asian Infrastructure Investment Bank (AIIB) provides a new funding avenue for Malaysia's infrastructure development, which in turn will promote the connectivity between China and ASEAN, and the region's economic growth in the end, said a Malaysian economist.
Malaysia has continued to develop its infrastructure like roads, highways, airports, however, a notable area of "weakness" or " bottlenecks" in the country's infrastructure is railways, which has been a somewhat under-invested infrastructure until recently, Suhaimi Ilias, chief economist of Malaysia's leading bank Maybank, said in an interview with Xinhua.
With Phase One of the Klang Valley Mass Rapid Transit and Light Rail Transit extension projects under construction, more railway- related projects have been proposed and are in the planning, Suhaimi said.
"The total values of the railway infrastructure projects that are currently under construction and in the pipeline are 160 billion Malaysian ringgit (about $44.14 billion) for the period 2013-2020," he said.
However, with the country's level of economic development currently, it no longer "qualifies" for, or can have access to, infrastructure project financing and soft loan programs from the major developed economies and international organizations like the World Bank like in the past, the economist said. Now AIIB stands out as a new source of funding for Malaysia's infrastructure development, he added.
"One should also look at the broader context of the upcoming ASEAN Economic Community (AEC) to be officially launched later this year," Suhaimi noted, adding that in particular, the expected focus on railway infrastructure development in Malaysia going forward fits in with China's "One Belt, One Road" initiative.
This is especially important in improving and expanding the connectivity between China and ASEAN, specifically involving Singapore, Malaysia, Thailand, Myanmar, Vietnam, Cambodia and Laos, a potential railway backbone that is well-linked to the roads, highways, ports and airports across ASEAN, he said.
Transport and logistics will one of the key enabler for the growth and facilitate the efficient working of an integrated ASEAN Single Market and Production Base, given the expected rise in business flows via trades and investments, he said.
Suhaimi said that Malaysia can play a strategic role in making ASEAN a key part of China's "One Belt, One Road" initiative and the AIIB set up, by tapping on Malaysia's current chairmanship of ASEAN and taking note of China's interests in partnering ASEAN.
Moreover, the economist proposed AIIB to consider setting up an "ASEAN Office" in Kuala Lumpur as a hub to coordinate and execute its operations within ASEAN.
BEIJING - China CITIC Bank, one of China's leading banks, posted slowing profit growth and rising bad loans in the first quarter (Q1) of the year as the previously lucrative sector feels the pinch of a slowing economy.
The bank registered net profits of 10.93 billion yuan ($1.78 billion), up 2.07 percent from a year ago, according to the Q1 report filed with the Shanghai Stock Exchange on Saturday.
The growth rate was much lower than the 16.14 percent increase seen during the same period last year.
CITIC was not the only commercial bank in China feeling the chill from the economic downturn as profits earned by China's major banks slowed to the single digits across the board last year.
The bank said in the report that it is facing increasing challenges from financial disintermediation, interest rate liberalization and fierce competition amid the slowing economy and ongoing reform.
The bank is reinforcing its ability to fend off risk while trying to expand profits, the report said.
Total turnover of the bank increased 10.71 percent to 32.99 billion yuan in the Jan-March period.
As of March, outstanding non-performing loans (NPL) grew 6.23 percent to 30.23 billion yuan from the end of 2014, and the NPL ratio rose to 1.35 percent.
On the stock market, the company dropped nearly 2 percent to finish at 7.89 yuan per share on Friday.
BEIJING - Overseas visitors will be able to claim tax refunds on purchases made in Beijing starting in 2015 in a move to boost tourism and consumption in the city.
The Beijing Municipal Commission of Tourism Development is discussing the details with revenue authorities, and the tax refund scheme is expected to be implemented this year, Beijing vice mayor Chen Hong announced earlier this week.
According to the plan, foreign tourists and those from China's Hong Kong, Macao and Taiwan who have stayed on the Chinese mainland for no more than 183 days may receive a rebate of 11 percent on consumer goods purchased at designated department stores.
The minimum purchase for a tax refund is 500 yuan (about $82) at any one store in one day.
China started a pilot tax refund program in the southern island province of Hainan on Jan 1, 2011.
The Ministry of Finance (MOF) announced in January that China will expand the tax refund program to spur inbound trips and boost exports of China-made commodities.
BEIJING - Chinese Premier Li Keqiang has demanded a high level of opening up and innovation to bolster economic growth.
The promotion of reform, opening up and innovation can help China combat downward pressure on the economy, Premier Li said during a three-day visit to the cities of Xiamen, Quanzhou and Fuzhou of southeast China's Fujian province.
China on Tuesday launched three new free trade zones (FTZ) in Tianjin, Guangdong and Fujian, 18 months after the first FTZ opened in Shanghai.
"China's economy is resilient," he said. "Through targeted control and keeping the growth within a range, China can develop during structural changes."
"The FTZ should foster the world's best business environment, setting an example for the whole country in pushing reform and opening up and promoting quality growth," he said.
The premier demanded that innovation, entrepreneurship and streamlining of administration continue.
China should press ahead with its strategy of "going global" and "bringing in". International cooperation will help China achieve medium high growth and elevate its economy to a medium-high level, he said.
Entrepreneurs from Taiwan were advised by Li to make the most business opportunities as more beneficial policies are on the way, alongside the old preferential policies.
During the visit to a branch of the Industrial Bank Co Ltd in Fuzhou,he urged financial institutions to come up with more innovative and streamlined approaches to meet the needs of the real economy.
He encouraged students to read while touring Xiamen University, both books that provide cutting-edge knowledge and classics that can cultivate the mind.
The premier also asked for substandard accommodation to be renovated well and for the protection of traditional culture in the modernization of cities.
BEIJING - The Standing Committee of China's National People's Congress (NPC), the country's top legislature, adopted an amendment to the 2009 Food Safety Law on Friday with the heaviest penalties yet for offenders.
With 154 articles, compared with 104 in the original law, the revamped Food Safety Law adds new articles and provisions on baby formula and online shopping.
Chinese people have been shocked by many food safety scandals in recent years, including injecting clenbuterol into pork, recycled cooking oil, selling pork from sick pigs, medicines made with toxic gelatin and passing off rat and fox meat as fit for human consumption.
The revised law gives heavier punishment to offenders, increasing the cost for violating the legislation, said Huang Wei with the Commisison for Legislative Affairs of the NPC Standing Committee.
The new law will go into effect on Oct 1.
The revised law brings harsher civil, administrative and criminal penalties for offenders and their supervisors.
The amendment introduces administrative detention for offenders. Those who add inedible substances to food could find themselves behind bars for up to 15 days. Administrative detention normally refers to that imposed by police without court proceedings. This has been considered tough as other punishments stipulated in the Food Safety Law generally involves fines and revocation of certificates.
Buyers also get better protection. Consumers can demand reparation of three times any loss they suffer from substandard food. Previously, only compensation of 10 times the price of the food was allowed. Substandard food can be very cheap and can cause very serious problems with consequential losses, hence the new rule guarantees that consumers can get higher compensation.
Bigger fines for offenders are also on the menu. Producers may face fines of up to 30 times the value of their products, up from 10 times. If the products are worth less than 10,000 yuan (1,630 U.S. dollars), the fined can be up to 150,000 yuan, three times the previous amount.
The amendment adds provisions for landlords of production sites who turn a blind eye to illegal activities on the premises, and suppliers who sell unlawful substances to producers, knowing that they will be added to foods. Their revenue can be seized and they can be fined up to 200,000 yuan.
Administrative penalties, such as demotion and dismissal, will be imposed on officials with food and drug regulators who fail in their duty to protect the public or connive in cover-ups. Similar punishments will be dished out to officials in health and agriculture departments. Abuse of power and neglect of duty for personal gain may precipitate criminal penalties.
Infant milk formula will be heavily regulated to restore public confidence in the domestic dairy industry.
Producers will be required to register powdered baby milk formula with the food and drug regulator. Earlier provisions stipulated that firms only needed to ensure their formulas were on record.
There are more than 1,900 varieties of baby formula available in China. Each company has around 20 varieties. In other countries, firms produce and sell only two or three.
"Some producers are creating new formulas purely for the sake of marketing," according to the Food and Drug Administration.
In 2008, infant formula produced by the Sanlu Group, a leading dairy firm in north China, was found to contain melamine. Six babies died and thousands fell ill. As a result, the first Food Safety Law was enacted in 2009 but public confidence in domestic baby formula has not recovered. Instead, consumers have demanded baby formula from countries like Australia, New Zealand and Germany, which now have strict export quotas for China.
Producers will now have to test every batch of their product, conduct regular internal inspections and submit reports to regulators.
Online shopping has become part of daily life in China. Food producers are expanding their business to instant messaging services like WeChat.
China's online retail sales totaled 1.85 trillion yuan in 2013, with food eating up 32.4 billion, and problems concerning food safety have emerged. To keep up, the amendment adds new articles on online shopping, clarifying the liabilities of shopping platforms. They are required to register the real identity of vendors and check their certificates. The platforms will have to compensate consumers if they cannot provide the identity, address and contact details of retailers.
They should also report malpractice to the government and deny access to delinquent retailers.
BEIJING - Sales revenue of China National Offshore Oil Corp (CNOOC) went down 39.9 percent to 35.5 billion yuan ($5.8 billion) in the first quarter, the company said on Friday.
CNOOC, China's largest offshore oil and gas company, attributed the drop to the falling oil prices.
Oil and gas production in the first quarter went up 9.4 percent to 118 million barrels of oil equivalent, thanks to some new fields going on stream.
The company's average oil price during the period was $53.4 per barrel, down 49 percent. Gas was priced at $6.68 per thousand cubic feet, up 5.5 percent.
CNOOC said its expenditure for the first three months went down 15.7 percent to 15.9 billion yuan as it increased efficiency and lowered costs.
BEIJING - China is lending more to the property sector, especially affordable housing projects, the central bank said on Friday.
Outstanding yuan-denominated loans to the property sector at the end of March stood at 18.4 trillion yuan ($3.02 trillion), up 19.4 percent from the previous year.
In the first quarter, such lending expanded by 994 billion yuan, 196 billion yuan more than the same period last year. The expansion took about 27 percent of the total lending in the first three months. The ratio was up 0.6 percentage point year on year.
Loans to affordable housing construction hit 1.28 trillion yuan at the end of March, up 64.3 percent year on year.
In January-March, loans to affordable housing construction grew by 135 billion yuan, 86 billion yuan more year on year, 43.7 percent of the total lending to the property sector. The ratio was 24.4 percentage points higher year on year.
China's real estate market continued to weaken but with smaller price drops in March, leaving analysts to expect a further rebound with new relaxed mortgage rules.
BEIJING - The economic planner is likely to announce a batch of projects to help stabilize growth and boost investment, an official said on Friday.
New projects will be in line with macro-economic policies, said Luo Guosan, deputy director of the Department of Fixed Asset Investment under the National Development and Reform Commission (NDRC).
Since September last year, the NDRC has approved seven project packages on information, electricity, oil and gas network, environmental protection and clean energy, he said.
Overall investment has been falling remarkably, but investment in infrastructure has been rising quickly, he said.
National fixed asset investment only expanded 13.5 percent in the first quarter (Q1) year on year, 4.1 percentage points lower than in Q1 2014, he said.
However, investment in infrastructure grew 23.1 percent in Q1, up 0.6 percentage point year on year. Of the total, investment in road and waterways grew 15.2 percent year on year, up 3.8 percentage points from Q1 2014, Luo said.
Land supply for infrastructure picked up 0.6 percent in Q1 year on year, while supply for industrial warehouses and property development dropped 26.1 percent and 38.7 percent, respectively, indicating government investment had accelerated, Luo said.
Apple Watch on display in an Apple retail store in Hangzhou city, East China's Zhejiang province, April 24, 2015. The watch went on sale on April 24 around the world, and it proved a hit in China, with fans queuing in front of the outlets even before it started selling. [Photo/IC]
Customers try to use an Apple Watch in an Apple retail store in Hangzhou city, East China's Zhejiang province, April 24, 2015. The watch went on sale on April 24 around the world, and it proved a hit in China, with fans queuing in front of the outlets even before it started selling. [Photo/IC]
Customers take photos of the Apple watches in an Apple retail store in Hangzhou city, East China's Zhejiang province, April 24, 2015. The watch went on sale on April 24 around the world, and it proved a hit in China, with fans queuing in front of the outlets even before it started selling. [Photo/IC]
A customer wears two Apple watches on his wrists in an Apple retail store in Hangzhou city, East China's Zhejiang province, April 24, 2015. The watch went on sale on April 24 around the world, and it proved a hit in China, with fans queuing in front of the outlets even before it started selling. [Photo/IC]
A red Apple Watch on display in an Apple retail store in Hangzhou city, East China’s Zhejiang province, April 24, 2015. The watch went on sale on April 24 around the world, and it proved a hit in China, with fans queuing in front of the outlets even before it started selling. [Photo/IC]
Fans line up in front of an Apple retail store in Hangzhou city, East China's Zhejiang province, April 24, 2015. The watch went on sale on April 24 around the world, and it proved a hit in China, with fans queuing in front of the outlets even before it started selling. [Photo/IC]
A customer tries to touch an Apple Watch on display in an Apple retail store in Hangzhou city, East China's Zhejiang province, April 24, 2015. The watch went on sale on April 24 around the world, and it proved a hit in China, with fans queuing in front of the outlets even before it started selling. [Photo/IC]
A staff member shows an Apple Watch to a customer in an Apple retail store in Hangzhou city, East China's Zhejiang province, April 24, 2015. The watch went on sale on April 24 around the world, and it proved a hit in China, with fans queuing in front of the outlets even before it started selling. [Photo/IC]
Top planner says mechanisms in place to kickstart investment in seven key sectors
Engineers work at a railway bridge near Hami, Xinjiang Uygur autonomous region, on April 20, 2015. The country's new railway development fund has raised 8.2 billion yuan, while top oil refiner China Petroleum & Chemical Corp has attracted more than 100 billion yuan of private capital to restructure the company's business. [Cai Zengle / for China Daily]
The nation's top economic planning agency will launch several large infrastructure projects to blunt the impact of decelerating economic growth, an official of the body told a news conference in Beijing on Friday.
The National Development and Reform Commission has boosted investment in seven sectors since September, the official said. They are environmental protection, clean energy, healthcare and senior-care services, food, water, transportation and ancillary services for oil, natural gas and mining.
The commission has established a mechanism that allows project adjustment and the timely addition of new qualified projects, said Luo Guosan, deputy director-general of the investment department. He did not specify what would be included in the newly added projects.
"Investment growth has declined substantially. However, infrastructure investment has maintained momentum thanks to large projects," he said.
Urban fixed-asset investment rose 13.5 percent year-on-year to 7.75 trillion yuan ($1.26 trillion) in the first quarter, down 4.1 percentage points from a year earlier. Infrastructure investment was a highlight, with an increase of 23.1 percent.
The government has encouraged private investment as it moves to develop a mixed-ownership model in State-owned enterprises and sectors such as water conservation, senior-care services, transportation infrastructure and hydroelectric power stations.
The new railway development fund has raised 8.2 billion yuan, while top oil refiner China Petroleum & Chemical Corp has attracted more than 100 billion yuan of private capital to restructure the company's business.
GDP grew 7 percent year-on-year in the first quarter, the weakest in six years. The economy is still "within a reasonable level", said Cong Liang, deputy head of the NDRC's department of national economy. The employment situation remains relatively stable in most regions, he said.
In addition, the consumer price index, a main gauge of inflation, increased only 1.2 percent year-on-year in the first quarter. "That's below the 3 percent upper limit that we have set," he said.
High-tech companies reported growth of 11.4 percent year-on-year in the first quarter. The new driving forces in this sector include information technology, bio-medicine, advanced equipment, alternative energy, e-commerce and logistics.
Maintaining an economic growth at around 7 percent means an increment of $800 billion per year in GDP, which is equal to the total economy of 1995.
A man walks next to a McDonald's restaurant at a shopping mall in Shanghai July 28, 2014.[Photo/Agencies]
McDonald's Corp, the world's largest fast-food chain, is to close 350 stores globally, including 220 in China and the United States.
The company said the move is in reaction to an 8.3 percent slump in first-quarter comparable sales in the Asia Pacific, the Middle East and Africa, which it blamed on the impact of what it called prolonged, broad-based consumer perception issues in Japan, and negative but improving performance in China.
Global comparable sales dropped 2.3 percent, reflecting negative customer traffic in all major segments, resulting in a 28 percent slide in the company's overall consolidated operating income.
During the quarter, its operating income from the Asia Pacific, the Middle East and Africa declined 80 percent due to strategic restaurant closings and other charges, on top of the issues in Japan and China, it said.
The fast-food restaurant company is expecting 130 stores to close in Japan, but it did not respond to China Daily's inquiry on the specific number of stores being shuttered in China.
Kevin Ozan, McDonald's chief financial officer, said that April's global comparable sales are also "expected to be negative".
McDonald's is considered the world's leading global food service retailer with over 36,000 locations. More than 80 percent of those are owned and operated as independent businesses.
Yum Brands Inc, the parent company of Taco Bell, KFC and Pizza Hut, is also still struggling in China, where sales declined 6 percent in the first quarter, while same-store sales fell 12 percent.
The result was an improvement over the 16 percent same-store sales decline in the last quarter of 2014, and the company still insists it plans to add at least 700 new stores in China.
Analysts said customers in China have been slow to forget recent food scandals, one of which involved a major supplier of meat to fast-food companies including McDonald's and Yum, which was shut down for allegedly violating numerous safety regulations, including mixing in chicken and beef parts that were well beyond their expiration date.
Yum has launched several initiatives to attract more customers in China including a high-end restaurant Atto Primo in Shanghai, and providing quality coffee in 1,300 restaurants across 10 cities.
Ben Cavender, principal of the Shanghai-based China Market Research, said he expected both brands to continue to struggle in China and internationally.
"This is due to changing consumer tastes and an overall shift toward either more healthy foods or niche brands," said Cavender.
He said in China specifically both brands continue to feel the effects of the scandal, and a slowing economy, and any company running a huge number of stores might be faced with having to close some.
"Coffee sales may be boosting KFC a little bit," he said, "but I don't think they have it fully implemented yet and they also have a lot of competition in that space."
Chinese investors look at prices of shares (red for price rising and green for price falling) at a stock brokerage house in Hangzhou city, East China's Zhejiang province, March 30, 2015. [Photo / IC]
The China Securities Regulatory Commission said on Friday it will crack down on "increasing" illegal trading activity as the country moves ahead with innovative new trading methods and tools.
The initial phase of the campaign will target five specific types of illegal activities, according to the CSRC:
financial fraud involving the mergers and acquisitions of listed companies
stock price manipulation using capital or information advantages
insider trading on the share transfer platform for unlisted companies
trading on the basis of non-public information by employees of securities firms
futures market manipulation
The move comes amid a market boom that has seen the benchmark Shanghai Composite Index surge more than 80 percent over the past six months.
"Some new and hard-to-detect illegal trading tactics have emerged along with innovative reform in the country's private equity sector, the over-the-counter market, the futures market and the new business of margin trading and short-selling," Zhang Xiaojun, the CSRC spokesman, said in Beijing.
Zhang said that the regulator will exert a "tightened grip" on illegal activities, which have "seriously affected and endangered" the capital market's development.
The CSRC also pledged to step up oversight on trading at the National Equities Exchange and Quotations, a platform for small unlisted companies to raise funds, where excessive valuations and surging transaction volumes have raised concerns of speculation and illegal practices.
On Friday, the benchmark Shanghai index was down as much as 2.2 percent during the day, the largest decline in seven weeks. But the market later erased some of these losses, closing just 0.47 percent lower at 4,393.69 points.
Some analysts said that the market was dragged down by investors' concerns that an increased supply of new shares will drain liquidity. The CSRC said earlier that it would review and approve two batches of applications for initial public offerings each month, up from one previously.
Separately, the CSRC dismissed market rumors claiming that the government has considered raising the stamp tax to curb market bubbles and control the risks of leverage.
In a statement on Friday, the CSRC also said it would expand the capital-raising cap from 25 percent to 100 percent for listed companies that seek M&As. Previously, capital raised by companies that exceeded 25 percent of the value of the M&A deal required review and approval by the regulator's IPO panel.
Foreign investors are keeping a watchful eye on new opportunities emerging from China's surging stock market; but an increasing number are also starting to warn against the possibility of a growing bubble, in what has become world's fastest-growing stock index.
Their key concern relates to the unreasonably high price-to-earnings multiples of the stocks leading the growth of the A-share market, warning that prices have become detached from fundamental values.
"A lot of these firms already have very high PE multiples, meaning a lot of work still needs to be done to meet their expectations," said Robert Davis, senior portfolio manager at NN Investment Partners.
"The companies could grow fast - but there is a greater risk that they will not grow as fast to justify their valuations."
Davis' views are echoed by Steve Yang, an A-share strategist at UBS Securities.
"A-share prices have grown extremely fast in recent months. But we certainly can't have such high growth every day, because at the current rate we'll have 400 percent growth annually, which is unsustainable," he said.
To put the skyrocketing A-share prices into perspective, China's main stock index, the Shanghai Composite Index, has doubled since July last year. It rose from around 3,000 points in February to around 4,400 in April.
Yang said the A shares are being driven by incremental capital being ploued into the market.
A lot of Chinese mutual funds and hedge funds have raised new capital in the past three months and investors are using the leverage to invest. Individuals too are directing more of their savings into equities.
For over a decade, foreign institutional investors have been tapping the A-share market through the Qualified Foreign Institutional Investor program, although the opportunities broadened at the end of last year when China introduced the Shanghai-Hong Kong Stock Connect program.
The linkage allows both institutional and retail investors that trade on the Hong Kong stock market to purchase a selection of A shares, while allowing investors in the Chinese mainland to buy H shares, or Hong Kong-listed shares, that can be freely traded by foreigners.
Yang said the Stock Connect program has been well received by international investors, and marks an important step in the opening up of China's capital markets.
It is also being seen as healthy because some of the capital from domestic investors can now flow into international stocks as opposed to being concentrated in the A-share market alone.
For international investors such as NN Investment Partners, which has traded on the Hong Kong market for years, the Stock Connect program provides great opportunities to tap into the A-share market.
At the same time, however, the Stock Connect has also caused a degree of nervousness about the quality and transparency of the A shares being offered to foreign investors, as they may not necessarily have the same disclosure standards as H shares.
"There's a feeling that the investor relations departments of some of the mainland companies lack sophistication, as they have not dealt with overseas investors before," said Davis.
"They may not have accounts in English, or may not release their press releases at a timely manner."
These concerns, combined with the relatively unfamiliar landscape of the A-share market for foreign investors, have meant that many Western investors are also cautious about how they tackle opportunities in the mainland market.
"Some Western investors don't know these companies, and they may not have Mandarin teams to communicate with them. But if you are talking long term, this channel presents a big opportunity for overseas investors to tap into China's growth," Davis said.
Job seekers look for employment information during a job fair in Hangzhou, Zhejiang province, in March. Ju Huanzong / Xinhua
The number of jobs created in the first quarter decreased for the first time since the global financial crisis, and a senior official warned of the growing impact on the job market of slower economic growth.
The country created 3.24 million new jobs in the first quarter, down by 200,000 compared with the same period last year, according to the Ministry of Human Resources and Social Security.
It is the first time the number of newly added jobs has decreased in the first quarter since 2009, when they dropped by 350,000 during the global financial crisis.
"It is a change that is worthy of our close attention," said Xin Changxing, vice-minister of human resources and social security, in a news conference at the State Council News Office on Friday.
Xin said one reason for the decrease might be that the Spring Festival this year fell on Feb 19. A large number of migrant workers did not return to urban areas from their family reunions for new job opportunities until the Lantern Festival on March 5.
"Meanwhile, the figure might also show that the growth in the number of people employed in urban areas decreased because of the downward pressure of the economy. We need to stay vigilant for that," Xin said.
He added that the country's slowing economic growth has not been reflected in the unemployment figures, as the urban unemployment rate stayed at 4.05 percent in the first quarter, which is even lower than the 4.08 percent in the same period last year.
According to the National Bureau of Statistics, China's economic growth fell to a six-year low of 7 percent in the first quarter. "The change in the employment market might lag behind the major economic indicators," Xin said.
However, he said that economic growth is still enough to beef up the employment market.
"The restructuring of the economy, especially the expansion of the service sector, must be taken into account as the sector is the most effective in the creation of new jobs," he said.
The decrease in the number of new jobs has the attention of the State Council. The central government rolled out a string of measures on Tuesday to stimulate employment, including expanding taxation reduction and exemption policies to cover sole-proprietorship enterprises.
A statement released after a State Council executive meeting presided over by Premier Li Keqiang said that the country is facing growing pressure on employment this year.
The government has to launch more active employment policies and give full support to mass entrepreneurship and innovation, the statement said.
Job seekers flooded a job fair in Hefei, Anhui province, on April 15, 2015. [Photo/Xinhua]
Chinese firms are increasingly embarking on overseas mergers and acquisitions deals as a key way of expanding globally and in the process creating win-win partnerships, experts said.
They said that different from the M&A style of firms in mature markets, where the acquirer would make great changes to the target, Chinese firms generally keep their targets' management team and learn from them to develop new technology or products for the Chinese market.
These discussions were made at a forum on Friday in London, organized by the China Europe International Business School.
Wang Gao, co-director of CEIBS Research Centre on Globalisation of Chinese Companies, said that Chinese companies are going global to seek resources and capabilities to strengthen their competitiveness in the domestic markets.
After they grow stronger in home countries by using these new capabilities, they may leverage on their new capabilities to compete internationally, Wang said.
He said one example of win-win partnership created between the Chinese acquirer and the overseas target is ICBC's acquisition of a 20 percent share in Standard Bank for $5.5 billion in 2007.
"For ICBC, the acquisition helps them to assist their large customers to go abroad, especially in going to Africa, providing them with financing and other support," he said.
Secondly, the acquisition helps them to produce organization capability improvement, he said, explaining that although ICBC is the largest bank by market capitalization it can still benefit from learning more advanced management techniques from Standard Bank.
Meanwhile, this acquisition also provides benefits for Standard Bank, because the new injection of capital allows them to participate in the financing of bigger projects that they previously were unable to do, he said.
Despite these opportunities, it is important that Chinese firms realize that they need to focus on having a clear objective for the acquisition, bearing in mind that M&A is just the strategy to achieve the wider goal of globalization, said Ding Yuan, director of CEIBS Research Centre on Globalisation of Chinese Companies.
Yuan said that dangers of less successful globalization sometimes lie in the possibility of company management not having a clear view of the end goal. For example, M&A activities driven by the availability of excess capital or political order may not achieve the best results, whilst over optimism could lead to overpaying for the targets.
For example, many of the M&A deals relating to natural resources and commodities, like coal mines and oil fields, were struck at rather high prices, and now there is a great amount of impairment cost created.
Instead, they should focus on developing in-depth knowledge about the target firms, these firms' industry position, and consider the further scope for improvement of these firms before making a purchase.
They should also assess the target's technology advancement, research and development ability, management team competency and stability, and cultural fit with the parent company, he said. Chen Weiru, associate professor of strategy at CEIBS, adds that attention must also be paid to the cultural side of the new partnership in the post-acquisition integration stage to maintain respect, and to focus on the long term future growth rather than to capture short term value gain.
He said that central to the success of Chinese outbound M&A activities is the combination of Chinese and global advantages. Whilst Chinese advantages include market size, market growth, labor cost and easier and cheaper costs of finance, and global advantages include natural resources, brand image, marketing capability and technology and know how.
Two Apple Watch look-alike devices (left), made by a Chinese manufacturer, have among their features a built-in camera, and sell for between 320 and 550 yuan ($52 to $89). The Apple Watch (right), the first new product to be launched by Apple under Chief Executive Tim Cook, hit stores on Friday. PHOTOS BY REUTERS
Shenzhen company produces look-alike for a fraction of the price
When Apple delivered the first long-awaited smartwatch to its customers on Friday, a small factory in Shenzhen, Guangdong province, had already sold tens of thousands of Apple Watch look-alikes worldwide for a fraction of the price.
Zheng Yi, founder of smartwatch factory YQT Electronic Technology, is expecting "explosive demand growth" this year because of the Apple Watch release.
"Apple ignited customers' craze for wearable devices. We will definitely benefit from it," he said, sipping a cup of tea at his office close to the Shenzhen airport.
Less than 10 meters from his office, workers were assembling prototypes of a low-end smartwatch for children. Noise from the exhaust system in the workshop drowned out the roar of passenger jets overhead.
Zheng's company makes a smartwatch very similar to Apple's device at first glance. It is capable of tracking your steps, receiving short messages and browsing Web pages. The device, named Smart Watch, sells for around 300 yuan ($48), a fraction of the cheapest Apple wearable, which sells for 2,588 yuan.
The 38-year-old, who graduated from China's elite Zhejiang University with a degree in urban planning, said his device is a "completely different product" compared with the Apple Watch. "All we did was to borrow some of the outstanding features from Apple and add our own watch. We did not copy them," according to Zheng.
The device beats Apple Watch's embarrassing 18-hour battery life, and the imitation can take low-quality pictures, a function that the Apple Watch does not have. The 40 engineers also moved the positions of the crown, the microphone and the speaker on the watch so that Zheng could apply for an appearance patent in China to avoid potential legal problems.
Apple did complain about YQT's wearable after the Cupertino, California-based giant found that the Chinese company used the exact same setting icon in its device. YQT quickly replaced the icon.
Apple did not reply to an e-mail from China Daily seeking comment.
John Fang, business analyst at China Market Research Group, said the cheap imitations will not defeat Apple Watch despite the significantly lower price tag.
"The knockoffs only attract those who cannot afford the real ones. But I think the vast majority of consumers would still buy Apple products from a trustworthy channel," Fang said.
Apple's "most personal device" was not hurt by the knockoffs and was received with initial success in China. The company is not able to provide products for walk-ins because of short supplies. The earliest delivery date for online orders was pushed to June. Apple did not disclose the number of smartwatches available for sale in China.
It will be extremely tough for an unknown manufacturer to take on Apple, analysts said.
"Apple commands a huge, loyal customer base who are already part of the brand's ecosystem and willing to embrace their latest offering," said Jack Chuang, associate partner at OC&C Strategy Consultants Greater China. The company is attempting to maximize the consumer base by introducing devices at all price ranges, Chuang said.
Although Zheng admitted it is impossible to take down Apple or Samsung with current products, he remains optimistic about a potential faceoff against Apple in the long run.
"We've been making smartwatches for more than seven years. Apple is a latecomer. We have more experience in this field and it is a huge advantage," he told China Daily.
The company makes 85 million yuan in annual revenue.
"To build a company like Apple, we need to build better brand awareness, and making knockoffs is not going to help," he added.