Huawei Technologies Co aims to stand out among this string of firms, with its years of technological prowess.

Sitting on its more than three decades of R&D and experience of working with different vertical sectors, Huawei aims to turn the idea of a smart city into reality.

Yan Lida, president of the enterprise business group at Huawei, said the goal of smart cities is to facilitate governance, serve the people and boost business growth.

"In the process of building smart cities, Huawei aims to construct the essential and fundamental platform, or the soil, for all partners to thrive, and to bring in all their capacities so as to help drive digital transformation forward," Yan said.

According to him, Huawei has already participated in the construction of more than 200 smart cities, and with more than 16,000 partners around the world, the Shenzhen-based company will step up its push to construct an open platform and lure more companies in.

Huawei's intensified push into the smart city arena came as a clutch of tech heavyweights such as Alibaba Group Holding Ltd, Tencent Holdings Ltd and Baidu Inc are upping their ante.

A McKinsey research report forecast that the global smart city industry covering 600 cities worldwide is projected to spawn a $400 billion market by the end of 2020. These cities are expected to generate 60 percent of the world's GDP by the end of 2025.

"In comparison with rival products, our platform's edge lies in our full stack of technology support, the capacity to serve all industries and our open attitude toward all partners," said Lu Qi, president of marketing and sales at Huawei's enterprise business group.

Different from most players that focus only on offering the platform as a service, or PaaS, Huawei has a sprawling presence across hardware, infrastructure as a service, and PaaS.

The company is also in a good position to serve all sectors, with a focus on public governance, transportation, finance, energy and manufacturing at the moment, Lu said.

According to him, clients who choose Huawei's platform have a choice to adopt technological solutions for specific application scenarios from other companies. Such freedom has enabled Huawei to stand out from the competition.

In 2018, Huawei announced it was partnering with the Tianjin municipal government to build a smart platform, or digital twin, for the Binhai New Area.

The platform will be able to help government officials deal with daily routines related to tasks like reducing unemployment, and emergencies including floods and fires.

"Huawei has helped us design over 4,000 parameters such as education indexes and health indexes to gauge the status of urban citizens. We will use such data to develop a slew of models to conduct intensive analysis, which will allow officials to predict what will happen and how to respond to them," said Chen Song, an official in Tianjin in charge of smart city construction for the Binhai New Area.

"Without a good platform, it is impossible to coordinate and integrate mounting cross-system resources. Huawei's full package of products has put it in a good position to help us build such a platform," he said.

Ma Jionglin, a senior partner at Deloitte, said in an earlier interview: "China is one of the most active countries in the world in building smart cities. With the advancement of urban management and the increasing emphasis on people's living and working styles, smart cities will enter a new stage of development."

Already, China has included the smart city initiative in its national strategy and made significant investments in these projects. Both first-tier cities and small and medium-sized cities are home to smart city projects and they have formed many smart city clusters across the eastern and southern coastal areas of China, according to a Deloitte report.

Powered by the next-generation information technologies such as 5G, mobile internet, internet of things, artificial intelligence and cloud computing, China is gearing up to develop smart cities nationwide.

In China, improving cities, especially metropolises, is an urgent and pressing demand as the urban population is growing amid rapidly increasing urbanization, experts said.

In 1949, just 10.6 percent of people, or 57 million residents, lived in 132 cities in China. But, by the end of 2018, nearly 60 percent of the country's population, or 830 million residents, lived in 672 cities. The figures continue to grow.

"As the population grows and we become more urbanized rapidly, the carrying capacity of the cities cannot sustain the pressure of population explosion. Diseases could emerge as new problems in cities due to resource shortages, traffic congestion and pollution, raising new concerns for the government's public management capabilities," said Shan Feng, deputy head of the Digital City Engineering Research Center, which is part of the Chinese Society for Urban Studies, at a meeting on smart cities in November in Beijing.

By the end of 2018, more than 500 Chinese cities proposed to build smart cities in their respective local government work plan, according to Shan.

Today, China has also become a key force in the development of smart city technologies and the industrial innovation globally.

A new report from market research firm MarketsandMarkets estimated the smart cities market in China is projected to reach $59.9 billion by 2023 from $30.4 billion in 2018 with a compound annual growth rate of 14.5 percent.

According to the report, the growth is mainly driven by the increase in population, the need for rapid urbanization and the government's investment and policies to speed up the implementation and development of smart city projects.

MarketsandMarkets noted China is the biggest marketplace in the Asia-Pacific region in terms of development of smart cities, and the APAC region is set to emerge as the main revenue contributor to the smart cities market globally.

By 2023, the global market for smart cities is estimated to grow to $717.2 billion from $308 billion in 2018, at a compound annual growth rate of 18.4 percent, the company said.

In fact, the adoption rate of smart cities solutions is growing rapidly in China. Not only some big cities but small and mediumsized cities are actively embracing the digital solutions.

For instance, Yingtan, a city in Central China's Jiangxi province, is accelerating the push for building an internet of things-enabled digital economy.

By 2018, Yingtan's 1.1 million people had connected to the internet of things. And more than 200 internet of things companies have been set up in the city, helping Yingtan to better embrace the digital transformation.

So far, the city has officially provided more than 40 kinds of internet of things services, including 5G services, smart transportation, smart water utilities, smart streetlights and smart parking.

For instance, 95 percent of the local families have installed smart water meters, which help save 2.4 million metric tons of water a year.

Yao Yao, head of property investment and management consultancy JLL's research in China, said smart cities' construction plays a more important role in China when compared to other markets.

"On the one hand, the practice of smart cities will help alleviate the increasing burden on traditional infrastructure systems caused by the rapid increase in urban population. On the other hand, intelligent application in fields including travel, safety, health and energy will improve the quality of all aspects of the residents' life. And the key issue is how to meet people's growing need for a better life," Yao noted.

Seeing the growing potential in smart cities development, an increasing number of tech companies are ramping up the efforts to carve out a stake in the rapidly expanding sector.

Beijing Percent Information Technology Co Ltd has seen huge potential in the market. So far, it has served more than 10,000 clients both at home and abroad, including a number of government customers.

"In the era of data intelligence, data has become a new and most important means of production, while data intelligence has become a key infrastructure in the cities," said Su Meng, chairman and CEO of Beijing Percent Information Technology.

According to Su, China has seen a growing number of digital cities and e-government projects on the ground.

"The digital cities market is really huge," Su noted. "The government is aware of the importance of data assets and the social benefits brought by the data sharing and exchanges. And now, we are at a very early development stage."

The company mainly provides e-government, digital cities and safety services for governments.

Powered by Percent's AI and big data technologies, governments will be able to access more data related to citizens, cars and other details in the cities. With a comprehensive big data governance and sharing platform, the government will be able to better operate in areas like market supervision, social governance and offering public services.

In fact, Percent has expanded its services globally. The company has built a visual national center data analysis and decision-making system for the Angolan government.

Previously, most of Angola's population information was recorded on paper, which was difficult to access and manage. With the new platform, the Angolan government can accurately and dynamically record entire data of local population in terms of birth, education, marriage, social security, fingerprint, faces and more.

A firm called G7 (not to be confused with G-7, or the Group of Seven, the leading industrial nations) is another example of Chinese companies actively engaging in the construction of smart cities. Unlike most tech firms eyeing the digital government solutions, G7 aims to empower traditional industries to embrace the digital transformation, which will not only help boost the productivity of the companies, but help create a better life for local citizens.

"Technology is having a profound impact on various industries," said Zhai Xuehun, founder and chief executive officer of Beijing-based internet of things company G7. "Based on the IoT, big data and artificial intelligence, G7 has already helped connect 98 percent of logistics factors to the internet in China. It is just a small step. We are also using the internet of things to inter-connect traditional industries, injecting new impetus into those industries."

Powered by its own internet of things technologies and algorithms, G7 is able to access the truck driver's real-time conditions. With AI and artificial means, G7 helps reduce the number of driver deaths to one-sixth of the previously reported number.

The company also offers a whole batch of services to drivers. With the support of the internet of things, drivers can make oil and gas payments online.

Shan Feng from the Chinese Society for Urban Studies said next-generation technologies such as the ultrafast 5G and smart cities will see rapid development, and new applications will pop up gradually.

"However, we are still facing some challenges in the development of smart cities," Shan said. "Some cities only focus on software and hardware investment, while local people seldom engage in the process and lack the sense of gain. More efforts are needed to shift the focus to residents, innovation, integration of different sectors and refined management."

The company said on Thursday it has submitted an application to the Monetary Authority of Singapore for a wholesale license, which would allow it to serve corporate clients.

"Ant has long been committed to the development of inclusive finance globally. We look forward to contributing to the development of digital banking in Singapore," a spokesperson said in an emailed statement.

MAS announced in June that it would offer up to two digital full bank licenses and three digital wholesale bank licenses in a bid to liberalize its banking sector, making it more "resilient, competitive and vibrant", according to its website.

Ant, the financial arm of Alibaba Group Holding Ltd, stands to benefit from the e-commerce giant's presence to support the development of Lazada, its newly acquired e-commerce counterpart in Southeast Asia, said Vey-Sern Ling, an analyst from Bloomberg Intelligence.

Gaming company Razer Inc also said it was leading a consortium that has applied for a license, while earlier this week Singapore Telecommunications Ltd and Southeast Asian ride hailing firm Grab said they were teaming up for a bid of their own.

Southeast Asia's digital lending market is expected to more than quadruple to $110 billion by 2025, according to a report by Bain, Google and Temasek Holdings.

Last year, Hong Kong offered digital banking licenses to companies including Alibaba, Tencent Holdings Ltd and Xiaomi Corp. Ant has been developing and fostering local digital wallet solutions in nine economies, the majority of which are in Southeast Asia, whereas Tencent is also heavily invested in supporting payment in local currencies in the region.

The likes of Alibaba, Ping An and Tencent are "increasing their investments as consumers from India to Japan to Malaysia turn to digital channels for retail purchases－both online and offline", said Jacob Dahl, a senior partner of consultancy McKinsey.

"These moves pose significant threats for incumbent banks, as these attackers have momentum in scaling innovative business models centered on data collection and the application of advanced analytics to identify new revenue opportunities and make smart lending decisions," he said.

As a result, incumbent banks like DBS have embarked on digital transformation inspired by platform players like Alibaba and Tencent, according to a McKinsey report on the importance of ecosystems. Over the past five years, DBS has invested S$1 billion ($741 million) annually in its transformation, resulting in a substantial increase in digital customers from 33 percent in 2015 to 48 percent in 2018.

IMF data showed that in 2017, roughly 39 percent of the adult population in low-and middle-income countries did not have a bank account, 55 percent of whom live in Asia. However, with an extremely high rate of mobile penetration over the past few years, this trend is improving, said Arunkumar Krishnakumar, a venture capital investor at Green Shores Capital.

"With technology firms joining the digital and financial inclusion wave, Asia (not just China) could be the new consumer fintech hub of the world," he said.

]]> 2020-01-05 14:37:13 http://www.chinadaily.com.cn/kindle/2020-01/05/content_37531129.htm China will improve the supply of commercial insurance products for people aged 60 years and above by stepping up research and product innovation in this field, to satisfy the growing insurance demands of an aging population.

Liu Hongjian, deputy director of the life insurance supervision department of the China Banking and Insurance Regulatory Commission, said the regulator will further promote the insurance sector to optimize product supply, accelerate the launch of insurance products specially designed for the elderly, and provide the elderly with products that offer more comprehensive coverage at lower premiums.

"The CBIRC will improve regulations, deepen supply-side structural reform in the financial sector, and make guidelines for enriching insurance product supply targeting the elderly and encouraging innovation of such products. We will also urge insurance companies to develop products that are specially designed for the elderly based on their risk features and demands for insurance services, and to further increase product supply mainly in the areas of sickness insurance, medical insurance, long-term care insurance and accident insurance," said Liu during a media conference held by the State Council Information Office on Thursday.

Besides, the banking and insurance regulator will develop actuarial mechanisms for insurance products targeting the elderly, make rules on how to price these products, and launch relevant regulatory measures, in an effort to guide insurers to price their products scientifically and reasonably, she said.

Among the existing products offered by commercial insurance companies, more than 1,000 products are available for purchase by Chinese people aged 60 years and above. However, these still cannot meet the senior people's robust demand for insurance products.

Currently, most of the products are not specially designed for the elderly. Instead, they just relax the restrictions on the age and conditions of insurance policies that are made for younger customers. The premiums are much higher for the elderly who may be charged 10 times the premium paid by the young and middle-aged people for accident and health insurance products. Not to mention that some elderly who are in poor health cannot find insurance products that are suitable for them, Liu said.

To solve these problems, domestic insurers must improve their risk management capability, service awareness and product innovation, she said.

Huang Hong, vice-chairman of the CBIRC, pointed out that these problems also show that insurance companies did not accumulate enough data on the elderly in terms of health and old age care, nor did they conduct enough research on the law of risks for elderly insurance.

"As the population of Chinese elderly aged 60 years and above reached 250 million at the end of 2018, we must strengthen the efforts to develop insurance products for the elderly," Huang said.

The CBIRC will make regulations and rules urging insurers to support the elderly insurance market, he said.

Beidou has had great applications in a string of areas including transportation, electrical power, fisheries, mining and agriculture, said Wang Yanyan, deputy general-secretary of the Global Navigation Satellite System and Location-Based Services Association of China.

Official data showed that the direct output of domestic satellite industries exceeded 300 billion yuan ($43 billion) by the end of 2019, with Beidou contributing 70 to 80 percent of the total.

"In addition to the navigation function that is well-known to the public, Beidou's applications in areas like pipe leakage detection has also made substantial progress," Wang said.

She noted that Beidou's technology in pipe network detection has already been applied in at least 600 cities, counties and towns across China.

Beidou has recently cooperated with Swiss industrial giant ABB in launching the world's first gas leakage detection system with an accuracy as fine as ppb or parts per billion, overturning the traditional accuracy of parts per million seen worldwide.

"With the new move, Beidou can not only position accurately the gas leakage points but is also able to analyze data, for example, to offer solutions," Wang said.

Zhang Yijin, head of analysis meter of ABB China, said that such an application has come into the forefront of global high-accuracy gas leakage detection, which has exceeded that of the global positioning system and Google.

"It is of great importance and also business potential given that the gas network in China alone has grown from 400,000 kilometers to 800,000 kilometers in the past five years," she said.

Zhang said that such technology is prepared to go into the foreign markets soon with the Beidou system set to be complete by 2020.

Currently, there are 46 operational Beidou satellites and China plans to send two more satellites in geostationary orbit in the first half of 2020 to finish the deployment of all of Beidou's space-based assets.

China began to construct its Beidou navigation system, named after the Chinese term for the Big Dipper constellation, in the 1990s and started to serve the Asia-Pacific region since 2012. It is currently one of the four largest space-based navigation networks operating globally, along with the US GPS system, Russia's GLONASS and the European Union's Galileo.

Such progress also dovetails with China's determination to step up the application of Beidou systems in a wide range of sectors as well as various regions.

Statistics from the China Satellite Navigation Office showed that as of April, the Beidou system had been put into use in more than 6.2 million taxis, buses and trucks as well as at least 40,000 fishing ships across the country.

By the end of last month, Beidou's solutions were exported to more than 120 countries and regions, according to the China Satellite Navigation Office.

The system is now being applied in more international sectors including precision farming, digital construction and smart port construction, the office said.

"It is beneficial for the Association of Southeast Asian Nations, South Asia, Eastern Europe, West Asia and Africa," the office said.

With the 5G era, Beidou is also integrating with the new technologies including blockchain and artificial intelligence, according to the office.

In December, the Civil Aviation Administration of China released a roadmap for the application of Beidou, which pointed out that the civil aviation sector should gradually see full coverage from Beidou by the end of 2035.

"The application of Beidou in the segment will make up for the inadequacy of traditional navigation systems as the new application will greatly enhance safety and efficiency," said Liu Lianxi, an official at the CAAC.

The launch of the toys follows on from the success of popular sets Dragon Boat Race, Dragon Dance and Chinese New Year's Eve Dinner, which were also created to mark Chinese festivities.

The sets also come complete with eight figures including lion dancers and a man in a rat costume.

The new Lego sets, featuring Chinese traditional cultural elements, which were rolled out in China and Asia-Pacific markets on Dec 26 and globally available this month, are part of the Danish company's efforts to get closer to young Chinese consumers.

"Playing helps children acquire some of the skills and personal characteristics they need to be successful in the future, including creativity, problem-solving, collaboration and resilience," said Lego CEO Niels Christiansen.

"Ideally, you can acquire those skills through play. We can play a big role in that," he added.

Lego invests heavily in innovation, with at least 60 percent of products renewed every year, which is quite a challenge and hard to achieve for an established toymaker, said Christiansen.

But strength and capacity to excite kids are at the heart of Lego. "It keeps us fresh because it is new," he said.

The priority for Lego in China is to enhance its brand presence and make it more accessible to Chinese families.

Since the launch of its first flagship store in Shanghai in 2016, the group has set up three flagship stores and 140 certified stores in more than 20 cities on the Chinese mainland, according to Lego's data.

In 2019, Lego opened 73 new stores in 16 cities in China and will open 80 new stores this year. The company opened its first certified store in Northwest China in July last year.

About 42 percent of its certified stores are located in emerging first-tier cities such as Chengdu in Sichuan province and Wuhan in Hubei province. About 12 percent are in second-and third-tier cites including Hefei in Anhui province, Changchun in Jilin province and Wuxi in Jiangsu province.

By the end of 2020, Lego expects to operate 220 stores in China, a pace that shows the toy retailer's ambition to penetrate further into the country's second-and third-tier cities.

The Chinese market achieved double-digit growth in the first half of 2019 for the private, family-owned company, which had stores in 35 cities in China by the end of last year.

Revenue for the period grew 4 percent to 14.8 billion Danish krone ($2.18 billion) compared with the same period of the previous year, according to Lego's financial returns for the first half of 2019 released earlier last month.

The CEO said Lego's global e-commerce will double over the next four years. But in China, the growth will come from both physical stores and digital channels.

"For us, physical bricks will always be at the center. When kids come to toy stores, magic happens. We can use digital channels to enhance that, but we always know it all starts with a brick," he said.

Generating more than 3 billion clicks on the Tencent Video platform, the esports themed series The King's Avatar has become one of the most viewed online dramas, gaining a huge following among young audiences.

Adapted from the hit novel of the same title, The King's Avatar tells the story of a top-level professional esports player, Ye Xiu, who has been forced to retire from the team and then rise again with a new team to win back lost glory.

Notably, the popular online drama for the first time features pure esports related plots instead of romantic themes.

"When I finished the first volume of the The King's Avatar novels, I was deeply impressed by the sportsmanship and the spirit of teamwork shown by the characters engaged in the esports," said Yang Xiaopei, the drama's chief producer and vice-president of Shanghai-based studio Linmon Pictures.

"I'm really interested in such a new theme, which allows me to build brand-new characters and innovation in the way to build up scenes in the drama."

Yang added the drama caters particularly to younger generations born in the 1980s and 1990s, who are in some degree enthusiastic esports fans.

"In fact, we were making something that had no reference before," Yang said. "The story mainly focuses on esports plots and highlights teamwork, friendship, brotherhood as well as sportsmanship. The difficulty lies in the connection of the online virtual world and the offline real world. To make a good esports story, we need to combine refined management and top technologies."

To offer the audience immersive experiences, the new drama has used a wide range of world-leading technologies, including motion capture, face capture and unreal engine real-time rendering, which are commonly used in movies like 'The Jungle Book' and 'Rise of the Planet of the Apes.'

Those technologies help build up a complete world outlook well stocked with virtual and real life stories. Yang said she hopes more audiences will have a better understanding of esports through the new series.

"Esports actually combines gaming and competitive sports and has created many jobs chances as the sector has been upgrading in recent years," Yang added.

"With the rising government support, esports is booming in China, generating a series of new businesses. We do see the huge potential in this emerging sector. More efforts are needed to add more innovation to related entertainment products and offer audiences better experiences."

Li Yiyang, an analyst at consulting firm iResearch, said esports have already become a red hot field in terms of market size and popularity.

In fact, Chinese gamers' rising enthusiasm has created a huge market worth 233 billion yuan ($33 billion) in 2019, up 8.7 percent on a yearly basis, a report released by Chinese gaming database Gamma Data Corp said.

Revenues generated from the esports industry jumped 16.2 percent to 96.96 billion yuan in 2019, growing faster than the overall gaming sector, the report added.

"With young gamers' growing purchasing power, they have already become the key driving force to drive esports-related consumption, and they are willing to pay for beloved stuff," Li said. "Looking ahead, the future esports industry will be able to boost the development of various sectors, such as the esports themed online dramas and other derivative products."

Generating more than 3 billion clicks on the Tencent Video platform, the esports themed series The King's Avatar has become one of the most viewed online dramas, gaining a huge following among young audiences.

Adapted from the hit novel of the same title, The King's Avatar tells the story of a top-level professional esports player, Ye Xiu, who has been forced to retire from the team and then rise again with a new team to win back lost glory.

Notably, the popular online drama for the first time features pure esports related plots instead of romantic themes.

"When I finished the first volume of the The King's Avatar novels, I was deeply impressed by the sportsmanship and the spirit of teamwork shown by the characters engaged in the esports," said Yang Xiaopei, the drama's chief producer and vice-president of Shanghai-based studio Linmon Pictures.

"I'm really interested in such a new theme, which allows me to build brand-new characters and innovation in the way to build up scenes in the drama."

Yang added the drama caters particularly to younger generations born in the 1980s and 1990s, who are in some degree enthusiastic esports fans.

"In fact, we were making something that had no reference before," Yang said. "The story mainly focuses on esports plots and highlights teamwork, friendship, brotherhood as well as sportsmanship. The difficulty lies in the connection of the online virtual world and the offline real world. To make a good esports story, we need to combine refined management and top technologies."

To offer the audience immersive experiences, the new drama has used a wide range of world-leading technologies, including motion capture, face capture and unreal engine real-time rendering, which are commonly used in movies like 'The Jungle Book' and 'Rise of the Planet of the Apes.'

Those technologies help build up a complete world outlook well stocked with virtual and real life stories. Yang said she hopes more audiences will have a better understanding of esports through the new series.

"Esports actually combines gaming and competitive sports and has created many jobs chances as the sector has been upgrading in recent years," Yang added.

"With the rising government support, esports is booming in China, generating a series of new businesses. We do see the huge potential in this emerging sector. More efforts are needed to add more innovation to related entertainment products and offer audiences better experiences."

Li Yiyang, an analyst at consulting firm iResearch, said esports have already become a red hot field in terms of market size and popularity.

In fact, Chinese gamers' rising enthusiasm has created a huge market worth 233 billion yuan ($33 billion) in 2019, up 8.7 percent on a yearly basis, a report released by Chinese gaming database Gamma Data Corp said.

Revenues generated from the esports industry jumped 16.2 percent to 96.96 billion yuan in 2019, growing faster than the overall gaming sector, the report added.

"With young gamers' growing purchasing power, they have already become the key driving force to drive esports-related consumption, and they are willing to pay for beloved stuff," Li said. "Looking ahead, the future esports industry will be able to boost the development of various sectors, such as the esports themed online dramas and other derivative products."

Today, buying hanfu for their pet cats is increasingly popular as a growing number of millennials largely born in the 1980s and 1990s have started to raise cats in their homes.

A recent report by Alibaba's e-commerce platform Taobao said sales of hanfu for cats jumped tenfold in early December from the year earlier.

Taobao noted in the report that almost half of the pet owners in cities are those born in the 1990s, and they usually take their responsibilities as pet parents very seriously.

"I love my cat so much, and it has become a full-fledged member of my family," said 28-year-old Cathy Liu, who lives in Beijing. "I just want to do my best to provide it a high-quality life."

Liu has spent more than 6,000 yuan ($860) on her cat in the past six months. Pet food gets the lion's share of this spending, or about 300 yuan per month. Other expenses include medicines, snacks, toys, vaccines, a cat climber and a bed.

"My cat provides me companionship and teaches me responsibility," Liu said. "My cat takes up most of my spare time. In fact, I would rather snuggle up with it than people around me. And I will suffer anxiety when separated from my pet. Once I have to leave for holiday travels or business trips, I need to watch it and even talk to it via pet cameras every day."

She's not alone. A growing number of young people in China are spending their time and money on raising cats. They are willing to purchase high-quality items for their precious pets.

By the end of 2018, there were approximately 67 million pet cats in China, a report by consulting firm Frost & Sullivan said. It noted that the love for cats by Chinese consumers has created a market worth 60.2 billion yuan in 2018.

The annual average spending on each pet cat was 3,117 yuan. Of that amount, the largest share is 1,340 yuan on average which was spent on food.

Experts believe China's pet industry will further develop along with the increasing number of pets and the growing purchasing power of pet owners. Frost & Sullivan estimated the market size of China's pet industry would reach 472.3 billion yuan by 2023, up from 172.2 billion in 2018.

Peng Kunyi, a researcher at Qianzhan Industry Research Institute, noted that cat-owning households are becoming more willing to pay for their cats, leading to greater prosperity in the cat economy.

"China has witnessed a significant surge in the number of pet cat owners," Peng said.

"The country has a unique family structure, namely the elderly, office workers and the only children. For the elderly, raising pet cats is playing a key role in easing their loneliness and enriching their spiritual life. And raising cats also can teach the only children responsibility. For office workers leading fast-paced lives, pet cats can provide companionship and help relieve stress."

The new trend is also backed by a new report released by e-commerce giant JD and global data analytics company Nielsen.

The report said young people born in the 1990s, especially those who live alone, are now the core group of pet owners.

"Those young working groups lack time and energy to walk the dogs. Many of them love cats for their independence. Compared with dogs, cats don't take up space and is not time consuming," the report noted.

Cat owners are mainly young females who are more likely to purchase some expensive high-quality items for their pet cats, the report added.

JD said that high-end and high-tech pet products were very popular during the recent Singles Day shopping event in 2019.

For instance, sales revenue for insect repellents for pets surged 243 percent year-on-year, and sales of litter boxes for cats increased 232 percent.

Peng from Qianzhan said a whole bunch of cat-related businesses are booming in China such as pet foods, pet clothes, supplies, medical care, insurance, hotels and services.

"Currently, China is still at the very early development stage of a cat economy," Peng added. "More efforts are needed to tackle problems, such as expensive medical bills and low-end food processing."

 

 

 

China's success in poverty alleviation and its massive middle-income group have brought huge opportunities for business cooperation, said Chan. His organization boasts around 200 members from the Midwest that all have economic ties with China.

"We're glad to see Chinese achievement in poverty alleviation, education and healthcare in the last decades and we wish more could be done in this regard in 2020," he said.

"We hope more Chinese enterprises will go global and land in the United States, bringing in capital, technologies and even manpower," Chan said, adding that Chinese Americans can play a more active role in deepening exchanges between the two sides.

Business cooperation between the two countries has also contributed to world peace, stability and economic development, he added.

According to Chan, local-level cooperation such as those between sister cities should be put into full play, and his organization has been promoting such economic and trade ties as well as investment.

The Midwest USA Chinese Chamber of Commerce will have a 150-square meter booth to promote US enterprises at the third China International Import Expo (CIIE) in Shanghai, he said.

The second CIIE, held in November 2019, concluded with $71.13 billion worth of tentative deals reached for one-year purchases of goods and services, a 23-percent rise from what was recorded in the first CIIE.

"A world-class enterprise and a number of small-and medium-sized enterprises on technology, food processing and others from the Midwest will join the next CIIE," he said.

Chan also called on the two countries to build a platform that could help channel limited resources into important areas like people's welfare, infrastructure and innovative social governance.

]]> 2020-01-04 00:00:00 http://www.chinadaily.com.cn/kindle/2020-01/04/content_37531229.htm Bayer Pharmaceuticals sees great potential in the Chinese market to foster innovation and digitalization, and has singled out China as one of its priorities, according to a top executive of the company.

Its president Stefan Oelrich said the company has a particular position of strength in China that is linked to its extensive history in the country, and is looking to further sustain and strengthen its position in the nation through strong innovation and digitalization.

"We have our research and development base in China. We hope to strengthen that in the future and to bet more on Chinese innovation," he said.

China's pharmaceutical demand has been booming in recent years due to the rapidly aging society with burgeoning purchasing power. It has become the world's second-largest market for pharmaceuticals, and the biggest emerging market with growth tipped to reach $145 billion to $175 billion by 2022, according to healthcare information company IQVIA.

The Chinese authorities have rolled out a series of policy reforms for drug registration, regulation, reimbursement, and public procurement process, with focus on innovation and homegrown research and development.

Experts said such a move aims at reconstructing and upgrading China's pharmaceutical market and will stimulate cooperation between domestic and foreign companies.

"China's pharmaceutical market has the greatest potential in the world, due to its tremendous population, even though it is now second to the United States," said Shi Lichen, founder of medical consultancy Beijing Dingchen Consultancy.

"Besides, opportunities arising from the restructuring of the market matter even more than the huge market size itself to multinational pharmaceutical firms eyeing the alluring market."

He explained that in the US, a typical mature pharmaceutical market, about 70 percent of the medicine expenditure paid by medical insurance are for original, innovative, or rare drugs, while in China about 80 percent of the payments from the public medical insurance funds are on generics, causing great financial burden to both patients and society.

That drives the authorities to reform related regulations and mechanisms to restructure the domestic market, with a focus on development and procurement of high-quality generics and novel drugs, which is creating room for further cooperation between domestic and foreign companies to explore new opportunities on R&D and marketing of high-quality generics and new drugs, he said.

Bayer Pharmaceuticals, the first to market in certain areas with advanced technologies, is increasingly envisaging to deepen its local cooperation with Chinese companies and Chinese academia, and also hopes to play a role in digital solutions for patients, an area China is very advanced with, according to Oelrich.

As Chinese digital giants, including big names such as Baidu, Tencent and Alibaba, have been betting on the healthcare industry in both consumer and business sectors, Oelrich said the combination of digital companies and traditional healthcare companies complements each other.

Digital companies have an advantage that the traditional players in healthcare may not have, coming from their use of big data technologies and smart algorithms that can connect across all sections of healthcare system, he said.

"Healthcare is very much structured in silos. You have the hospitals, you have other people that pay for it, and then you have the industry that provides medicines, devices, or solutions," he said.

Besides, as China is speeding up innovation in line with the Healthy China 2030 Initiative and improving patients' access to medicines and affordability, the company can bring innovations faster to Chinese patients, which means not only record-setting access for patients but also reimbursements that benefit the company, he said.

With deep roots in China's scientific community, the company also hopes to start exporting Chinese science to the rest of the world at some point, a new and upcoming trend in healthcare, he said.

Oelrich estimated China must have become the company's largest market in 2019 in terms of revenue, for the first time, despite the absence of any full-year data.

Bayer said its sales revenue in the Chinese mainland, Hong Kong special administration region and Taiwan province reached 3.13 billion euros ($3.47 billion) in 2018.

Local governments of Sichuan and Henan provinces offered a combined 87.6 billion yuan ($12.6 billion) of special bonds on Thursday. Authorities in the city of Qingdao, Hunan and Zhejiang provinces also released the special bond issuance plans for January. The total amount of special bonds may exceed 800 billion yuan in the first quarter, according to analysts and data from the China Central Depository and Clearing Co Ltd.

The capital raised from the special bonds will be invested into municipal infrastructure projects, environment protection and transportation. About 89.7 percent of the first batch of special bonds in Sichuan and Henan have maturity periods of more than 10 years, the Ministry of Finance said.

The earlier-than-ever local government bond issuance came after the People's Bank of China, the central bank, announced plans to inject 800 billion yuan in the financial sector by cutting the reserve requirement ratio (RRR) for banks by 0.5 percentage point on Wednesday.

The PBOC said the RRR cut will save about 15 billion yuan in funding costs for banks this year, and the injected funds may help to lower the new benchmark interest rate－the loan prime rate (LPR) when banks will report the rate later this month.

The central bank's move was to coordinate with the local government bond issuance, to prevent liquidity tightening when the bond sales rise in January, said Wen Bin, chief economist with China Minsheng Bank.

Local government bonds are more attractive for banks because of the lower risk and higher returns compared with corporate bonds, said analysts. For example, for the 10-year special bond for toll roads in Sichuan, the coupon rate was 3.38 percent, compared with 3.1956 percent for the 10-year treasury bond on Thursday.

Liu Yu, an analyst with Guosheng Securities, said on Friday that the quota for newly-issued special bonds in 2020 may reach 2.95 trillion yuan, 800 billion more than the new quota in 2019, as the local governments have to increase financing resources to strengthen investment but with a limit in the budgeted fiscal deficit. Her prediction was in line with many experts.

The Ministry of Finance released a statement on Friday, indicating that the local government bond issuance work of 2019 was "successfully" completed. A total of 4.36 trillion yuan of such bonds were issued, including 2.15 trillion yuan of special bonds.

To prevent local government debt risks, at a two-day annual meeting that concluded last week, Finance Minister Liu Kun asked local government officials to carry out debt dissolving plans "in a practical and detailed way", accelerate the market-oriented reform of local government financing platforms, most of which are indebted State-owned companies guaranteed by the local governments, and strengthen supervision to curb growth in implicit debt.

Individual investors have been allowed to buy local government bonds since March 2019, and this group accounted for 37 percent of all types of investors by the end of last year, the finance ministry said. The average coupon rate of local government bonds was 3.47 percent last year, 42 basis points lower than a year earlier, the statement said.

"With the deceleration in economic growth, policy support is still needed. We continue to expect a 20 to 30 basis points decline in the official one-year loan prime rate for this year and think the PBOC will also reduce the interest rate for its medium-term lending facilities," said David Qu, China economist of Bloomberg.

A research from Citigroup Inc said that the monetary authority is expected to keep an easing bias by maintaining a measured pace in the rate cut cycle, and policy rates, such as the medium-term funding rate, will likely drop by 5 to 10 basis points in the first quarter this year.

]]> 2020-01-04 00:00:00 http://www.chinadaily.com.cn/kindle/2020-01/04/content_37531249.htm Suspension of stock connect denied

China's top securities regulator on Friday denied media reports about the suspension of the stock trading connect between Shanghai and London. Reports saying that China has suspended the Shanghai-London stock connect are untruthful," said Chang Depeng, spokesman of the China Securities Regulatory Commission, at a regular news conference. Chang said that the stock connect is an important effort by China to open its capital market and to expand cross-border investment and financing. Reuters reported on Thursday that China had suspended the Shanghai-London stock scheme over political tensions with Britain.

Refined oil import quota unchanged

China will keep the quota for refined oil imports by non-State companies unchanged at 16.2 million metric tons for 2020, according to the Ministry of Commerce. A statement by the MOC listed the detailed application requirements for the import quota, including the scale of oil storage tanks and bank credit lines. China is one of the world's largest oil buyers. Customs data showed its imports of refined oil amounted to 27.25 million tons in the first 11 months of last year.

Employment up in Germany last year

Roughly 45.3 million people were in employment in Germany in 2019, an increase of 0.9 percent compared to the previous year, according to the Federal Statistical Office (Destatis). The increase was lower than the relevant growth of 1.4 percent in 2018. According to Destatis, the employment growth observed in Germany for the past 14 years continued but with less momentum. A higher labor force participation of the German population as well as immigration of foreign workers more than offset the effects of demographic change, Destatis said. The number of people in employment last year was the highest since German reunification in 1991.

]]> 2020-01-04 00:00:00 http://www.chinadaily.com.cn/kindle/2020-01/03/content_37531116.htm The People's Bank of China's decision to reduce the reserve requirement ratio, or the amount of cash banks have to set aside as reserves, will ease credit pressure for homebuyers but may not spur huge spikes in home sales, as the broad sentiment that housing is for living instead of for speculation remains unchanged.

The central bank cut the RRR on Wednesday for most financial institutions by 0.5 percentage point effective on Jan 6 to support the development of the real economy and lower social financing costs.

The across-the-board RRR cut on the first day of this year will help increase liquidity and lower social financial costs, with indications that more adjustments in loan and interest rates are in the offing, said Yan Yuejin, research director at the E-House China R&D Institute.

"The RRR cut, the first this year after three instances in 2019, indicates that the monetary environment is shifting from tight to loose, and will be positive for the real estate sector in terms of financing," said Yan.

Reasonably ample liquidity and social financing will open up more lending avenues for homebuyers in the first quarter, but property developers may continue to see crimped financing conditions, said Zhang Bo, chief analyst of Anjuke, a leading Chinese property portal.

Analysts said the application of the loan prime rate introduced by the central bank will possibly bring down home purchase costs.

The central bank had last Saturday decided to scrap the traditional benchmark lending rate for new loans starting from this year, and made the loan prime rate (LPR) the only benchmark rate for fresh lending starting this year.

Financial institutions and their clients can negotiate a floating rate higher or lower than the benchmark, and for those loans already issued but yet due, new contracts will be signed between banks and borrowers between March and August to shift to the LPR.

"The increased liquidity will likely lead to a cut in the LPR, which means the interest rate for homebuyers will be marked down too," said Zhang Dawei, chief analyst at Centaline Property Agency Ltd.

Despite the positive impact for homebuyers, industrial analysts said demand for homes will remain steady, as the annual Central Economic Work Conference has earmarked stabilizing land and home prices as well as market expectations as one of the key tasks to ensure steady and health development of the property market this year.

"The key target for the real estate market is to prevent risks, so that the financing environment for the property sector will remain stable in the future," said Xu Xiaole, chief market analyst with Ke Research Institute, a research organization under real estate brokerage platform Ke.com.

"It is highly likely that the central government will take steps to ensure adequate liquidity and lower financing costs this year, but such decisions will not be a stimulus for the property market. We have to bear in mind that housing is for living in, and not for speculation," said Ding Zuyu, CEO of E-House (China) Enterprise Holdings Ltd.

Xu said the consistent reserve ratio reduction since 2018 is a response to ease the financing difficulties of medium-and small-sized enterprises in particular as China's economic development is shifting from high growth to quality growth. The RRR cuts will not increase demand for home purchases, he said.

 

 

 

Moutai, a distiller from Maotai town in southwestern China's Guizhou province, closed at 1,130 yuan ($162) per share on Thursday after opening the day at 1,128 yuan. Though the company's share prices have declined from the high levels seen in May last year, it is still the most expensive stock in the A-share market with a valuation of more than 1.4 trillion yuan.

Other major liquor makers also saw lackluster stock performances on Thursday. Shares of Sichuan province-based Wuliangye Yibin Co Ltd and LuzhouLaojiao Group dropped by 0.7 percent and 1.42 percent.

Moutai said it expects to achieve full-year sales revenue of 88.5 billion yuan in 2019, up 15 percent year-on-year. Net profit during the same period was forecast to reach 40.5 billion yuan, up about 15 percent year-on-year, a slower growth rate for sales and net income from the previous two years, according to the company's estimates.

Last year, the distiller produced 49,900 metric tons of liquor, and 25,100 tons of series wines. This year, the company plans to sell 34,500 tons of liquor, which is 11 percent higher than its plan for 2019, and it aims to achieve an annual sales growth of 10 percent in 2020, according to the company.

In 2017 and 2018, Moutai achieved sales revenue of 58.2 billion yuan and 73.6 billion yuan, jumping 49.61 percent and 26.46 percent over the previous year. Its net profit reached 27.1 billion yuan and 35.2 billion yuan, surging 62.28 percent and 29.89 percent year-on-year.

Moutai, one of China's most prominent consumer brands, earlier became the first consumer stock with a market value exceeding 1 trillion yuan. As one of the leading stocks in the A-share market, Moutai has seen continuous steady growth and its rising share prices have been a trigger for several other peers. Once such companies report lower-than-expected sales, their share prices are likely to drop significantly, industry observers said.

This year, Moutai plans to establish its own e-commerce platform and further promote overseas sales of its products.

"Moutai plans to increase its self-operated product volumes and adjust its sales channels. The company's sales are expected to maintain steady growth. The distiller also might raise its ex-factory price to dealers to maintain good performance," said a research report from Sealand Securities.

The benchmark Shanghai Composite Index rose by 1.15 percent to close at 3085.2 points, the highest level since late April. The Shenzhen Component Index gained 1.99 percent to close at 10,638.82 points.

The market rally was led by internet and technology firms, financial companies, machinery and semiconductor manufacturers. The rise reflected investors' expectation of the monetary loosening by the central bank to help ensure reasonably ample liquidity in the market and reduce financing costs for companies to stabilize the country's economic growth, analysts said.

The People's Bank of China said on Wednesday that it will lower banks' required reserve ratio by 0.5 percentage point, which will be effective from Monday. The RRR cut is expected to release about 800 billion yuan ($115 billion) into the financial sector.

Zhang Yulong, chief strategist at China Securities, said that the latest RRR cut by the central bank will help ensure the stability of China's financial sector and maintain ample liquidity in the market ahead of the Lunar New Year holiday.

"It is also beneficial to the stock market and the A shares are likely to continue to rise with stocks in sectors like property, construction and finance being the preferred picks of investors," Zhang said in a research note.

Market confidence was also boosted by the stabilizing trend of the Chinese economy. The official purchasing managers index of the manufacturing sector, a gauge of factory activity growth in China, stood at 50.2 last month. It is the second consecutive month that the index has remained in the expansion territory.

Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group, said that the Chinese economy continued to stabilize in December as business owners' confidence has been improving and there is a stronger willingness among them to expand production and increase stocks.

Economists expect more monetary loosening to come, but China's policy easing will be modest as policymakers intend to avoid using massive easing to stimulate the economy. They said that the monetary easing could help boost China's infrastructure investment and credit growth this year.

"More monetary easing should help boost credit growth from 10.8 percent in 2019 to 11.4 percent this year, although this rebound would be much more modest than previous episodes of policy easing," Wang Tao, chief China economist at Swiss bank UBS, said in a research note.

Wang expected another RRR cut by 0.5 percentage point over the rest of this year and a 0.1 to 0.15 percentage point cut of the medium-term lending facility rate after inflation peaks in the first quarter.

"Overall, we continue to expect sequential growth momentum to rebound in the first and second quarters and maintain our 2020 GDP growth forecast at 6 percent," Wang said.

The champion in terms of revenue was Pop Mart, a Beijing-based lifestyle retailer, which in nine seconds sold 55,000 toys in mini blind boxes－small, sealed packages containing collectible toys that are part of a series. It also sold more than 2 million art toys－designer toys normally designed by artists－worth 82.12 million yuan ($11.8 million).

The growth compared with the previous year's event is 295 percent, and it was only the third time Pop Mart had participated in the Singles Day shopping spree. All the other top four toy brands were foreign. According to Tmall, about 80 percent of the art toys sold on Tmall during the 2019 Singles Day were from Pop Mart.

The company said its victory over international leading toymakers did not come from low costs and large quantities, a stereotype of Chinese toymakers.

"We beat them by selling at decent prices and relying on our own brands," said Wang Ning, founder and CEO of Beijing Pop Mart Culture and Creative Co Ltd. "We are not selling copies of popular toys. We won by innovating a completely new toy category."

Compared to the brick toys and robots, Wang's toy empire is founded on art toys, and Pop Mart's toys are targeting mostly at teenage and adult consumers aged between 15 and 35－people they refer to as art toy collectors. The company has 2 million active registered customers.

"The growth in demand for toys from adult consumers is probably bigger than that from children and parents," he said. "And this has immense potential."

Walking into his Beijing office with its views of the central business district, one might mistake it for that of an artist. Filled with displays of collectibles, paintings and sculptures, the center piece is an electronic drum set that Wang occasionally plays.

Wang opened a store in 2008 in his sophomore year at university, renting out small spaces in the store to individual sellers. In 2010, he founded Pop Mart to sell arty designer products including accessories, makeup and digital products.

While the business was largely unsuccessful, Wang discovered one toy, SonnyAngel, was a big hit. In 2015, Wang took a risk and dropped many categories and focused on selling art toys, notably securing the licensing rights for the character Molly by Hong Kong toy designer Kenny Wong, founder of Kennyswork Co Ltd. His risky move proved successful.

Now defined as an integrated intellectual property operation service provider, Pop Mart is engaged in retailing art toys, acting as a broker for artists, developing new media entertainment and organizing large-scale exhibits.

In China's first-and second-tier cities like Beijing and Shanghai, Pop Mart has about 130 retail stores and more than 700 machine terminals, making it the largest art toy retailer in China. It has cooperated with well-known brands and artists around the world and launched a variety of popular art toys.

In 2017, Pop Mart publicly listed on the National Equities Exchange and Quotations, known as the "new third board", with a loss of 30 million yuan. In the following year, the company made a profit of 8 million yuan. In the first half of the third year after listing, Pop Mart reached a profit of 25 million yuan. The company went private in March 2019.

A total of 65 percent of Pop Mart's business comes from brick-and-mortar stores and the rest comes from online sales. Wang believes offline stores serve as a channel to not only sell products, but also create a space to cultivate a sense of culture.

According to global asset ranking firm Hurun, Pop Mart's capacity in building its own intellectual property supply chain－designing, manufacturing and retailing－has contributed to its sudden surge in the retail and entertainment sector.

"Our business is to commercialize and industrialize what artists have created," Wang said. "It is a pity that an artist can sell only 200 pieces of artwork. I want to bring them to a mainstream audience through our platforms and the ecology we have built."

Speaking about what makes art toys popular in China, Wang said it sometimes requires decades of cultivation for major international intellectual property such as Star Wars to make an impression on Chinese people. But art takes less time and effort, he said. "You could be moved to tears just by looking at a painting simply because it moves you," he said. "That is probably the charm of Molly."

According to Wang, art toys are popular with adults because they meet their desire to preserve rare and collectible figures, especially those hidden in blind boxes.

"Collecting is a natural human desire," said Wang. "Collecting art toys is similar to older generations collecting stamps, or rich people collecting paintings and antiques, girls collecting bags and boys sneakers."

Besides encouraging collecting, Pop Mart has cashed in on the popularity of its products in the secondhand trade market.

According to Xianyu, Alibaba's online platform for secondhand goods, since the second half of 2018, more than 300,000 blind boxes have been traded, with Molly toys traded more than 230,000 times.

Wang said the reason people want to trade and collect art toys such as Molly is the strong demand for the toys. "What has been revealed from the secondhand market is the tip of the iceberg," Wang said.

The desire for individuals to please themselves is also a market opportunity. Wang compares buying blind box toys to sending gifts to yourself. Opening a blind box and finding a rare figure involves anticipation, surprise and delight, he said.

In addition to retail, Pop Mart also engages in intellectual property operations, working with renowned organizations including The Walt Disney Company.

It collaborates with leading artists and nurtures young artists through courses at art academies around the country. Exhibitions attract hundreds of artists and serve as a talent show for Pop Mart to select partners.

Wang's vision is to be inclusive, and to nurture the entire market.

"If we want to become a company that creates something like Hello Kitty, it would make us a rival to all the toymakers," he said. "But working closely with those toymakers with influential intellectual property, we've become a distributor and collaborator."

Pop Mart has plans to become an incubator for global artists amid its fast expansion to overseas markets. With a presence in 20 countries and regions, Pop Mart's sales have achieved growth worldwide, Wang said.

He hopes overseas sales revenue will eventually contribute half of the company's total revenue, though at present it's below 10 percent.

"China has for so long been a top toy manufacturer, but never a leading toymaker," Wang said. Pop Mart now works with more than 30 domestic top toy manufacturers in Dongguan, Guangdong province, where it has manufactured toys for leading toymakers in the United States and Europe for decades.

"Our orders have taken up more than half of the manufacturing capacity of many such factories," Wang said. "High-end toy orders with more profitability and respect for internationalized manufacturing procedures are incentives to turn Chinese manufacturing capacities to producing toys for Chinese brands."

Art toy sector is still a niche market therefore is challenging to expand to mainstream consumers, said Jason Yu, general manager of Kantar Worldpanel China. However, Pop Mart's capacity to empower art toys with social features and to define them as trendy toys with popular IP and affordable prices have contributed to its high repeating purchase rate, he added.

In addition, Pop Mart's collaboration's and cross-over with other renowned IP have further widened its access to consumers, Yu said.

An art major, Wang said his vision is to make Pop Mart a company that spreads warmth and happiness, and a company that could become the Chinese equivalent of Disney or Netflix.

"We want to stand for well-known intellectual property. When consumers think of our logo, they feel happy," he said.

Nomura Holdings Inc's majority-owned securities joint venture in China, Nomura Orient International Securities Co Ltd, opened for business in Shanghai on Dec 20. It became the first newly formed securities joint venture, in which the foreign side holds a controlling interest, that has opened for business in China.

Nomura owns 51 percent of the outstanding shares of the joint venture, whose registered capital is 2 billion yuan ($287 million), Orient International (Holding) Co Ltd 24.9 percent, and Shanghai Huangpu Investment Holding (Group) Co Ltd 24.1 percent.

"It was beyond market expectations that China made strong efforts to push further opening-up in the financial sector last year, bringing a number of business opportunities for foreign institutions," said Tang Shengbo, head of China financials research at Nomura.

The country will lift foreign ownership limits on securities, fund management and futures companies by 2020, a year ahead of schedule, said the State Council's Office of Financial Stability and Development Committee on July 20 when it announced 11 measures to further expand the financial sector's opening-up.

Encouraged by policies, foreign shareholders of a joint venture in China may hope to take a controlling interest in the company or even hold 100 percent of its shares. Besides, some foreign financial institutions, which either withdrew from joint ventures they previously formed with Chinese partners or have not yet conducted business in the country, may apply for new business licenses or re-enter the Chinese market through mergers and acquisitions, analysts said.

"Foreign investors are now willing to invest in China's financial market, and the country is removing regulatory barriers to foreign investment. As the financial market is comprehensively opening up in many sectors including insurance, asset management and mutual funds, there is a lot to do for foreign investors in different business segments," Tang said.

Tang noted that foreign insurers holding a controlling ownership interest in joint ventures in China can set up asset management companies later, just like their Chinese counterparts.

"Recently, regulators have kept highlighting the principle of equal treatment for foreign and domestic investment. Many foreign-invested companies will think of ways to take the opportunity," he said.

"Policymakers and regulators need to make detailed rules for the implementation of these policies. They may even allow some existing regulatory frameworks of Chinese investment to be applied to foreign investment," Tang added.

China's accelerated opening-up of its financial sector since April 2018 will also bring development opportunities for the country's commercial real estate market, said Cushman& Wakefield, a global real estate services firm, in a report issued on Dec 18.

"As overseas financial institutions keep coming to China, they will bring business opportunities to the office market in first-tier cities and certain core second-tier cities. Meanwhile, overseas insurers will enter the Chinese market continuously and will hopefully give strong support to the bulk properties investment market," said Wei Dong, head of North China research at Cushman& Wakefield.

CG Lai, CEO of BNP Paribas (China) Ltd, said: "The year 2019 marked a set of milestones for China's further reform and opening-up of its financial sector, sending a strong signal of the country's determination to uphold an even more open economy, laying solid groundwork for further market liberalization and injecting confidence into all foreign financial institutions in the Chinese market.

"We believe that the policies toward liberalization are enabling foreign subsidiaries and branches in China to be more connected with their international franchise network, easing the procedures to leverage resources from parent companies, which ultimately address the growing and robust demands from both foreign and domestic clients."

BNP Paribas is one of the first two foreign banks that have received a Type A Corporate Bond Lead Underwriting License from the National Association of Financial Market Institutional Investors after China announced 11 measures in July to promote the further opening-up of the financial sector, allowing foreign banks to apply for such licenses.

"For all foreign financial institutions in China, the world's second-largest credit market is definitely appealing and will inspire a wider array of cooperative models and tailored products among domestic and local players," Lai said.

"Alongside a deepened engagement of foreign institutions in China over the past few years, market governance will be enhanced, driven by the participation of all, and we are confident it will reach new heights through an even more open financial environment in the near term," he said.

Further opening-up of China's financial sector will particularly benefit foreign asset managers, life insurers and securities brokerages, for some of the skills they have in these niche markets are not yet mastered by their Chinese counterparts, said Nicholas Zhu, vice-president and senior credit officer at Moody's Investors Service.

US-based asset manager Vanguard and Ant Financial Services Group announced on Dec 14 they had established a joint venture to provide a fund investment advisory service to Chinese individual investors, as approved by the China Securities Regulatory Commission. Ant Financial holds a 51 percent stake in the joint venture whose registered capital is 20 million yuan, and Vanguard holds 49 percent.

Back in 2017, Vanguard launched its wholly foreign-owned enterprise in China－Vanguard Investment Management (Shanghai) Ltd－in Shanghai free trade zone.

Charles Lin, chief executive officer of Vanguard Asia and chairman of Vanguard Investment Management (Shanghai) Ltd, said: "China's new round of opening-up of its financial sector provides foreign asset managers a rare opportunity to enter the Chinese market. Following the launch of a series of policies, the country will make big progress in its asset management industry, which will help the industry to keep up with international standards and practice."

In the past, many domestic asset managers took distribution channels and sales capability as the core of the asset management business. They built their resources, experience and abilities mainly in terms of looking for credit assets and designing financial products that were nested in multiple layers. However, as far as Vanguard is concerned, investment and asset management capabilities lie at the core of asset management, Lin said.

"As foreign asset managers, we think the road map for China's opening-up of its financial sector is crystal clear, and we believe the Chinese market will open up continuously. This has further consolidated foreign institutions' long-term confidence in China and has also given us clearer directions," he said.

"We hope that our company and the Chinese market and financial system will learn from each other, become accustomed to each other, and grow together. Only by building a better financial market and business environment through multi-party efforts, could we provide higher quality services to investors more efficiently."

Vanguard is looking forward to bringing its experience and advantages in mutual fund product investment, research and development in the US and other developed countries to China, promoting practices to develop an enduring investment philosophy, and launching mutual fund products, which are suitable for long-term investment by individual and institutional clients, he said.

 

 

 

 

 

Goat milk formula has been popularized and is better recognized by consumers after a decade of growth and more dairy makers are making investments in the product, given the increasingly fierce competition in the milk formula market.

Chinese dairy giant Inner Mongolia Yili Industrial Group launched its first goat milk infant formula product in the high-end segment in December. The product uses goat milk which is originated from the Netherlands. It is meant for babies till the age of three.

Yili said goat milk infant formula will be easier to digest and absorbed by babies and will help to enhance the resistance of infants to diseases. The launch of the new product will help the company to enrich its high-end product portfolio. Yili is the largest dairy maker in Asia.

"The market of goat milk infant formula has been growing rapidly in China. With scarce output and richer nutrition, the category is seeing good growth prospects," said Zhao Xin, vice-president of the Yili Group.

"With increasingly specialized nutritional demand from young mothers, the goat milk formula we have launched is expected to help revive domestically-made infant formula products," he said.

The goat milk formula market in China is forecast to hit 10 billion yuan ($1.4 billion) this year. The figure was 5 billion yuan in 2015 and 300 million yuan in 2008, said an industry report issued by the China Academy of Social Sciences.

Dutch dairy provider Kabrita, a sub-affiliate of Chinese dairy maker Ausnutria Dairy Corp, has taken a commanding 60 percent share in the imported goat milk formula market in China. The company said it plans to launch more diversified kinds of goat milk formula goods in the next few years.

A bottle of 800 grams of goat milk formula costs 274 yuan on Tmall, an e-commerce platform under Alibaba Group, higher than the similar size of traditional milk infant formula brands.

In the first half of 2019, sales of goat milk formula products under Ausnutria reached 1.32 billion yuan, surging 45.3 percent year-on-year. During the period, sales of milk powder jumped 20.7 percent year-on-year, according to the company.

"Compared with normal milk, the digestion rate of goat milk infant formula is closer to that of breast milk. Goat milk formula also contains more protein, fat, minerals and vitamins," said Wang Junbo, a professor at the School of Public Health of Peking University.

"With increasingly higher recognition of the nutritional values of goat milk by the public, goat milk has been more widely applied to dairy products and skincare products, and it is seeing ample growth potential in China," Wang said.

Some other domestic brands such as Guangdong Yashily Group and Synutra Dairy Group have become major industrial players in the goat milk formula market in China.

The new generation of young mothers have recorded higher and more personalized demand, so dairy makers have to conform to the trend and keep enriching their product portfolios to meet those requirements, industry experts said.

Song Liang, a dairy industry analyst, said the growth rate of goat milk formula has actually slowed down in recent years, with an increasing number of big companies promoting the category, and some small-and middle-sized companies will suffer a loss as a result.

"Yet, big brands can promote new products with their sales and marketing advantages, and the bonus from brand imaging still exists for major players," he said.

The benchmark Shanghai Composite Index gained 22.3 percent in 2019, its best annual performance since 2014. The Shenzhen Component Index also rallied 44.08 percent in the past year, the biggest annual gain in nearly 10 years.

Analysts believe that market sentiment will continue to be supported by investors' expectation of more capital market reforms this year, which will help boost the quality of the listed companies, improve the efficiency of the Chinese stock market and make it more market-oriented.

China's top leadership pledged at the Central Economic Work Conference in December to speed up financial sector reforms and continue improving the underlying framework of the capital market.

From diversifying financing channels for the country's private and smaller firms to further liberalizing the financial market to foreign investors, the reform measures have helped facilitate China's economic upgrading and defuse financial risks, analysts said.

The recently adopted revision of the Securities Law has also set the legal basis for China to expand the pilot registration-based system for initial public offerings to the whole A-share market. It means that the country's new share sale system will be market-based and administrative approval will no longer be required.

The capital market reforms have helped create more policy consistency and improved market transparency, which will boost investors' confidence and draw more institutional capital from home and abroad into the A-share market this year.

Analysts at Guosheng Securities said in a research note that foreign capital, insurance funds and wealth management money will continue to flow into the A-share market this year and they will be the most important supporting factor for any possible rise of the Chinese stock market this year.

This view was echoed by analysts at Industrial Securities who believe that institutional investors including insurers and pension funds have been flowing into the A-share market in a faster pace and the Chinese stock market will likely appear attractive to some investors as the global market has entered a period of negative interest rates.

Yang Delong, chief economist of Shenzhen-based First Seafront Fund, said that the valuations of the A-share market remain attractive compared with global equities markets and the trend of the stabilizing and steady growth of the Chinese economy in the mid and long-term has not changed, which will continue to draw global capital into the Chinese market.

Possible recovery of corporate profitability as a result of the government's pro-growth policies this year will also bring structural opportunities in the A-share market, analysts at BOC International said.

The China Securities Regulatory Commission, the country's top securities watchdog, is scheduled to hold its annual work conference this month. The CSRC is expected to lay out its work priorities and reform objectives at the meeting.

In September, the CSRC listed 12 priorities for deepening the reform of the capital market, charting a clear roadmap for the sector.

The key tasks include giving full play to the role of the STAR Market, the high-tech and innovative board on the Shanghai Stock Exchange, as an experimental field, encouraging listed companies to enhance their quality, further promoting the reform of the Nasdaq-style board ChiNext, and pushing faster improvement in China's National Equities Exchange and Quotations, or the "new third board".

In a bid to accelerate the high-level opening up of the capital market, China will implement opening-up measures and safeguard financial security in an open environment, the regulator said.

"With the implementation of the reform measures, China's capital market will see fundamental improvement to better play its role in facilitating economic transformation and high-quality development," said Han Qian, a professor at the School of Economics at Xiamen University.

Xinhua contributed to this story.

The futures market became the first sector in the Chinese financial industry in which foreign companies can have full control of their business entities as the country removed ownership restriction on futures companies on Jan 1.

An official at the China Securities Regulatory Commission said the regulator is keen to give foreign investors greater market access in a hope of consolidating and energizing the industry, which is less developed compared with the country's securities and fund industries.

The regulator is expected to issue a revised regulation soon on qualified foreign institutional investors, which will substantially expand their investment scope and allow them to trade in the derivatives market including financial and commodity futures and options.

Meanwhile, more types of commodity futures and options contracts will be made available for overseas investors this year. The Shanghai Futures Exchange will launch the trading of low-sulfur bunker fuel oil futures contracts and container freight index futures contracts this year, which will allow foreign investors to participate in trading. The exchange will also open copper futures trading to foreigners this year.

China has been accelerating the opening of its derivatives market since 2018 when the country launched the trading of crude oil futures contracts and opened it for the first time to foreign investors, a milestone development of the country's futures market. Following crude oil, three more products－iron ore, pure terephthalic acid and technically specified rubber 20 futures contracts－became available to foreigners.

The efforts underscored China's intention to boost its pricing power in the international commodity markets as the country has been a major importer of raw materials and commodities but has had limited pricing influence in the international markets.

The liberalization of the futures market will also help raise the global profile of the Chinese currency as the contracts of commodity futures and options contracts that are open to global investors are denominated in renminbi, or the yuan.

"The opening of the futures market is line with the development of China's international trade. It is also a necessary way to boost the international pricing capability of the Chinese futures market," Fang Xinghai, vice-chairman of the CSRC, said at a derivatives forum recently.

"The trading of both domestic and foreign investors in the futures market will help create a more consistent, transparent and fair market pricing … and the yuan-denominated contracts will help push the internationalization of the renminbi," Fang said.

Fang said the securities regulator will continue to enrich the derivatives market by approving and offering more products to investors at home and abroad this year. In December, two new option products, the gold option and CSI 300 stock index option, debuted in the market and more are expected as the regulator aims to strengthen the functions of the country's commodity and financial derivatives markets to offer companies and investors more tools to manage risks amid a slowing economy.

Wang Wei, director at the market economy research institute of the Development Research Center of the State Council, said promoting the two-way opening of the futures market will allow China to better participate in the allocation of global resources and ensure the national economic security and stable growth while enhancing the country's global competitiveness and pricing influence.

Li Zhengqiang, chairman of the Dalian Commodity Exchange, said the financial industry should serve the economy by providing not only necessary funding but also efficient risk management products and services, which include important tools such as forward contracts, futures and option contracts.

The view was echoed by Xiao Gang, former CSRC chairman and now a national political adviser. He urged the country to fully unleash the risk-hedging function and accelerate the internationalization of the derivatives market, an indispensable part of the country's financial sector.

The development and liberalization of China's derivatives market has been welcomed by global investors who will gain more access to hedging and risk management tools for their exposure in the onshore capital markets.

"I think what is welcome is the continued ability to allow investors to innovate in terms of hedging tools and derivative trading. The expansion of derivatives in the Asian financial markets has been an important step for overseas investors to gain confidence in the ability to access the market in a more liquid fashion," said Kevin Anderson, head of investments for Asia-Pacific at State Street Global Advisors.

Christine Lam, chief executive officer of Citi China, said the US bank Citigroup is seeking opportunities to develop new types of business and obtain new licenses as China will remove foreign ownership restrictions for futures.

"We are interested in this type of business. As foreign investors are increasingly taking part in China's financial markets, our clients' demand for risk hedging and mitigation products such as futures is also on the rise. We look forward to the opportunities to develop new business," Lam said.

Another positive development is that the country's lawmakers are accelerating futures market legislation. The first Futures Law is already in the national legislative process and lawmakers are reviewing the draft.

While China's futures market came into existence in the early 1990s, there has not been an industry law that governs and regulates the sector. Investors are hoping that the first Futures Law can be approved by national lawmakers as soon as possible.

Fang, the CSRC vice-chairman, said the legal process of the futures market has lagged behind the market's fast development.

He noted that China should carefully study the mature legal and regulatory systems in international markets and borrow useful experience and expertise to push the domestic rules and regulation to be consistent with international standards and practice.

It is precisely this aspect that has kept Chen Haibo, founder and CEO of DeepBlue Technology, a Shanghai-based AI company, occupied in the past year by sharing his understanding of the topic through intensive writings and lectures.

So when his new book Talk About AI to Government Leadership made its debut last week in the Party School of the Central Committee of the Communist Party of China, responses were exceptionally popular.

"The subject has always attracted tons of attention and inquiries," said Chen, whose firm offers an array of AI-backed services. "You can easily sense the enthusiasm from government and State-owned enterprise representatives of all levels about utilizing this cutting-edge technology."

China has upheld AI as a key cornerstone to drive the next phase of growth, unleashing a series of policies in the past two years to bolster the sector's development. The guiding "New Generation AI Development Plan" has set 2030 as the year for accomplishing the global AI lead, with a bevy of milestones to be reached by the end of 2020.

"The pursuit of AI-related knowledge shows their eagerness for strategically emerging industries, and how they want to drive economic growth using technologies in a sustainable manner," he said.

Chen's book starts with a historical retrospect on the different impetuses driving growth worldwide, and pinpointed AI as the next engine that will revolutionize industries and power economic transformation. He has taken care to avoid technical jargon and keep the language straightforward and easy to comprehend.

"While internet represents explosion in scale and innovation in business models, the core game changer is so-called 'hard-core technologies'," he said. He said the foreseeable abundance of AI-related graduates, the wealth of data, as well as the government's determination in driving AI initiatives, are conducive to China's goal of leading the global AI pack.

It is imperative that government officials follow the AI trend, riding the next wave of information technology and swimming with the tide, said Xu Weixin, former vice-president of the school, on the same occasion when the book was unveiled.

To this end, the school held a one-day seminar with a particular focus on how smart cities should be developed with the aid of new technologies like AI and blockchain.

"We need to understand the technology and its law of development, and optimize relevant laws and regulations so as to bolster the healthy development of such emerging technologies," Xu said.

It is critical for people in leadership positions to understand the relationship between AI and the Fourth Industrial Revolution, the role of the digital economy and how technologies can be integrated into the manufacturing sector, all of which are properly addressed in the book and relevant lectures, said Ni Guangnan, an academician at the Chinese Academy of Engineering.

"And it's important to share concrete examples and case studies in the application of such technologies, making it the profound and seemingly-distant technology relevant for decision-makers at all levels," Ni said.

DeepBlue's Panda Bus fleet is an example of how AI could ensure a safe and smooth public commuting experience. The smart vehicle uses a combination of AI technologies including computer vision, biometrics, autonomous driving and voice recognition to give buses a digital makeover.

"Our deal in Tianjin is the first government procurement of self-driving buses of its kind worldwide," Chen said. "It shows the boldness and determination of how the government wants to improve people's livelihood leveraging technological leaps."

A recent report by global consultancy Accenture pointed out that AI has the potential to add as much as 1.6 percentage points to China's economic growth rate by 2035.

"Policymakers should prepare the next generation for the AI future … and advocate a code of ethics for AI," wrote Mark Purdy, managing director Accenture Research and lead author of the report.

Not having enough access to efficient charging piles remained problematic for EV drivers in China, according to a McKinsey survey.

With the total number of EV chargers climbing dramatically by 61.2 percent year-on-year to 1.17 million units by November, services bridging between charging stations and drivers have emerged as a top concern.

Buoyed by increasing demand for charging services, a rising number of EV charging infrastructure operators in China are exploring new business potential through information sharing, mapping, battery maintenance, and many other sectors, an expert said.

"As the total number of EV charging piles increase, EV drivers' demand for charging services like information and battery maintenance will soar," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

China's EV charging service market is estimated to create an industry value worth 2.2 billion yuan ($315.9 million) by 2020, a report by industry association China EV100 and the Natural Resources Defense Council said.

The boom in China's EV charging service sector came as the government is extending its financial support to the operation of charging stations.

As a result, subsidies will be offered to EV charging operators that are commercially viable and able to guarantee a minimum usage and will no longer be easily available for electric vehicle charging infrastructure makers, Lin said.

"It is natural that an increasing number of companies are rushing into the sector and trying to take a share in the promising business. For them, it (developing EV charging services) is also a good opportunity to have businesses with added value and generate new growth points. Currently many of them fail to make ends meet," said Lin.

China's largest charging infrastructure provider Qingdao TGOOD Electric Co Ltd with 2 million kilowatt-hour annual charging capacity and about 190,000 charging piles, has joined hands with the second player State Grid Corp of China, the third-ranked Star Charge, as well as China Southern Power Grid to launch a website and app for classifieds for EV drivers, named Uniev, to tap the growing market.

By November, Uniev has its platform connected to over 390,000 public charging piles which make up about 85 percent of China's total. The platform covers information about the locations of the piles, availability such as whether it's fully occupied, prices, and user ratings.

The platform has also been developed for adaptation into various platforms like mobile phones, a mini app on WeChat, government platforms and in-car systems.

Huang Shan, general manager for charging services at Uniev, said the company has partnered with nearly a hundred charging operators and NEV manufacturers. It will continue offering products and solutions for NEV drivers, charging infrastructure providers, and NEV manufacturers.

The technology, media and telecom business has been the fastest growing business in Citi's China franchise in recent years. Its TMT business has grown by double digits every year since the bank set up a team specializing in the TMT sector at the end of 2016, said Jianxun Toh, head of technology, media and telecom of Citi China Corporate Banking.

Gerald Keefe, head of Citi Asia-Pacific Corporate Banking, said, "We see the innovations that the Chinese new economy players have created and probably perfected here in China as very attractive to the rest of the world, and that attraction is promoting their expansion."

Keefe further explained that the innovations which have made commerce more accessible to people, and which have promoted financial inclusion by enabling people who did not have access to banking to make and receive payments, are easily identifiable examples of innovations from the Chinese new economy that are spreading globally.

"Our role in this is to support these Chinese new economy champions as they expand globally by making our global network available to them, which provides rails for their systems to run on," he said.

Being physically present in almost 100 countries and regions, Citi provides financial services in more than 160 markets. The bank maintains 13 China Desks around the world, out of a total of 32 Asia Desks it has globally, to support its global clients as they go out and invest, and develop their business worldwide.

Within each country, Citi has banking teams that cover financial institutions, the public sector, subsidiaries of multinational corporations, and locally headquartered corporates. Within each of those teams, it has groups specializing in certain industries, namely TMT, energy, power and construction, consumer and healthcare, and diversified industrials.

"The desks where we send people out overseas are typically staffed by mainland residents whom we hire and train here (in China) and then give them an opportunity to go out into the Citi network and be global bankers," Keefe said.

"Our Chinese clients have a very high standard for turnaround time and a very high expectation of how hard their bankers are going to work. So we send bankers out to meet those expectations in local language because it makes the whole interaction of the Citi network with those clients more effective," he said.

Bob Zhang, Citi's China Desk head in Europe, said, "New economy companies make decisions quickly and require banks to respond much faster than they do to companies in traditional sectors… This has raised new challenges for us in terms of product innovation and customer responsiveness, forcing us to optimize our internal procedures and make decisions more quickly."

It is worth noting that in recent years, the types of Chinese TMT companies that are going global are evolving from hardware manufacturers and large technology companies to technology platforms in a horizontal market, as well as small－and medium-sized payment service providers. Citi provides TMT companies with wide-ranging financial services including on-the-ground support as they enter new markets, cash management, supply chain financing, and strategic advice on industry developments, Toh said.

The number of fintech companies, especially third-party payment processors, that enter the European market, keep rising because Europe has higher standards for personal privacy protection and information safety than any other continent. Many companies believe that once they successfully enter the European market, it will be easier for them to enter other markets. Emerging fintech companies are using Citi's platform to help merchant clients expand their business overseas, collect cross-border payments, and send the money back to their bank accounts in China as quickly as possible, and settle a payment in renminbi at the best exchange rate, Zhang said.

Alibaba Group Holding Ltd is scheduled to launch its annual sales campaign for the upcoming Chinese Lunar New Year from Thursday, with a goal of helping farmers sell over 150 million kilograms of agricultural products during the monthlong festive season.

Alibaba plans to maximize public exposure of local produce from impoverished regions by linking customers with a dedicated, onestop landing page via Taobao's home page.

"Our purpose is to help farmers increase their income and make quality, yet affordable, agricultural produce more accessible to the vast consumer group," said Li Shaohua, vice-president of Alibaba and general manager of its rural business unit Rural Taobao.

Dubbed "Rural Produce and Fresh Food", the channel hosts e-shops from 832 poor counties across China. Local products are displayed and introduced through vivid story telling in a variety of media formats.

Prospective buyers are also expected to be drawn by livestreaming shows, which exhibit farmers and local government officials coming together to promote goods and discuss opportunities and challenges of local interest.

During the last Nov 11 shopping festival held by Alibaba, agricultural product sales jumped 64 percent year-on-year to 7.4 billion yuan ($1.06 billion). A total of 370,000 livestreaming shows were conducted in September alone, which offered 1 billion agricultural items via online channels.

Li said the platform will look to cultivate 1,000 livestreaming hosts from poverty-stricken areas in 100 counties and help them each generate more than 10,000 yuan in monthly income. The platform will also work with media outlets such as China Central Television to curate professionally-produced content about fresh produce as well as the farms themselves.

Encouraging self-development and empowerment of the poor population through novel measures has proved to be an effective approach as China aims to achieve total poverty eradication by this year, according to experts.

"Multisectoral approaches, targeted strategies, leadership, constant innovation such as using e-commerce to connect farmers to markets have been core enablers of poverty alleviation in China, by adding income and enhancing commitment," said Ehizuelen Michael Mitchell Omoruyi, executive director of the Center for Nigerian Studies at the Institute of African Studies, Zhejiang Normal University.

Other platforms have also upped the ante. Shanghai-based social commerce site Pinduoduo said a dedicated project that sells farm produce from poverty-stricken regions earned "record revenue" and is on course to make the endeavor into a regular poverty relief initiative with the assistance of information technology.

E-commerce major JD said in the first half of 2019 people spent 6.6 times that of the previous year on agricultural produce from poor counties via its platform. In just three years' time, sales of dragon fruit, pineapple and avocado from rural regions surged 8, 3.3 and 3.4 times by the middle of last year, JD's data showed.

"E-commerce-powered poverty elimination is expected to gain bigger momentum this year, as the internet facilitates not just the consumer end (i.e. making it easy for people to purchase) but the industrial end, meaning research and development, manufacturing and logistics for agricultural produces can be customized and automated through the adoption of artificial intelligence, big data and cloud computing," said Li Yongjian, a researcher of the internet economy at the Chinese Academy of Social Sciences.

China has vowed to eradicate poverty in all poor counties and regions by this year to build a moderately prosperous society in all aspects.

The launch came as Wanda Film is seeking ways to reverse its fortunes after it saw net profit drop by 57.25 percent year-on-year to 829 million yuan ($118.68 million) for the first three quarters of the year.

The Prime line cinemas of Wanda will have RealD Ultimate Screens which are expected to bring in an enhanced visual experience, high frame rates, and Dolby Atmos, according to the company.

Wang Qi, chief technology officer of Wanda Film, said the company is working to offer top-notch technologies and individualized services for an enhanced film watching experience.

High technologies have been a focus of efforts by Wanda to lure back moviegoers.

Earlier this year, Wanda agreed to install 20 Cinity Cinema Systems in its cinemas. The system offers film screenings in 4K stereoscopic 3D at 120 frames per second, which is considered superior compared to the often-used 24 frames per second.

Wanda was not the only one to bet on high-tech embedded film screenings to boost profits.

Major cinema chain Guangzhou Jinyi Media Corp also agreed to install 20 Cinity Cinema Systems in its cinemas earlier this year after seeing its net profit drop by 24.17 percent year-on-year to 105 million yuan for the first three quarters of this year. So did Bona Film Group Ltd.

"There are many reasons. Viewers' enthusiasm was cooling. Consumers' spending on entertainment was weakening due to economic slowdown. Supercheap film tickets (sold at 9.9-19.9 yuan per ticket) were rare on the market," said Chen Shaofeng, a professor of culture and entertainment at Peking University.

Chen said the booming home cinemas and rapidly-developing online streaming services are also part of the reason for the changes.

"Many industry people hold the view that current film screening services had outstripped movie going demand," he said.

In the first half of 2019, the total box office revenue stood at 31.17 billion yuan in China, down 2.7 percent year-on-year, data from National Radio and Television Administration showed. Total cinema visits were 808 million during the same period, a decline of 10.3 percent year-on-year.

"As film giants are betting on tech-embedded enhanced film screening services, film technology companies like Imax and Dolby are enjoying great popularity among cinema chain companies," Chen said.

Imax China has posted a double-digit growth in box office revenues from cinemas supported by its systems in the first half of this year.

"Aside from tech-embedded film screenings, cinemas are also eyeing non-box office sectors to boost new revenues," Chen said.

A report from industry analysis website Forward the Economist said revenue from ads shown before a film's screening is expected to create a 20 billion yuan market in 2020.

"In addition, sectors like film-related accessories and dining are also growing," Chen added.

Wanda Film's merchandise sales and dining had a 67.43 percent profit margin in the first half of 2019. Its ads business had a 65.43 percent profit margin in the same period. Its businesses leading to box office revenue, which accounted for 80 percent of Wanda Film's operation cost, only had a profit margin of 6.07 percent.

Talking about future potential of those sectors, Chen made a reference to Disney. In 2018, Disney reaped big bucks from its parks and resorts business, having netted $20.3 billion out of total revenue of $59.43 billion. Earnings from consumer products and interactive media contributed $4.65 billion to the total revenue.

"Although Chinese cinema companies are still at a very early stage in developing businesses in non-box office sectors and are facing challenges like copyright protection, many companies are on a fast track exploring this field," Chen said.

Thanks to direct freight train service between China and Europe, Chinese businesses with an intimate knowledge of the European market have stepped up their game in Europe's Christmas economy by means of innovation and new designs.

The latest data from Germany's Federal Statistical Office showed that in 2018, the country imported 17,720 tons of Christmas items worth around 143 million euros ($159 million). Nearly three quarters of the items were from China.

In fact, from decorative LED lights to automated Santa toys, more than 60 percent of the world's Christmas-related merchandise come from the eastern Chinese city of Yiwu, around 260 km south of Shanghai. The great variety of holiday products there have earned the place a nickname: "China's Christmas Village".

"European customers prefer simple and elegant designs for Christmas trees, green pine trees with snow, and a couple of jingle bells would be enough," said Zhu Zhijuan, who discussed different regions' preference regarding the choice of a Christmas tree.

Based in Yiwu, her company Xintean Arts and Crafts have been making artificial Christmas trees for 15 years. Its annual revenue amounts to 100 million yuan ($14.3 million), and is expected to grow 10 percent this year, Zhu said.

In Yiwu, the Christmas goods section alone boasts 15,000 varieties. The manufacturers have their own organization－the Yiwu Christmas Products Industry Association－and follow regularly published market indicators.

The local commerce bureau has listed 333 exhibitions around the globe as recommendations for local businesses to attend. Shortly after the holiday season, in January or February each year, for example, Zhu will go to Frankfurt Consumer Goods Trade Fair in Germany to get prepared for the coming year.

More and more Chinese products have made their way onto the shopping lists of European households in the holiday season.

In downtown Brussels, local residents were busy with Christmas shopping at Kam Yuen Supermarket, the largest Asian supermarket in Belgium.

"Kam Yuen used to be a small shop for Chinese people, now 70 percent of the customers are non-Chinese," said Liu Jingrui, CEO of Kam Yuen Investment.

In Warsaw, Chinese retailer MINISO has become one of the most popular places for Christmas gift shopping, and their best-seller this year is a stuffed snowman imported from China.

Piotr Piorkowski, the shop's manager, said that the customers like the original design of the Christmas products sold there and the quality they get for the price they pay.

For Anna Godlewska, co-owner of Amko Toy Store in central Warsaw which imported 90 percent of its customers' goods from China, its love for Chinese toys is obvious: Two days before Christmas, all the products in the store like dollhouses, stuffed animals and baby shoes were sold out.

"People love to buy products from China for Christmas because they have a reasonable price and really good quality," said Godlewska.

In Budapest, a lot of Hungarians turn to Chinese tech products for Christmas gifts for their loved ones.

According to Extreme Digital, a leading Hungarian online marketplace, their best-selling products during Christmas this year were the Chinese sandwich maker and a smart fitness watch produced by Huawei.

Total retail sales of consumer goods is likely to reach 41.1 trillion this year, up 8 percent on a year-on-year basis, said Wang Bin, deputy director-general of the ministry's department of market operations and consumption promotion.

Thanks to emerging business models such as fresh food and broadcasting-themed e-commerce, as well as the expansion of global firms including the US warehouse club chain Costco and German supermarket chain Aldi in China this year, the country's online retail sales amounted to 7.6 trillion yuan between January and November, up 19.7 percent from same period a year earlier.

The strong growth has also been driven by the diversified import channels, service sector, daily living expenses, the nighttime economy and strong purchasing power from China's central and western regions this year, Wang said at a media briefing during the ministry's year-end meeting from Sunday to Monday.

Boosted by cross-industry cooperation, digital tools and e-commerce related business models, Wang said China's booming consumption sector has created a large number of jobs and built better infrastructure network in the country's lower-tier cities, counties and rural areas.

For instance, the number of deliverymen at Meituan-Dianping, one of the country's largest on-demand service platforms by sales revenue, surged from 2.7 million in 2018 to 4 million this year.

"With digitalization being one of the trends of China's takeout business, the delivery options have also expanded. In addition to food and beverage, orders for flowers, green plants, cosmetics and daily necessities have grown in recent years," said Hu Jianping, deputy director-general at the ministry's department of market system development.

She said that meeting the daily needs and festive demands is a new consumption trend across China. Consumption potential can be further unleashed by increasing residential incomes and improving product quality to build a strong domestic market.

Though many parts of the world are confronting downward economic pressure, a strong domestic spending power with many emerging service and business modes is key to attracting foreign direct investment in the long term, said Zong Changqing, director-general of the department of foreign investment administration development at the Ministry of Commerce.

For the next step, the ministry will accelerate the upgrading of pedestrian streets in the country's major cities, and further release consumption potential in the country's rural areas via e-commerce, modern agriculture, tourism projects and infrastructure development.

Apart from building a sound domestic consumption environment, Xian Guoyi, director-general at the ministry's department of trade in services and commercial services, said the government will study and formulate a negative list for cross-border service trade in 2020.

He said China will expand service exports, cultivate new growth points in service trade and further enlarge the global market for service trade next year, as well as import more quality services to meet domestic demand.

These moves target short-and long-term consumption, and focus on stabilizing products such as passenger vehicles and digital goods, while also cultivating new drivers from service sector and 5G technology, said Ma Yu, a researcher at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.

In their eyes, doom and gloom seemed the only possible scenario for the country amid trade disputes and mounting external uncertainties. However, the resilience and vigor of the Chinese economy have proved quite the opposite.

Here is a fact-check on how at least six claims about China's economy have fallen apart.

Natural slowdown or bleak growth?

Some scaremongers have long tried to sell the message of a "hard landing" of the Chinese economy, whose resilient growth this year made this theory all the more flimsy.

China's GDP expanded 6.2 percent year-on-year in the first three quarters of this year, data from the National Bureau of Statistics showed. The growth, in line with the government's annual target of 6-6.5 percent set for 2019, still outpaces other major economies including the United States, Japan, Germany and India.

A slowdown, rather than a steep fall, is "to be expected and is not surprising or alarming in any sense", as the economy is moving along an expected natural path of maturing growth following its unprecedented growth pace over four decades, said Ahmed Saeed, vice-president of the Asian Development Bank.

Global ratings agency Fitch in November maintained its A+ credit rating on China, affirming its stable growth outlook supported by the country's robust external finances and strong macroeconomic performance.

Stable job market or employment crisis?

Navigating headwinds, China has delivered robust job gains with a stable unemployment rate instead of the massive layoffs predicted by some. NBS data showed that 12.79 million new urban jobs were created in the first 11 months of this year, exceeding the annual goal of creating more than 11 million new jobs.

As China's economic structure has shifted from being industry-led to service-led, the growing service sector, new business models and multiple support policies are also generating more opportunities.

Every percentage point growth of the country's economy can be translated into about 2 million new jobs, said Liu Aihua, spokesperson of the NBS, adding that the job market is kept stable as steady economic growth, structural adjustments and entrepreneurial innovation continue apace.

Made-in-China: Boom or gloom?

In another sign of economic resilience, made-in-China continued to display dynamism despite increased downward pressure. NBS data showed that the purchasing managers' index for China's manufacturing sector re-entered the expansion zone by firming up to 50.2 in November from 49.3 in October.

Analysts suggested that China, as the only country that possesses all the industrial categories in the United Nations industrial classification, has the competitive edge of a complete and efficient supply chain.

As the country continued its structural shift to quality-oriented growth, high-tech manufacturing has also been forging ahead, with an output increase of 8.9 percent in November, and investment surging 14.8 percent year-on-year in the first 11 months of this year, far outpacing the manufacturing sector's average growth of 2.5 percent, official data showed.

Foreign trade: Firming up or faltering?

At odds with what some market observers may have surmised, China's foreign trade remained steady this year, climbing 2.4 percent year-on-year to 28.5 trillion yuan in the first 11 months with exports of high-tech, high-quality and high value-added goods expanding at a faster-than-average rate.

The scope and scale of foreign trade has kept growing as China opens wider to the world. In the first 11 months of this year, China's trade with the European Union and ASEAN expanded, while trade with countries involved in the Belt and Road Initiative reported faster growth than the overall average to account for 29.3 percent of the total trade.

China's commitment to increasing imports is evident in hosting the China International Import Expo and adjusting import tariffs for a range of products starting next year, allowing other countries and regions to share in China's development.

Foreign firms: Investing or retreating?

Misgivings about foreign firms faced with trade tensions and rising costs withdrawing from China are overblown, as the country saw foreign direct investment utilized in the first 11 months of this year rising 6 percent year-on-year, and more than 100 new foreign-invested firms set up every day.

China remains the second-largest recipient of FDI and the largest among developing economies, according to a report by the United Nations Conference on Trade and Development.

The country has taken concrete policies and legislative measures to improve its business environment that grants equality of rights, opportunities and rules for domestic and foreign companies alike, ascending 15 places to rank 31st globally this year on the World Bank's ease of doing business list.

Capital market: Improving or imploding?

Defusing risks and improving the market system, China saw its capital market make a bullish run this year, with the Shenzhen Component Index rising almost 40 percent and the Shanghai Composite Index up nearly 20 percent from closing on the last trading day of 2018.

China's financial opening-up efforts, which include stock connect schemes and scrapping QFII and RQFII quotas into the country's capital market, as well as its strong and increasingly international currency, made yuan-denominated assets more attractive to investors worldwide as foreign holdings of Chinese stocks and bonds jumped 53.56 percent and 27.6 percent respectively in the first nine months of this year.

Inclusion to and increased weighting of China's stocks and bonds in global benchmarks like the MSCI, FTSE Russell, S&P Dow Jones and Bloomberg Barclays index are expected to channel more foreign capital into China's financial market, while ongoing reforms including the registration-based IPO system and spin-off listings bode sustainable growth.

En route to high-quality and more sustainable growth, China is yet to dazzle the world as it stands poised to finish building a moderately prosperous society in all respects next year and turn its institutional strength into better governance in the long run.

 

 

 

 

 

Shanghai-listed Chongqing Iron and Steel announced on Friday in a statement that its actual controller, Four Rivers Investment Management Co Ltd, had signed a letter of intent with China Baowu on transferring the controlling stake in the steelmaker.

According to the statement, China Baowu would take the controlling stake in Chongqing Iron and Steel through a share purchase. The deal is expected to be completed by the end of next June.

"Taking a controlling stake in Chongqing Iron and Steel is one of the latest acquisitions and consolidations China Baowu has made in the past few years since it unveiled the target of expanding its capacity to 100 million tons by 2021," said Wang Guoqing, director of the Lange Steel Information Center.

In its development scheme published in November 2017, China Baowu set a goal of expanding its output from 80 million tons to 100 million tons between 2019 and 2021.

China Baowu, a monolith formed by the merger of Shanghai-based Baosteel Group and Wuhan Iron and Steel Group in Central China's Hubei province in December 2016, is the nation's most competitive steelmaker with a production capacity of 70 million tons, second only worldwide to the Luxembourg-based ArcelorMittal.

The steel mill keeps expanding its scale. In June this year, it announced it would acquire Maanshan Iron and Steel Co Ltd (Magang), whose output of crude steel totaled 19.64 million tons in 2018.

"Magang has 20 million tons of steel capacity, and its unique product portfolio will extensively consolidate Baowu's strengths and increase its output to more than 90 million tons," said Chen Derong, chairman of China Baowu.

Chongqing Iron and Steel, established in 1997, went through a mixed ownership restructure at the end of 2017, according to ThePaper.cn report. Four Rivers is a fund launched in 2017 committed to forwarding the steel industry's restructuring and upgrade.

Baowu's Hwabao Investment Co Ltd and US-China Green Fund originally held 25 percent each in the fund. WL Ross & Co owned 26 percent and China Merchants Finance Holdings Co Ltd held the remaining 24 percent.

"Based in southwestern China, Chongqing Iron and Steel will also complete China Baowu's nationwide presence, as the steel giant already has a presence in the East, South, Northwest and most recently the North by Shougang Group transferring 15 percent of its listed arm stake to Baowu in November," said Wang.

"We are going to see more mergers and acquisitions in the future as an industry-wide restructuring and upgrade continues to roll out," she added.

By 2025, the country's top 10 steel enterprises will have their combined output contribute between 60 percent and 70 percent of the nation's total, among which, the top three or four companies' annual capacity will reach 80 million tons each, according to the target set by the State Council.

 

SMEs play important role in fostering economy

China's medium-sized, small and micro enterprises made important contributions to the country's economic development during the 2014-18 period, official data showed. At the end of 2018, the number of medium-sized, small and micro enterprises rose 115 percent from 2013 to 18.07 million, making up 99.8 percent of all legal entities, according to a report on China's fourth economic census released by the National Bureau of Statistics. Those enterprises employed around 233 million people, accounting for 79.4 percent of all enterprise employees nationwide, the report said. Total annual operating revenue of those enterprises stood at 188.2 trillion yuan ($26.9 trillion) in 2018, accounting for 68.2 percent of that from all companies in the country.

CDB transfers $14.29b to small businesses

The China Development Bank, a major policy bank, has so far transferred 100 billion yuan ($14.29 billion) of loans this year to boost the development of small and micro firms and spur industrial growth in poverty-stricken areas. Since the beginning of this year, the loans have been channeled to 322 banks, benefiting more than 120,000 small and micro-sized firms. Of the total, loans worth 10.5 billion yuan have reached some 100 impoverished counties and helped lift tens of thousands of people out of poverty. The CDB will continue to give full play to the vital role of development finance institutions and provide high-quality and effective financing services for real economy.

Coking coal imports increase in November

China's imports of coking coal saw steady growth in November, according to data from General Administration of Customs. Last month, the imports of the coking coal surged 16 percent year-on-year to 6.18 million tons, customs data showed. The import turnover reached $7.89 million, decreasing 3.9 percent year-on-year. From January to November, a total of 72.8 million tons of coking coal was imported, up 17 percent from the previous year, according to the GAC. The main use of coking coal is to refine coke, material for making steel.

COMPANIES AND MARKETS

China sees record daily number of startups

China's market vitality has been further boosted this year due to easing market access and streamlining approval procedures, according to the country's top market regulator. Around 21.79 million new market entities were established in 2019. A record 20,000 new firms were set up every day on average, data from the State Administration for Market Regulation showed. China has long been ramping up efforts to improve business environment to unleash market vitality and boost high-quality economic growth. The country started the pilot reform to separate business operation permits from business licenses in all 18 pilot free trade zones on Dec 1. The reform is expected to cover the whole country in 2020.

Regulator clears 3 new floats on sci-tech board

China's securities regulator has given the nod to the registration-based initial public offerings of three companies on the science and technology innovation board. UCloud Technology Co Ltd, Willfar Information Technology Co Ltd and Guangzhou Jet Bio-Filtration Co Ltd will be listed on the Shanghai Stock Exchange's sci-tech innovation board, commonly known as the STAR Market, according to the China Securities Regulatory Commission. The companies and their underwriters will confirm the IPO dates and publish their prospectuses following discussions with the stock exchange.

Volkswagen to produce more electric cars

German automaker Volkswagen AG said that it is ahead of schedule in producing electric cars and announced a new overall plan to produce 1.5 million electric cars by 2025. The previous strategic target of 1 million electric cars is expected to be reached by the end of 2023－two years earlier than anticipated, the company said. In September this year at the Frankfurt Motor Show, Volkswagen unveiled the new all-electric ID. 3 model and vowed to become a world market leader in e-mobility. Over 37,000 customers have reserved an ID. 3 and paid a pre-booking deposit, the company said, adding that the model is expected to appear on the market from summer 2020.

Toyota to recall 1,380 defective vehicles

Japanese automaker Toyota will start recalling 1,380 vehicles on Jan 10, from the Chinese market, according to China's market regulator. Filed by Toyota Motor (China) Investment Co Ltd, the recall involves 723 imported Alphard Hybrid models manufactured between Aug 19, and Sept 10, as well as 657 imported Vellfire Hybrid produced between Aug 19, and Sept 6, the State Administration for Market Regulation said in a statement. Due to a defective emergency locking retractor, the safety belts may fail to take effect when vehicles are involved in collisions, said the statement.

AROUND THE WORLD

Japan's jobless rate drops to 2.2% in Nov

Japan's unemployment rate improved in November for the first time in four months, the government said in a report. According to the Ministry of Internal Affairs and Communications, the unemployment rate stood at 2.2 percent in the recording month, dropping 0.2 percentage point from October. Unadjusted for seasonal factors, the number of unemployed people was 1.51 million in the recording month, down by 170,000 from a year earlier and still hovering near the lowest levels since the early 1990s amid the nation's ongoing labor crunch. The statistics bureau also said that 630,000 people left their jobs of their own volition, a decline of 120,000 from the previous year, while those laid off stood unchanged at 220,00 people in the recording period.

Brazil reports primary deficit of $19.8b

The Brazilian central government registered an accumulated primary deficit of $19.8 billion from January to November, which represents the best result since 2014, said the National Treasury Secretariat. The figure declined slightly from $21.8 billion in the same period last year. The primary balance of the central government is influenced by that of the National Treasury, the Central Bank and the social security system. From January to November, the National Treasury and the Central Bank had a primary surplus of $29.8 billion, while the social security system accumulated a primary deficit of $49.6 billion.

Malaysia to issue five digital banking licences

The Malaysian central bank said that it would issue up to five licences to qualified applicants to establish digital banks to conduct either conventional or Islamic banking business in Malaysia. Bank Negara Malaysia said in a statement that it had issued the exposure draft on licensing framework for digital banks, which allowed digital banks to offer banking products and services to address market gaps in the underserved and unserved segments. "Such digital banks are expected to offer meaningful access to and promote responsible usage of suitable and affordable financial solutions to financial consumers," said the central bank.

"I fear that I would lose money if the disease continues to spread even after I expand my farm," said Zhu, who owns the Changchun Topigs Animal Husbandry Co Ltd in Dehui.

"If prices continue to stay at such high levels, I will consider expanding my farm then," he said.

According to the Ministry of Agriculture and Rural Affairs, China's pork prices in surveyed markets averaged 51.22 yuan ($7.3) per kilogram in the last week of November, the fourth consecutive week of falling prices. In some cities, pork prices peaked at more than 60 yuan per kilogram in October.

In June, pork prices were only about 20 yuan per kilogram. Then they started to surge and more than doubled in October, pushing the national consumer price index above 3 percent to hit 3.8 percent, and further lifting it to 4.5 percent in November.

Facing the continual and strong spikes in pork prices, the authorities have adopted a slew of policies to increase market supply and encourage hog farming.

Governments at all levels have vowed to support the building of pig farms and fiscal subsidies are given to those who raise pigs.

In Jilin province, for example, the provincial government has provided subsidies and loan interest discounts for raising pigs. It has also encouraged the expansion of insurance coverage for raising of pigs and sows to alleviate risks to farmers and enterprises.

"We will implement relevant policies from the central government," said Lu Guoping, an official of the Jilin Animal Husbandry Bureau.

Imports have been increased to fill the gap in the domestic market. And the authorities have taken out pork reserves to increase market supply and stabilize prices.

Moreover, as China and the United States signed the Phase One trade deal, the country is set to increase imports of pork from the US, which will help increase domestic supply.

"Prices of live pigs hit 40 yuan per kilogram in the wake of the seven-day National Day holiday, the highest level this year," said Wang Dali, head of a pig farm owned and operated by Jilin University in Changchun, Jilin province. However, consumers could not afford such high prices and the demand decreased, leading to price falls, he said. "Even without the government measures to control prices to make pork affordable, prices will drop."

He said the State's release of pork reserves into the market is not on a large scale and cannot satisfy market demand. "But the move sends an important signal to the market: the State will not allow pork prices to continue to rise; then pig farmers will not wait for higher prices and increase sales of pigs, leading to more supply and lower prices," he said.

On Dec 27, 2 million tons of pork reserves were released into the market, the seventh such move this year. Some local governments have also taken similar measures to increase pork supply. China's output of pork amounted to 54 million tons in 2018.

But given the advent of the Lunar New Year, which falls on Jan 25, pork prices may not drop significantly and may even rise moderately during the Spring Festival holiday, analysts said.

Traditionally, demand for pork increases seasonally in the month before Spring Festival, said Zhang Ming, an economist of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences. The rising demand may bring extra pressure on pork prices, although the authorities would also take measures to intervene, he said.

With all these factors taken into consideration, he said, pork prices may hover at high levels until March 2020 and start to moderately fall starting from the second quarter of 2020.

"Given the expected increases of supply and high base effect, pork prices may decline sharply in the third quarter of 2020," he said.

If that happened, China's consumer inflation measured by CPI may peak in the first half of 2020 and fall sharply in the third quarter, which would provide room for China to cut its interest rates to boost growth, Zhang said.

While falls in pork prices, which are expected to happen after the summer of 2020, will benefit consumers and the country's inflation controls and monetary policy maneuvers, they will not be good news for pig farmers.

"For pig farmers, the profit margin is high, but things are not always so promising," said Zhu.

This year, following price rises, profits are on the rise. "But costs are also rising," Zhu said, adding that the salaries of his workers rose by more than 30 percent this year. "As prices rose, there are more investors building new pig farms and they hire new hands, which leads to a shortage of labor."

Although he made a lot of money this year, the profits cannot cover his losses last year, when prices were extremely low, Zhu said, adding that if the current high prices continue, his profits would cover losses by January 2020. "We sold live pigs at about 6 yuan per kilogram at the lowest level last year and the more we sold, the more losses we suffered."

Before this round of pork price surges, China's pork prices had flattened out at low levels for more than two years and farmers were forced to reduce the scale of hog raising because it was not profitable.

"This round of pork price rises has also come from external factors that pig farmers and enterprises cannot control," said Zhang, referring to the spread of African swine fever and the environmental control policies by some local governments. "The combination of the two factors has led to sharp decreases in the numbers of pigs and sows."

As African swine fever spreads, pig farmers and enterprises have become more alert and taken measures to prevent it.

"The government, industrial associations and ourselves have taken time to learn how to control the spread of the disease and now we are more experienced and more capable, both in terms of methodology and equipment, to control it," said Wang of the Jilin University pig farm.

Wang said his farm has increased frequency of disinfection and keeps more disinfection equipment in store so that the procedure will not be interrupted by dysfunctional equipment.

Many newly built pig farms have had equipment, such as that used for ventilation and automatic dung clearing, installed so that the improved living environment would help improve the immune systems of the pigs to help prevent infection, Wang said.

Some local governments that had forbidden pig raising in the name of environmental protection, meanwhile, are revising their policies, Zhang of the CASS said.

Though Realme is still relatively new to the smartphone game, its meteoric rise has been raising eyebrows. It was created by employees from Chinese smartphone vendor Oppo in the middle of 2018 to take on rivals, including Xiaomi, in smartphone markets like India.

Now, as an independent brand, Realme is the fourth-largest smartphone vendor in India. Riding on its instant popularity with young online consumers, the company is eyeing a bigger offline presence with plans for more brick-and-mortar retail ventures. The company plans to expand offline sales to 150 Indian cities this year.

Wang Shuo, head of marketing at Realme India, said in an interview with China Daily that the company already has made significant progress in shifting from the online-sales model. Currently about 30 percent of its sales come from offline stores.

"We will tap more resources to accelerate our offline expansion next year. Demand for upgraded smartphones is burgeoning in third-and fourth-tier cities of India. That is a huge opportunity," Wang said.

According to him, the company will soon offer tailor-made smartphones for offline consumers. "Users buying smartphones online are highly sensitive to technical parameters. They demand the latest processors and the best image pixels. They assess all the differences through data," Wang said, "But when it comes to offline sales, aspects like retailing, design, selfie capability and storage matter more, because consumers can feel and touch the smartphones with their own hands before they decide to buy or not."

Realme is currently the world's fastest growing smartphone brand. Six months after its launch, the brand became the No 4 vendor in India during the fourth quarter of 2018. Little over a year since its inception, Realme said it has joined the big league with more than 10 million units shipped. To be more accurate, 10 million smartphones in 14 months, which translates to 22,000 units sold per day since its debut.

During the third quarter of this year, Realme continued to be the fastest growing vendor in India with a 401.3 percent year-on-year growth in sales. The company now controls 14.3 percent of the smartphone market in India, according to data from market research company International Data Corp.

Wang attributed Realme's rise partly to its accurate product positioning strategy. "We sensed an unmet demand. Online consumers also have desire for smartphones that can combine good performance, design and quality. But back then, no one was here to offer such an option, so we came," Wang said.

In 2018, the Indian online market was dominated by Chinese smartphone brand Xiaomi, which prioritized cost-effective products. Other players including Huawei Technologies Co's Honor brand started to lose traction online, which created a market vacuum that no alternative player can fill, said Xiang Ligang, CEO of telecom industry website Cctime.

"When companies put heavy emphasis on lower prices, they have to make sacrifices on the performance of the smartphones to some extent," Xiang said.

Wang said Realme, overtook Chinese smartphone company Vivo as the No 3 player in India in terms of smartphone shipments in September this year.

To resonate with the younger generation and better build its brand image, Realme has hosted a string of campus concerts and activities for fans. In October, the company hosted four multicity music concerts with famous Indian singers and 11 campus festivals.

During India's festive season, Realme sold more than 5.2 million smartphones between Sept 30 and Oct 31.

Madhav Sheth, CEO, Realme India, said; "We are delighted to once again emerge as the No 1 preferred choice on Flipkart during festive days. Our 5.2 million smartphone sales figure is an actual and credible sellout data that is different from the usual sell-in numbers, which the other brands have been promoting. Realme offers the most blockbuster products that are high on features, style, and performance and is available across price segments."

Recently, Realme unveiled its new payments platform, Realme PaySa, which is designed to help individual customers and small－or medium-sized businesses financially. It is also part of the company's broader push to offer more internet services and direct more revenue from a growing pool of consumers who use its smartphones.

The move came after Xiaomi announced its Mi Credit lending service (and Mi Pay) to make its mark in the fintech space a few months ago. Another Chinese smartphone vendor OnePlus also revealed its plans to get into the payments services next year.

Clearly, the competition in India is still intense, with Xiaomi maintaining the leading position among smartphone vendors and Samsung the second position.

But Wang from Realme said, "Our biggest edge always lies in our products."

Antibiotics have long been used to kill harmful bacteria in both animals and people. But the continued overuse of the drugs has led to the serious problem of resistance. The European Union decided in 2006 to eliminate antibiotic growth promoters from animal feed and China has announced that it will follow suit starting from next year.

The move is in line with the requirement of the 19th National Congress of the Communist Party of China held in October 2017, that China should "push green development" and "implement food security strategy to ensure people have access to safe food".

Statistics from the Chinese Academy of Sciences show that in 2013, China used more than 16 million tons of antibiotic products, and half are used for animals, leading to the release of 5 million tons of antibiotic residues into water and soil.

"The State will no longer allow the use of antibiotic growth promoters next year and what we can do is improve the immune systems of animals in a more healthy manner," said Zhang Jing, an animal science professor of Jilin University.

To that end, some provinces, such as Jilin, Liaoning and Guangdong, have formed industry associations to promote use of feed free of antibiotics.

Meanwhile, to solve the problem of disease prevention and treatment, some researchers and enterprises are experimenting with using traditional Chinese medicine to meet the requirements not to use antibiotics.

"Many livestock farms and enterprises want to find products to promote animal growth without antibiotics, but it is a challenging task," said Du Yunsheng, head of the Kangfa Animal Drug Institute in Changchun, capital of Jilin.

"We have been experimenting with TCM to improve the immune capability of animals and prevent and cure animal diseases for 15 years and have achieved satisfactory results," said Du.

Du said he became a veterinarian in 1993 after graduating from an agricultural school, and at that time, antibiotics were widely used.

"I felt that antibiotics had been overused and had become harmful, and therefore I began thinking about ways to replace them," he told China Daily.

He later formed a research institute for companies testing and promoting the use of TCM in animal treatment.

By 2016, Du had developed 10 corporate standards and 11 patents on use of TCM in raising livestock.

"National standards are yet to be established in this respect," Du said.

The local government has also selected 40 pig raising farms with more than 10,000 sows to promote his TCM-based solution.

Du's solution mainly involves the combination of different TCM herbs in accordance with different growth stages of the animals.

"We conducted experiments on tens of thousands of pigs, chickens and other animals over a period of 15 years," he said.

Correctly used, TCM herbs are effective and quick in curing diseases and promoting growth of animals."

The use of TCM herbs can reduce stress and inflammatory response, increase feed intake and weight, reduce mortality, and increase feed conversion, he said.

The cost of TCM herbs is the main bottleneck for many livestock farmers and enterprises that want to use them to replace antibiotics. But Du said costs are high due to incorrect selection of herbs.

"There are numerous herbs in nature and many of them can work to solve the same problem; so we can select herbs that are seldomly used to treat people to form our low-cost herb combinations," he said.

Since those types of herbs are not used to treat people, generally they are not in tight demand and are therefore not expensive, he explained. "Actually, the herbs we use are cheap and will not increase costs for livestock farmers much."

Through improving the immune systems of animals, TCM herbs may hopefully provide some clue for preventing and curing the spread of the African swine fever virus, he said. "Research should be conducted to find out whether TCM herbs can play a role."

Most of the pecan growers in the US had suffered substantial losses since the start of the US-initiated trade friction against China, the largest market for the US pecan industry.

Randy Hudson, a pecan grower in Irwin County, Georgia, said he and his fellow pecan farmers were "encouraged" by the fact that leaders of the two countries are working on the tariff issue.

The Chinese side announced on Dec 13 that China and the US have agreed on the text of a phase-one economic and trade agreement based on the principle of equality and mutual respect.

While waiting for the details of the trade deal, Hudson said, "we would have hoped that all tariffs would be removed, at least back to the original level."

China was the top market for US pecans. In 2017, US in-shell pecan exports reached more than $300 million, and a staggering 76.37 percent were sold to China, according to pecanreport.com.

Hudson was among the first pecan growers to enter the Chinese market and has maintained a close business relationship with his partners in China.

Since he brought the nuts to the Chinese market in 1999, Hudson and his fellow pecan growers and exporters, as well as their Chinese partners, have managed to grow the business in China, with an increasing number of consumers interested in the nuts' health benefits and rich flavor.

Before the latest trade tensions, Hudson's company exported 4,500 to 9,000 tons of pecans every year, accounting for about 20 to 30 percent of Georgia's total annual output of pecans.

To satisfy Chinese demand, the company bought pecans from other growers. The Chinese market accounted for 90 percent of the company's total sales revenue.

However, increased tariffs had been eroding Hudson's business expansion in China, costing him tens of thousands of dollars in losses and the whole pecan industry more than $10 million.

Irwin County exported nearly $50 million' worth of pecans to China in 2017, but the volume dropped to zero after US-China trade tensions began. In 2018, the county's pecan exports plunged to a record low of less than $10 million.

Pecan prices declined about 40 percent due to oversupply caused by trade tensions, according to Hudson's estimation. This means the local industry suffers more from trade tensions than from damage caused by hurricanes.

The US government provided pecan growers subsidies equal to $146 an acre to help them recover from losses due to trade friction. But that was far from enough.

"It's been very, very difficult to be able to balance our income with our expenses under the burden of the tariff," said Hudson.

Like many of his fellow growers and exporters, Hudson still tries to maintain a good relationship with his Chinese clients.

Although business has paused for the moment, both sides exchange information and keep each other updated about their businesses, hoping to resume cooperation soon. Keeping the relationships afloat is key and often personal.

"We are friends first," he said.

Related countries are expected to complete legal reviews by June next year, Zhang Shaogang, director-general of department of international economic and trade affairs, said at the Ministry of Commerce's year-end meeting.

The RCEP, a proposed free trade agreement among 16 nations, is hailed as what would be the world's largest trade bloc.

During the meeting, Zhang identified three steps to advance RCEP consultations. "The first step is to finalize the remaining talks. At present, what remains are bilateral negotiations, and most of them are technical details that won't affect the final conclusion of the agreement," Zhang said. "Relevant countries will complete legal reviews by June next year."

For the second step, governments or parliaments of related countries may take about three to four months to review the pact, Zhang said.

Finally, the parties are expected to sign the agreement at the RCEP leaders' meeting in November next year. "China is confident about the official signature as planned," he said.

The RCEP is a proposed free trade agreement between the 10 member states of the Association of Southeast Asian Nations: Indonesia, Thailand, Singapore, the Philippines, Malaysia, Vietnam, Brunei, Cambodia, Myanmar and Laos, as well as Australia, China, Japan, New Zealand, India and the Republic of Korea. Negotiations were formally launched in 2012.

On Nov 4, 15 member states of the RCEP essentially concluded all negotiations on market access. India did not sign the agreement on that day. Analysts said India was worried that opening its economy would undermine its already fragile domestic manufacturing base.

Zhang said all parties of the RCEP understand the concerns of India, and the door was always open to the Asian country for consultations. "China is willing to resume talks with India at any time and at any place, in an effort to reach a mutually satisfactory agreement," he said.

Liang Xi, an analyst with Haitong Securities, said: "Once the RCEP is signed, tariff and non-tariff barriers will be removed, which will help stabilize foreign trade and investment."

The move will be beneficial for many enterprises, for instance textile manufacturers, as material costs would decline, Liang said.

In another development, the ministry said that China's foreign trade volume is likely to hit a new high of over 30 trillion yuan ($4.3 trillion) for the whole year.

Li Xingqian, head of the ministry's foreign trade department, said China's export growth rate is higher than the overall level of major global economies.

Private enterprises have played a prominent role, with the proportion of exports going up by 3.5 percentage points to 51.5 percent in the first 11 months, Li said.

China's trade with the Belt and Road economies accounted for 29.3 percent of the total, according to Li.

While external uncertainties are likely to persist, he said the ministry is confident in ensuring steady and quality development of the country's foreign trade.

The comments came after China adopted the revised Securities Law over the weekend and made systemic amendments to enable a phased-in replacement of the approval-based system by the registration-based system for initial public offerings across the whole market.

The revised law, set to take effect on March 1, has signaled a faster capital market reform agenda, especially in terms of implementing the registration-based system in Shenzhen's innovation-enterprise heavy ChiNext in the first half of next year at the earliest, they said.

Higher reform expectations have boosted investors' confidence in securities firms, whose investment banking business should benefit from the registration-based reform that is expected to quicken the pace of IPOs.

A subindex tracking the sector rose by 5.72 percent on Monday, while the benchmark Shanghai Composite Index went up by 1.16 percent to close at 3040.02 points, according to market tracker Wind Info.

"The registration-based reform entails not only enabling more firms to get listed, but a series of reforms in fundamental market institutions," said Wang Tingting, an associate professor of finance at the Central University of Finance and Economics.

"If it succeeds, it will strengthen the market's role in resource allocation and help companies with strong competence to thrive and get the weak out of the market, leading to higher quality of listed firms and market returns," he said.

In the short term, less administrative controls on the pace of IPOs and therefore more financing activities under the reform, however, may put some pressure on market liquidity and lead to a divergent stock performance, Wang said.

Particularly, the market value of "shell companies"－or dormant, low-value listed firms that have the potential of being acquired by a nonpublic company seeking to get listed through the deal－may decline as more companies may choose IPOs as a handier channel to go public, said Wang.

A report from Sealand Securities said that the valuation of large-cap companies may rise in 2020 but that of small-caps may drop.

More small-cap firms may get listed under ChiNext's registration-based reform, while money flowing into the market may instead favor large-cap industry leaders, because the money will mainly be foreign capital and funds from the social security system that pursue long-term stable returns, it said.

Stock connect programs between mainland and Hong Kong bourses have seen net foreign inflows into mainland stocks for 30 consecutive sessions of over 110 billion yuan ($16 billion) in total as of Monday, according to Wind Info.

"The market in 2020 will test investors' ability to select stocks and manage risks. To elevate investors' awareness of risks, as well as of their rights and obligations, is a crucial part of the registration-based reform," Wang said.

We should bear in mind that the period from 2018 to 2020 marks a peak of debt redemption faced by Chinese borrowers, which means an adequate supply of funds must be ensured to shield any risks of large-scale defaults and even a financial crisis.

Conditions of the housing market, meanwhile, have significant impacts on the supply of funds and the overall financial situation. Sharp rises and drops in property prices could both be dangerous.

If property prices rise so much that more money floods the real estate sector through trusts and other financial instruments as well as individuals' speculative investments, the sector will strain the supply of funds for other sectors.

On the contrary, if property prices drop too sharply, real estate developers may see weaker solvency and individuals may default on mortgages, let alone other potential chain effects.

Therefore, if property prices can be stabilized so that the real estate sector can tide over any potential financial stress, the world's second-largest economy may face a much easier situation of financial risks in 2020.

Beijing's pre-owned home market seems to be facing a trend where prices remain high but people are reluctant to buy. When I worked at a real estate agency last year to observe the attitude of property sellers and buyers, I found that though property owners asked high prices on agency platforms, they mark the prices down when it finally comes to a deal.

This phenomenon has alerted me to a question: who will pay for the highly priced properties?

Whether or not drops in property prices could be within a tolerable range－that will be a crucial issue in 2020. If property prices fall too quickly, the authorities should postpone policies to curb the property price bubble, such as the real estate tax, to ensure a stable financial situation.

Given the significance of the property sector for financial stability, we can understand the tone-setting annual Central Economic Work Conference's requirement of property sector policies: to stabilize land prices, home prices and market expectations, and carry out policy adjustments based on each city's actual market condition.

Another important precondition for adequate supply of funds in 2020 is a stable stock market, which in turn entails a better rule of law in the market. Given the current speed of law-based reforms, China's A-share market may welcome an inflection point, or upside potential, in 2020.

The stock market matters in terms of guaranteeing supply of funds because many listed companies have outstanding loans using their stocks as collateral. This means that, on deep stock price declines, listed firms may be forced to sell their stocks to redeem the loans, which will constrain funds available for normal uses.

To prevent such risks associated with stock price plunges, regulators should promote improvements in fundamentals and governance of listed firms, reduce administrative controls, and encourage more mid－to long-term funds such as those from insurers and the social security system to enter the market.

The Central Economic Work Conference called for efforts to improve fundamental institutions governing the capital markets and to improve the quality of listed companies, as well as to complete delisting mechanisms, which will get more low-quality listed firms out of the market.

From the perspective of economic growth, a slowdown in the property sector also mirrors the contraction of old engines of China's economy. I expect that 2020 will still be a key year of economic restructuring, so it is necessary to boost emerging industries, to counter downward pressure from weaker old engines.

Besides the real estate sector, traditional manufacturing sectors such as auto and construction may continue to see contraction and adjustments in 2020.

Meanwhile, strategic emerging industries such as new energy and new materials, the services sector, and modern manufacturing industries such as aircraft and high-speed train manufacturing will strengthen their role of new growth engines in the next year. We need to promote development and even breakthroughs in all the three sectors to maintain a reasonable economic growth.

Also, it is necessary to speed up optimizing the business environment and continue reducing taxes and fees charged on enterprises, to re-vitalize enterprises by reducing all kinds of burdens on them.

Based on our estimations, the government has cut 1.5 trillion yuan ($214 billion) worth of value-added tax and 500 billion yuan worth of fees on enterprises in total for 2020. This could ease the pressure of rising costs on many businesses.

But more could be done. I suggest that the government continue the tax cut campaign in 2020 by reducing number of the value-added tax brackets from three to two.

I would argue that downward pressure in 2020 will mainly arise from domestic factors, especially restructuring, while the trade friction with the United States may exert a weaker negative impact on the Chinese economy.

This is not only because that the two countries have agreed on the text to the much-anticipated phase one trade deal, but because that a large portion of impacts of the trade friction on the Chinese economy has been digested.

In the longer run, external uncertainties may remain, but this should not obstruct China's pace toward a steady and quality development if the three tasks discussed below could be completed.

First, the country should strengthen its advantages of manufacturing and large-scale market by addressing weak links in its manufacturing sector and opening its markets of production resources, services and investments.

Second, China needs to further facilitate technological innovation and motivate more people to engage in innovation.

Third, a more comprehensive trade and investment system, including better financial and legal frameworks, is needed to serve the Belt and Road Initiative.

Popcorn, a variety of snacks, beverages, plush toys, on-screen and off-screen advertisements… believe it or not, such products and services are generating more (non-box office) revenue than ticket sales for some, if not all, cinemas.

Non-box office revenue is the new growth point for cinema chains in China. It is not uncommon for some cinemas to turn profitable in a sluggish market on the back of non-box office revenue.

According to a report from consulting firm Forward the Economist, revenue from non-box office sales is driving growth of cinema companies in China. Among all sectors of non-box office businesses, ads shown before a film's screening is a major revenue earner, and is expected to hit 20 billion yuan ($2.86 billion) by 2020.

Wanda Film Holding Co Ltd reported the operating cost of the box office business accounted for more than 80 percent of Wanda's total, but its profit margin ratio was only 6.07 percent in the first half of 2019. However, Wanda's merchandise sales and dining contributed 67.43 percent profit margin in the first half of 2019. That was followed by ads, which had a 65.43 percent profit margin in the same period.

Chen Shaofeng, head of the Fenghuo Cultural Research Center at Peking University, said: "An increasing number of Chinese cinema chains are betting on non-box office revenue to boost growth amid a market slump."

Among all categories of non-box office revenue streams, film-related derivatives are likely to generate long-term profit, Chen said.

"On-screen appeals, accessories, conventional toys, and plush toys are important revenue sources as they can be sold even after a film's theater release. China is still at a very early stage in the business. Most Chinese cinemas are still betting heavily on ads aside from box-office receipts.

"But take a look at the world's leading film studios. Sales of film-related derivatives can contribute up to 70 percent of their annual revenue."

Chen said Disney's revenue from studio entertainment, including box-office sales, was only $9.99 billion in 2018, accounting for only about 17 percent of its total $59.43 billion revenue.

Instead, Disney earned a large part of its business from media networks, parks and resorts, and consumer products. Among those, revenue of consumer products and interactive media was $4.65 billion, and parks and resorts netted $20.3 billion in 2018.

"Film-related derivatives' development is on the rise in China with the success of animation hit Monkey King: Hero is Back and Ne Zha. It is also a good thing that Chinese audiences have increasing awareness of intellectual property of film-related derivatives," Chen said.

My friends and I can relate to that. Despite many merchandise stores on Taobao starting to sell Ne Zha-related products at very low prices after the film's success, my friends and I would tend to buy only from authorized merchandise sellers.

"There is a great potential for the development of Chinese cinemas' non-box office businesses," Chen said.

Farfetched as it may sound, such an experience could soon be reality, given the fast-evolving technologies like virtual reality and 5G that are "coming soon" to a cinema near you, promising to enhance viewing experiences of moviegoers and boost revenues of film exhibitors in a sluggish market.

"An increasing number of cinemas in China are betting on advanced technologies to attract filmgoers, as Chinese audiences today spend more money on tech-embedded film watching experience," said Chen Shaofeng, head of the Fenghuo Cultural Research Center at Peking University.

A film trade report from PwC said tech-embedded auditoria top the priority list of Chinese cinema companies. The latter are struggling with a range of challenges. For one, fewer tickets were sold this year. For another, rapidly developing online streaming services and rising number of home cinemas are offering stiff competition.

China's cinema companies boast over 60,000 screens in all, which generated almost 61 billion yuan ($8.7 billion) in revenue last year. But this year, box-office receipts slumped, sparking concerns as well as moves to reverse the industry's fortunes.

Data from the National Radio and Television Administration showed box-office revenues in the first half of this year were 31.17 billion yuan, down 2.7 percent year-on-year. Total visits to cinemas also fell 10.3 percent year-on-year to 808 million in the same period.

But not so long ago, moviegoers' demand had outstripped supply of cinema screens. However, supportive government policies and subsidies encouraged film exhibitors to expand rapidly. But, an unintended consequence of that frenetic expansion was that supply exceeded demand.

Combined with fewer blockbusters, weakening consumer spending on entertainment due to slowing economic growth, and super-cheap film tickets on mobiles apps becoming rare, overall box-office receipts as well as profits fell.

Take Wanda Film. The cinema company saw its net profit drop by 57.25 percent year-on-year to 829 million yuan for the first three quarters this year. Jinyi Media's net profit was down by 24.17 percent year-on-year to 105 million yuan.

This prompted cinema owners to explore various ways of luring back moviegoers, with focus on high-tech, although almost all film exhibitors are also actively exploring nonbox office revenues.

At the 28th Golden Rooster and Hundred Flowers Film Festival, which closed on Nov 23 in Xiamen, Fujian province, telecom carrier China Mobile's entertainment branch Migu announced cooperation with the film festival. The two decided to launch an innovative service with technologies like 5G, 4K (screening with high-definition images and sound), VR, and AR (augmented reality) embedded in it. The goal is to provide immersive viewing experience to viewers at the festival.

Although there is no full-length film that has used VR technology yet, a few cinemas have adopted the technology to screen short videos, to give a taste of emerging technologies to moviegoers in some first-and second-tier cities.

Chen said further research and development are needed to adopt the technology in cinemas. Aspects like how to avoid dizziness while watching VR content need to be sorted out. As a trend though, VR cinema has the potential to reshape filmgoers' viewing habit, he said.

Details on adapting 5G to cinema operations are still sketchy but many exhibitors have already taken their first step in that direction.

Cinemas are also embracing the latest technologies in conventional projection systems and acoustics, besides investing in upgrades of revolutionary viewing experiences like Imax.

Richard Gelfond, CEO of Imax Corp, Imax China's parent company, said Chinese audiences' demand for Imax experience has never been stronger as it is now, prompting the company to expand its footprint in China.

Imax China reported box-office revenue of $236 million on the Chinese mainland for the first half of this year, up 24 percent year-onyear.

That contrasts with the Chinese mainland's sluggish box-office performance in the same period.

The market-defying success of Imax has encouraged more cinemas to bet on advanced technologies to boost their profits.

Korean cinema chain CJ CGV Co Ltd partnered with Imax China earlier this year to open 40 new Imax screens. Till Sept 30, the Imax screens were installed at 666 cinemas across China.

Since cinemas are all about audiovisual wizardry, film exhibitors are paying equal attention to sound. For instance, US audio technology company Dolby Labs saw steady expansion in China with the growing uptake of the company's imaging and sound technologies.

Dolby partnered with local cinema giants like Wanda Film. By July, ahead of the release of The Lion King, the number of Dolby-fitted cinemas expanded to 51 across the country.

"Dolby cinemas' rapid expansion ... and the ongoing release of new cinema products reinforce the strong demand for spectacular cinema experiences," Doug Darrow, senior vice-president of Dolby's Cinema Business Group, was quoted by a Xinhua report as saying in July.

Chinese cinema chain Wanda Film Holding Co Ltd, which reportedly has about 13-percent market share in China's cinema business, owned or operated 595 cinemas that had in all 5,279 screens by the end of 2018. Wanda has since set up its premium film viewing cinema chain Prime to attract tech-loving, experience-conscious moviegoers.

Huaxia Film Distribution Co Ltd, another Chinese cinema chain, introduced CinemaCon's Cinity Cinema System earlier this year. Oscar-winning director Ang Lee used the system to produce his latest film Gemini Man in 4K stereoscopic 3D at 120 frames per second (which is considered superior to the standard of 24 frames per second).

Domestic firms Guangzhou Jinyi Media Corp, Bona Film Group Ltd and Wanda have agreed to install 20 Cinity Cinema Systems in their cinemas across China.

In addition to high-tech, popular technologies like smartphone apps are boosting box-office receipts in China. Moviegoers find it convenient to pick and choose their seats and book combo deals online in advance at cheaper prices, although such discounts appear to be ebbing of late.

A film industry report from iiMedia Research said online film ticketing now accounts for 85.7 percent of the total film ticketing market. In the first quarter of this year, Maoyan mobile app alone accounted for 42.6 percent of total film tickets sold, while its competitor Taopiaopiao had 31.5 percent.

Now that they have stopped offering deep discounts on film tickets, thus contributing to slack box-office sales, which in turn added to the factors that squeezed profits of cinema firms, film exhibitors can no longer expect to boost profits merely by setting up more cinemas, Chen of Peking University said.

Agreed Neil Wang, president of consulting firm Frost & Sullivan China. He said in the past, whenever cinema companies found demand outstripped supply of screens, their reflex was to simply set up more cinemas. But that strategy would not work in the current market situation. For, as Chen explained, profits and policy support had enabled rapid expansion in the past.

"Now, the market is heading to saturation. Fewer cinemas are betting on filmgoers' habitual visits to boost profit. Instead, they are seeking new revenue growth through technology-embedded film screenings," Wang said, adding such shows can help attract big audiences even if tickets are priced higher.

"Many leading Chinese cinema chains are shifting their focus from box office-led revenue to non-box office-led revenue."

Chen of Peking University said many cinema companies have started seeing derivatives as a new revenue stream, though the sector still lacks a well-developed industry chain. "Intellectual property protection, copyright licensing… these are all challenges that need to be tackled to develop film derivatives into a sector.

"Going forward, there might be more tech innovations for cinemas to better deliver film content. Tech advancement has always been important to boost China's film market."

 

 

 

 

 

Widespread rapid economic growth has raised more than 750 million people out of poverty during the 40 years of reform and opening-up. But, the last group of extremely poor people still are located in some rural villages, often in remote mountainous regions, who were not able to participate in the general economic transformation.

In 2013, during a visit to Hunan province, President Xi Jinping announced a strategy of "targeted poverty alleviation" that focused on providing the specific infrastructure, education and social support needed by these rural villages. The new programs also shifted focus from the regional and county levels to villages and households.

Especially since 2013, there has been great progress in reducing poverty in rural areas. The number of rural people living in poverty declined from an estimated 99 million rural poor in 2012 to 16.6 million in 2018.

A further 10 million-plus of the remaining extremely poor people are estimated to have been lifted out of poverty this year. The government allocated 91 billion yuan ($13 billion) to poverty alleviation funds this year and the China Development Bank has allocated 400 billion yuan.

Annual income in impoverished rural areas rose from less than 5,000 yuan in 2012 to 10,371 yuan in 2018, which is an inflation-adjusted average annual growth rate of 8.3 percent. Rural areas are slowly narrowing the large disparity in incomes versus city dwellers.

Still more work needs to be done, especially in areas suffering the most intransigent poverty. The two-day Central Rural Work Conference in Beijing on Dec 20-21 concluded that, in order to achieve the goal of eliminating extreme poverty in rural areas by next year, emphasis needs to be put on improving the living environment in those areas－including infrastructure, water supplies, sanitary toilets, education, medical services, social security, cultural activities and ecology.

I recently had the opportunity to visit a small village of about 60 families, mostly of the Yao ethnic group, in mountainous rural Yunnan province to see the ideas of targeted poverty alleviation put into practice.

Hebian Village in Mengla county, Xishuangbanna Dai Autonomous Prefecture of Yunnan province, about 40 kilometers from the border with Laos, is in a fantastically beautiful location－surrounded by mountains and rainforest. But, this isolated location has, until recently, condemned its people to extreme poverty.

Villagers said that earlier they often did not have enough to eat, their health was bad, and their houses lacked modern sanitation, water, and heat. With only an often-muddy dirt track to the outside world, children had to walk at least half a day to school, so many got only a primary education or less.

An all-weather concrete road to the village, completed in 2017, has been one key part of transforming people's lives.

Zeng Kaijun, an official with the Yunnan provincial department of transportation, in a 2018 interview with Xinhua, said: "For years, poor infrastructure has impeded development in several mountainous areas in Yunnan province … All-season roads bring more exchanges with the outside world for people living in remote areas. They also bring health, education and information services to them."

Since the 18th National Congress of the Communist Party of China in 2012, President Xi has often called on government at all levels to ensure rural roads are well-constructed, well-managed, well-maintained and well-operated. From 2012 to 2017, China built or renovated 1.28 million km of rural roads, with 99.24 percent of the townships and 98.34 percent of villages connected by asphalt or cement roads by 2017.

Xi said it was important for poverty-hit areas to improve their transportation conditions and infrastructure in order to shake off poverty and set out on a road to prosperity. Governments at all levels should increase support in this regard.

Villagers in Hebian say that similar roads have been built to all the villages in the area, so the lives of all the people in the surrounding areas have also been greatly improved.

Poverty was earlier greatly reduced in the United States by similar infrastructure programs. For example, the farm-to-market road system started in 1949 by the state of Texas was instrumental in transforming that state from a poor region into what is now the nation's most dynamic economy.

And, the Tennessee Valley Authority, a federal government program to build dams and provide electricity to rural areas, helped raise much of the South out of poverty and backwardness.

A team of researchers from Beijing's China Agricultural University, led by Professor Li Xiaoyun, has lived and worked in Hebian since March 2015 to help the villagers and to demonstrate and research programs that can succeed in reducing poverty in Hebian and similar villages. The team helped villages build new houses with modern facilities, to improve agricultural techniques, and to develop businesses consistent with the comparative advantage of the village. Their work was all under the auspices and leadership of the local government.

Li, who is a well-known national-level advisor for poverty reduction policy, said that CAU's work in the village is part of the ongoing national poverty reduction program. Most of the funds for the project come from the national government, with additional funding from local government and charities－partnered with university technical experts.

He has worked closely with the local government to use the poverty reduction funds and resources more effectively. It was a combined effort of local government, experts, NGOs and philanthropists, and involved partnership with university technical experts.

Some relatively simple steps have transformed lives. For example, the CAU team taught the villagers to separate pigs and chickens from the human houses. An elderly villager said that since this change was made he gets sick much less often.

Hebian is located adjacent to a national forest reserve and is also in the national elephant reserve. So, great care had to be taken to find business opportunities that protected environment.

So the people of Hebian built gorgeous traditional-style houses, designed by Li, each of which has a high-quality guest room. The village business strategy concentrates on becoming a venue for conferences and meetings. For example, a conference of ASEAN village officials recently met in Hebian. For weeks each summer, children from around China come to the village to enjoy the environment and to form bonds with local children.

The people of Hebian, who only recently escaped extreme poverty and isolation, still have a long way to go to take advantage of all their opportunities.

The December Central Rural Work Conference stressed that industries capable of increasing rural people's incomes should be developed and all kinds of skilled workers should be encouraged to set up businesses. Local officials are barred from merely handing out State benefits to farmers. Instead, they are required to set targeted measures to develop local industries and create jobs.

However, the villagers of Hebian have very little experience building businesses. "The villagers are very far away from real market-oriented activity. They don't have any concept, they have no capacity, nor technical skill, and no idea how to proceed," said Li.

They need help from the government and from expert teams. The infrastructure and help provided to them are just the first steps on a longer road to building capacity and prosperity.

Yet, much has been accomplished in just a few years. Huang Yuanzhou, a former village leader in Hebian who is 65-years-old, said that he has dreamed all his life of seeing a civilized rural life. Now, his dream is finally coming true.

In November, jewelry pieces valued at more than 1 billion euros ($1.1 billion) were stolen from the Green Vault of Dresden Castle in Germany.

In April, the oak-framed roof of Notre Dame Cathedral in Paris was burned to the ground in a blaze, causing immeasurable loss.

China also reported several fires at some historic relic sites in Sichuan, Fujian, Jiangxi and Zhejiang provinces in the first half of this year.

Art pieces, while in storage, transit, exhibition, loading and unloading, face multiple risks, from natural disasters to accidents such as fire, explosion, flood, robbery, collision and breakage.

Art insurance is regarded as the most direct and efficient way to control such risks and help policyholders gain economic compensation afterwards, according to Yang Hongbo, general manager of property insurance business of TK.cn, a subsidiary of Chinese major insurer Taikang Insurance Group.

Last year, China had more than 5,000 museums, which organized over 26,000 exhibitions that attracted about 1.1 billion visits, data from the National Cultural Heritage Administration showed.

China was also mentioned in a report of the Hurun Research Institute as the second-largest artwork auction market in 2018 with 29 percent market share globally, trailing only the United States.

The frequent exposure and trade of art suggest a strong demand for related insurance services.

"It's a promising business. Besides museums, galleries, agents, logistic companies and individual collectors are potential clients for artwork insurance," said Wang Guojun, a finance professor at the University of International Business and Economics in Beijing.

"China's artwork market develops fast. It is no exaggeration to say that insurance for fine arts is in high demand."

However, only a few insurers in China have provided such services so far due to the high premium, ordinary awareness levels among art collectors and lack of related talent, laws and regulations, experts said.

Besides, to do such business, insurers have to be able to tell the authenticity of the artwork, asses its value, review risk factors, assess the loss and give solutions for restoration and compensation, which makes the entry barriers high, said Yang.

That's why, some policyholders seek the help of foreign insurers, and some give up on the idea of getting their artworks insured, he said.

TK.cn released its artwork insurance product in late 2018 to target both companies and individuals, according to Yang.

The services include delivery of exhibits, tracking of transportation, survey of the exhibition hall and training of the audience to observe the artwork in a proper way, to conduct risk assessment and control from the preparatory stage of the exhibition, he said.

It provided services to British artist David Hockney's first exhibition in China, which was held in Beijing from August and will be concluded in January; exhibitors and collectors of the 2019 Guardian Fine Art Asia, one of the top antique and design art fairs in China; and the Jupiter Museum of Arts in Shenzhen, which displayed 104 works from 60 modern Chinese artists from December this year to April.

In November, the horse head bronze statue from Beijing's Old Summer Palace was exhibited at the National Museum of China. Wang Lu, manager of non-automobile insurance underwriting department of the Beijing branch of Huatai Insurance Group, told Beijing Youth Daily that the company's insurance products covered risk during the transportation of the exhibit and the exhibition period.

He Hongkai, head of underwriting of cultural relics and artworks of Switzerland-based insurance company Chubb, said as China is actively participating in the global artwork development, more Chinese collect and invest in artworks, and the fine arts insurance is being accepted by more people.

Wang said the business, though with high premium and revenue, carries high risk. He suggested insurers should employ more experts in both insurance and art, and adopt technological tools to enhance risk management.

"The circumstances for each artwork can be quite different. For example, porcelain is susceptible to damage from vibrations; calligraphy and painting should be protected from water or improper lighting; sheepskin is affected by coldness and dryness," he said, adding insurers need to have a professional team to provide targeted services each time.

He said premiums for art insurance policies are defined by the value of artworks and the difficulty involved in safeguarding them.

It's a big deal because the US market is massive. And BeiGene's achievement could inspire many other Chinese drug companies to confidently go global.

Wu Xiaobin, 58, BeiGene's president, is aware of the implications. As one who oversaw the rise of BeiGene to global spotlight, he feels he is on the right track to realize his career dream－contributing to the rise of innovation forces in the Chinese pharmaceutical industry.

The USFDA's accelerated approval for BeiGene's Brukinsa (zanubrutinib) capsules, for the treatment of adult patients with mantle cell lymphoma who have received at least one prior therapy, received positive media coverage in China and elsewhere.

For, it marked a milestone in the Chinese pharmaceutical industry. The drug is the first compound discovered in China to have received the FDA's Breakthrough Therapy designation, representing a significant milestone for not only BeiGene but China's pharmaceutical industry.

Wu said the company decided to focus on independently developed therapies because it does not make much sense any more to be on the sidelines as the forces of innovation gather momentum across industries, especially in innovative drugs and biomedicine.

The fillip for this trend, Wu recalled, came from China's medicine regulatory reforms that started in 2015.

In Wu's view, foreign companies' entry into the China market on the back of the reform and opening-up policy changed the landscape of the Chinese pharmaceutical and healthcare industry.

The policy brought in new concepts and practices to the academic, clinical and business communities, and helped ignite pharmaceutical innovation and boosted generic drug quality in China.

However, China must rely on innovative and patented drugs independently developed by its own pharmaceutical companies to ensure that its people could have easy access to affordable and high-quality medication, he said.

"It is okay for a small country to rely on drug imports, but (it's) not okay for a big country as China with 1.4 billion people," he said, adding he is very excited about the latest developments in China's pharmaceutical industry, which is evolving at a high speed, surprising everyone.

"Both the medical community and the regulators are quite open-minded to changes and reforms," he said.

"From the central government to different levels of local governments, and to industry, people are very keen to develop China's own innovative drugs."

Although China started from almost scratch to establish an industry chain for innovative drugs, it is catching up very fast in related fields such as basic research, clinical trial, factory production, commercialization, and quality control.

Chinese innovative drug companies have been developing very fast with increasing innovation capabilities, he said.

In 2017, China became a full member of the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, an organization that standardizes global drug regulations.

In a recent report, global consultancy McKinsey also concluded China's pharmaceutical industry is undertaking a critical transformation toward high-quality and innovation-focused development, as reflected by the explosion of new drug and clinical trial approvals in recent years. An increasing number of approvals are for drugs or therapies from Chinese companies.

Since late 2018, Chinese biomedicine companies have shown the world their capabilities in PD-1/PD-L1 inhibitors with two homegrown treatments, which is a field where both domestic and foreign pharmaceuticals are still in a race. The emerging therapeutics revolutionize cancer treatment as they help the immune system to target and kill tumors.

The two drugs were approved only six months later as two foreign anti-PD-1 treatments entered the China market, and followed shortly by a third domestic PD-1 treatment early this year.

BeiGene's anti-PD-1 treatment is also pending approval from the Chinese drug regulatory authorities.

The company has been also implementing about 20 clinical trial programs globally on Brukinsa's efficacy on other types of blood or lymph tumors, with high hope to get more market approvals in the near future.

The company, which has nearly 10 new drug candidates in pipeline, is a partner in a global strategic oncology collaboration with Amgen, a California-based biopharmaceutical company that is a global leader in this niche.

Chinese biotech firms are increasingly offering China-developed high-quality treatments to Chinese patients, which will help challenge the expensive prices of imported drugs, Wu said.

With innovative drugs such as anti-PD-1 and Brukinsa, Chinese drug companies also have the ability to offer treatment options for patients abroad, especially those in the Belt and Road economies, he said.

Wu joined the Beijing-headquartered company in 2018 from Pfizer China, which he headed since 2009.

His jump to the Chinese biotech startup founded in 2010 surprised many as he had more than 26 years of rich experience in the pharmaceutical industry, including 17 years leading China operations of big-name multinational pharmaceuticals such as Wyeth and Bayer.

He returned to Beijing in 1996 to co-build Bayer's China branch as marketing head. Prior, he was in Germany where he received a master's degree in molecular biology and a PhD in biochemistry and pharmacology from the University of Konstanz. He started his career at Bayer's sales and marketing in 1992.

In 2004, he rose to general manager of Wyeth China. In 2009, as Pfizer acquired Wyeth, he was named head of the combined group.

He also served as vice chairman of the R&D-based Pharmaceutical Association Committee of the China Association of Enterprises with Foreign Investment since 2008.

Under his belt are numerous industry awards, including the "Person of the Year" in Healthy China Awards 2017, "2017 Top 10 Most Influential Persons in the Chinese Healthcare Industry" and the "2017 Social Responsibility Eminent Person Award".

 

 

 

 

 

Traditionally, the cultural products industry had been ridden with high uncertainty, risks and low level of stability. Hence, investors tended to steer clear of it.

But, as the country is mulling more supportive policies to give a fillip to the cultural products industry, a host of sectors are now looking at it. They include investors, financiers, insurers, consumer finance providers and tax policy experts.

The draft first cultural industry promotion law, which began to take shape with a request for public opinion this month, suggests more opportunities may be awaiting the sector, they said.

The cultural industry has wide scope spanning fields like news, publishing, televisions, films, performance, animation, online games, music, relics, crafts and design.

As per-capita GDP of China is about to surpass $10,000 this year, the consumption structure of Chinese people is expected to see a significant change, increasing the demand for spiritual products as people pursue a better life, in line with the all-round consumption upgrade, said Fan Jianping, chief economist of the State Information Center.

He made the remarks at a forum organized by the PBC School of Finance at Tsinghua University and Dongcheng district of Beijing.

Zhou Yanli, former vice-chairman of the China Insurance Regulatory Commission, said at the forum that most of the cultural firms are small and micro players with less than 50 employees or annual revenue of less than 5 million yuan ($710,000), while some are no more than personal studios or individuals.

"They are asset-light and rely much on creativity, which means they don't have a stable profit model and life cycles are relatively short," he said, adding more financial support should be given to such small and micro businesses.

Mature financial tools can help de-risk investments in, and other forms of association with, cultural companies.

Insurance, for example, can provide risk management and economic compensation services, as well as enhance their credit to get more financing elsewhere, he said.

It is common for Hollywood filmmakers to apply for bank loans by cooperating with insurance and guarantee services providers, he said.

Financial technologies, or fintech, can also help reduce uncertainty of returns on investments, so that the cultural field can attract more capital. Blockchain, for example, can help in authentication of artworks, Zhou said.

Wang He, former vice-president of the People's Insurance Company of China, said finance firms tend to expect their clients to be controllable and whose value can be specifically defined, but the cultural industry is full of uncertainty. "We can only know the value of a film through its box-office data after its release.

"Financial firms should understand, accept and respect the nature of the cultural industry, and enhance risk management by various technological methods."

Wang further said such services are already available in the market. Beijing-based tech company Trinity Earth, for instance, is able to assess a play or film and predict its popularity in advance using big data.

He said cultural content producers can also use the intellectual property as mortgage.

At the event, Dongcheng district of Beijing was approved by the Ministry of Culture and Tourism, the Ministry of Finance and the People's Bank of China to construct a national demonstration zone for cooperation between the cultural industry and finance.

The district will work on establishing a credit rating system for cultural enterprises, expanding direct financing and innovating in related financial products and services, to ease the difficulty and lower the cost of financing for private, small and micro cultural firms, according to Ma Feng, deputy director of the industrial development division of the Ministry of Culture and Tourism.

Zhao Lei, deputy director of Beijing municipality's publicity development, said culture and finance are two pillar industries of the city economy. Revenue of the cultural industry in Beijing grew 11.9 percent to reach 1.07 trillion yuan in 2018, data from the local government showed.

Su Zhong, chairman of Daye Transmedia Group, a Beijing-based firm specializing in film, TV opera and animation, said investors often show more interest in tangible assets and the lack of funds has hindered the development of culture.

"Intangible assets are of great value, which has huge potential and will benefit the whole society in the long run," he said.

Liu Shaojian, director of Beijing's State-owned cultural assets administration center, said the city is working on establishing a cultural development fund, a risk compensation fund, a credit rating system and appraisal system for intangible assets, to help more cultural companies get financing and lower the risk of investment firms.

Jim Athanasopoulos, chief financial officer of Imax China, said: "We are continuing to push the envelope, differentiating our (film screening) experience, and to offer consumers something different.

"A growing number of Chinese consumers are seeking premium film-watching experiences, and we are working to deliver quality and differentiated content－things Chinese audiences want to see and enjoy … and we see that continuing in the future."

To date, Imax has introduced some of its advanced technologies, including Imax Film Camera, Aiexa Imax Camera, and Imax with Laser, in China.

According to the company, an increasing number of Chinese filmmakers are using Aiexa Imax Camera. It is a two-dimensional digital camera with a high level of digital image capture and playback, producing lifelike images defined by enhanced clarity, details, colors and a higher dynamic range for contrast.

The upcoming Detective Chinatown, which will be released during the Spring Festival peak movie-going season, was shot entirely with Aiexa Imax Camera, Imax China said.

Imax with laser is a laser projection system with 5.1 or 12.1 channel sound system. The technology is designed to offer an immersive cinematic experience with Imax's big screen to moviegoers.

"We are continuing to roll out our theaters. We give guidance to around 90 percent of new theaters this year," Athanasopoulos said.

"We saw strong demand (for technologies) in (shooting and screening) blockbusters, not only those (from) Hollywood but films in Chinese language, which are increasingly welcomed by Chinese audiences."

His remarks follow Imax China's strong box-office performance in a sluggish market.

Imax theaters earned $236 million in ticket sales on the Chinese mainland in the first half of this year, up 24 percent year-on-year.

While China's overall market sales were lower than expected, data from the National Radio and Television Administration showed box-office receipts were 31.17 billion yuan ($4.46 billion), down 2.7 percent year-on-year.

"The contrast shows audience's growing interest in quality content and enhanced watching experience, despite China's box-office receipts and total cinema visits both dropping in the first six months of this year, a possible result of consumers' weakening spending," said Wang Yi, a senior analyst from the Maoyan Research Institute, which tracks box-office trade.

Despite the market downturn, Athanasopoulos said Imax China will continue to focus on expanding in the Chinese market.

Imax China has partnered with South Korean cinema chain company CJ CGV Co Ltd to open up to 40 new Imax theaters featuring Imax with laser projection systems in July.

Till Sept, Imax has 666 commercial theaters in China.

The company has been implementing a "brand globalization" strategy since 2006, and maintained a rapid development worldwide, with its compound annual growth rate reaching over 20 percent in overseas markets.

"Hisense is counting on overseas markets for future growth," said Zhou Houjian, the company's chairman, adding it is targeting the middle and high-end segments of the market.

Zhou noted the revenue from overseas markets rose 30 percent year-on-year to 37.8 billion yuan ($5.4 billion) last year. Sales of its self-owned branded products in the United States and Canada increased by 57.5 percent and 106 percent year-on-year, respectively.

The European market is a key area for Hisense's internationalization layout, the company said in a statement. Its sales in the European market increased 19.4 percent from January to July this year, compared with the same period of last year, and the growth rate in some key markets such as Germany and the United Kingdom surpassed 20 percent.

Meanwhile, the Qingdao, Shandong province-based company has accelerated its entry into Europe through mergers and acquisitions. In August 2018, Hisense completed the acquisition of Slovenian appliances producer Gorenje.

Founded in 1950, Gorenje had been one of the leading manufacturers of home appliances in Europe and owned high-end brands such as Atag and Asko. It had about 30 percent market share in the household appliances market in East Europe. With Gorenje, Hisense has established full-scale products portfolio and a complete system covering research, production and sales.

Apart from the traditional home appliances sector, Hisense is tapping into the mobile phone industry in Europe. The company launched two new types of smartphones to lure consumers from Russia.

"Russia is of great significance in Hisense's international push. We will continue to expand our presence in overseas markets, with a focus on Europe, Africa and the Americas," said Fang Xueyu, deputy general manager of Hisense Communications Co Ltd.

The company's overall sales surged 274.4 percent year-on-year during the 2018 FIFA World Cup in Russia. In Europe, Hisense has built a sales network covering Spain, Italy, the UK, France and the Czech Republic, with its regional head office in Germany.

In addition, Hisense has announced its global partnership deal with the Union of European Football Associations for men's national team football competitions ahead of the UEFA Euro 2020.

The company will engage in various global marketing and advertising activities. Hisense will be the official television supplier to the competition. It is expected that the partnership will see the brand reach over 200 territories and greatly enhance its international brand exposure.

This is the second time the Chinese giant has filled the position of a global partner among other UEFA sponsors. The company's brand awareness has already increased significantly in Europe through sponsorship of the UEFA Euro 2016 and 2018 FIFA World Cup. It is also a team supplier to Red Bull Racing and sponsor of the Australian Open in 2014.

Zhou said sponsorship of such top sports events will increase the brand's awareness and influence, and let the consumers recognize the products more quickly.

Being at the forefront of electronics and the home appliances industry, Hisense is banking on new technology, which will fuel business growth and power its global brand awareness.

It is doubling down on the cutting-edge laser TV and has unveiled several large-sized and hi-tech TV products at the IFA Electronics Show in Berlin and the Consumer Electronics Show or CES in Las Vegas.

It started to actively lay out the laser display field in 2007, and officially launched the first ultra-short laser TV globally in 2014. Currently, Hisense has more than 600 international patents related to laser displays.

Founded in 1969 as a small radio factory in China, Hisense has grown into a multibillion-dollar global company with a workforce of over 75,000 worldwide.

Its sales revenue in the overseas markets reached $37.9 billion in the January-October period this year, an increase of 28.71 percent year-on-year, according to the company.

It has established 54 overseas branches in Europe, the Americas, Africa, the Middle East, Australia and Southeast Asia; has five overseas production bases to ensure it has its own supply chain and 12 research and development institutions worldwide.

In 2015, Hisense purchased Sharp's TV business in Mexico and acquired Sharp America's TV line for the North and South American markets. In 2017, the company acquired a 95-percent stake in Japan's Toshiba Visual Solutions Corporation, as part of its efforts to expand globally.

"Acquiring local companies is the easiest way for Chinese household appliances producers to expand their presence in the global market," said Zhang Yanbin, an independent researcher in the home appliance sector, adding the European market is of great significance to Chinese appliance manufacturers.

The Chinese home appliance market is almost saturated, so domestic makers are looking overseas to find new business growth points, Zhang explained. "The acquisition will allow the Chinese company to obtain local customers quickly and reduce production costs."

Industry data showed sales of Hisense refrigerators in South Africa ranked first in both 2017 and 2018, while its market share of TVs in Japan reached 20 percent in the first half of this year and ranked third, surpassing Japan's local brand Sony.

"We are processing the fish head with newly-introduced fresh-freezing equipment to cater to the Chinese community, and we are also developing items including fish patties, dumplings and sausages to target US customers," said Yu, president of Two Rivers Fisheries, a company dedicated to carp processing located in Wickliffe City, county seat of Ballard in the US state of Kentucky.

The lineup of fish products, ranging from fish meat to fish sausages, is her answer to the invasive Asian carp－a radical plan to battle the notorious carp plague with knives, forks and chopsticks.

Following their introduction to the United States in the 1970s for algae and waste treatment purposes, the Asian carp have multiplied rapidly and have been crowding out indigenous fish species in the Mississippi River and surrounding waters.

US authorities and the fish industry fear that the Asian carp's northward proliferation, if not curbed, spells disaster for the $7 billion fish industry of the Great Lakes region.

Yu, who has been in the seafood business for over 15 years, acutely sensed opportunities when she read reports about the troublesome fish back in 2010.

She then relocated from California to the obscure Kentucky county on the Mississippi River to start her business in 2012. "Our mission is to reduce, reuse and redefine Asian carp," said Yu, whose operation hires more than 20 local people.

The entrepreneur prides herself on her choice of location. As the name Two Rivers Fisheries indicates, her plant sits on the confluence of two rivers－the Mississippi and its major tributary, the Ohio. Unlimited supply of Asian carp and agreeable climate in middle Mississippi the whole year round have guaranteed her company's smooth operation.

After receiving carp from local fishermen, the plant processes, flash-freezes and boxes up the fish before shipping them out to destinations across the globe.

"The yield varies a bit with the season. We have seen rapid growth in production recently, with about 1 million pounds in October alone," said Yu, adding about 80 percent of the output was exported to Eastern Europe and the Middle East.

Over the past seven years, the company has taken 10 million pounds (450,000 metric tons) of Asian carp out of the Mississippi River, which were sold to a total of 11 countries.

While making headway in fulfilling her business ambition, Yu said the journey has never been without challenge. A lack of commercial fishermen used to be one of them, as most locals deemed there was no market for carp.

Because of the complex bone structure, US consumers showed little appetite for the fish, according to Yu. However, the growth of her business, driven by an export-oriented vision as well as a bold attempt at innovation, has been helping transform the landscape.

"When we first came here, there were only three groups of fishermen in the neighborhood. Now, the number has jumped to some 60 groups," she said.

Yu said purchasing carp from the fishermen, hiring staff and transporting the products account for a large share of her costs.

Yet, the forward-looking entrepreneur is quite bullish about the prospects as she believes in the potential of a robust fish processing chain along the Mississippi River due to its abundant aquatic resources.

This April, Yu, together with multiple Chinese investors, launched the International Fisheries Industrial Park in the county area.

The 72-acre industrial park dedicated to Asian carp harvesting and processing has attracted about 10 Chinese companies to land by far, said Yu.

The new industrial park, designed for vertical processing integration, aims to produce value-added products with the Asian carp.

Yu wishes the park to be a success in exploring new opportunities while mitigating the "carp crisis."

Todd Cooper, judge-executive of Ballard County, praised Chinese wisdom as well as business acumen in developing the project.

He is also hopeful that the new business cluster would help bring in more Chinese companies to establish their presence as economic development and job creation are crucial to the local community, which had experienced years of business slack. "We had lost jobs for 12 straight years at one point," said Cooper, adding the county has started to reverse that trend since 2018, "and I will say it's because of the Chinese investment."

The International Fisheries Industrial Park is expected to create at least 150 full-time jobs and plenty of indirect and part-time work for fishermen and construction companies, according to estimates by the Kentucky Cabinet for Economic Development.

Statistics from local economic authorities showed that Chinese-owned companies operating in Kentucky currently employ nearly 9,000 people.

Xinhua

Eclipsing lackluster spending tides in sectors like food and beverages, makeup sales revenue from imported lipsticks to eyeliners this year rose 28 percent year-on-year, outstripping the nearly 10 percent growth rate of the overall fast-moving consumer goods sector, according to latest figures by consultancies Bain and Kantar Worldpanel.

Charles Kao, 58, China president of South Korean cosmetics group Amorepacific, will likely welcome the trend: the company recorded staggering sales during the Nov 11 online shopping carnival.

Ten of its brands participating in the gala saw sales surge 62 percent from a year ago, with its Sulwhasoo, Laneige and Innisfree brands each netting over 100 million yuan on that day.

But in the eyes of Kao, who has worked with major international beauty brands for over 20 years, the 11-11 extravaganza represents more than product discounts－it is a unique opportunity to tap into the vast Chinese consumer market that has seen increasing sophistication in the past few years.

"It is an occasion where brands find their positions and enhance customer engagement," he said, referring to the 2.6 million new customers the company enlisted, thanks to the 24-hour e-shopping festival.

China accounted for about one-fifth of Amorepacific's 6.78 trillion won ($5.84 billion) revenue last year, and a lion's share of its overseas sales outside of home turf. The shifting needs and preferences of local digital-savvy consumers found reflection in their product research and purchases done online.

Kao, embraced China's burgeoning e-commerce back in 2013 when he took the helm of Amorepacific's China business. He oversaw the opening of the official online stores of its multiple brands at a time when digital shops were not perceived as a prerequisite to success but seen as potentially eroding the premium image of established brands.

"Digitalization has been an ongoing area of investment for us in the past several years," said Kao. "E-commerce is an avenue we value a lot and will be our business focus from now on."

Today, Amorepacific's digital push isn't confined to registering record sales－it aims to implement the "In China for China" ethos through customized product co-creation powered by consumer insights.

This is best exemplified by the recent setup of a dedicated office with Chinese internet giant Alibaba in Hangzhou. The aim is to incubate new products tailored to the Chinese market, facilitate online-to-offline sales, gain precise consumer insights and explore opportunities in overseas markets.

"For new product launches in China, we are moving from 'intuition-driven readiness' to the employment of data that depicts the clear preferences of customers," said Kao, under whose leadership the group has seen nearly 30 percent of revenue generated through online channels.

Ideally, the Amorepacific-Alibaba office is designed to shorten the average length for new product introduction to six to nine months, from the typical 24 months taken by many Japanese and South Korean cosmetic companies, said Hu Weixiong, general manager of fast-moving consumer goods practice at Alibaba's Tmall site.

"In the early stage, the office can enhance coordination between Alibaba and Amorepacific's headquarters and hopefully speed up the decision-making process for the introduction of new products in China," said Hu.

Under such an initiative, the first batch of two co-created skin care products, banking on data feeds that track people's favored formula and packaging, is scheduled to debut in China early next year, Kao noted.

Navigating the world's second-largest consumer market has never been easy. The CEO highlighted the dual focal points for the next phase of growth: deployment of both high-end and mass market products.

A divergence of customer preference is clearly emerging. Young Chinese consumers are willing to pay more for high-quality items and services. "Therefore, we are investing heavily on enhancing immersive experience in the premium product line, such as the spa services in our Sulwhasoo storefronts," he said.

At the same time, small-town youngsters form a new growth point for the industry with 7.8 percent year-on-year growth in spending in 2018, according to consultancy Kantar Worldpanel.

Online sales of beauty products, including cosmetics and personal care, in small towns soared 38 percent in 2018, double the growth rates in big cities.

To harness such a trend, Amorepacific has enhanced its mass market offerings both online and offline. It is also looking to leverage a wide array of social media apps from Douyin, Kuaishou to Bilibili, to tap into the emerging consumer group who generally have more spare time watching content streamed online.

"Emerging beauty trends normally debut online. In the foreseeable future, companies in other sectors are likely to follow suit and invest in the marriage of digitalization and customization," said Jason Yu, general manager of consultancy Kantar Worldpanel China.

Kao doesn't feel like being shackled to his brightly-lit office in downtown Shanghai, making decisions purely based on data and research reports. Rather, he embarks on trips to the country's inland cities and talks to beauty assistants and local shoppers for first-hand feedback and insights.

That's his guiding principle for not only business operations but philanthropic endeavors. Under a project dubbed "Make Up Your Life", Kao led his team to seven impoverished townships across five provinces, overseeing free cervical and breast cancer screening examinations for more than 70,000 women.

Joining hands with the China Women's Development Foundation, the company, since 2016, has spent 38 million yuan so far not just conducting checkups and health-related lectures, but hosting regular charity sales, fund-raisers, and classes teaching skin care and makeup skills to those who had undergone surgeries.

Kao said he is mulling introduction of more diverse corporate social responsibility programs in China, such as a women empowerment project aiming to equip those with relatively low income with professional capabilities in training, career path, and even financing.

Asked about the secret of staying refreshed in light of his packed schedules, Kao said: "It's the magic of the beauty industry."

Such expansion is necessary to maintain robust growth over the next three years, said a senior executive of Fung Group.

With its business covering trading, logistics, distribution and retail sectors, the company will adopt more digital solutions to upgrade the entire supply chain management system and establish a global smart supply chain to shorten the response cycle.

"Over the past few decades, Asian countries exported consumer goods to the Western markets, but not the other way around. However, twoway trade has deepened of late because Chinese consumers started looking for high-quality products or services from outside the national market," said Stephen Fung, the group's president for the Chinese mainland market.

He said the retail growth rate driven by the Asian market is twice that of others, and the Chinese market has gradually grown into the largest in Asia. The purchasing power of Chinese consumer has also contributed to the global inclusive economic growth and sustainable development.

Since the establishment of Fung Group in Guangzhou of South China's Guangdong province back in 1906, the Chinese mainland market has always been a valuable asset to the group's business strategy and development, he said.

Nearly half of Fung Group's global sourcing currently comes from the Chinese mainland. With its plan of expanding the consumer market, the firm predicted that its revenue and profit from the Chinese mainland will keep growing notably over the next three years.

Supported by over 42,000 employees in more than 40 countries and regions, the company also believes that the Guangdong-Hong Kong-Macao Greater Bay Area will serve as the basis for economic development that "provides ample space for the company to grow".

Fung, who previously studied and worked in the United States and Japan, stressed that the emerging digital technologies are driving innovation and creating new opportunities, which companies in supply chain management cannot fully optimize if they work alone.

So, Fung Group and JD Group signed an agreement to boost mutual cooperation in March. The company launched the first AI-enabled checkout system for retailers in Hong Kong. It uses image recognition technology and advanced AI algorithms. The checkout counter can identify up to five products in one second with over 97 percent accuracy, which can reduce the overall checkout time by 30 percent.

It also formed a partnership with Alibaba Group Holding Ltd in 2018. The two parties started to leverage their online and offline channels to initiate new opportunities that can help more lifestyle brands enter the Chinese mainland market.

With the support of its partners, the company has digitalized all key fields in supply chain, including product development, material costing, design, sampling, production and delivery to further compete with other established competitors in the market, Fung said.

"Take 3D design. It shortens the time from sampling to application (from hours to weeks) as well as cuts unnecessary sampling and traffic, which will increase the overall speed, improve the supply chain efficiency, and help its partners gain additional profits," he said.

Apart from investing more on digitalization, the company established the group's head office for the Chinese mainland in Shanghai this year, to forge a closer bond with local exchanges, as well as create a better connection with local business partners, in order to integrate resources and diversify sales channels.

Fung said the group will further exploit potential in markets participating in the Belt and Road Initiative and build platforms for many Chinese companies seeking to go global. This should help them to boost exports, and support small and medium-sized enterprises to grow in global markets.

Fung Group plans to bring a variety of products to Belt and Road economies, and introduce the right products to meet the growing needs of local consumers.

Yu Jianlong, secretary-general of the Beijing-based China Chamber of International Commerce, said the tangible development brought about by the BRI will offer Chinese companies more opportunities to enhance their earning ability in global markets, given the massive population base, growing demand for infrastructure, and movement of resources in the BRI footprint.

"From a long-term perspective, population determines economic growth. Even though it will take a certain amount of time, the number of consumers will determine the potential of economic development in both developed and developing economies," he said.

Yu said China's consumption upgrade is not only creating new demand in China but facilitating rapid development of e-commerce, transportation and logistics sectors in many BRI markets. This has also led to profound restructuring of supply chains of daily necessities, industrial goods, foods and beverages.

"The fiscal policy should strengthen countercyclical adjustments and meet the fiscal balance requirements next year," Liu said in a work report, which was issued on the ministry's website on Friday, after the two-day annual meeting in Beijing.

Tax and fee reduction will be the key measures for a proactive fiscal policy, through which more resources can be transferred from the government to market entities, and is another way of increasing fiscal expenditure, said Liu. "We will reduce the taxes and fees that need to be reduced."

Experts said no new tax and fee cuts will be announced in the near term and the government will instead focus on implementing existing policies.

Full-year tax and fee reductions for this year is expected to be more than 2 trillion yuan ($286 billion), and the manufacturing industry, as well as the small and micro enterprises will benefit the most. For instance, about 70 percent of the value-added tax cuts happened in the manufacturing sector, according to finance ministry data.

Fiscal and taxation system reform will continue next year, along with the accelerated tax legislation process and strengthening fiscal expenditure management, the minister said in his speech.

Maintaining a balance between fiscal income and expenditure will be more difficult next year, the minister said, predicting a slower increase in revenue growth for central and local governments. That may limit the space for implementing an expansionary fiscal policy, said experts.

"How much the government can spend is determined by how much the income is", which is a key principle for setting next year's fiscal budget.

Government spending will focus on reducing poverty, environment protection, improving education and supporting small-and medium-sized enterprises, according to the work report.

The government will encourage local governments to expand the scale of financing guarantee business of small and micro enterprises in the real economy to reduce the financing guarantee rate. Local governments will be urged to repay the debt borrowed from private and small companies. A pilot program to deepen financial services reforms for private, small and micro enterprises will be launched, the report said.

In terms of fiscal and tax reforms, the legislation on value-added tax law, consumption tax law and tariff law is in the pipeline, and the finance ministry plans to expand the water resources tax pilot.

At the two-day annual meeting, the Ministry of Finance asked local officials to carry out the debt dissolving plans in a practical and detailed way, accelerate the market-oriented reform of local government financing platforms－most of which are indebted State-owned companies guaranteed by the local governments, and strengthen supervision to curb the growth of implicit debt.

The Finance Minister suggested to "make good use of the local government special bonds" in 2020, a debt instrument that collects funds for infrastructure construction, which usually has relatively lower financing costs compared with corporate bonds. "The scale of projects using special bonds should be expanded, and a mechanism for reserving, assessing and selecting special bond investment projects is needed," said Liu.

The local government special bonds will be an important fiscal tool next year to expand investment and stabilize economic growth, Li Yang, director of the National Institution for Finance and Development under the Chinese Academy of Social Sciences, said at the 2019 China Bond Market Forum on Friday.

This year, some local governments have already taken measures to reduce the implicit debt, but further efforts should be taken to prevent debt risks, which calls for tighter supervision of local governments' budget performance, he said.

Another task is to step up reforms for managing State-owned funds and enterprises, to push for the establishment of a company, which is in charge of investing and operating the State-owned capital, as delegated by the State Council. The introduction of regular rules for capital owned by State-owned financial institutions will help accelerate, streamline and centralize the fund management, said Liu.

China's banking and insurance regulator issued draft rules on banks' cash-related wealth management products on Friday, part of ongoing regulatory efforts to further strengthen regulation of commercial banks' wealth management business to resolve financial risks. The draft rules clarified the definition and regulatory requirement of cash-related wealth management products sold by the country's commercial banks and their wealth management subsidiaries. Friday's rules are a supplementary regulation after the regulator released rules to strengthen regulation of banks' wealth management business in July to prevent shadow banking risks.

Sixth C919 prototype completes test flight

The sixth and last prototype of the C919, China's first home-built narrow-body passenger jet, completed a successful test flight in Shanghai on Friday, marking a milestone in the model's development as it moves to gain airworthiness certification before entering the market. The jet took off at 10:15 am on Friday from Shanghai Pudong International Airport, and flew for two hours and 5 minutes, before returning to the airport. So far, all of the static tests of the C919 have been completed, and its manufacturer Commercial Aircraft Corp of China said it has started manufacturing the first batch of aircraft that are set to be delivered to customers.

Tarim oilfield output increases in 2019

The Tarim oilfield branch of PetroChina, China's largest oil and gas producer, said it has produced more than 28 million tons of oil equivalent of crude oil and natural gas in 2019. The output, which was about 1.76 million tons more than that of 2018, included about 5.67 million tons of crude oil and about 28.05 billion cubic meters of natural gas. The oilfield's output is expected to reach 30 million tons of oil equivalent by 2020 and 36 million tons by 2025, the company said. Located in the Xinjiang Uygur autonomous region, Tarim Basin is one of the most difficult to explore due to its harsh ground environment and complicated underground conditions.

]]> 2019-12-28 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/28/content_37530666.htm China's financial authorities released a notice on the disposal of corporate bond defaults on Friday in an effort to resolve financial risks and step up punishment for debt evasion and other illegal activities in the country's bond market.

The notice underscored the authorities' intent to steadily push the disposal of corporate bond defaults through market and rules-based approach and to effectively contain financial risks amid slower economic growth.

Financial authorities have pledged to raise the efficiency of bond default disposal by introducing more market-oriented mechanisms and vowed to strengthen regulation on intermediary agencies including bond underwriting and credit ratings agencies and ordered them to effectively carry out due diligence, according to a statement jointly issued by the People's Bank of China, the National Development and Reform Commission and the China Securities Regulatory Commission.

The regulators also ordered bond issuers to strictly fulfill their obligations including information disclosure and to actively pay off their debts.

The rules also highlighted the necessity to improve the regulatory coordination and step up law enforcement and punishment of illegal activities including debt evasion.

The issuance of the notice came as China's economy is facing growing headwinds from domestic and external uncertainties. The financial regulators have been paying close attention to the development of the country's corporate bond market to fend off financial risks as there are chances of a rise in corporate debt defaults next year.

Liu Guoqiang, vice-governor of the PBOC, said at a recently held meeting that regulators will push market liquidation, maintain order in the bond market and work to ensure that the bond market plays a better role in providing funding for companies.

Zou Lan, head of the financial market department at the PBOC, said at the meeting that default cases may continue to rise next year and the risks are higher in low-quality private firms, property developers that are highly reliant on unconventional financing channels and local government financing platforms.

Zou said that China's overall debt default rate is not high but it is growing at a faster pace, and it is necessary to raise the efficiency of default disposal as the low efficiency has hurt investors' confidence and weakened their investment enthusiasm in the bond market.

China has the world's second largest bond market with its total value reaching nearly 100 trillion yuan ($14.3 trillion). The value of the Chinese corporate bond market has exceeded 20 trillion yuan, according to regulators.

Yi Huiman, chairman of the China Securities Regulatory Commission, the country's securities watchdog, said earlier that the regulator will strengthen the regulation on corporate bond issuance, prevent excessive financing and strictly control risks.

]]> 2019-12-28 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/27/content_37530546.htm The contracts signed between SBM Offshore, a Netherlands-based company engaged in the offshore energy industry, and its Chinese partners on two more floating production storage and offloading (FPSO) hulls will further enhance their ties and thus help the company to expand its presence in China, said company's top official.

SBM Offshore signed contracts with Shanghai Waigaoqiao Shipbuilding and China Merchants Industry Holdings earlier this month on building the two new multipurpose hulls, also the company's fourth and fifth hulls, bringing its building tally to five in the country.

An FPSO vessel is generally used by the offshore oil and gas industry for the production and processing of hydrocarbons, and for the storage of oil.

Short for floating, production, storage and offloading, an FPSO vessel is designed to receive hydrocarbons produced by itself or from nearby platforms such as a subsea template, process and store the oil until it can be offloaded onto a tanker or, less frequently, transported through a pipeline.

The two hulls built for SBM Offshore will also be using the company's Fast4Ward standardization program, same as the previous three hulls the shipyards are building for them, a senior executive of the company said.

SBM Offshore's new build hulls will have a storage of up to 2.3 million barrels, as well as a daily production capability of up to 250,000 barrels of oil.

Srdjan Cenic, SBM Offshore's China general manager, said the multipurpose floaters have a large volume of work in steel and welding.

SBM Offshore has been helping its partners in developing supply chains, financing and improving quality and efficiency, as the company has been focused on expanding presence in China since its entrance in China in 1973, he said.

The company is expected to have about 80 vendors in China by the end of this year, and is targeting 250 by 2021, according to the company's plan.

"We see China and its partners as important enablers in our strategy for potential growth and expansion in deepwater projects," said Bernard van Leggelo, managing director of strategic growth of SBM Offshore.

The demand for FPSO projects is on an upturn given the fact that the oil price hovered around $62.8 per barrel in 2019, which is 11.5 percent below the 2018 average of $71 per barrel.

FPSO industry revenue is expected to hit $117 billion by 2024, growing at a rate of 19 percent over the period of 2016-2024, according to Global Market Insights Inc.

Poised to reach over $77 billion by the year 2025, FPSO will bring in healthy gains as it adds significant momentum to global growth, said a report by ResearchAndMarkets.

The report suggested that China, as the world's second largest economy and the new game changer in global markets, has shown the potential to grow at 19.1 percent in this sector over the next couple of years.

"The FPSO market is full of opportunities where Chinese industrial players should exhibit their strengths to vie for orders. It is worth noting that demand for construction of large, deepwater and complex FPSO projects has been increasing in recent years, but as an emerging sector, there exist many challenges which require concerted efforts of the domestic FPSO operators, shipyards, offshore engineering companies, financial institutions and equipment producers," Yu Hua, a general manager from a subsidiary of CNOOC Energy Technology & Services Ltd was quoted as saying by China Energy News.

 

Most of the US-listed Chinese companies are technology titans and much younger than some of their US peers. Most of these companies are in potential maturation stage for initial public offerings (IPO) and pursuing their next steps.

According to BNY Mellon, the New York-based custodian bank and asset servicing company, about 15 to 20 Chinese companies listed their shares on US bourses this year to raise $3 billion, compared to 20 companies that collected $7 billion to $9 billion in funding last year. The IPO pipeline outlook for 2020 looks robust, it said.

Although there were media reports in September that the US government is considering delisting Chinese stocks in the US and limiting US government pension funds' investments in Chinese companies, US bourses are still a favorite listing destination for Chinese technology companies.

"The US market has significant potential peers, seasoned investors and sheer size of assets under management. At the same time, US investors are seeking exposure to what is unique in Asia-Pacific－the demographics that you cannot replicate in other parts of the world," said Francis Giglio, head of Asia-Pacific Depository Receipts at BNY Mellon.

"Chinese companies listing in the US can have unparalleled access to knowledge capital in the US market, a market where investors are aware of the intrinsic value. Enterprises will continue to evaluate each market based on its unique characteristics to find the best fit for them," Giglio said.

For example, OneConnect Financial Technology Co－the online financial services platform of insurance giant Ping An Insurance Group Co of China－in December raised $312 billion after slashing its IPO target price by half.

Giglio reiterated that it is possible that some Chinese companies which have issued ADRs in the US could seek another listing on the Hong Kong stock exchange. "It is a viable option for companies based in Asia to access both the capital markets of the US and Hong Kong to fund their strategies."

In November, technology giant Alibaba Group's IPO in Hong Kong created a record for the largest IPO of this year by raising about $11.2 billion in a float that was larger than Uber Technologies Inc's $8.1 billion IPO in April, and about twice the size of Budweiser Brewing Company APAC's $5.76 billion deal in September.

The global e-commerce behemoth listed its shares in New York five years ago in the world's largest public offering, raising $25 billion in 2014 after the Hong Kong stock exchange refused Alibaba's IPO application since it did not allow dual class share sales at that time.

Chinese enterprises usually list their shares in the form of American Depositary Receipts (ADR) in US stock exchanges, representing a feasible and liquid way for US investors to invest in overseas companies. Foreign firms also benefit from issuing ADRs as they come without the hassle and expenses involved in listing on US bourses.

As at February this year, 156 Chinese companies were listed on US bourses and had a total market capitalization of $1.2 trillion, according to the US-China Economic and Security Review Commission.

Latest data from the Ministry of Industry and Information Technology showed China's crude steel output reached 904 million metric tons over the January-November period, increasing 7 percent year-on-year－nearly 3 percentage points lower than the year-on-year crude steel output growth rate for the first half of 2019, which stood at 9.9 percent.

The China Metallurgical Industry Planning and Research Institute predicted in a recent report that both China's crude steel output and demand will fall in 2020 from 2019.

Crude steel output in 2019 and 2020 is expected to reach 988 million tons and 981 million tons, respectively, said the report released earlier this month.

Steel consumption is estimated to hit 886 million tons this year, while demand forecast for 2020 is expected to be 881 million tons, down 0.6 percent from the level in 2019.

Chen Kexin, chief analyst of industry information provider Lange Steel Research Center, estimated that increasing crude steel output growth over the past few years is likely to come to an end soon.

"Capacity is the foundation of output growth. As most of the advanced steel capacity built in the past years has already come into use, there will be little new capacity coming into operation in the future, which means less steel output," Chen said.

Li Xinchuang, president of the institute, came to a similar conclusion, although from a different perspective.

"As the Chinese economy is transitioning from high-speed growth to high-quality development, consumption is to play a bigger role in driving economic growth, while the economy will no longer excessively depend on investments," Li said.

"That is to say, investment in fixed assets will remain at a relatively low level and steel demand will no longer be as high as in the past."

He estimated steel demand is likely to decline slightly over the 14th Five-Year Plan (2021-25) period, although the total amount will still be considerable.

Qu Xiuli, deputy head of the China Iron and Steel Association, said at an industry forum in November that the industry will continue to rein in unwanted steel capacity, and pursue green development with less energy consumption but higher product quality.

Also, the industry will make efforts to increase market shares of leading companies through industrial upgrade and mergers and acquisitions, so that the steel market will become more orderly, she said.

Over the Jan-Oct period, the top 10 steel companies only accounted for 34.6 percent of the total crude steel output, a 0.7 percentage point decline compared with last year, which was the opposite of the industry's expectations, according to her.

Li said mergers and acquisitions are becoming key for quality industry players to have more market influence so that the industry can better avoid disorderly competition, amid the industry's pursuit of high-quality development, since remarkable progress has been made in overcapacity removal and environmental protection.

As the largest steel producer in the world, China's top 10 steel companies account for less than 40 percent of domestic capacity, far off the goal of 60 percent if the industry wants to avoid disorderly competition, while the top four mines in the world control about 80 percent of global iron core output, he said.

However, as there is consensus in the industry for increasing concentration－or the market share and influence of the top companies－efforts have been made with some achievements, experts said.

A recent example is China Baowu Steel Group's stock acquisition of Maanshan Iron and Steel Co Ltd, which took the former one step closer to becoming the global leader.

Li predicted there will be more market-oriented, cross-region and cross-ownership mergers and acquisitions among Chinese steel companies.

Hopefully, there will soon be a fleet of national and regional steel giants, and a slew of small-scale but specialty steel companies, including three to four steel companies with capacity above 80 million tons, and six to eight steel companies with capacity above 40 million tons, he said.

The new product relies on the cloud and is dubbed Tencent Meeting. It offers a way to maintain strong communication with coworkers, clients, partners or anyone who uses the system, which will help enterprises save costs and improve efficiency.

Wu Zurong, vice-president of Tencent Cloud, said Tencent aims to be a co-builder of the video conferencing ecology.

"Entering the video conferencing sector, we will not offer any hardware products. Instead, we will focus on providing the platform and standard software as a services, dedicated to connecting people, devices, conference rooms and maintaining strong communications," Wu said during the launch event on Wednesday in Beijing.

"Tencent hopes to work with both software and hardware partners to expand the smart office market, helping Chinese companies reduce costs, increase efficiency and accelerate the digital transformation," Wu added.

Given the blossoming mobile internet, cloud computing and other new technologies as well as the rise of millennials in the workforce, the smart offices sector is booming globally, along with the rise of video conferencing businesses.

A recent report released by consulting firm Frost & Sullivan said 32.8 million video conferencing related devices, infrastructure and cloud services seat licenses were shipped, generating a total revenue of $7.8 billion in 2018. The market is on a high growth trajectory and is estimated to expand at a compound annual growth rate of 12.1 percent to hit $13.82 billion by 2023.

"User demand for video communications has been booming," said Roopam Jain, an industry director within Frost & Sullivan's information and communications technologies business unit. "The proliferation of mobile devices combined with an unending appetite to consume video in all its forms has been a major factor in breaking traditional barriers to adoption."

Jain added the consumerization of video has also led to a growing need for hassle-free video conferencing that empowers users to connect from any device with a simple click of a button.

Seeing the growing demand for an easy-to-use option, Tencent's new product can be deployed on mobile phones and personal computers. Users also can access the service via Tencent's WeChat mini programs and the Enterprise WeChat that targets corporate clients. Users can sync the notes across multiple devices.

To cater especially to the growing young generation and provide a service that can be used anywhere, Tencent Meeting offers functions that include blurring the background and putting in beauty effects.

With more than 20 years of experience of audio and video technologies and over one million servers, Tencent is getting serious about carving out a stake in the burgeoning video conferencing market.

So far, Tencent has gained 1.1 billion WeChat users, 800 million QQ service users and 2.5 million corporate clients on its Enterprise WeChat platform.

 

 

 

The comments came as a new report forecast that China will have more than 700 million 5G users by 2024, accounting for more than half of the global 5G population by then.

Wang Zhiqin, deputy director of the China Academy of Information and Communications Technology, a government think tank, said in 2020, China's telecom carriers will build 5G networks on a large scale, laying down a sound infrastructure for widening the use of cutting-edge technology.

By the end of this year, there will be more than 3 million 5G users in China, Wang said. The numbers will mark a significant rise from the data in late November when the country had only 870,000 5G mobile subscribers.

China kicked off the commercialization of 5G on October 31, with the country's telecom carriers rolling out their 5G data package plans. China Mobile, the world's largest telecom carrier by mobile subscribers, plans to have more than 50,000 base stations by the end of this year.

China Telecom and China Unicom, two smaller players, have also announced plans to work together to build a nationwide 5G network as the country's second-and third-largest telecom operators join hands to reduce construction costs. As of December, the two companies have already shared 27,000 5G base stations, Wang said.

The comments came after the government think tank published a report which forecast that the commercialization of 5G in China is expected to generate a direct economic output of 10.6 trillion yuan ($1.5 trillion) from 2020 to 2025, and an indirect economic output of about 24.8 trillion yuan.

Yang Jie, chairman of China Mobile, said that: "The 5G butterfly has already fanned its wings and will have a broader economic and social impact."

The company plans to attract 70 million 5G subscribers, and sell 100 million self-brand and third-party 5G smartphones next year.

Yang also said the State-owned company will invest 20 billion yuan ($2.8 billion) next year to build a robust ecosystem for the commercialization of 5G technologies.

Xu Zhijun, rotating chairman of Huawei Technologies Co, said earlier that China has the right conditions to build the world's best 5G network and the global telecom industrial chain can benefit from the country's development.

"China has the best resources in frequency spectrum and base stations. Local consumers and enterprises have some of the highest enthusiasm and willingness to embrace 5G. And the governments have rolled out favorable policies," Xu said.

Xu said that China is likely to have more than 200 million 5G mobile subscribers by 2020, and the fast deployment of 5G tech in the country will benefit global telecom and semiconductor industries.

The Shanghai Composite Index gained 0.85 percent for the session to close at 3007.35 points on Thursday, while the Shenzhen Component Index also climbed 0.72 percent to end at 10303.72 points. Year-to-date, the Shanghai Index is on track to post a gain of more than 21 percent.

Securities firms were the major drivers for the Thursday advance. According to Shanghai-based market tracker Wind Info, A-share listed securities firms reported an average daily price increase of 3.3 percent. Other public financial service providers also saw their prices rise 2.34 percent on average on Thursday.

Yang Delong, chief economist of First Seafront Fund, said that securities firms that are seen as market indicators have shown robust growth over the past few weeks. As the Chinese financial market is further opened up to foreign security firms, domestic companies are seen improving their competitiveness.

Looking forward to the new year, Yang said that the Shanghai Composite Index will likely stand firm around the 3000-point area, while pointing to the possibility of a 20 percent increase, he said.

The State Council announced on Wednesday the removal of the household registration limits for cities with a population under 3 million people and relaxation of the limits for those between 3-5 million, in the hope of facilitating the free flow of the labor force.

Boosted by this latest policy, the property developers who are heavyweights of the A-share market reported a 1.9 percent average price increase on Thursday, which could provide a push to the market's upward momentum.

Analysts from Jufeng Investment wrote in a note that financial service providers, companies sensitive to economic cycles, and technology companies have become the major drivers for the A-share market since November.

Fluctuations seen last week were largely due to an expansion in the trading volume registered on Dec 17 as investors adjusted their positions with the end of the year in sight.

But as the adjustments ended and the market started to rebound again, the follow-through buying is expected to spill over into the new year, the market analysts said.

Zhang Yanpeng, head of the mutual funds investment department at Rosefinch Investment, said that investing in the A-share market will be more profitable than investing in commodities and bonds in 2020 as there will be four major reasons for the A-share market to climb.

Overseas capital inflows are expected to increase given a rise in the allocation to equity assets. Another source of attraction for investors would be the increased return on equity rate in public companies since the third quarter of this year.

Free cash flow of industry leaders will be largely improved in 2020. More importantly, the A-share market is still undervalued based on historic numbers, Zhang said.

Gao Yuncheng, general manager of Shanghai Greenwoods Asset Management, said that companies specializing in the new sectors of consumption, services and manufacturing will show strong growth in 2020. Mobile internet and medicine will continue to show room for solid gains, he said.

Han Zirong, secretary-general of the Beijing Organizing Committee for the 2022 Olympic and Paralympic Winter Games, said the association with Qi An Xin will help reduce the cybersecurity risks for the event.

"The events offer enterprises a giant opportunity to accelerate their brand building and enhance their competitive advantage," Han said during a media briefing in Beijing.

Due to the advent of technologies like mobile internet and internet of things, new cybersecurity risks are emerging due to the new era of pervasive connectivity.

Compared with the 1G to 4G era, the next-generation superfast 5G tech will serve various industries and foster a wide range of applications, thereby allowing people, devices and organizations to better connect with each other.

Qi Xiangdong, chairman of Qi An Xin Group, said cybersecurity has become not just an important but a necessary step for the Olympic Games.

"Hacking attacks will pose great threats to the safety of the event," Qi said. "We are committed to investing time and resources, as many as 3,000 people, to avoid such risks during the upcoming Winter Olympics."

Qi said due to the complicated Olympic system, the company does not have the right to transform its working system or screen the network services providers, thereby posing greater challenges to the company's security capabilities.

"We will work closely with previous information and network providers to keep a safe and sound cyber environment," Qi added.

To better serve the global sporting event, Qi An Xin has established the Beijing Winter Olympics network security operation center. It will continue to collect information on competition venues and accelerate the push for the safe design of the overall network services.

In May this year, Qi An Xin Group announced a strategic partnership with the State-owned China Electronics Corp, marking a key step for the company to join the national network security sector. With nearly 8,000 employees, the company claimed its technologies have been adopted in 90 percent of the government departments, State-owned companies and large banks.

As of now, the Beijing Winter Olympic Committee has signed on 10 official partners, eight official sponsors and five official suppliers.

The revision of the measures, issued by the China Banking and Insurance Regulatory Commission on Dec 18, became effective since the day it was released.

The main focus of the revised measures of implementation, according to experts, is to ensure that the revised regulations on the administration of foreign banks, which was issued in October, will be implemented effectively.

The CBIRC has allowed foreign banks to establish subsidiaries and branches simultaneously in the country and set requirements for the relevant banks.

It removed the $10 billion asset threshold necessary for foreign banks to set up locally incorporated banks and the $20 billion asset cap for branches.

After gauging public opinion for a draft of the implementation measures earlier this year, the regulator lifted the restriction that limited the scope of business of foreign bank branches to wholesale banking, which refers to the provision of services by banks to larger customers or organizations such as corporates and institutional clients, if the foreign banks choose to set up branches and subsidiaries in China simultaneously.

The revised implementation measures, on the other hand, allow foreign bank branches to choose their business direction based on a clear functional positioning, said the CBIRC in a note posted on its website on Wednesday.

Zeng Gang, deputy director-general of the National Institution for Finance and Development, said the abolishment of rules that limited foreign ownership of Chinese commercial banks was the most noticeable change of the revised regulations for foreign banks.

Previously, the caps on foreign holdings in domestic banks were 20 percent for a single foreign-invested bank and 25 percent for group investors.

"Taking both efficiency and steadiness into account, China will further open up its banking sector in an orderly way and ensure stability of the financial system at the same time.

"China should control the overall pace and order of the opening-up of its financial sector, comprehensively assess the likely impact of foreign banks' access to the China market, and make differentiated regulations according to the different types of banks and their modes of entering the China market," Zeng said.

He advised Chinese regulators to tighten regulations on cross-border funding operations by foreign-invested financial institutions to prevent financial risks, strengthen the isolation of risk associated with a foreign-invested parent bank and its subsidiary bank in China, and actively explore the construction of regulatory institutions for foreign financial institutions that adopt a mixed operation model in the country.

Dong Ximiao, chief analyst at Zhongguancun Internet Finance Institute, said: "Further opening-up will enhance the business philosophy and management approaches of China's financial sector, increase market efficiency, boost market vitality, and further improve financial institutions' competitiveness."

The removal of restrictions on market access and foreign ownership and the introduction of a larger number of foreign-invested financial institutions will largely enrich financial products and services provided to Chinese consumers, Dong said.

By relaxing requirements for foreign-invested financial institutions on setting up branches and subsidiaries in the country and expanding their scope of business, China will encourage healthy competition between foreign and domestic financial institutions, improve consumer experiences and better protect consumer interest.

Besides, compared with their Chinese counterparts, foreign-invested financial institutions are more globalized and have richer experience in wealth management and private banking. They will help China's middle class and high net worth individuals improve their global asset allocation, he said.

"I don't just stay in London or go to San Francisco" because "if you care about speed and you need quality, then Shenzhen has the supply chain and the network and experience already," said Salter, a vice-president with hardware startup Carv.

Once a small fishing town, Shenzhen, after four decades of reform and opening-up, has gradually become a global hardware center and hub for scientific and technological advances, where skyscrapers appear commonplace and the population has surged past 13 million.

Like Salter, every foreign resident living in Shenzhen has their reason for staying.

When the young British entrepreneur came to Shenzhen for the first time, he was blown away by the heightened differences compared to home.

"Crazy new technology is moving around and there are loads of people, and it's always busy," he said.

His destination upon arrival was HAX, an American company investing in hardware startups based in the city and San Francisco.

The workshop is divided up into open-plan offices where young entrepreneurs like Salter are hard at work developing their first prototypes, using components from the electronic market just downstairs.

Nikita Iliushkin, another HAX protege from Canada, who is currently working on a new type of drone, pointed out the advantages of Shenzhen for fledgling companies.

"Here all the various suppliers work much, much faster," Iliushkin said. "We are able to iterate so much faster being here."

"One week in Shenzhen is like one month everywhere else," he said.

Today, Shenzhen is known for its hardware expertise, thanks to its huge number of factories and resellers. It also has one of the world's most developed hardware industry chains and abundant intellectual capital.

"As a hardware startup, you don't have much money, and partly because of that, you do not have much time, you need to get to market quickly," Salter said. "So the best place to do that is, without a doubt, Shenzhen."

His company now has devised a digital sports coach that analyzes skiing techniques in real-time providing feedback on the slopes.

With China's successful bidding for the 2022 Winter Olympic Games and the country's plans to encourage"300 million people to join in ice and snow sports", Salter dreams bigger in China.

"Chinese skiing would offer real potential for us," he said.

Wolfgang Egger, a world-famous German car designer, is also building his dreams with BYD, a Shenzhen-headquartered electric vehicle maker.

Sitting in the BYD global design center, Egger, who proposed building the center, said that as a designer with experience in different companies and brands, "to have this opportunity to create something like this from nothing is a big challenge that I need."

That is the main reason why he joined the Chinese car manufacturer three years ago.

At that time, the "electric car trend in the rest of the world was not so strong" while China was a leader, Egger said.

"I was looking to really do a project on the identity and on the electrical future," he said. "BYD is the best option I could have."

At the Shanghai International Automobile Industry Exhibition in April, BYD debuted its E-SEED GT electric concept car with a "Dragon Face" design.

Such details as "dragon-scales" feature on the car's door panels, headlights resembling "dragon whiskers," and a "dragon ridge" on its roof and tail, were inspired by a symbol of dragons in China's Hongshan culture that dates back thousands of years.

Behind the eye-catching design is Egger and his team's desire to "look for inspiration for the brand's identity in Chinese culture".

A voracious reader of Chinese traditional tales, BYD named several of its car lines after dynasties in Chinese history.

Shenzhen was also designated as a United Nations Educational, Scientific and Cultural Organization City of Design in 2008, the first of its kind in China.

"The concept of modern Chinese design was gradually created in Shenzhen and has increasingly become a part of the city residents' lives," UNESCO said on its website.

"From my point of view, Shenzhen could be, (and) should be the design capital in China," Egger said, adding all the elements are present, including technology, young people and emerging trends.

In August, Shenzhen, the trailblazer in China's reform and opening-up, received a new mission: to create a pilot demonstration area of socialism with Chinese characteristics.

The southern Chinese city, one of China's first special economic zones set up in 1980, has since been widely dubbed the "Miracle of Shenzhen".

Official data showed that Shenzhen's GDP was only 196 million yuan ($28 million) in 1979, one year after China initiated reform and opening-up. In 2018, it soared to over 2.4 trillion yuan.

Shenzhen's embrace with the world has helped the city grab the tail of globalization.

The first Walmart-owned Sam's Club store on the Chinese mainland, which was opened in Shenzhen in 1996, has become the top Sam's Club store globally since 2008.

Globalization also enables international talent to work and live in such fast-developing cities like Shenzhen.

At least five Nobel laureates have set up their research institutes in Shenzhen. Among them, Arieh Warshel, a Nobel laureate in chemistry in 2013, said, "Shenzhen has a lot of high technologies which allow you in principle to innovate and collaborate, (and) a lot of resources which help innovation."

James Corner, a landscape architect and urban designer who once participated in planning the city, said Shenzhen is moving to "create a modern 21st-century city, a city that combines new technologies and dense forms of buildings and programs with human-scale streets and blocks, integrated with green natural systems, parks and open spaces."

Shenzhen is attracting more capital and talent, becoming a model of development for other Chinese cities and even the world.

In the first three quarters of 2019, Shenzhen's foreign investment increased by nearly 90 percent year-on-year.

This year, multinational companies including European aerospace giant Airbus, global management firm Boston Consulting Group, and tech-minded professional services firm Accenture, have set up shop in Shenzhen.

Shenzhen is also expected to play a global role in creating standards for institutional design, particularly in Qianhai, a Shenzhen-Hong Kong pilot cooperation zone in Shenzhen. Qianhai in September launched a pilot program to reduce the approval time for setting up businesses from one day to less than a minute.

With such fundamental innovations, Shenzhen could set global standards for years to come.

PBOC skips reverse repos as liquidity improves

The People's Bank of China, the country's central bank, skipped reverse repos on Thursday. "Rising fiscal expenditure near the end of the year keeps the banking system liquidity at a high level," the PBOC said on its website. With 30 billion yuan ($4.3 billion) of reverse repos maturing Thursday, that led to a net withdrawal of 30 billion yuan from the market. A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

China makes steady progress in fiscal fixes

China has almost addressed all the fiscal irregularities from 2018 identified in an audit report, according to the country's top auditor. Such rectifications involved about 310 billion yuan ($44.33 billion), said Hu Zejun, head of the National Audit Office. Many local governments have rolled out measures to push forward related rectifications, and different departments have enhanced coordination to improve rectification efficiency, Hu said. The NAO would continue to follow up on the rectification progress, Hu said.

Local government bond issuances drop in Nov

China's local governments issued fewer bonds in November, official data showed. The value of local government bonds issued in November totaled 45.789 billion yuan ($6.55 billion), down from 96.46 billion yuan in October, according to the Ministry of Finance. In the first 11 months, local governments issued bonds valued at 4.32 trillion yuan, including 2.55 trillion yuan worth of special-purpose local government bonds aimed at providing financial support for public-interest projects. MOF data also showed outstanding local government debts amounted to 21.33 trillion yuan at the end of November, below the official ceiling of 24.08 trillion yuan set for the year.

Freight train service to Poland commences

A new freight train service has opened linking northwest China's transport hub of Xi'an with Slawkow, Poland, in the hinterland of Europe by way of the Alataw Pass in the Xinjiang Uygur autonomous region. The first train left the station in Xi'an, capital of Shaanxi province, on Tuesday for the 9,478-km trip, which is expected to take about 10 days. After crossing China's border through the Alataw Pass, the train will pass through Kazakhstan, Russia and Ukraine to reach Poland. Compared with the traditional shipping route, the rail service takes less time and involves fewer changes in trains during the long journey.

COMPANIES AND MARKETS

Central SOEs report strong profit growth

China's centrally administered State-owned enterprises saw strong profit and revenue growth in the first 11 months of the year, according to the State-owned Assets Supervision and Administration Commission. Despite downward pressure on the economy, the net profits of central SOEs expanded 9 percent year-on-year and their combined operating revenue rose 5 percent during the January-November period, SASAC data showed. The supply-side structural reform of central SOEs has deepened, with a total of 14,000 legal persons removed and the overcapacity-cutting of steel and coal completed, Hao Peng, chief of the SASAC, said at a meeting. During the period, central SOEs' spending on research and development jumped 24.6 percent from a year earlier, with firms in petroleum, steel and automobiles industries notching a year-on-year growth of over 30 percent.

New intercity trains start services in Hunan

A new model of high-speed trains designed for intercity transportation was put into operation on Tuesday in Central China's Hunan province. With a design speed of 160 kph, the CJ6 trains were jointly developed by an intercity railway company in Hunan and CRRC Zhuzhou Locomotive Co Ltd. The new trains are versatile, as they can run in four-car formations during non-rush hours and eight or 16-car formations during rush hours, said Zhou Qinghe, chairman of CRRC Zhuzhou Locomotive. Using lightweight materials and equipped with a braking system powered by recycled energy, the new model is also energy-conserving and environmentally friendly, according to Zhou.

AROUND THE WORLD

Budget balance rises to 1% of GDP in Portugal

Portugal's budget balance reached 1 percent of gross domestic product in the first three quarters of 2019, better than the forecast of a government deficit of 0.1 percent for the whole year of 2019, according to the latest data from Portuguese National Institute of Statistics (INE). "In the first three quarters of 2019, the balance of General Government (GG) was positive, corresponding to 1.0 percent of GDP," compared with 0.4 percent in the same period of the previous year, said the INE. The INE pointed out that the GG balance was nil in the year ending in the third quarter.

Belarus cuts oil product shipments by 14.5%

Belarus reduced the export of oil products by 14.5 percent in the period from January to October this year, local media reported. In the first 10 months of 2019, Belarus exported 8.79 million metric tons of oil products, which is 14.5 percent less compared with the same period last year, the country's statistical committee was quoted as saying. Exports of oil products amounted to $4.44 billion, which is 19.7 percent less compared with the first period of 2018, the committee said. In October 2019, oil product exports totaled 750 thousand tons against 950 thousand tons in September and August, 900 thousand tons in July and 680 thousand tons in June.

Saffron output soars to record in Afghanistan

Saffron production in Afghanistan has soared to record levels in 2019, with a 22 percent increase compared to last year, Afghan Ministry of Agriculture, Irrigation and Livestock said on Wednesday. "The latest statistics showed that saffron or so-called 'red gold' production increased 22 percent, reaching 19,469 kg this year, which is about 20 metric tons," the ministry said in a statement. The statement added that more than 7,557 hectares of land were for cultivated saffron across the country this year. The country produced 16 tons of saffron last year, according to the statement. Nearly 90 percent of saffron production is exported abroad.

Albania GDP up 3.81% on quarterly basis

In the third quarter of 2019, Albania's gross domestic product increased by 3.81 percent year-on-year, Finance and Economy Minister Anila Denaj said at a news conference. Denaj referred to the latest data published by the National Institute of Statistics. Denaj said that the sector of trade, transport, accommodation and food services was the main contributors to the economic growth. "This sector registered a growth of 6.69 percent and gave a contribution of 1.3 percentage points to the GDP in the third quarter," she said.

After receiving the IPO approval from China Securities Regulatory Commission on Friday, Beijing-Shanghai High-Speed Railway Co Ltd, a unit of the State-owned China Railway Corp, plans to sell 6.3 billion new shares on Shanghai Stock Exchange, or 12.8 percent of its enlarged capital, according to its prospectus.

The company submitted its application on Oct 22. Industry experts estimated that the financing of the Beijing-Shanghai high-speed rail line operator will exceed 35 billion yuan ($5 billion), making it one of the largest IPOs in years.

The company's prospectus said it plans to acquire a majority 65.08 percent stake in the Anhui branch of the Beijing-Fuzhou High-speed Railway. It will also proceed with the mergers and acquisitions of companies in the same industry to better connect the other key lines between Beijing and Shanghai.

Sun Zhang, a professor at the Institute of Rail Transit of Tongji University, said the listing of the Beijing-Shanghai high-speed rail line operator will help to introduce private capital and advance the mixed-ownership reform of SOEs.

Upon its successful debut on the stock market, the company can adopt methods such as a debt-equity swap to lower the liability rate of China Railway Corp, he said.

As the most profitable rail line in China, the Beijing-Shanghai High-Speed Railway reported a sales revenue of 25 billion yuan for the first three quarters of this year, with the net profit amounting to 9.52 billion yuan. On that basis, the daily net profit of the rail operator is expected to be as high as 34.87 million yuan.

The profitability of the line operator is even more impressive when it comes to the fact that the company has only 67 employees. Considering its net profit of 10.25 billion yuan in 2018, the net profit generated by each employee may top as much as 153 million yuan. The asset managed per capita amounted to over 2.79 billion yuan by the end of September.

But that small head count and large asset size raised concerns from the CSRC.

In feedback provided on Nov 4, the CSRC questioned its prime operation and asked for an explanation to define the issuer as an asset management company or a high-speed train passenger transport service provider.

In a reply provided a week later, the company explained that the prime operation of Beijing-Shanghai High-Speed Railway Co is providing high-speed train transportation services.

"It does not have any asset management businesses, nor income from asset management activities," the reply said.

Professional service provider E&Y predicted in its latest report that up to 200 companies will have completed their IPO at the A-share market by the end of this year, up 90 percent from a year ago. The total financing is expected to reach 252.8 billion yuan, up 82 percent year-on-year.

Statistics from Wind Info showed that the total IPO financing recorded at the A-share market had reached over 248.3 billion yuan by Dec 21, having hit a record high and the loftiest since 2012.

Deloitte forecasts in its latest survey that between 140 and 170 companies will be listed on the main board, SME board and ChiNext board in 2020. The total financing will range between 180 billion yuan and 220 billion yuan. The STAR Market in Shanghai can attract up to 150 IPOs, with the financing raised likely reaching 160 billion yuan.

 

 

 

 

 

A research conducted with 2,000 executives found that only 20 percent of them were getting adequate returns on the data analytics they did.

The executives gave four reasons for the surprising outcome of the research, which was jointly conducted by Mastercard and Harvard Business Review earlier this year.

"First of all, they said today's analytics is happening in silos, meaning various parts of the company are running their own analytics, and tend to produce conflicting results sometimes," said Dimitrios Dosis, president of Mastercard Advisors, during a recent interview in Beijing.

"Second, there is a big time lag between the moment you need the data and the moment you get them. Sometimes it can take weeks. Third, data analytics is not really embedded in the workflow. When people need it to make decisions, they are not getting it. And fourth, they said sometimes you need a PhD degree to understand the software and the results, which means it is not really intuitive."

The fact that data analytics is not embedded in the day-to-day workflow is one of the primary concerns of Dosis who heads Mastercard Advisors.

Offering information, consulting and implementation services to merchants and financial institutions worldwide, this unit of Mastercard helps customers cleanse and understand the data they have, including anonymized and aggregated transaction data from Mastercard, to derive recommendations for customers based on data insights and advanced analytics.

Before fully rolling out the recommendations and executing them, consulting teams from Mastercard Advisors test the recommendations through the application of a test-and-learn technology.

"What we do is identifying a concrete opportunity based on our data, specifying the targeted segments where this opportunity primarily exists and then identifying the offer, and testing and executing it. This is a classical end-to-end service we provide for many banks, including Chinese banks," Dosis said.

Right now the company is developing a technology for this end-to-end service so that data analytics will become an effective part of the day-to-day work process. That means people do not need to do specific analytics while it is happening in the background.

"Imagine that for a cards manager of a bank, when she comes in the morning, instead of her logging in and running analytics, she gets a message on her device that says, 'Looking at the data from last week, we believe you have an untapped opportunity in the mass affluent segment.'

"Automated recommendation engine provides her the right offers for the right audience and asks, 'Would you like to test it?' She says yes. Six weeks later, she gets the results, chooses the best campaign and rolls it out. The analytics is happening in the background, and she is just there to make decisions. This is the technology that is going to come next," Dosis said.

So far, deriving recommendations has been a manual process, with consultants looking at the data regularly.

Companies have a lot of data and customers would like to interact with them, but the data are not cleansed. As data cleansing takes a lot of time, artificial intelligence could be applied in the process, Dosis said.

"Normally, it took us 80 hours to analyze the data and come up with recommendations. By applying artificial intelligence and having a more automated recommendation engine, we have been able to reduce this to 10 hours," he said.

Earlier in December, German conglomerate Merck signed a strategic collaboration with China's Ping An Good Doctor, a one-stop healthcare online platform, to jointly explore integrated solutions to advance intelligent healthcare in the country.

The tie-up will leverage Ping An's extensive experience in artificial intelligence medical technology, insurance provision and online and offline healthcare resources and Merck's medical expertise, high-quality medicines and innovative solutions to develop an integrated one-stop healthcare solution.

According to a joint news release, the duo also pledged to tear down the barriers between online and offline healthcare through innovative retail models that connect pharmacies, hospitals and primary healthcare institutions in rural areas.

"As part of our digitalization strategy, we are seeking out innovative solutions that will offer the highest possible benefits to patients, with the mission of transforming the lives of 40 million patients in China by 2025," said Rogier Janssens, managing director and general manager of Merck's Biopharma Business in China.

The tie-up is not a water-testing endeavor for either party, though: Merck entered into an agreement with Chinese internet giant Tencent in developing intelligent digital healthcare services by populating public knowledge of diseases, whereas Ping An built an internet healthcare platform for the government of Guangxi Zhuang autonomous region.

China's online healthcare market exploded from an insignificant 1.5 billion yuan ($214 million) in 2012 to a projected 23.5 billion yuan next year, according to data from Statista Research Development.

China has unveiled a multilayered grand plan called "Healthy China 2030" to boost people's livelihoods and longevity. Given the imminent struggle to contain rising healthcare costs, much focus will be placed on delivery of primary care and health promotion to empower both patients and physicians.

Digital solutions can address the critical issue of how the industry uses data analytics to drive efficiencies and deploy resources in a smart way, according to Kings Wang, senior director for strategic planning and head of marketing at IQVIA China, a US company serving the combined industries of health information technology and clinical research.

"Internet, AI, and other suites of personalized services will allow premium health resources to revolve around users and actively facilitates the precise implementation of the Healthy China 2030 initiative," said Wang.

Making medical products and services accessible to patients is a top priority. Guided by a so-called omni-protection concept, French vaccine maker Sanofi Pasteur unveiled in December a string of smart and standardized vaccination procedures in China to help users access immunization information, track vaccine data, and manage the vaccination process through the internet and big data technologies.

During the second China International Import Expo in November, Sanofi Pasteur inked a pact to establish cooperation with Chinese internet giant Alibaba Group's healthcare arm to build a vaccination cloud platform, offer related information online and location-based vaccine search services.

"The common thread running through the entire vaccination cycle is data, the sharing and smart deployment of which will assist authorities to keep track of disease prevention and data accumulation nationwide," said Mike Zhang, general manager of Sanofi Pasteur China.

What digital technology can do is to "create that closed loop so that people can be reminded about their second or third vaccine, and using other digital formats for them to be informed about their health," said Joseph Romanelli, senior vice-president of MSD and president of MSD in China.

The US-based company has joined hands with Ali Health to create a preventive health management system combining healthcare knowledge and technologies so that users can get to understand the burden of diseases and where they can get vaccinated.

"The digital platform that we have in China is probably second to none. What's great about China is that all of our customers, whether they are physicians or patients or potential patients, are online," he said.

Li Jinhui, general manager of the oncology and rare disease business of Pfizer China, said internet plus healthcare, which enables top-notch doctors with diverse expertise to be accessible to patients from all over the country, will bring significant benefits to patients prompting them to seek diagnosis and medical treatment instead of staying undiagnosed.

"Such accessibility provides patients with another choice to access high-quality medical services, other than lining up at the country's best hospitals, and helps them save travel costs. It will obviously accelerate medical service development in smaller cities and remote areas," said Li.

Physicians also stand to benefit from the digitalization wave.

Li pointed to big-data analysis, which will also play an important role in elevating diagnosis and treatment standards in the areas of oncology and rare diseases in smaller cities and rural regions.

A tumor patient database can be established and the most standardized models of diagnosis and treatment of certain types of cancer will be formed, Li said, thus establishing a system to guide every step in a doctor's decision-making process when making a diagnosis.

"Such a system will definitely empower medical institutions at a grassroots level and gradually help achieve equal availability of high-quality medical care," she said.

Others are rolling out medical devices backed by technological leaps. Siemens Healthineers, the healthcare unit of German conglomerate Siemens, unveiled in November its latest 5G-powered ultrasound solutions. The locally developed gadget is expected to help physicians in remote areas and county-level clinics better diagnose people with the real-time aid of seasoned doctors thousands of miles away.

"Currently, China lacks physicians especially in entry-level healthcare institutes, primary hospitals and rural healthcare institutes. Also, it is difficult for ultrasound physicians to improve their skills," said Jerry Wang, general manager of Siemens Healthineers China.

"Most 5G applications are in place to help higher-level hospitals to connect with lower-level hospitals. So limited physician resources will be utilized in a much better way," he said.

The company has also rolled out a one-stop stroke solution center, which has fast CT scanning and an angiography system in one room.

Despite all the perks, experts have called for prudence in the marriage of technology and medical care.

Zhang Meng, vice-president of Tencent Medical, said that the internet focuses on speed and pushing forward novel ideas, but the medical care industry is where safety is prioritized.

"Therefore it's difficult to totally change the industry using the internet and attempts may come step by step and slowly," he said.

Five of the seven hospitals benefiting from social capital investment totaling more than 12 billion yuan ($1.7 billion) in the phase-one project of the New Hongqiao International Medical Center are scheduled to open by the end of next year. All patients visiting the hospitals specializing in different areas, including tumors, plastic surgery, pediatrics, obstetrics and gynecology, will be able to access a shared facility center with cutting-edge technologies for medical examinations.

The Shanghai Concord Medical Diagnostic Imaging Center, part of the shared facility center, will offer access to internationally leading PET-MRI equipment used for the physical examination of patients suffering from tumors in their livers, breasts and heads, experts said.

"A patient needs to be injected with only one-third of the amount of a certain drug before taking the PET-MRI examination compared with that required by a PET-CT checkup, which makes it safe even for pregnant women and young children," said Zhang Xiaojian, a doctor from the imaging center.

There are only three such devices in Shanghai and no more than 20 nationwide, he added.

There is also an advanced digital radiography system, which can eliminate the effect of overlapping tissue information and thus enhance the ability to detect a lesion, at the center.

"It can also strengthen the display of the spine as well as tissue behind the heart and the diaphragm, which is important for patients suffering from congestive heart failure," Zhang said.

The shared facility center comprises medical technologies and supportive services, including labs, an imaging center, and a pharmacy.

The Hongqiao branch of Huashan Hospital affiliated with Fudan University, which boasts strong medical strength and facilities in neurosurgery and trauma treatment, was put into use in the Hongqiao area, which is located in the western part of Shanghai bordering the municipality's neighboring Zhejiang and Jiangsu provinces, in June last year.

More than 50 percent of the 12,000 inpatients in the past year and a half came from areas of the delta region outside Shanghai, according to the hospital.

A development plan regarding the Yangtze River Delta region unveiled in December by the country's central government announced that the overall layout of first-class medical and healthcare resources in large cities would be promoted to expand the coverage of high-quality medical institutions.

The plan aims to boost vitality in the region, which is about the same size as Germany and encompasses Jiangsu, Zhejiang and Anhui provinces as well as Shanghai and contributes roughly a quarter of the country's GDP and one-third of foreign trade and investment.

A McKinsey report showed that 300 million people from 15 nodal cities, 55 medium-sized cities and more than 1,000 towns can reach the New Hongqiao International Medical Center, which is a 10-minute drive from the Hongqiao transportation hub, within three hours.

As an eWTP institution, the secretariat is responsible for the daily operations, international cooperation, training and exchange programs, achievement displays and the release of rules and models, according to company officials.

The secretariat, located in the Xixi National Wetland Park close to Alibaba's headquarters, is slated to be operational from October next year.

"As the initiator of eWTP, Alibaba is a pioneer in combining business services with technology capabilities," said Eric Jing, a partner of Alibaba and chairman of Ant Financial Services Group, its payment arm. He said that the secretariat is on course to establishing similar platforms with other eWTP hubs in Malaysia and Belgium.

The secretariat is likely to play a pivotal role in constructing eWTP, which is aimed at lowering trade barriers through technological empowerment, and pushing ahead with some of the world's best digital economy practices in Hangzhou, according to the city's vice-mayor Hu Wei.

"We hope the secretariat will … enhance our connections with international organizations and institutions like the World Economic Forum and United Nations Conference on Trade and Development, organize high-level training with relevant government agencies and companies, and promote the sharing of 'Chinese experience' on digital economy with the rest of the world," he said during the launch ceremony.

In a parallel development, a public service platform under the auspices of eWTP will also debut in Hangzhou, allowing small-and medium-sized enterprises engaged in cross-border business to access a unified electronic "operating system", the company said.

SMEs thus stand to benefit from a one-stop solution for online customs clearance, settlement exchange, tax refunds, as well as logistics and financial services.

Hangzhou Customs completed in September tests on a cross-border e-commerce bonded area, paving the way for SMEs to realize the "Buy from the Globe and Sell to the Globe" vision, said Zhang Yi, vice-director of Hangzhou Customs.

Since it was first proposed by Alibaba founder Jack Ma in 2016, the eWTP has been recognized by the G20, and adopted by cities in China, Malaysia, Rwanda, Ethiopia and Belgium.

In the latest attempt, Ethiopia joined the eWTP last month to develop a multifunction digital trade hub to serve as a gateway for Ethiopian products to China, a center for cross-border e-commerce and trade within Africa, and a training center.

The drive also included implementing the capacity building and training, which consists of a number of programs, including specialized programs for Ethiopian entrepreneurs, business leaders and university lecturers.

At home, Yiwu, a city in Zhejiang province known for manufacturing and exporting small commodities, agreed to join eWTP on digitizing trade infrastructure and developing additional trade flows for the city. The venture also plans to work on innovations in trade finance and establish a smart logistics hub there.

Enthusiasm for savings up on quarterly basis

China's urban residents are more enthusiastic about depositing more savings in the fourth quarter (Q4) of this year, said a central bank survey. Among the 20,000 urban bank depositors surveyed in 50 cities across China, 45.7 percent responded with a willingness toward more savings in Q4, 1.2 percentage points up from the previous quarter, according to a survey conducted by the People's Bank of China. Meanwhile, their willingness toward investment shrank, with 26.3 percent of the respondents planning for more investment in Q4, down by 1.5 percentage points from a quarter ago. Respondents who are willing to increase consumption in Q4 accounted for 28 percent, up 0.3 percentage points from Q3.

Alcohol firms see stable growth in first 10 months

China's alcohol enterprises above designated size saw a total revenue of 681.98 billion yuan ($97.4 billion) in the first 10 months, according to the Ministry of Industry and Information Technology. The reading was up 8.7 percent compared with the same period last year, the ministry said. During the period, the profits of 2,126 alcohol makers with an annual revenue of over 20 million yuan grew 17.9 percent year-on-year to reach 130.88 billion yuan, the ministry said.

COMPANIES AND MARKETS

Smart sensor industrial park starts in Jiading

Shanghai on Tuesday launched a smart sensor industrial park in Jiading district, which has been striving to develop intelligent internet of things (IoT). The industrial park contains a core industry cluster exploring IoT-oriented applications of smart sensors, as well as two others that focus on intelligent manufacturing and automotive electronics. A total of 32 enterprises signed to settle in the park, investing 24.8 billion yuan ($3.5 billion) on projects ranging from the design, testing, packaging and massive production of sensor chips.

Cargo throughput increases in Qinzhou

The port of Qinzhou, a major link between southern China and Southeast Asia, saw its cargo throughput rise 17.9 percent year-on-year in the first 11 months of the year thanks to increased traffic on a new land-sea trade route. The port handled 108.6 million metric tons of cargo in the January-November period, according to the publicity department of the city of Qinzhou in the Guangxi Zhuang autonomous region. Meanwhile, the port handled 2.69 million standard containers, an annual increase of 33.2 percent. Since a new land-sea freight route was launched in 2017, an increasing number of trains have carried goods to and from the Qinzhou port, connecting many western Chinese regions with Southeast Asia.

Crowdfunding used to promote more brands

Chinese tech giant Xiaomi's premium e-commerce platform Youpin has teamed up with global crowdfunding platform Indiegogo to promote Chinese products and brands overseas in its latest move to expand globalization. The two platforms announced a strategic cooperation on Monday, leveraging their crowdfunding services and other resources to cooperate on the introduction and promotion of products and market development, among others. The two sides also plan to establish a project dedicated to promoting Chinese brands via crowdfunding. The two parties have made several successful attempts before the official announcement. Youpin has introduced Pamu Slide, a popular wireless earbuds product on Indiegogo, to China, while launching Walking-Pad, a foldable treadmill, and an electric toothbrush on Indiegogo.

Kweichow Moutai eyes high-quality progress

China's top liquor brand Kweichow Moutai on Tuesday launched 12 new projects with a total investment of 15.8 billion yuan ($2.25 billion) for high-quality development. The projects include a packing plant with a capacity of 80,000 metric tons of Moutai liquor, a warehouse that can store up to 30,000 tons of alcohol, and an organic sorghum planting base in Guizhou province. "We aim to build a batch of infrastructure projects with long-term benefits, boost the growth of Moutai and achieve high-quality development," said Li Jingren, general manager of Kweichow Moutai Group.

Alibaba pilots nonprofit elderly care service

Alibaba Group is testing a new model of elderly care through its "time bank," which makes every hour people spend advancing public welfare exchangeable for services for seniors, the company said on Tuesday. According to a memorandum of understanding on cooperation signed between Alibaba Foundation and the bureau of civil affairs of Binjiang district in Hangzhou, capital of Zhejiang province, online Alibaba users will have a unified quantitative standard to evaluate their public welfare acts. Alibaba also unveiled a set of criteria, the first in China to measure the value of voluntary service hours and philanthropic behaviors, with its basic unit named "public welfare hours."

Spanish firm to invest in Australian company

Spanish energy giant Iberdrola has announced that it will invest hundreds of millions of dollars in renewable energy in South Australia. Xabier Viteri, Iberdrola's head of renewables, said that the company will invest A$500 million ($344.9 million) in the Port Augusta Renewable Energy Park (PAREP), a proposed wind and solar farm, according to Guardian Australia. He said that Australia was an ideal renewable investment opportunity because of its high consumption and stable energy market. "It's a place where renewables are going to play a much more relevant position in the coming years, clearly," he said.

Kalanick severs ties with ride-hailing giant

Travis Kalanick, who built Uber into a ride-hailing giant, is cashing out. Kalanick disclosed on Tuesday that he has sold off all his Uber stock－estimated at more than $2.5 billion－and is resigning from the board of directors, severing ties to the company he co-founded a decade ago. "Uber has been a part of my life for the past 10 years. At the close of the decade, and with the company now public, it seems like the right moment for me to focus on my current business and philanthropic pursuits," the 43-year-old entrepreneur said in a statement.

AROUND THE WORLD

South Korea's retail shipments rise in Nov

Retail sales in South Korea grew last month as a year-end shopping festival buoyed both online and offline sales, a government report said on Wednesday. The combined sales of 26 major online and offline retailers increased 7.5 percent in November from a year earlier, according to the Ministry of Trade, Industry and Energy. It came as the Korea Sale FESTA, a South Korean version of Black Friday, ran for three weeks from Nov 1. Consumers raised the purchase of discount products during the country's biggest shopping season. Offline sales rose 2.4 percent in the month, marking the first increase in three months. Online sales advanced 14.8 percent, keeping a double-digit expansion for four straight months.

Supermarket sales in Japan fall by 1.4%

Japan's supermarket sales in November decreased 1.4 percent from a year earlier on a same-store basis, down for the second straight month, continuing to be affected by a consumption tax increase on Oct 1, the Japan Chain Stores Association said on Tuesday. According to the association's figures, sales at 10,538 supermarkets operated by 55 companies totaled 996.8 billion yen ($9.1 billion). The industry body's figures also showed that sales of food items, which were generally exempted from the 2-percentage-point tax hike from 8 percent, dipped 0.2 percent, with demand for alcohol subject to a 10-percent tax not recovering after being pushed up in September on last-minute demand.

For Chinese AI startup firm Shukun Technology, the participation confirmed that its footprint in AI-backed medical imaging and diagnosis is on the right track and has huge market potential.

Together with bigger international medical names, Shukun is showcasing two of its products: CTAs for coronary arteries and the head and neck.

"We use software, database and machine learning algorithms to make diagnosis more accurate," said Anne Ma, Shukun's co-founder and CEO. "We hope the products will help doctors make better diagnoses and plan surgery faster than they can now."

According to the 2017 Report on Cardiovascular Diseases in China by the National Center for Cardiovascular Diseases, the country had more than 290 million cardiovascular disease patients, and 3 million die each year.

Founded two years ago in Beijing, Shukun's specialty is in the diagnosis of cardiovascular-related disease. It uses data, along with software and algorithms, to model human hearts and diagnose heart disease.

Shukun has accelerated the commercialization of its technologies to assist cardiovascular diseases diagnosis in more than 42 cities in China, and claimed to have the largest market share in the number of products installed in Chinese hospitals－particularly in 200 top-tier hospitals－among medical AI companies in the cardiovascular disease sector.

But Ma admitted that cardiovascular disease diagnosis requires a much more sophisticated technological process, together with a complex data collection process, due to the lack of data access from open sources. This will inevitably retard the machine learning process.

The key to Shukun's work, and what Ma said sets it apart from others in the field, is its world leading original medical AI neural network with more than 1 billion neurons.

A recent study conducted by University Hospitals Birmingham NHS Foundation Trust in the United Kingdom found that AI is on a par with human experts when it comes to making medical diagnoses based on images. The biggest benefit comes from the potential easing of strain on resources, freeing up time for doctor-patient interactions and even aiding in the development of tailored treatment.

Also joining RSNA's dedicated AI Showcase exhibition session was Japan's Fujifilm. The company displayed its latest solution bringing diagnostic radiology, mammography and cardiology together on the server-side, enabling immediate interaction with these modality imaging data sets through a single AI-enabled platform.

"We are showing our commitment to progressing AI technology to empower physicians to make more efficient and impactful care decisions," said Bill Lacy, vice-president, medical informatics, Fujifilm.

Belgium pharmaceutical company UCB, which has mature therapies in epilepsy and osteoporosis, is considering designing such products for screening osteoporosis and forecasting possible epileptic seizures for use in hospitals or as smart phone apps for patients.

"The diagnosis rate of some diseases is low or it may take years before a correct diagnosis. We feel the responsibility to help patients and doctors achieve a better and earlier diagnosis," said Taco van Tiel, vice-president and head of international markets at UCB.

Zhou Wenting contributed to this story.

Data from market consultancy All View Cloud or AVC showed that TV sales reached 36.33 million units nationwide from January to October this year, down 3.1 percent compared with the same period last year.

However, the accumulative sales of OLED TVs rose 21.8 percent to 154,000 units in the January-October period, with Skyworth topping the list in OLED TV shipments in the domestic market, according to AVC.

Market research firm IHS Markit said the shipment of OLED TVs is expected to reach 455,000 units next year and 693,000 units in 2021.

OLED is a relatively new technology and part of the recent innovations in display. It has a fast response rate, wide viewing angles, super high-contrast images and richer colors. It is much thinner and can be made flexible, compared with traditional LCD display panels.

Tang Xiaoliang, chief brand officer of Shenzhen Skyworth-RGB Electronic Co Ltd, which is a subsidiary of the Skyworth Group, said the company plans to invest 200 million yuan ($28.5 million) in a marketing campaign during the spring's peak season as part of a broader drive to bolster the transformation and upgrading of the whole TV industry.

Skyworth is transforming itself into a high-tech and innovation-driven company, having invested heavily in OLED technology, self-developed chips that are used to improve the quality of the image, and the big-screen AIoT ecosystem, Tang said.

AIoT, which means artificial intelligence of things, is the combination of AI technologies with the internet of things infrastructure to improve human-machine interactions and enhance data management and analytics.

The company has been producing OLED TVs in partnership with South Korea's largest panel maker, LG Display, since 2013.

Statistics from AVC showed sales of Skyworth OLED TVs accounted for 46 percent of total OLED sales in the Chinese market in 2017, followed by LG with 16 percent and Sony at 14.9 percent.

LG Display is the only company capable of mass producing large-sized OLED screens globally. In August, the company's production plant began operations in Guangzhou, the capital of Guangdong province.

With an investment of 46 billion yuan, the plant will be able to manufacture 60,000 glass substrates per month at the preliminary stage. That will be used for 4K ultra-high-definition large-sized OLED TVs in sizes of 55 inches, 65 inches and 77 inches.

Another home appliance giant, Hisense Group, has jumped on the bandwagon and launched its own 55-inch and 65-inch A8 series OLED TVs in March.

Yu Zhitao, general manager of the group's listed arm in Qingdao Hisense Electric Co Ltd, said the company will adhere to presenting a high-quality picture and large-sized screens this year, as well as promoting continuous innovation in graphics chips, laser displays and artificial intelligence technologies.

"The traditional TV market is almost saturated and companies need to seek new growth points," said Dong Min, an independent researcher in the home appliances sector, adding new display technologies such as OLED TVs, curved screen TVs and laser TVs are all good choices and in line with ongoing consumption upgrades.

The OLED TVs will be the future development direction of the TV industry and present an opportunity for TV manufacturers to expand their profit margins, said AVC President Wen Jianping.

Li Yaqin, general manager of Sigmaintell, said the 65-inch TV will become the mainstream screen in people's living rooms in the future, but that OLED TV will not be able to immediately trigger customer purchases at this time although most current consumers are technophiles and high-end users.

Developing brand recognition among Chinese consumers is a "topic that interests us very much," said Federico Stanham, head of the National Meats Institute (Inac).

"Countries that have positioned their brand, such as Australia, achieve 25 percent higher sales in meats than we do," he explained. "Led by Inac, Uruguay has since April of this year launched a strong promotional campaign in China on social networks, at points of sale, and at food distributors and producers."

The campaign is designed to make the "Uruguay brand" better known in China, a destination for about 60 percent of Uruguay's beef exports. The campaign should "continue for several years to make us recognizable," said Stanham.

The campaign "has been seen more than 100 million times on social networks. That's very significant," the industry official said.

In China, "people shop online and also navigate shopping sites, and Uruguay having a presence there helps to make us more recognizable," he added.

For producers and exporters, "China as a market has several advantages: it has so many different regional cuisines and Chinese consumers find ways to prepare all of the parts an animal can supply," said Stanham.

When it comes to beef, for example, the Asian market "demands all of the various cuts. That's very beneficial because all of the production can be placed in China," he said.

To satisfy China's growing appetite for beef, Uruguay "has diverted its trade flow from traditional markets such as Europe, Chile, the United States, Israel and Russia," said Stanham.

"Today, it's more convenient to place your production in China rather than those markets. In several countries, the volume (of product) placed has decreased, but in China it has increased significantly," he said.

The Asian market is seeing "a rise in beef consumption," while the traditional markets are either holding steady or seeing a decline, he added.

So far this year, Uruguay has exported 446,000 metric tons of beef, generating revenue of $1.724 million. Of that total, China purchased 294,000 tons worth $1.012 million.

Uruguay's meat industry is eagerly anticipating a free-trade agreement with China to gain a competitive edge over rivals from Australia and New Zealand, both of which enjoy benefits from tariff reduction programs.

Xinhua

Admitting that the deal was a big relief, Jay Foreman, president and chief executive officer of Basic Fun, a Florida-based toy business, said the threat of tariff hikes was akin to a "sword" over his head and had cast a shadow on business operations, planning and development.

"Of course I will feel great that I don't have impending disaster raining down on me," Foreman told Xinhua News Agency in a recent interview. "I would have really felt a lot better if I never had it in the first place."

For months, Foreman and his colleagues had been concerned that the toys his company imports from China would be slapped with additional 15-percent tariffs, previously scheduled to take effect on Dec 15.

"It's a direct tax on our merchandise and profits," Foreman said of the tariffs. "If somebody is trying to take and reduce our profits, it becomes a nightmare."

Facing the threat, Basic Fun, most of whose products are manufactured in China, has closely followed the trade negotiations between the world's top two economies and constantly held meetings to discuss the situation.

"Are the tariffs on? We have a meeting. What do we do? Are the tariffs off? We have a meeting. What do we do? So it really becomes difficult to plan," Foreman said.

The anxiety kept growing until two days before the deadline when China and the United States announced the "phase-one" agreement, followed by the White House's decision not to proceed with the planned tariffs targeting Chinese imports, including phones, computers, holiday ornaments, clothing and toys.

Steve Pasierb, president and chief executive of the New York City-based US Toy Association, said he welcomes the deal.

"With the uncertainty removed, toy companies can move forward and focus on planning, product development and providing joy for kids through the toys and games they make," Pasierb said in a statement.

Foreman said he understands that the deal will not fix all the trade issues between the two nations, but "it's a goodwill gesture to show the market and the world that the US and China can work together."

Since trade friction between the two sides began over a year ago, US businesses relying on China's manufacturing prowess were frequently asked why they did not relocate their production to other countries or regions.

Most said they could not or would not, including Basic Fun, which lists safety as its primary concern. Over the past few decades, Basic Fun and many other US toy companies have worked closely with their Chinese partners. Together they have developed the best supply chain and the highest safety standards in the toy industry.

"It's a really efficient, fantastic and most importantly, safe production and supply chain … It's really important for toys to be made safely," said Foreman. "You hardly ever hear an issue of a toy being unsafe anymore that's made in China."

The entrepreneur also weighed in on China's strength in manufacturing. "We really rely on the Chinese productivity a lot because the factories and the workforce are extremely efficient."

"They really know how to set up production lines," he said. "They are motivated. They are hardworking. They are diligent. And they have been a really important part of the growth of the US toy industry."

As for Basic Fun, moving production out of China would take 12 to 24 months and cost millions of dollars, not to mention posing certain risks.

"I can say that I have no interest in moving out of China … There is no good option for our industry," Foreman said.

The past two years for the US toy industry have been tough. Toys "R" Us, once the country's leading toy retailer and Basic Fun's biggest customer, filed for bankruptcy in 2017, resulting in the closure of hundreds of stores and the elimination of tens of thousands of jobs.

Partly because of Toys "R" Us' downfall, the US toy industry is expected to be hit with a decline of 3 to 5 percent in sales in 2019, Foreman said.

The waning of brick-and-mortar retail in the United States comes amid a rise of online sales and shopping, which has brought both challenges and opportunities for Basic Fun and other toy brands. "All of us in the toy industry are slowly, with many challenges, learning the best way to sell and market our products online," Foreman said.

In addition to competing against each other, US toy makers also face fierce competition from console games, mobile gaming and social media. Clearly, no one wants more tariffs or the threat of them.

"We work in a business that has a long development cycle. We are selling and we are showing our customers products now for next Christmas," he said. "When there is uncertainty about the price you are going to charge your customers, you really can't plan effectively."

But the US toy industry might consider itself lucky, given how plenty of imports from China still remain subject to extra tariffs by Washington, which are taking a toll on the national economy, company profits and the public.

Pasierb said he wants to see an end to the trade friction, urging the administration to "seize this opportune point in time to also eliminate tariffs that remain in effect".

Xinhua

"Work on publishing of the draft tariff law is likely to be pushed in the near term. And we expect a breakthrough in tariff legislation next year," said Li Xuhong, a senior researcher with the Beijing National Accounting Institute and a consultant to the State Taxation Administration, which is tasked with drafting tax laws.

The tariff law is a significant legislative work for China next year as it is closely related to the international trade and economic opening-up, Li told China Daily.

Shi Zhengwen, director of the Center for Research in Fiscal and Tax Law at China University of Political Science and Law, said earlier that the tariff legislation process will be accelerated, as the country is planning to complete the entire process by the end of next year.

In the upcoming tariff law, experts said, the existing tax framework and overall tax burden level will remain unchanged so as to stabilize market expectations, amid a complex and uncertain external environment.

During the first 11 months of this year, total tariffs reached 263.8 trillion yuan ($37.7 trillion), down by 2.2 percent from a year earlier, according to data from the Ministry of Finance.

The government decided on Monday to lower tariffs on a broad range of imported goods, including frozen pork and high-tech products, to satisfy domestic consumption and reduce production costs, starting Jan 1.

Temporary tariff rates, which are set for a specified period, will be applied to 859 items. Designated items will enjoy import tariffs that are lower than the existing most-favored-nation rates in 2020.

The tax legislation process in China started in 2013, targeting to transform all existing tax regulations into laws. By the end of November, nine tax laws had been formulated across 18 tax categories. The 13th Five-Year Plan (2016-20) plans to finish the entire legislation process by the end of next year.

The tax legislation process needs to be in coordination with the overall tax and fee reduction plan so as to improve the efficiency of the macroeconomic policies to support economic growth and guarantee tax levy increases, said Li.

China's largest tax contributor－the value-added tax (VAT), is currently ready for the legislation process. A draft VAT law was released by the Ministry of Finance for public opinion on Nov 27.

PwC China National Indirect Tax Leader Robert Li said: "Considering the tax reduction trend in the last couple of years and the guidance of the State Council on simplifying the VAT rate brackets from three to two, it is important to monitor closely whether adjustment and simplification of VAT rate brackets will be included in the final draft VAT Law to be submitted to the National People's Congress for review and discussions."

The finance ministry also released the draft of the consumption tax law last month for public opinion, which seeks to reduce the frequency of tax payments for the convenience of taxpayers.

Finance Minister Liu Kun submitted the drafts of the two tax laws to the ongoing bimonthly session of the Standing Committee of the NPC for review on Monday.

In the draft laws for deed tax and urban maintenance and construction tax, the existing tax rates will remain unchanged, and their current tax administration framework and overall tax burden level will remain stable, said Liu.

Cao Yin contributed to this story.

For foreign currency debt without hedging arrangements (including natural hedging and financial hedging), the banks may need to reserve more capital as a cushion to prevent defaults, in accordance with the Basel III requirements.

"Risks from overseas debt issuance of property companies without any foreign exchange income, and local government financial vehicles, should be monitored and notified, to avoid a currency mismatch," said Sun Tianqi, chief accountant of SAFE, at the recent annual meeting of the China Financial Forum.

Measures are also being studied to discourage companies from investing in sophisticated foreign exchange derivative products that are beyond their professional capabilities, according to Sun.

Meanwhile, the government's implicit guarantee on companies' cross-border debt should be controlled, to reduce moral hazards, he said. "We should pay more attention to the foreign exchange and foreign currency interest rate risks of companies that are related to their overseas bond issuances."

Some international organizations, including the International Monetary Fund, have warned about the risks due to a currency mismatch, which exists when a borrower funds its operations in one currency while the earnings derived from these operations accrue in another currency.

Developing the local currency-denominated bond market can help China reduce its reliance on foreign-currency financing, said experts. They said the country should consider further opening up to foreign direct investment as it is a more stable mechanism for foreign capital inflows than debt.

Improving the exchange rate mechanism and increasing its flexibility are other measures that the country can adopt to reduce the risk of currency mismatch, said Sun.

To prevent exchange rate risks, the SAFE official suggested that in case of companies that rely on raw material and equipment imports but have no foreign exchange income to repay their foreign exchange loans, banks should take account of the foreign exchange rate and commodity price fluctuations, foreign currency interest rate risks and the companies' hedging arrangements.

Government departments, including the central bank and other financial regulators, should build a mechanism under which they can share data related to international balance of payments, foreign investment in domestic bonds, stocks and derivative markets, as well as information about commercial banks' foreign exchange risk regulation and monitoring indicators (such as cumulative foreign exchange exposure and foreign exchange liquidity), Sun said.

Zhu Min, head of Tsinghua University's National Institute of Financial Research and former IMF deputy managing director, said that the yuan exchange rate is likely to remain stable in 2020, while large capital inflows will continue and a strong monetary policy will continue to boost high-quality, steady economic growth.

China's foreign exchange market maintained a basic equilibrium in October, according to SAFE data, indicating a balanced supply and demand relationship. Cross-border capital flows also remained stable, including an equilibrium of foreign exchange settlement and sales by banks－a deficit of $4.4 billion in October, lower than the average of the first nine months.

Foreign-related receipts and payments by banks for their customers represented a surplus, official data showed. The non-banking sector, including companies and individuals, registered a surplus of $10.9 billion in foreign-related receipts and payments, versus a slight deficit in the March-to-September period.

Foreign exchange supply through major channels of inflows rose steadily, and cross-border capital inflows from foreign direct investment and securities investment continued growing on a yearly basis, said Wang Chunying, spokeswoman of SAFE.

"Despite the complex and challenging external environment, China's economy has shown great resilience, potential and vibrancy. The economic performance remains within a reasonable range and the high-level opening up is advanced, laying a solid foundation for the stability of the foreign exchange market," said Wang.

PBOC skips reverse repos as liquidity improves

China's central bank skipped reverse repos on Tuesday, citing sufficient liquidity in the banking system. The banking system reports a sufficient level of liquidity at present, the People's Bank of China said in a statement. A reverse repo is a process in which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.

Curbs on deboned Japanese beef lifted

Chinese authorities recently announced that the country would remove a ban on imports of Japan's deboned beef under 30 months old starting Dec 19. The ban was imposed amid outbreaks of mad cow disease in 2001, according to a statement jointly released by the General Administration of Customs and the Ministry of Agriculture and Rural Affairs. Inspection and quarantine requirements would be made separately, said the statement. The authorities also unveiled another statement to lift import restrictions imposed on cloven-hoofed animals and products, removing a ban placed in 2010.

Trademark applications swell to 7.12m in China

From January to November, 7.12 million trademark registration applications were filed in China, according to the trademark office of the National Intellectual Property Administration. China's total number of effective registered trademarks has reached 24.78 million, with every 4.9 market entities owning one registered trademark on average. The public services related to trademarks have become more efficient and convenient. The period needed to review trademark registration in China has been shortened to five months on average.

Foreign trade volume rises by 12.7% in Hebei

The foreign trade volume of North China's Hebei province rose 12.7 percent year-on-year to 364.23 billion yuan ($52 billion) in the first 11 months of the year, local authorities said on Tuesday. The province's exports totaled 214.71 billion yuan during the period, up 6.4 percent, while its imports rose 23.1 percent to 149.52 billion yuan, said the customs in the capital city of Shijiazhuang. The province's trade with economies along the Belt and Road rose 18.9 percent to 116.78 billion yuan, and its trade with the Association of Southeast Asian Nations grew 33.7 percent to 39.54 billion yuan. Its trade with Australia and Brazil saw double-digit growth from January to November, up 61.9 percent and 24.6 percent, respectively.

COMPANIES AND MARKETS

Business climate sees steady improvement

Chinese firms reported an improving business climate in the fourth quarter of this year, a central bank survey showed. The business climate index stood at 55.5 percent in the fourth quarter, 2.2 percentage points higher than in the third quarter, according to a report from the People's Bank of China, whose results are based on surveys of over 5,000 industrial firms. Respondents also reported improving profitability, with the index rising 2 percentage points from the previous quarter to 57.3 percent. About 60.5 percent of surveyed entrepreneurs said the macroeconomy was running smoothly. Sentiment for product selling prices and raw material purchasing prices both improved quarter on quarter, edging up 1.9 percentage points and 0.8 percentage point, respectively.

Ito-Yokado sustains momentum in Sichuan

Japanese retailer Ito-Yokado has shared benefits from consumption upgrade in west China, said Tomihiro Saegusa, president of Japanese retailer Ito-Yokado. Saegusa arrived on Sunday in Chengdu, capital of Southwest China's Sichuan province. Nine of 10 Ito-Yokado stores in China are situated in Chengdu's downtown and surrounding area. Ito-Yokado entered the Chinese market in 1996.

Cambodian carriers expand flights to China

Two Cambodia-registered airlines have announced new routes connecting Phnom Penh, capital of Cambodia, to destinations in China, an English-language daily newspaper reported on Monday. Carrier Cambodia Airways will launch a regular nonstop flight between Phnom Penh and Shenzhen in southern China on Dec 27, the Khmer Times reported, citing an airline's statement. The same company will begin flying to Chengdu, the capital of Southwest China's Sichuan province, from Phnom Penh on Jan 2. Shenzen and Chengdu are important transportation hubs.

AROUND THE WORLD

Thailand central bank expects 2.8% growth

In a seminar held in Bangkok on Monday, the Bank of Thailand (BoT) governor said he predicts the Thai economy to expand by 2.8 percent next year as a result of government budget disbursement and investment in mega infrastructure projects. "The economic growth rate would be higher at 2.8 percent, comparing to 2019's GDP at 2.5 percent," said BoT Governor Veerathai Santiprabhob, "The 2020 budget bill would pass the parliament, megaprojects are already making progress so as many investment projects; also 5G communication networks will begin and projects related to financial institutions will emerge." The governor said Thailand could do better than a 2.8 percent growth projection.

S. Korea plans more treasury bond sales

The South Korean government's treasury bond sale would rise in double digits next year, the country's finance ministry said on Monday. The Ministry of Economy and Finance said that 130.2 trillion won ($111.8 billion) worth of government bonds planned to be issued in 2020. It was up 28.0 percent, or 28.5 trillion won, from this year, marking the fastest yearly growth since 2009 when the global financial crisis rattled the economy.

Iran boosts commodity exports to Uzbekistan

Iran exported $152 million worth of commodities to Uzbekistan during the first eight months of the current Iranian year (March 21-Nov 21), Eghtesadonline news website reported on Monday. The figure registered a 60 percent rise compared with last year's corresponding period, the Chairman of Trade Promotion Organization of Iran Hamid Zadboum was quoted as saying. Stone-cutting machines, cement, propane, glass sheets, construction stones and furniture were Iran's main exports during the period under review. Iran mainly imports cotton, yarn, potassium chloride, phosphate fertilizer and pinto beans from Uzbekistan.

Singapore's CPI-All Items inflation surges

Singapore's Consumer Price Index for all items (CPI-All Items) grew 0.6 percent year-on-year in November, compared to a 0.4-percent growth in October, according to a joint statement issued by two government authorities. The Ministry of Trade and Industry (MTI) and Monetary Authority of Singapore (MAS) said in the joint statement that the CPIAll Items inflation increased in the month because of an increase in private road transport inflation and smaller declines in the costs of retail goods and accommodation, even as services inflation eased. In November, the MAS core inflation, which excludes the costs of accommodation and private road transport, was unchanged at 0.6 percent from October as lower services inflation was offset by a smaller decline in the cost of retail goods.

China Daily - Agencies

Only 20.7 percent of the survey respondents were willing to make fresh home purchases during the next three months, the lowest level since 2017. It also came against the 21.5 percent demand seen during the third quarter of this year, said the report published by the People's Bank of China, the central bank, which tracks housing demand on a quarterly basis.

The survey covers 50 cities and 20,000 residents and most of the questions are about the participants' income level, employment situation, inflation expectations and willingness for consumption, deposits and investments.

The latest results showed that residents are now less interested in buying new houses. About 11 percent of the participants expect new home prices to decline in the first quarter of 2020, higher than the 9.8 percent seen in the third quarter of this year, the report said.

Policy makers have repeatedly stressed that, "housing is for living in and not for speculation". A similar stance was seen at the annual Central Economic Work Conference held earlier this month, when it was decided to keep the tone unchanged for next year. It also highlighted the need for "keeping property prices stable and rationalizing expectations".

Song Yu, chief economist of Beijing Gao Hua Securities Co Ltd, said the idea of "keeping property prices stable" can be interpreted as a measure to prevent abnormal price swings.

According to data released by the National Bureau of Statistics, property investment growth weakened to 8.4 percent year-on-year in November, down from 8.8 percent in October. Growth in land sales by volume fell to negative 0.8 percent in November from 12.8 percent in October.

A report from Nomura Securities said that growth in land sales by volume is expected to tumble further in the coming months, given the headwinds including the recent tightening in financing for property developers.

From an entrepreneurial perspective, indicated by a separate PBOC report released on Monday, 37.9 percent of the managers from 5,000 companies were of the view that China's macroeconomy remained "cool" in the fourth quarter, compared with 36.3 percent in the July-to-September period.

Policy makers have recognized that downside pressures on economic growth are increasing in China, influenced by the expected global economic slowdown next year and existing trade friction between China and the United States. Economists said this will lead to more rational and cautious consumption, investment behavior from Chinese people next year.

Instead of putting more money into property or other types of financial assets, a larger number of people are keen on increasing deposits, said the PBOC survey. About 45.7 percent of the respondents were keen to put more money in banks, up from 44.5 percent in the third quarter survey, the PBOC said.

According to the survey, about 27.5 percent of the participants planned to increase spending on healthcare in the first quarter of 2020, up from 25.8 percent a quarter ago. About 28.3 percent of the respondents plan to spend more on travel, down from 30.6 percent in the third quarter.

In face of the economic challenges, analysts expect the main policy objectives for next year to be on maintaining growth and stability. At the same time, economic rebalancing is making steady progress, with private consumption and services playing a much bigger role in the overall growth.

"China's policy focus continues to shift between three－at times competing－policy objectives of ensuring sustainable growth, maintaining financial stability and implementing reforms to rebalance the economy, with the current focus primarily on growth and stability in the face of slowing GDP growth," said Michael Taylor, managing director of the Asia-Pacific region at global credit ratings agency Moody's.

1. Alibaba makes Hong Kong debut

Alibaba Group Holding Ltd debuted on the Hong Kong stock exchange on Nov 26, five years after the Chinese internet giant first went public in New York in 2014. Alibaba's Hong Kong-listed shares jumped 6.25 percent above its issue price of HK$176 ($22.60) per share in the morning before hitting an early intraday high of HK$189.5. They closed 6.59 percent up at HK$187.60. The company said it raised HK$101.2 billion by selling 575 million new shares to investors.

2. Telecom majors roll out 5G data plans

China's three major telecom operators on Oct 31 launched their long-awaited 5G service plans. China Mobile, China Unicom and China Telecom, in simultaneous moves, unveiled their monthly 5G plans with prices ranging from 128 yuan ($18.26) to 599 yuan. The move means consumers can now pay to access superfast 5G speeds as more than 86,000 5G base stations have already entered service in China, covering 50 cities nationwide, including Beijing, Shanghai, Guangzhou and Shenzhen.

3. Alibaba chairman Jack Ma steps down

Jack Ma, founder of e-commerce giant Alibaba, retired as Alibaba's executive chairman on Sept 10, one year after he announced his resignation plan. Ma, a former English language teacher, co-founded Alibaba with 17 partners in an apartment in Hangzhou. This year marks the 20th anniversary of the company's founding. Alibaba said Ma would remain on the board of directors until 2020. Daniel Zhang, 47, who had been acting as chief executive officer since 2015, took the helm.

4. Costco opens first store on Chinese mainland

The world's second-largest retailer, Costco Wholesale Corp, opened its first brick-and-mortar store on the Chinese mainland in Shanghai on Aug 27. The 14,000-square-meter store was inundated on its first day, with customers spending up to two hours queuing at checkouts or waiting three hours to find a spot in the 1,200-bay parking lot. Costco membership costs 299 yuan a year.

5. Huawei unveils its own operating system

Huawei Technologies Co unveiled its much-anticipated in-house operating system Harmony OS on Aug 9. Harmony will be able to support a wide range of application scenarios, including smart TVs, automobiles and wearables, said Yu Chengdong, CEO of Huawei's consumer business group. The senior executive said Harmony can be used in its smartphones. But Android is still Huawei's preferred choice for handsets if the company is allowed to use it. "But when Android is not available, Harmony can be applied immediately to smartphones. Harmony is ready," Yu added.

6. China State Railway Group inaugurated

China Railway Corporation has been renamed China State Railway Group Co Ltd, a wholly State-owned enterprise with registered capital of more than 1.73 trillion yuan, according to a statement from the company on June 18. The company is run by the central government, and the Ministry of Finance performs investor duties on behalf of the State Council. The company will be responsible for the national railway system's operation, construction and safety, as well as nonprofit transport jobs.

7. Tesla breaks ground on Gigafactory in Shanghai

Tesla's 50-billion-yuan Shanghai Gigafactory broke ground in the Lingang Special Area on Jan 7.

The plant is the company's first factory outside the United States and the first automobile production project wholly owned by foreign capital in China. With an initial weekly production of about 3,000 Model 3 electric vehicles, the factory is designed with an annual capacity of 500,000 electric cars.

8. World's largest shipbuilder sets sail

China Shipbuilding Corp was officially unveiled on Nov 26 in Beijing as the world's largest shipbuilder. The giant corporation was created through the merger of China State Shipbuilding Corp and China Shipbuilding Industry Corp, the country's two biggest shipbuilders by production capacity. The new company has about 310,000 employees, 147 subsidiaries, including manufacturing complexes nationwide and 35 institutes as well as total assets worth 790 billion yuan.

9. Websites suspended for multiple violations

The websites of Visual China Group and IC Photo, which provide visual content, were required to suspend services for rectification on Dec 10 due to multiple violations.

The websites were engaged in internet news information services without obtaining authorized licenses, according to the Cyberspace Administration of China. They also carried out cooperation involving internet news and information services with overseas enterprises without security assessment.

10. National oil, gas pipeline firm unveiled

China officially launched its long-planned national oil and gas pipeline network company on Dec 9, as part of the country's ongoing oil and gas reforms to help meet the nation's increasing energy needs.

Combining the pipeline assets of the country's big three State-owned energy giants－PetroChina, Sinopec and CNOOC－the creation of the new company will help foster a more competitive environment for all players in the sector.

By September this year, the tourism industry provided employment opportunities for 986,400 people in the province, which in turn helped 897,000 of them to come out of the shadow of poverty, according to data provided by the provincial authorities.

Guizhou has developed 19,495 tourism spots in 66 poverty-stricken counties, with 4,490 of them in 16 counties that are suffering from deep poverty. During the first three quarters of this year, Guizhou's rural tourism attracted 423 million visitors, up 21.7 percent on a yearly basis. Total rural tourism revenue surged 30.6 percent year-on-year to 256.2 billion yuan ($36.5 billion).

During the same period, total tourism revenue in Guizhou reached 1 trillion yuan, up 28.3 percent year-on-year, according to the Guizhou Provincial Department of Culture and Tourism.

"In recent years, Guizhou has attracted tens of thousands of tourists with its unique landscape and rich culture. Promoting the development of the tourism industry is an important approach for targeted poverty alleviation. Through tourism, we hope to bring more people out of poverty," said Wang Wenxue, deputy head of the Guizhou Provincial Department of Culture and Tourism.

Xijiu, a northern town in Guizhou, is an ideal example of tourism-driven poverty alleviation in the province. As a town famous for producing baijiu, the town attracts tens of thousands of baijiu lovers every year. Guizhou Xijiu, the largest baijiu producer in the town, regularly organizes baijiu discovery tours. The tours include learning brewing techniques at the factory, visiting liquor collection museums, as well as baijiu tasting parties guided by liquor professionals.

According to the company, in November, over 900 batches of tourists, or 13,400 visitors, experienced its liquor tourism.

Lou Bihua, Party secretary of Xijiu town, said that in 2014, there were 4,628 villagers facing poverty. Through the active poverty alleviation efforts, the town managed to reduce the incidence from 13.86 percent in 2014 to 1.02 percent in 2018. This year, Xijiu town has managed to eliminate poverty, said officials.

Xiang Chengqiang, Party secretary of Xishui county, which Xijiu town belongs to, said: "Xishui county has beautiful natural scenery, a pleasant climate, and rich history and culture. More tourists are now coming to Xishui. We will continue to give full play to the role of the tourism industry in poverty alleviation, and realize high-quality development."

According to Xiang, during the first six months of 2018, Xishui attracted 3.02 million tourist visits, up 51 percent year-on-year. Its total tourism revenue surged 53.8 percent on a yearly basis to 3.48 billion yuan.

Tongzi county, in northern Guizhou, is another example of tourism-driven poverty alleviation. With the support of the government, the county transformed from a poverty-stricken area to a national 4A-level scenic spot.

The income from the scenic spot is mainly through tourism entrance tickets, parking fees, village-level labor service income, village-level housing rental and village-level land transfer.

According to the local government, currently, there are 1,822 village guesthouses in Tongzi. In 2018, the scenic spot attracted 19.39 million visits, lifting nearly 4,000 poor villagers out of poverty.

The annual Central Economic Work Conference held in Beijing from Dec 10 to 12 has called for resolute efforts in targeted poverty alleviation, as one of the "three tough battles". It also underscored the importance of using industry development for poverty alleviation.

Li Jinzao, vice-minister of culture and tourism, said tourism-driven poverty alleviation work can bring positive results to both the economic and civil enhancement sectors. Rural tourism has become the strongest force to lift villagers out of poverty, he said.

With both its past and present dependence on labor-intensive industries such as apparel and toys, the city in recent years quickened its pace to move up the industrial chain and by 2021, it aims to increase the value added of high-end manufacturing to more than 300 billion yuan ($42.9 billion).

The plan also called for the creation of two world-class manufacturing clusters in automobiles and ultra-high definition videos, as well as four other national clusters in industries that include new materials and high-end equipment.

The city's manufacturing shift is emblematic of the broader trend in China as the "world's workshop" built upon low labor and production costs will be taking on new forms.

Apart from the traditional "Made in China" tags found on store shelves, high-speed trains and semiconductors are becoming the new symbols of Chinese manufacturing.

Across the nation, provinces such as Sichuan, Shandong, Zhejiang and Jiangsu have invested huge amounts to push high-quality development in their manufacturing industries.

Over the past year, as overall manufacturing investment was losing steam, investment in high-tech manufacturing showed resilience.

Data from the National Bureau of Statistics showed investment in high-tech manufacturing surged 14.8 percent year-on-year in the first 11 months of the year, far outpacing the sector's average growth of 2.5 percent.

At the Central Economic Work Conference earlier this month, top policymakers promised to step up the upgrading of equipment to optimize traditional manufacturing and increase long-term financing support for the sector.

China will work to build a number of advanced manufacturing clusters with international competitiveness, a statement released after the key economic meeting said as it charted the course for economic work in 2020.

The meeting also called for promoting industrial and consumption upgrading, fully tapping into the advantages of China's considerable market, and giving play to the vital role of consumption alongside the pivotal role of investment.

The emphasis on concerted monetary, fiscal and regional support for advanced manufacturing highlighted the industry's key role in China's economic transformation, said a research report by Shenwan Hongyuan Securities.

Investment in high-tech manufacturing will not only help prop up investment demand in the short term, but also spur technological progress at the supply end in the long run, the report noted.

Wang Yiming, deputy director of the Development Research Center of the State Council, said the meeting sends a signal that more investment will flow to areas such as high-end manufacturing which could stimulate upgrades at both the supply and demand end to achieve a dynamic balance.

In addition to rising investment, the Chinese government has launched across-the-board tax cuts and fee reductions to enable enterprises to focus more on research and development, which is key to driving the upgrading of China's manufacturing.

Considering China's existing advantages, the tremendous domestic market and its wide adoption of frontier technologies, the country's manufacturing sector will be ready for another big leap forward, analysts said.

Xinhua

Together with AliExpress, an e-commerce site under Alibaba Group selling to overseas markets, Xiaomi conducted massive content marketing campaigns and leveraged local internet influencers to endorse a mobile phone model that debuted exclusively on the platform.

Sales were brisk, with 20,000 devices snapped up during the launch day, said Zhu Long, operating director for the brand's AliExpress channel.

"We've clearly drawn marketing experience from the domestic e-commerce gameplay," Zhu said. "This is among the major thrusts for us to achieve $20 million during this year's Nov 11 sales, which is a quite remarkable single-day record for overseas sales."

Equipping Chinese merchants with capabilities from branding, sales to logistics and payment in a foreign market is on the priority list of Wang Mingqiang, general manager of AliExpress.

"A primary task for next year is to invest more heavily in local resources," said Wang. "Our success is based on the empowerment of our merchants."

The 9-year-old platform now sells to 150 million customers in over 200 economies worldwide. It started out as an obscure online avenue where budget items largely dominated but has quickly turned into a must-go site where overseas buyers purchase mid-to-high-end products.

Wang said more emphasis will be put into the deployment of overseas warehouses and enhancing its logistics prowess. This is achieved through a tie-up with sister company Cainiao Network, whose footprint is in over 224 countries and regions.

The more than 300 overseas warehouses have effectively helped trim cross-border logistics from 70 days to the current 10 working days, according to the company.

Based on big data analysis, AliExpress also trained its sights on setting up pre-storage warehouses so that sought-after items can be preemptively deployed to shorten delivery time.

"During the promotional period, a user in Madrid received his parcel five hours after placing the order, which was unthinkable before," he said.

AliExpress also pushed ahead with mobile payments by either enabling transactions in local currencies or collaborating with local payment agencies. Wang said more efforts will be put into introducing local payment methods through partnerships.

"Logistics and payment are arguably the biggest challenges compared with a domestic online business," said Yang Wanli, who oversees cross-border business at Chasha Pinguan Leather Trading Co Ltd. "Our online sales experience at home surely helps us crack the code but more concerted efforts are needed between vendors and the platform."

Years of operating on Taobao, the Chinese customer-to-customer site, have taught Yang the importance of attractive display pictures, which are crucial to enhancing the click-purchase rate.

Functionalities that are popular at home, like image search and celebrity livestreaming, have proved to be game-changers to excite customers abroad, said Gary Toppe, who is responsible for Eastern and Central Europe business at AliExpress.

The company will continue to bank on a network of internet celebrities to promote different merchandise to users of various nationalities. Social media personalities will become skilled at converting their influence into cash while helping to boost the revenue of merchants, Wang explained.

The remarks came against the backdrop of the annual meeting of the centrally-administered SOEs being held by the State-owned Assets Supervision and Administration Commission on Tuesday and Wednesday in Beijing.

Aside from setting out the priorities for SOE reform next year, the meeting will discuss ways to optimize the use of State-owned assets and spur innovation, while analyzing the hits and misses of this year's reform measures.

China is expected to unveil a three-year action plan on SOE reform in the first quarter of next year and these measures are set to instill fresh momentum in the country's capital market, invigorate the real economy, cut overcapacity and SOEs' administrative functions, said Li Jin, chief researcher at the China Enterprise Research Institute in Beijing.

"In addition to conducting strategic reorganization in areas such as shipbuilding, equipment manufacturing and chemical engineering this year, China will deploy more resources to restructure industries such as power, non ferrous metals, high-end offshore manufacturing equipment, environmental protection equipment and duty-free sales next year," he said.

Last week, a number of customized programs for mixed-ownership reform began at subsidiaries of central SOEs, including China Railway Rolling Stock Corp, State Power Investment Corp and State Grid Corp.

Among them, Huanghe Hydropower Development Co, a subsidiary of SPIC, gained eight strategic investors and raised funds of 24.2 billion yuan ($3.45 billion).

To better compete with global rivals, the mixed-ownership reform in sectors such as information technology, new energy and high-end equipment manufacturing has notably surged this year, indicating the country's policy requirements for optimizing the State-owned capital layout and resources, said Zhu Ge, president of China Beijing Equity Exchange.

He said several controlling stake transfers were implemented this year in sectors with full competition. The investor mix was also enriched with capital from the private sector. In addition, supportive government policies enabled greater nonpublic capital participation in the mixed-ownership reforms.

Since the beginning of this year, more than 50 percent of equity has been released by 47 mixed-ownership reform projects in both centrally-and locally-administrated SOEs, up 20.5 percent year-on-year, according to data released by the SASAC.

Liu Xingguo, a researcher at Beijing-based China Enterprise Confederation, believes that next year, the SOE reforms will focus on aspects like the upcoming three-year action plan for SOE reform, the role of SOEs' leading research institutes, optimizing and adjusting the layout of Stateowned assets.

SOEs should also boost their incentives in the field of science and technology innovation and use stock options, dividends and other such measures to gain new technology breakthroughs and financial support, he said.

Eager to enhance central SOEs' earning strength, China Reform Holdings Corp has invested 200 billion yuan in 180 innovation and high-tech related projects in select companies in the past three years, according to Zhou Yubo, chairman of China Reform Holdings Corp.

Of this, about 110 billion yuan was invested in over 70 projects for which China was heavily dependent on imports in the past.

China has also taken a series of measures to invigorate its SOEs this year including the mixed-ownership reform and the comprehensive reform of pilot areas in Shanghai, Shenzhen and Shenyang.

The combined profits of China's SOEs rose by 5.3 percent on a yearly basis to 3.2 trillion yuan between January and November, while the profit gained by central SOEs amounted to 2.09 trillion yuan, up 7.7 percent from the same period a year ago, according to the Ministry of Finance.

Chen Zhiyong, CEO of Vivo's Indian branch, said the company has acquired land for the new factory, adjacent to its existing facility in the Greater Noida area of Uttar Pradesh. Work on the new facility has commenced and will be put into operation phase by phase over the next five years.

"The first phase of the new plant is scheduled to start production in May or June next year," Chen said.

Vivo's new investment comes at a time when the Dongguan-based company, which is already the third-largest smartphone vendor in India, is locked in intense competition with rivals like Xiaomi Corp and Samsung.

Vivo has been in India for five years and started manufacturing handsets by the end of 2015. Its existing plant employs more than 9,900 workers and has an annual production capacity of 25 million units.

According to Chen, the first plant has already reached a saturation point in terms of production, and the second factory, once completed, will also make handsets for other countries like Indonesia.

Vivo CEO Shen Wei unveiled the company's strategy for the next five years in India during his visit earlier this month. During his trip, he indicated that Vivo is not just a smartphone vendor but a tech company, people familiar with the matter told China Daily.

"We will also unveil the internet of things devices for local consumers as well as finance services to meet local people's demands in the future," Chen said.

According to Chen, the company is also considering to launch iQOO, a new brand in India, but refused to disclose more details. The iQOO brand has been doing well in China.

India's smartphone market saw shipments of over 46.6 million units in the third quarter of this year, up 26.5 percent quarter-over-quarter and 9.3 percent year-over-year, according to data from market research company International Data Corp.

Vivo registered strong year-on-year growth of 58.7 percent in the third quarter of this year on the back of its affordable Y series. The newly launched exclusive online Z/U series accounted for more than 20 percent of its overall shipments, thus, making it the third-largest online vendor with a market share of 8.2 percent in the quarter, IDC said.

Xiaomi saw the highest ever smartphone shipments in a quarter with 12.6 million units, growing at 8.5 percent year-on-year. Upasana Joshi, associate research manager of IDC India, said: "The continued aggression by the online platforms with attractive cash-back and buyback offers as well as affordability plans like financing options were key in taking the share of the online channel to a record high of 45.4 percent."

Pan Sorasak, Cambodia's commerce minister, said the country will open its sixth trade center in China by the end of this month to further promote bilateral ties in trade, investment, culture and tourism.

The new trade center will be located in Kunming, capital of southwestern China's Yunnan province, he said, and Cambodian Deputy Prime Minister Yim Chhay Ly is scheduled to attend its opening ceremony.

"The center will exhibit Cambodian products and documents related to cultural and tourism sites, the business environment and investment potential in Cambodia," he said in a speech at the ministry's annual conference.

The minister noted the five existing Cambodian trade centers in China are in Guangzhou in southern Guangdong province, Xi'an in northwestern Shaanxi province, Haining in eastern Zhejiang province, the Hong Kong Special Administrative Region, and Yantai in eastern Shandong province.

Cambodian Ministry of Commerce spokesman Seang Thay said Cambodia saw China as a huge market for its products, particularly for agricultural ones.

"Cambodian trade centers in China are useful in promoting Cambodian products, investment potential, investment law and regulations, tourism attractions, and culture to Chinese investors and tourists," he said.

China is the biggest source of both foreign direct investment and tourists to Cambodia, and a key trading partner of the nation.

According to Cambodian government data, the Southeast Asian nation attracted a total investment of $21 billion from China from 1994 to date.

On the tourism side, the country gained 2 million Chinese tourists during the first 10 months of 2019, up 24 percent over the same period last year.

And for trade, the bilateral trade volume totaled $6.6 billion last year and is projected to hit $10 billion by 2023.

China has remained ASEAN's top trading partner for a decade. Bilateral trade volume reached $578.04 billion between January and November this year, jumping 7.5 percent year-on-year. With promising trade prospects, both sides aim at a joint target of two-way trade of $1 trillion and $150 billion in investments by 2020.

Asia Pulp & Paper Co, the Indonesia-based paper product manufacturer, pledged to raise its investment in China as the country's demand for baking paper, oil-proof paper, packaging paper, baby care and biodegradable paper products has notably surged due to strong purchasing power in major cities and the fast urbanization pace throughout the nation.

Supported by more than 70,000 employees globally, the group, with 25 million metric tons of annual production capacity for various paper goods, invested 45 billion yuan ($6.43 billion) in Rudong county, Jiangsu province, to build a plant producing high-end paper-made items in July. Once the facility becomes operational, it will be able to produce 3.96 million tons of paper products annually.

At last year's China International Import Expo, the company received $170 million worth of orders from clients both in China and globally. It also sealed import deals with a number of Chinese companies in Zhejiang and Guangdong provinces during the first CIIE.

Zhang Ge, CEO of the household paper unit at APP's China branch, said China's second-child policy has also brought new momentum to the mother and child care area, giving the company a clearer view of consumer demand, such as safety, purity, zero stimulation and softness.

Li Yong, deputy director of the China Association of International Trade Expert Committee, added that China and ASEAN will see sustained trade growth in the future after the upgraded protocol of the China-ASEAN Free Trade Area came into effect in October. In comparison with the previously goods trade-focused agreement, the upgraded CAFTA covers more areas including trade in goods and services, investment, and economic and technological cooperation.

To better confront protectionism, he said ASEAN and China both export a large amount of manufactured goods, agricultural and commodity products to global markets annually. They have been upholding a rules-based multilateral trading system and promoting regional integration.

Xinhua contributed to this story.

 

 

 

 

 

For about 8 yuan ($1.14) per round, master players will keep Lin company and help him get higher rankings in the game.

"I've got a more dedicated gaming experience," Lin said. "I hate getting matched with bad teammates. Master players will not only share their superior skills but also talk to me. That really relaxes me a lot."

Lin is just one among the increasingly growing group of young tech-savvy people who are interested in this new business, which is gaining traction in China.

Seeing this growing trend, major livestreaming apps are gearing up to expand the game companion business, as they attempt to diversify the offerings and generate new revenue streams.

Hangzhou-based Chushou TV, a popular livestreaming platform specializing in mobile games, is an early bird that has caught on to the new opportunity.

Chushou launched its game companion business in June. By the end of November, the platform had attained more than 5,000 game companions, with a total of 80,000 orders.

Yang Shuyu, chief marketing director of Chushou, said the game companion market is huge and one where the company sees continued growth.

"The market will be worth more than 10 billion yuan," Yang noted. "With a number of forward-looking investors and the emergence of several game companion apps, game companion services are gaining huge popularity among Chinese players."

Yang said a survey conducted by Chushou found that many users are interested in finding game companions.

"Basically, livestreaming users are also willing to pay for game companion services. Therefore, it's a good time for livestreaming platforms to enter the market this year," Yang added. "Compared to game companion platforms, livestreaming platforms have more paid users, which translates into a higher starting point for the number of companion orders and turnover.

"It is much easier for livestreaming platforms to gain those skill-sharers, as we have a large number of gaming hosts and it's not hard for us to hire new ones. Actually, we also can create a new way for those hosts to make money. For users, they can gain a better understanding of their required game companions via the livestreaming content."

Games, especially the esports sector, are now becoming mainstream in China, buoyed by strong government support and the growing number of young tech-savvy people.

Chinese gamers' rising enthusiasm has created a highly lucrative market worth 233 billion yuan this year, up 8.7 percent on a yearly basis, said a report released by Chinese gaming database Gamma Data Corp.

According to the report, revenues generated from the esports industry jumped 16.2 percent to 96.96 billion yuan in 2019.

Wu Xiaoyan, a researcher from Qianzhan Industry Research Institute, said game companions are a derivative industry of the gaming sector, which helps lower the skill barriers for novice players allowing them to enjoy the games.

"Although the success of professional esports is driving the esports boom in China, most master players have limited means to make money, such as producing original content," Wu said. "The game companion business allows them to share their skills. And it also brings novice players closer to the master players they admire, offering a new way to enhance gaming experiences and skills."

Yang from Chushou said the company will offer a higher linked set of livestreaming and game companion business.

For instance, Chushou launched a game companion voting event, where winners will join the ranks of popular hosts to attend Chushou's annual ceremony.

"As the market gradually matures, game companion services will likely become one of the main sources of revenue for livestreaming platforms," Yang added.

XAG forecasts domestic sales volumes to rise to 50,000 drones in 2020 from about 25,000 this year, said Justin Gong, co-founder of the Guangzhou-based company, adding the drones are used for seeding, fertilizing and spraying pesticides.

"More farmers are transforming their small plots of land into large farms," Gong said. "That makes drones more popular."

The Chinese government is encouraging smaller farmers, which make up the majority of the rural landscape, to consolidate and become part of large-sized collective farms in a bid to improve efficiency in food production.

The shift follows some 288 million farmers that have moved to cities to seek better paying jobs, leading to some empty villages, Agriculture Minister Han Changfu said last month.

"We've seen a big decrease in the rural population, especially as the younger generation are leaving the countryside for cities," Gong added. "We have to find a solution for farmers to produce better food for our urbanization demand."

XAG is also launching a self-driving utility vehicle, which is about 20 percent cheaper than drones, and aims to expand its business to villages where small household farmers can easily learn to use the vehicles. The ground vehicle can be used in fruit gardens and crop fields in North China where the land is flatter, said Peng Bin, the company's CEO.

DJI, the world's largest commercial drone manufacturer by market share, is also devoting a great deal of attention to agricultural drones, with the goal of helping farmers improve the efficiency of spraying pesticides and increasing the use ratio of intelligent agricultural equipment.

The company announced it plans to further invest 10 million yuan ($1.4 million) in agricultural drones and on cultivating drone operators in 2019, open 1,000 brick-and-mortar retail stores, train over 20,000 professional drone operators and establish more than 600 training branches across the nation.

"We don't focus only on profits but also on training people to operate the agricultural drones in the short term, as well as helping them develop a business model, which is in accordance with our corporate culture and medium-and long-term strategies," Luo Zhenhua, president of DJI, said in an earlier interview.

Last month, DJI launched its latest agricultural drone, the T20, which features a more dynamic system to increase working efficiency and accuracy. It is bullish about the prospects for agricultural drones as the demand for such gadgets is huge and the whole industry is still in exploration mode.

The Chinese government has also issued policies to promote the use of modern agricultural machinery, such as offering subsidies to encourage the use of drones in agriculture.

With the modernization of agriculture, the demand for advanced farming devices has been growing significantly. Data from the Shenzhen-based Qianzhan Industry Research Institute said the value of the domestic agricultural drone market will exceed 12.8 billion yuan by 2021, at an annual compound growth rate of 38 percent.

Bloomberg - China Daily

The company, which aims to reach another 10 million patients in China by 2023, has invested more than 1,500 million yuan ($215 million) in the past five years in research and development to support its new developments in China, said Costa Saroukos, CFO of Takeda, during a recent interview with China Daily in Shanghai.

"China is one of our top-priority markets with product launches and potential growth," Saroukos said, adding that the company, which ranked 16th among multinational pharmaceutical companies in China, currently has a window of opportunity due to government healthcare reforms.

"Our strategy of bringing in innovation for Chinese patients' unmet needs is consistent with the healthcare reforms, and that comes with continuous long-term investment in China," he said.

The China market continued to show strong year-on-year revenue momentum of 40-percent growth for the first six months of Takeda's 2019 fiscal year, said Saroukos, making the country the fastest growing market for Takeda, whose key business areas touch upon oncology, gastroenterology, neuroscience and rare diseases, and the area of plasma-derived therapy.

The company's revenue growth in emerging markets globally－around 50 countries and regions including China－was around 14 percent year-on-year, he added.

China's healthcare market is expected to reach 8 trillion yuan by 2020 and double that figure by 2030, according to the Healthy China 2030 blueprint.

In March, the company invested a further 110 million yuan in expanding its Tianjin facility to strengthen its manufacturing final step for the China market.

"Such investments enabled faster and smoother development and launches of innovative therapies in China and therefore benefit more Chinese patients," said Saroukos.

The growth of the China market for Takeda was mainly driven by new product launches, which benefited from increasing patient access to innovative medicines through accelerated approval timelines and reimbursement listing in healthcare reforms, the company said.

Sean Shan, president of Takeda China, said that an innovative therapy treating multiple myeloma, the second most common malignant tumor in the blood system, obtained regulatory approval in April last year and was launched on the market in July 2018, a year in advance from the company's estimated timeframe thanks to the healthcare reforms. The product was included into the National Reimbursement Drug List in October 2018.

Shan said that seven of over 10 products that the company planned to introduce to China are going through the approval process and three of them are included in the list for accelerated approval.

The therapies included the company's star product treating inflammatory bowel disease and an innovative therapy treating hereditary angioedema, a rare disease that can cause attacks of swelling in body parts and effective medical treatment is unavailable in China so far, Shan said.

Takeda Development Center Asia was moved from Singapore to Shanghai in 2017 and it has initiated more than 50 clinical trials in Asia, including 30 in China, to accelerate the company's new product development. The company said such programs are mostly driven by Chinese patients' unmet needs but can also benefit patients in other parts of Asia and globally.

Stephen King, vice-president of Gatwick's airline relations, said the airport is stepping up efforts to facilitate Chinese airlines efficiently and tailor services for an increasing number of Chinese passengers since the facility is part of a major network in Europe.

"At Gatwick, airlines will be able to operate efficiently, with sufficient landing slots. And passengers will have a very China-friendly experience," King said in an interview with China Daily.

Gatwick Airport, also known as London Gatwick, is the second-busiest airport by total passenger traffic in the UK. It serves 46 million passengers annually. Chinese passengers now account for a small proportion of those passengers, King explained.

"I expect the number of Chinese travelers to continue to grow. And I do expect them to keep choosing London as a destination, and therefore also London Gatwick," he said.

The innovative use of technology is one of Gatwick's advantages over other airports, King said. He cited the fact Gatwick introduced the UK's first airport electric car sharing service and self-boarding technology.

To meet the ever-increasing demand from Chinese travelers, Air China started a new service that flies directly from Gatwick to Shanghai earlier this month. China Eastern Airlines will increase its direct flights to a daily service this winter from three times weekly. In total, 11 weekly flights are now available from Gatwick to Shanghai.

The airport is discussing cooperation with other Chinese airlines and cities, King said. He did not elaborate further.

Gatwick's enthusiasm for the China market has been fueled by the burgeoning number of tourists to the UK. Figures from travel data firm ForwardKeys showed that the number of tourists visiting the UK from China climbed almost 20 percent year-on-year this summer.

Cargo volume is also expected to rise. This factor is a vital part of the profitability of a long-haul flight, King said.

"As the volumes of long-haul passenger flights increase, then so too will the volumes of cargo growth," he said, adding that Gatwick will ensure an efficient cargo process.

Gatwick's cargo volumes grew 24 percent year-on-year in 2018.

In the January-October period this year, China-UK trade volume reached 488.6 billion yuan ($69.5 billion), up 13.3 percent year-on-year, data from China's General Administration of Customs showed.

King said China remains one of the largest growing economies in the world when asked about its prospects going forward. He said: "Although there may be a small softening of the Chinese economy, we still expect to see more Chinese passengers visit the UK in the next few years."

Dai Bin, director of the China Tourism Academy, said the rising incomes of Chinese people coupled with their strong willingness to travel abroad would drive growth in the tourism market.

He said the number of Chinese traveling overseas reached 81.29 million in the first half of 2019, up 14 percent year-on-year.

In addition to including dual-use items which can be used for civilian and military purposes, military and nuclear items, the proposed law also covers other goods, technologies, services and items related to the fulfillment of international obligations and national security, to achieve full coverage of controlled items.

Commerce Minister Zhong Shan explained the draft law, submitted by the State Council earlier this month, at the bimonthly session in Beijing on Monday.

The minister said to strengthen and regulate export controls, many countries have attached great importance to the establishment and improvement of export control legal systems.

For instance, the United States has long had an export control regime that regulates trade globally in products which may contain US-origin technology and is subject to the Export Administration Regulations even beyond the US border.

China has formulated regulations for chemicals monitoring, nuclear export control, military export management, nuclear dual-use supplies and related technologies export control, missiles and related nuclear technology export control, and biological dual-use supplies and related equipment and technology export.

However, Zhong outlined that China's six export control legislations are relatively decentralized, as the overall coordination mechanism of export control work is not perfect, the scope of controlled items and control measures are not completely equal and balanced in comparison with other countries.

As the situation has changed, it is necessary to sum up the implementation experience of the current regulations, and draw on internationally accepted practices, and formulate a law governing overall export control, he said.

If enacted, experts said the law will be the first set of comprehensive and unified export control legislation in China.

Ren Qing, a partner at Global Law Office, a Beijing-based law firm, said the draft is aimed at upgrading the nation's existing regime consisting of various administrative regulations and rules, and to further interface with international standards.

To better prevent risks in other parts of the world, the draft stipulates that the government can evaluate a country or region where the items are exported, determine the risk level and take corresponding control measures, said Cai Kaiming, a senior partner at the Beijing office of Dentons, a global law firm.

It also stipulates that the authorities can formulate control lists in accordance with export control policies, and clarify the formulation and adjustment mechanisms of dual-use items, military products and nuclear export control lists, he said.

Central bank injects $7.13b into market

China's central bank pumped 50 billion yuan ($7.13 billion) into the financial system on Monday. The People's Bank of China injected 50 billion yuan into the market through 14-day reverse repos at an interest rate of 2.65 percent. With no reverse repos maturing on Monday, this led to a net injection of 50 billion yuan.

Cargo throughput up in first 11 months

China's cargo throughput at ports climbed 8.3 percent year-on-year to 12.7 billion metric tons in the first 11 months, official data showed. Foreign trade cargo throughput amounted to 3.96 billion tons in the January-November period, up 4.7 percent year-on-year. Meanwhile, container throughput at ports registered a 4.5-percent increase to around 239.5 million TEUs (20-foot equivalent units) in the same period. At the beginning of the year, the Ministry of Transport expanded the statistical range from major ports to all ports across the country. The cargo throughput growth at ports came amid the steady expansion of China's waterway freight volume, which increased 6.3 percent year-on-year to 6.8 billion tons in the first 11 months.

Gourmets make a beeline to green food expo

From French red wine to American ham, Malaysian bread and China's hot-selling farm produce, the 12th China Green Food Expo that opened on Friday in the East China city of Nanchang, capital of Jiangxi province, is an occasion for gourmets. The expo co-sponsored by the Ministry of Commerce and the Jiangxi provincial government will run through Monday. It offers 40,000 square meters of space for more than 2,000 exhibitors from home and abroad. According to the organizers, exhibitors came from more than 30 countries as well as from 13 Chinese provinces and municipalities.

Smartphone shipments to increase in 2020

China's smartphone shipments will rise in 2020, buoyed by the increasing popularity of 5G phones, according to the global market intelligence firm International Data Corporation (IDC). Shipments of smartphones in China are estimated to edge up 0.7 percent year-on-year in 2020, as 5G phones spread across the market and give hesitant consumers the final nudge to switch models, said the IDC. The IDC expects 5G phone shipments to lead 5G network users in the short term, while one in every five phones will be connected to the faster and stabler network by 2021.

COMPANIES AND MARKETS

EY expects A-share IPOs to remain robust

Management consultancy EY expects IPOs on China's A-share market to remain robust in 2020, as proactive fiscal policies and flexible and appropriate monetary measures will drive the capital market upward. EY said in a newly released report that 5G technology is also expected to drive the IPOs of innovative tech companies. In 2019, 200 companies are expected to be listed on the A-share market, raising 252.8 billion yuan ($36.1 billion), with deals and proceeds up 90 percent and 82 percent year-on-year, respectively, according to the EY report. EY attributed the record-high proceeds since 2012 to the early success of the science and technology innovation board (STAR) and mega IPOs which have raised more than 10 billion yuan in funds.

Xiaomi expands presence in Kenya

China's smartphone maker Xiaomi expanded its presence in Kenya over the weekend by opening its second retail shop. Kevin Zheng, manager for the Africa region, said in Nairobi that the Mi Home shop will make available to local consumers smartphones and smart digital products from the Xiaomi brand. "In the future, we plan to open more retail outlets both in Kenya and the rest of Africa in order to meet the growing demand for quality electronic products," Zheng said. Zheng added that its retail stores are ideal for consumers looking for affordable products because they stock a wide variety of Xiaomi products ranging from laser projectors, robot vacuum, cameras, TVs and many other ecosystem products.

Bonds worth $557b issued in November

The value of bonds issued in China last month totaled 3.9 trillion yuan ($557 billion), up from 3.1 trillion yuan in October, official data showed. Treasury bond issuance stood at 402.2 billion yuan, while local government bond issuance was 45.79 billion yuan, according to the People's Bank of China. Financial bonds issued last month were valued at 600 billion yuan, and corporate debenture issuance was 908.4 billion yuan. By the end of November, total bonds outstanding reached 97.6 trillion yuan, showed the data.

BMW Brilliance set to recall 312,281 vehicles

BMW Brilliance Automotive Ltd, a joint venture between the BMW Group and Brilliance China Automotive Holdings Ltd, will recall 312,281 vehicles in China due to defective fuel tanks, China's market regulator has said. The recall involves models including the series of 316i, 316Li, 318i, 318Li, 320i, 320Li, 328i, 328Li, 330i, 330Li and 335Li, which were manufactured between April 22, 2011 and July 31, 2016. The flaw with the fuel tanks could cause oil leaks and increase risks.

AROUND THE WORLD

Latin America to post slow growth next year

The Latin American economy will accelerate slowly in 2020 due to decreased concerns over global political and commercial risks, according to experts. After showing almost zero growth in 2019, the region's economy could grow between 1.0 percent and 1.3 percent next year, said Alfredo Coutino, director of Latin America Economic Research at Moody's Analytics. "The big risks that could change regional prospects are external, like the intensification of the tariff war," Coutino said, pointing to US President Donald Trump's tweets earlier this month saying that the United States would "restore" the tariffs on steel and aluminum imports from Brazil and Argentina.

South Korea sees fall in ICT product exports

South Korea's export of the information and communications technology (ICT) products fell for 13 straight months in November on weak demand for locally-made chips, display panels and mobile phones, a government report showed. The ICT exports tumbled 21.8 percent from a year earlier to $14.31 billion in November, continuing to dip for the 13th consecutive month since November last year, according to the Ministry of Trade, Industry and Energy. Imports in the ICT sector reduced 6.9 percent to $9.09 billion, sending the trade surplus to $5.22 billion.

Cuba banks on tourism for economic uptick

Cuba is looking to increase exports by 3.7 percent next year, Cuban Minister of Economy Alejandro Gil said. Gil made the remarks during the fourth session of the ninth National Assembly of People's Power, Cuba's single-chamber parliament. He said that the government plans to grow exports in a number of sectors including tourism, the country's economic engine, which brings in $2.5 billion a year. The government's strategy for 2020 is to attract 4.5 million visitors for a growth of 4.7 percent.

China Daily - Agencies

Liao Jieyuan, president and CEO of global leading digital healthcare company WeDoctor, said that Alibaba is currently China's first digital platform with a transaction volume of more than 1 trillion yuan. Considering the fact that China's pharmaceutical market volume surpassed 2.2 trillion yuan in 2019, the next trillion-yuan-level digital platform will probably occur in the healthcare industry.

In October, the World Health Organization integrated the concepts of medical information, telemedicine and digital medical treatment into digital healthcare, arguing that digital healthcare will upgrade the whole process throughout medical treatment and healthcare management.

It also issued a global digital healthcare strategy (2020-24), to prioritize digital healthcare and affirm the potential of digital healthcare in supporting the development of the medical industry in all countries.

According to a recent report issued by market research consultancy Investank, China is expected to become the largest digital healthcare market in the future.

Compared to the United States and European countries, China, as a newly emerged market, has few existing enterprises and limited infrastructure, which means digital healthcare companies will encounter fewer obstacles when developing new products and services, said the report.

The report also noted that there is a high internet penetration rate among China's large population base, which is fundamental to creating digital healthcare products and services.

A report on digital healthcare issued by Royal Philips Electronics NV showed that China is already taking a lead in digital healthcare application, way ahead of the US.

According to the report, currently, 94 percent of medical professionals in China are using digital healthcare technologies or mobile healthcare apps, while the ratio for the US is 76 percent.

In addition, compared to other countries, Chinese medical professionals are doing a better job in encouraging patients to use digital healthcare technologies or mobile healthcare apps to monitor their physical condition. For example, 60 percent of patients have been advised to monitor blood pressure using digital healthcare technologies, while 51 percent have been advised to monitor body weight using healthcare apps.

As early as 2017, China was recognized as one of the top six digital healthcare innovation centers by The Economist magazine. It was the only developing country in the top six. The other five countries were the US, Belgium, Finland, Israel and Singapore.

In April 2018, the State Council issued a guideline on promoting "internet plus healthcare". Specifically, the guideline underscored the importance of improving the digital healthcare service system, enhancing the support system, as well as guaranteeing industry supervision.

Enterprises in this niche are stepping up efforts to shape the country's healthcare industry.

In April, WeDoctor started construction of a drug purchase platform, which enables drug purchases, price negotiations, transactions, settlement and supervision. Once put into operation, the platform can cut national financial budget by 600 billion yuan per year.

It is also helping cities in China build a healthcare support system, using its cloud platform to connect the data of medical services, drugs, insurance and healthcare management.

"The healthcare support system aims to improve the physical condition of the public, increasing medical efficiency, as well as controlling the financial budget," said Liao from WeDoctor.

According to the company, at present, its healthcare support system is being used in more than 10 cities including Tianjin, Tai'an and Dezhou in Shandong province, and Pingdingshan in Henan province, covering a total of 25 million people.

"From online registration, online consultation to the construction of a digital healthcare community, we are striving to focus on the most important and urgent issues of the country's medical care, so that patients can obtain medical and healthcare services more conveniently and efficiently," Liao said.

As a key subsidiary of China Construction First Group Co Ltd, a central State-owned construction enterprise, the company has been adjusting its business layout proactively in the past few years to meet new development demands, and has made real estate and infrastructure the two cores of its business, supported by overseas business, and investment and financing.

In 2018, it was selected to take part in the "double-hundred action", a campaign led by the Leading Group for State-Owned Enterprises Reform of the State Council to select more than a hundred subsidiaries of the central SOEs, and more than a hundred local SOEs to implement reforms between 2018 to 2020.

The campaign constitutes part of Chinese authorities' efforts to deepen SOE reforms to boost productivity and make the enterprises more marketized.

Statistics from the State-owned Assets Supervision and Administration Commission showed that revenue of the enterprises monitored by it reached 46.7 trillion yuan ($6.67 trillion) during the first 10 months of this year, with total profit of 2.8 trillion yuan, up 7 percent and 6 percent year-on-year respectively.

From 2013 to 2018, the total assets of the enterprises under the supervision of the SASAC surged from 85.4 trillion yuan to 180.7 trillion yuan, with an annual growth rate of 16.2 percent, Xinhua News Agency reported.

During the period, their combined profits jumped from 2.2 trillion yuan to 3.4 trillion yuan, an average annual growth of 9.3 percent.

As for the Second Construction Co Ltd of China Construction First Group, its construction value in 2018 soared to 28 billion yuan from 20.5 billion yuan in 2016, with revenue increasing to 10.52 billion yuan from 7.72 billion yuan, while profits more than doubled over the period, from 145 million yuan to 362 million yuan.

The company estimated its contract value and revenue would reach 32 billion yuan and 12.5 billion yuan respectively for this year, with its competence, innovation, market influence, and risk resistance capability growing continuously.

"We hope to provide referable experiences to other SOEs by making reform breakthroughs in the Second Construction Co Ltd of China Construction First Group, to help deepen SOE reforms nationwide," said Luo Shiwei, chairman and Party secretary of China Construction First Group.

Thanks to the central government policy that encourages market-oriented debt-to-equity swaps for quality enterprises to boost their capital strength, reduce debt risks, and improve risk tolerance, the company has been attracting strategic investors through debt-to-equity swaps, and such strategic investment it obtained have totaled 300 million yuan.

Such moves have helped strengthen the company's financial capability to support the development of its main business, improve its corporate financial structure and corporate governance, and eventually helped preserve and increase the value of State-owned assets, the company said.

The company has also been implementing reforms in the corporate structure, to spur innovation and vitality of its affiliates and business units, in order to make breakthroughs in enhancing market-oriented corporate operations.

Rather than taking direct control, the company has been pushing forward classification-based authorization for subsidiaries to have different levels of autonomy in financing, personnel, and operations, so that the subsidiaries become independently accounting entities with self-governance in operation and development, and with sole responsibility on profits and loss, and risk management.

The company has accomplished such authorization reforms in four subsidiaries in Jiangxi, Guangdong, Jiangsu and Sichuan provinces, and two business units－the mechanical and electrical engineering business unit and the infrastructure business unit.

Together, these subsidiaries and business units account for 67 percent of the company's contract value.

The company has been exploring steps to cooperate with private enterprises across the entire length of the industrial chain through capital bonding. It also has decided to undertake market-oriented reforms in personnel management and recruitment.

Luo said the company will continue its efforts to advance related reforms and make the subsidiary a role model for the parent company in SOE reforms.

The draft has formulated new share sales arrangements with the aim of implementing the registration-based system across the whole market, according to the Constitution and Law Committee of the National People's Congress, the country's top legislature.

Arrangements regarding the approval-based system were deleted in the draft, while the section of general arrangements on new share sales was merged with the special section for the registration-based system on the sci-tech innovation board, or the STAR Market.

The committee submitted the draft revision to the Standing Committee of the NPC for the fourth review on Monday.

All A-share submarkets, except for the STAR Market in Shanghai, have implemented the approval-based system for new share sales. Policymakers have also said they would speed up the registration-based reform of ChiNext, Shenzhen's innovative enterprise-heavy board.

"The fourth version clarified that the registration-based system will be gradually implemented across all boards of the A-share market, and not merely the STAR Market and ChiNext," said Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology.

"If the draft is adopted, its endorsement of the registration-based system would be the biggest breakthrough and make it the most significant revision of the Securities Law in history," he said.

It could pave the way for deeper and wider market-oriented reforms under the registration-based system, ranging from letting the market decide the pricing and pace of initial public offerings to reducing administrative controls on trading, all conducive to elevating the market's capacity to serve the real economy, Dong said.

The draft said that the State Council, China's cabinet, will decide the scope and steps of the registration-based reform, allowing a flexible and step-by-step agenda of the reform.

Also, the draft has changed the requirement of issuing new shares from "capable of continuous profitability" to "capable of continuous operation", authorized stock exchanges to review public offering applications, and made information disclosure requirements stricter.

Another major change in the fourth version will be the stringent crackdown on illegal behavior in the securities market, as it not only stipulates the confiscation of illegal proceeds but also increased administrative punishments.

For instance, the draft said if a firm indulges in say fraudulent public offerings, and does not issue the securities, it would face fines of between 2 million yuan ($285,000) and 20 million yuan. This contrasts with the currently effective standard between 300,000 yuan and 600,000 yuan.

Individuals responsible for fraudulent offerings will face much higher punishments of between 1 million yuan and 10 million yuan, according to the latest draft.

In February, China's top leadership called for efforts to address the current situation where the costs of legal and regulatory breaches in the financial sector, especially in capital markets, are too low.

Dong said that administrative punishments stipulated in the fourth version, with heavier fines on both institutions and engaged individuals, would be much more effective in deterring legal branches and safeguarding investors' legitimate rights.

The draft also set a general framework of the much-anticipated system for securities class action lawsuits with Chinese characteristics, but details about how the system will work are not disclosed and await further discussions, Dong said.

"The system should focus on mechanisms to encourage small, individual investors－the vast majority of A-share investors－to take the initiative in class action lawsuits," he said.

Liu Junhai, director of the Business Law Center at Renmin University of China, called on introducing punitive damages into the securities legal system, or ordering listed firms and intermediaries that engage in intentional fraudulent conduct to compensate injured investors more than the amount of incurred losses.

This will help ensure the costs of securities legal breaches are higher than induced benefits and boost investor confidence, Liu said.

"Investor confidence is the key to capital market development, while confidence comes with an investor protection legal system that is sound, handy and considerate," he said.

The previous three readings of the revision of the Securities Law took place in 2015, 2017 and April 2019. China's top securities regulator said earlier this year that the authorities are trying to adopt the revision by the end of this year.

Li Xiang and Cao Yin contributed to the story.

Minister of Industry and Information Technology Miao Wei said in the face of significantly bigger risks and challenges at home and abroad, the ministry has fulfilled the objectives and tasks of the whole year in a relatively good manner.

According to him, the software and information technology service industry will see revenue growth of 15 percent year-on-year, while the internet sector will grow by 20 percent in revenue this year.

"Revitalizing the real economy, especially manufacturing, has become a consensus. Concrete steps have already been made to promote the high-quality development of manufacturing, and industrial management capabilities have been honed to better safeguard risks and better pounce on opportunities," Miao said.

Next year, the ministry will ratchet up resources to ensure the industrial economy grows in a reasonable range, with focus on stabilizing the investment into manufacturing.

More efforts will be made to attract money into advanced manufacturing, infrastructure and other areas that can have multiplier effects. The ministry will also pour more resources into boosting the industrial and consumption upgrade, Miao said.

China kicked off the commercialization of 5G in late October and so far, more than 126,000 5G base stations have entered services across the country. In accordance with the wider use of 5G across the country, more efforts will be made to popularize the application of technologies including 4K/8K TVs as well as virtual reality and augmented reality goggles, the ministry said.

The commercialization of 5G in China is expected to generate a direct economic output of 10.6 trillion yuan ($1.5 trillion) from 2020 to 2025, plus an indirect economic output of about 24.8 trillion yuan, while directly creating more than 3 million jobs, according to a report from the China Academy of Information and Communications Technology, a government think tank.

Qin Hailin, a senior industrial economy researcher at the China Center for Information Industry Development, said progress has been made to stabilize growth, optimize its structure, promote integration of the real economy and digital economy, and to create a good business environment during the year. The efforts have laid out a relatively sound foundation for growth next year.

"We are still facing strategic opportunities and have a unique edge to fuel high-quality growth. We have the world's most complete industrial systems, a super-scale domestic market, sprawling talent pool, and competitive industrial and digital infrastructure," Qin said.

The ministry said next year, it will cultivate another four national manufacturing innovation centers to achieve breakthroughs in core technologies. It will also call on enterprises, entrepreneurs, industrial associations to make a joint push to solve the problems of weak industrial foundations.

Cao Zejun, vice-president of Huawei Technologies Co's China branch, said the country's IT industry still faces huge pressure, with domestic operating systems and chips having very low market share in the world.

But with joint efforts, the domestic IT industry can make progress to solve these problems in the long term, Cao said.

CSPC Pharmaceutical Group Ltd announced on Friday that the US Food and Drug Administration had granted market approval to its independently developed Conjupri (levoamlodipine maleate) tablets for the treatment of hypertension in adults and children 6 years and older. The company is based in Shijiazhuang, Hebei province.

That makes Conjupri the first innovative drug from the Chinese mainland which has been granted full approval following a standard review by the FDA.

It also paves the way for the Hong Kong-listed company to market the drug in other parts of the world, said Cai Dongchen, chairman of the company, who stressed it is important for Chinese pharmaceutical companies to grow stronger by taking part in global competition.

The news inspired a strong advance of the firm's shares in Hong Kong. The company's stock ended at HK$18.62 ($2.38) on Monday, up 2.08 percent for the day.

"The FDA approval reflects the international pharmaceutical community's higher recognition of Chinese drug quality," said Shi Lichen, founder of medical consultancy Beijing Dingchen Consultancy.

"China used to have few self-developed original or innovative drugs, especially in new chemical compounds. But things are changing due to the improved regulatory environment and the stronger play of market mechanisms."

China's medicine reforms in recent years are driving Chinese companies to focus more on new drug R&D and innovation to optimize product portfolios toward medium-to-high end returns, instead of simply profiting from the production and sales of low-quality generics, he said.

China joined the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use, or ICH, in 2017.

The group is an international organization to standardize scientific and technical aspects of pharmaceutical product development and registration. China's participation makes it easier for foreign new drugs to gain entry into China, and for Chinese companies to be marketed outside the country, Shi explained.

In line with ICH requirements, Chinese pharmaceuticals can file new drug applications to the regulatory agencies of multiple countries and regions under the same technical requirements, greatly saving on the costs of R&D and registration, he said.

Shi predicts more high-quality Chinese drugs will be going abroad, improving the Chinese pharmaceutical industry's image overseas given the increasing R&D and innovation capabilities of those companies.

In November, Chinese biomedicine company BeiGene Ltd's cancer treatment Brukinsa (zanubrutinib) capsules gained Accelerated Approval by the FDA under a Breakthrough Therapy designation to treat Mantle Cell lymphoma. The treatment was also granted Orphan Drug designation, "which provides incentives to assist and encourage the development of drugs for rare diseases", the FDA said in a statement.

It was the first time the agency approved a drug based on efficacy data that came predominantly from China. The approval set a milestone that an innovative therapy from China is allowed to enter the US market.

Levoamlodipine maleate tablets have been marketed by CSPC Pharmaceutical as Xuanning in China since 2003, and the US regulator's review of the drug was based on the safety and efficacy data collected in China over a five-year period.

The FDA raised little follow-up inquiries on the clinical data, and also exempted on-site investigation of the company's Chinese factory before approving the drug.

That showed the US regulator has faith in the company's drug quality management and control system, as quality standards in China's pharmaceutical industry fully met the highest international standards, said Wang Xide, a senior executive of CSPC Pharmaceutical's US arm.

 

The underlying asset of the option contract is the CSI 300 Index which tracks 300 large-cap and most liquid stocks traded on the Shanghai and Shenzhen stock exchanges. The two bourses also launched trading in CSI 300 exchange-traded fund option contracts from Monday.

The introduction of the three option products came after China launched trading in the country's first equity option contract, the SSE 50 ETF option contract, in 2015.

Monday's listing of the new products highlighted the steady development of China's financial derivative market since the country first introduced stock index futures in 2010. The development also underscored the regulatory intent to provide more trading products and risk management tools to attract long-term and sophisticated institutional capital in the Chinese equity market which is still dominated by retail investors.

Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, said the launch of the equity and stock index options holds far-reaching significance for China's efforts to improve the fundamentals of its capital markets and expand product coverage.

"The simultaneous launch of the CSI 300 stock index option contract and CSI 300 ETF option contracts will help optimize the market mechanism, improve the multilayered capital market and promote its healthy development," Fang said at the launch ceremony in Shanghai.

The trading in option contracts will help draw more overseas institutional investors as it offers them an important risk management tool and allows them to enrich their trading strategies and adjust their investment portfolios with greater flexibility, analysts said.

Under the current regulations, individual investors must have at least 500,000 yuan ($71,300) in their stock accounts to be qualified for the trading of the options contracts. They are also required to have past experience in financial derivatives trading.

Analysts at Industrial Futures Co Ltd said in a research note that Monday's listing is an indication that China's financial derivative market has entered a new stage and investors could obtain more risk hedging tools and risk management services which will substantially boost their long-term confidence in the nation's stock markets.

The trading of the new products also means more business opportunities for the country's securities and futures companies and will boost their earnings through their brokerage and market-making services for clients, analysts said.

Wang Jianjun, chief executive and president of the Shenzhen Stock Exchange, said the bourse has been researching and studying derivatives since 2004 and the CSI 300 ETF option, as the bourse's first derivative product, plays a significant role in its development.

Wang said the option trading will strengthen the exchange's direct funding capacity and improve its asset allocation and risk management abilities.

Opening its doors to customers over the weekend, the three-story shop, which sells everything from clothes to furniture to appliances, is a "water-testing" endeavor for the fashion label to penetrate into other Chinese first-tier cities, said Kitamura Yoshiaki, board member and general manager of the sales division of Adastria Co Ltd, the owner of the brand.

"Shanghai has risen quickly up the global fashion ladder, making it a flag-bearer to host new entrants like us," Yoshiaki told China Daily ahead of the opening. "Lifestyle megastores are still a rarity in China. We decided to choose Shanghai－possibly the fiercest battleground－as the starting point (in the country)."

Located on the busy thoroughfare near the edge of pop-culture obsessed Huaihai Road, Niko and … sells up to 4,000 types of merchandise. It ranges from preppy-casual men's and women's separates, perennial offerings of tote bags, plants, as well as limited-batch soaps and holiday-inspired decor.

It also has a sun-drenched third-floor restaurant, set up as cosmopolitan bar and food chain, and serving everything from pizzas to salads.

Yoshiaki said what sets the brand apart from rivals is its commitment to constant change. A majority of products will be swapped with new offerings on a regular basis, with the pace of updates synchronized at the same rate as its sister shops in its home market of Japan.

A major thrust is the digital footprint it mapped out together with Chinese internet giant Tencent Holdings Ltd, which offers a wealth of services from WeChat mini-programs to public accounts and related advertising services.

The e-commerce-enabled online shop in China set foot on a namesake mini-program, which is an app-like service embedded in the WeChat ecosystem. It enables a user to circumvent the hassle of downloading a stand-alone app.

To be rolled out early next year, the mini-program sells the most iconic and eye-catching items online and gets a clearer picture of customer tendencies based on their shopping history.

"The mini-program serves as a bridge between the brand and consumers that ensures a smooth and convenient shopping experience," said Jimmy Zhang, director of Tencent's Smart Retail unit. "In the future, we will deepen our cooperation in areas like consumer insights, exploration of potential clients and store expansion."

Yoshiaki attributed the tie-up with Tencent to the latter's "holistic cycle of customer engagement", which means not just the e-shop but other functions like a status-sharing function Moments, public accounts where brands push their content to subscribers, as well as customized ads pinpointing certain customer groups.

"Because residents in China are largely digital savvy, we have a higher expectation of online sales to account for more than 20 percent of total revenue in China," he said.

Tencent has invested heavily in its "Smart Retail" initiative since a special business unit dedicated to empowering brands with technologies was founded in 2018.

The company said it has served over 80 leading brands in areas from shoes and apparel, supermarkets to cosmetics and maternity, helping them more than double their daily gross merchandise volume.

"Data are the most important element in redefining retail," said Wu Weijia, an equity analyst who focuses on internet-based businesses at ICBC International Holdings Ltd.

"With big data, multi-dimensional digital marketing can help increase the monetization rate of advertisements as well as the conversion rate of the online and offline merchants with the platforms."

1. China unveiled a prototype magnetic-levitation train with a maximum speed of 600 kilometers per hour in Qingdao on May 23, filling the gap between aviation and high-speed rail transport in the country, according to its manufacturer.

The engineering prototype is planned to roll off the production line in 2020 and go through comprehensive tests to conclude integrated verification in 2021.

The high-speed maglev transportation system is one of the key projects under the Ministry of Science and Technology's 13th Five-Year Plan (2016-20) to promote an advanced rail transit system.

2. The Ministry of Industry and Information Technology on June 6 officially rolled out commercial 5G licenses, a crucial step for next-generation 5G commercial use.

The ministry granted licenses to the nation's three major telecom carriers－China Mobile, China Telecom and China Unicom－as well as the State-owned China Broadcasting Network Corp.

The move marks an accelerated push by China in 5G application. Its previous plan was to commercialize the technology in 2020.

China is set to become the world's largest 5G market by 2025, with 460 million users, according to a forecast by industry group Global System for Mobile Communications Association.

The country's telecom carriers are forecast to spend 900 billion yuan to 1.5 trillion yuan ($134 billion to $223 billion) in total on 5G network construction from 2020 to 2025, according to a report from the China Academy of Information and Communications Technology.

3. China's STAR Market, or science and technology innovation board, a new stock venue for technology companies, started trading on the Shanghai Stock Exchange at 9:30 am on July 22.

The Nasdaq-like STAR Market was officially launched on June 13. The SSE accepted listing applications by July 4 from 141 companies, of which 118 received their first round of inquiry from the exchange.

The launch of the STAR Market in Shanghai was seen by analysts as a milestone event in the development of China's capital market. The board in the long run will likely have significant impact on the A-share market's valuations and investment choices.

4. In August, the price of pork increased 46.7 percent year-on-year, raising the consumer price index by 1.08 percentage points.

In October, pork prices rose 101.3 percent year-on-year, contributing nearly two-thirds of the CPI growth over the same period.

The national pork price slumped by 23 percent in November compared to late October, statistics from the Ministry of Agriculture and Rural Affairs showed.

Pork prices have risen due to three major reasons. First, the culling of pigs to prevent the spread of African swine fever seriously reduced stock. Second, the country was at a low level in the pig production cycle. Third, some inappropriate local administrative interventions have had a negative impact on pig breeding.

The price drops followed the introduction of multiple government measures to boost supply, including those to restore hog production.

5. Beijing Daxing International Airport saw its first flight take off after a China Southern Airlines' A380 left the airport at 4:22 pm on Sept 25 headed to Guangzhou Baiyun International Airport.

The flight signaled the beginning of operations at the facility after five years of construction, according to the airport authority.

According to the airport, 66 domestic and overseas carriers including China Southern Airlines, China Eastern Airlines, British Airways, Finnair and Ethiopian Airlines plan to operate out of the Daxing airport. Starting in the winter and spring seasons, the airport will serve 116 routes and 112 domestic and foreign destinations.

With four runways, 268 parking bays and a vast terminal building covering 700,000 square meters, the new airport is expected to handle 45 million passenger trips a year by 2022 and 72 million by 2025, with international flights accounting for 20 percent and 40 percent of the total respectively.

With more runways planned, the new airport will ultimately handle more than 100 million passengers annually. It's aiming to become the busiest airport in the world in the future and lead Beijing to become an international transit hub.

6. Market regulators decided to ban online sales and advertising of e-cigarettes amid growing health concerns that vaping and a fledgling online market may have a detrimental impact on minors, according to a statement released by the State Tobacco Monopoly Administration and the State Administration for Market Regulation on Nov 1.

The ban took effect immediately.

There are more than 300 million smokers in China, and 28.1 percent of people aged 15 years and older smoke. The country is aiming to slash the percentage to 20 percent by 2030.

7. More than $71.13 billion worth of intended deals were reached during the second China International Import Expo, held in Shanghai from Nov 5 to 10, up 23 percent from the first expo, according to the CIIE Bureau.

The second CIIE attracted more than 3,800 companies from all over the world, with a total exhibition area exceeding 360,000 square meters. By noon Nov 10, the exhibition had received more than 910,000 visitors.

The number of registered professional visitors to the second CIIE exceeded 500,000, among whom more than 7,000 were overseas buyers. Up to 32 percent of professional visitors specialized in manufacturing, while another 25 percent were from the wholesale and retail industries.

During the three-day demand-and-supply matchmaking meetings during this year's CIIE, up to 1,367 exhibitors from 103 countries and regions and 3,258 buyers reached a total of 2,160 purchase intention agreements.

8. China's Singles Day online payments hit 1.48 trillion yuan ($211 billion) on Nov 11, according to data released by the People's Bank of China, the central bank, on Nov 12.

The Double 11 shopping spree, which falls on Nov 11 every year, saw 1.779 billion online payment transactions totaling 1.48 trillion yuan, with year-on-year growth rates of 35.49 percent and 162.6 percent respectively, according to the central bank. These transactions were handled by Chinese online payment clearinghouse NetsUnion Clearing Corp and UnionPay, the country's largest bank card payment processor.

The payment figure is the equivalent of having every Chinese person order about 1,000 yuan worth of merchandise, 21st Century Business Herald said in a repot on Wednesday.

Alibaba, the initiator of the Double 11 shopping carnival in 2009, achieved sales of 268.4 billion yuan this year, an increase of 26 percent compared to 2018.

9. The United States Food and Drug Administration announced on Nov 15 Beijing time its accelerated approval of the drug for treatment of adult patients with mantle cell lymphoma.

The FDA's approval for Chinese biomedicine company BeiGene Ltd's Brukinsa (zanubrutinib) capsules marked a breakthrough for Chinese drug developers. It is the first time an innovative therapy from a Chinese mainland drug developer will enter the US market, while the majority of new drugs, especially cancer therapies, from the Chinese market are imported, industry insiders said.

The accelerated approval is based on overall response rate, or how many patients experience a complete or partial shrinkage of their tumors after treatment.

Mantle cell lymphoma, or MCL, is a rare, aggressive form of non-Hodgkin's lymphoma, which is a cancer developing from lymphocytes, a type of white blood cell. It usually responds well to initial treatment but eventually returns or stops responding, and cancer cells continue to grow.

10. China launched a mobile number portability program across the country on Nov 27, allowing cellphone subscribers to switch service carriers without changing phone numbers, according to the Ministry of Industry and Information Technology.

Technology, systems and rules for services related to the program have been implemented after a nationwide trial operation, it said.

The ministry has asked related enterprises to rectify problems exposed during the trial, such as some carriers creating obstacles for the service switch, said Lu Chuncong, an MIIT official, noting that the program will promote benign competition among enterprises.

The country's three major telecom companies－China Telecom, China Mobile and China Unicom－have promised to improve the transparency of their services.

As of Nov 26, about 3.16 million subscribers have completed number porting in five pilot provincial-level regions, MIIT data showed.

It will bank on China's fast-growing industries, including electronics, construction, automotive and transportation, for future growth.

As China has entered a new phase of economic development, with focus on quality rather than quantity, Covestro's products and solutions fit in, said Michael Friede, global head of the company's coatings, adhesives and specialties segment.

"Durable and environmentally friendly chemical products are a key enabler for the development of many downstream industries," he said.

He stressed that consumers in China, no matter where they are from and how old they are, are always seeking a better life and are forward-looking. This is the fundamental driving force for the country's strong domestic consumption for various industrial goods.

In addition to supplying various coating raw materials to domestic automobile makers such as Chongqing-based Chang'an Automobile Co Ltd, Covestro wishes to provide more water-based coating products to China's high-speed trains, as they can work under both low and high temperature conditions, and offer better scratch and big chip impact resistance.

The Leverkusen-headquartered group expanded its open innovation with various partners. In October, it started its new concept of "Open Innovation Hub" at its Asia-Pacific Innovation Center in Shanghai.

The move came as the multi-industry ecosystems in China had evolved via open innovation principles that push both the boundaries of the traditional industries and the upgrades in manufacturing and consumption.

As China is setting the pace for technologies and solutions in many areas that address future trends, Friede said new trends are emerging in electronics.

"5G is going to be a big player in both China and the world, it will create more growth points for global companies such as Covestro to engage with different innovation partners across the country," he noted.

Covestro showcased the world's first soft-touch cheongsam made using 3D printing. It marked the latest attempt to push the boundaries of 3D printing in commercialization and mass production. Covestro contributed its expertise in materials and technology.

The dress can be customized in multiple aspects like pattern and texture, as well as material properties, shape and the size.

Friede believes that 3D printing technology opens up freedom in creative design and allows complex structures with a seamless appearance.

For instance, manufacturers can create fully functioning shoes in the size that perfectly fits each individual consumer. It also presents the opportunity to individuals, designers and artists to customize their shoes within only the limits of their imagination, according to Friede.

Under such circumstances, Covestro's 3D printing laboratory in Shanghai aims to serve customers and partners in Asia-Pacific with a comprehensive range of filaments, powders and liquid resins for all common 3D printing methods. The company has accelerated commercialization and serial production development for the application of 3D printing technology.

With sales of 14.6 billion euros ($16.31 billion) in 2018, Covestro's business covers areas such as automotive, construction, wood processing and furniture, and electrical and electronics industries.

Other sectors include sports and leisure, cosmetics, health and the chemical industry itself. It has 30 manufacturing sites globally and employed 16,800 people by the end of 2018.

Supported by more than 3,000 employees in China, Covestro's sales totaled 3.1 billion euros in China last year, accounting for around 21 percent of Covestro's global total and making it the largest single market to the company.

Its cumulative investment in China exceeded 3.3 billion euros by the end of 2018. It currently runs seven production sites, one regional innovation hub and six offices throughout the nation.

Zhao Ying, a researcher at the Beijing-based Institute of Industrial Economics, which is part of the Chinese Academy of Social Sciences, said China's automotive market is still the largest in the world, with an annual production of some 20 million cars, which is a key market for major chemical product manufacturers such as Covestro, BASF and AkzoNobel.

He said many home and global automakers are already in the process of pushing major technological breakthroughs. Newcomers to the business are also willing to adopt the latest technology and new solutions to survive and develop in the market.

"If you look at the automotive mega trends of connected, autonomous, shared and electric, all these trends are driven by leading technologies and strong innovation power," he said. "That is why, multinationals are expanding their local research and development setup to develop and launch solutions together with their local customers."

Data from the World Gold Council showed that assets under management in Chinese gold-backed ETFs totaled 16.9 billion yuan ($2.4 billion) by the end of the third quarter of this year, a record high. That followed China's approval for its first gold-backed ETFs in six years in August.

Chinese funds, primarily Huaan Yifu Gold ETF and Bosera Gold Exchange Trade Open-End Fund ETF, accounted for most of the growth in China, the WGC said in its recent Gold Demand Trends report.

Wang Lixin, managing director for the WGC's China operations, said the country's gold-backed ETFs also contributed a major part of the 14.3 metric tons growth of Asian-listed funds in the third quarter.

Wang said nearly half of investors who bought WGC-launched gold ETF products were individual investors, with the rest being institutional investors.

"Gold remains a safe haven amid global economic uncertainties, and it is emerging as an investment with possible higher returns as central banks are cutting interest rates," said Huo Songling, secretary to the executive board of leading China National Gold Group Co Ltd.

Compared with physical gold and futures, gold-backed ETFs also have lower transaction costs. This is another reason why they are popular among investors, according to media reports.

In contrast to the rising demand for gold ETFs among Chinese investors, gold bars and coins, which are also an important source of gold investment, saw a 51-percent year-on-year drop to 42.8 tons in the third quarter, a three-year low.

Investors have put off buying gold bars and coins due to surging gold prices, the WGC report said, adding many investors are holding off purchases in anticipation of a possible price fall.

According to the WGC report, gold prices continued to rally and reached new multi-year highs. During the third quarter, gold prices rose by 5 percent. On Friday, the price of physical gold hit $1,478 per ounce.

The surge in gold prices was due to ongoing geopolitical tensions, concerns of a slowdown in economic growth, lower interest rates, and the level of negative debt yields, the WGC report said.

Alistair Hewitt, the WGC's head of market intelligence, said the factors underpinning inflows into gold-backed ETFs, including looser monetary policy and global economic uncertainties, will continue.

Chinese consumers' need for gold jewelry also tempered due to rising gold prices, Wang said.

In the third quarter, people bought 156.3 tons of gold jewelry, down 12 percent year-on-year.

Yi Gang, governor of the People's Bank of China, in an article published in Qiushi Journal in November, explained why the central bank will not use quantitative easing or QE－which is very large, rapid infusions of money into the system by having the central bank buy many types of financial assets. The PBOC will instead maintain a prudent, normal monetary policy－not too tight or too loose.

QE should be an extreme emergency policy－it's a way for a central bank to pour funds into an economy to raise the prices of specific target assets. However, it causes many long-term problems and economic distortions.

The Chinese economy is slowing as part of a long-term transition to a higher value-added production model. But, the slowing is far from an emergency.

Unemployment rose to 5.1 percent in November. This is low by international standards and is unexpectedly low during a structural transition. And, the inflation rate rose to 4.5 percent year-on-year in November, up from 2 percent last year. However, according to National Bureau of Statistics data, 2.6 percentage points of the inflation rate was due to a rapid rise in pork prices due to African swine fever. It does not reflect a systemic problem.

Three episodes in American history illustrate the problems caused by loose monetary policy and loose banking regulation: 1) The stagflation, combined inflation and slow growth, of the 1970s. 2) The savings and loan bank default crisis of the 1980s. 3) The debt-driven boom of the 1990s and 2000s that resulted in the global financial crisis of 2008, which in turn compelled the US government to use QE to escape from a possible great depression.

From November 2008 through 2012, the Federal Reserve, the central bank of the United States, bought more than $4.5 trillion of home mortgage-backed securities, commercial bonds, and other assets-about 30 percent of annual GDP. In effect, the Fed was printing money to boost asset prices and to keep the interest rates on US Treasury bonds low.

One key problem with QE is that it transfers wealth to richer people away from average and poor people. In practice, this means that QE drives up housing prices and the prices of stocks, and drives down the interest rate depositors and other savers can get on their savings. This is great for asset owners, but terrible for average savers or young people trying to buy a house.

QE rewards banks and money managers for taking high risks－they get the upside if the bets pay off, but the government bears the downside risk because bank deposits are insured.

Loose monetary policy increases the prices of a limited number of assets instead of financing real investment opportunities. Companies and people are rewarded for their ability to manipulate financial assets rather than for real productivity increases.

The US economy slowed sharply in the early 1970s in the aftermath of the war in Vietnam. Throughout the 1960s and 1970s, many economists and policymakers believed in a theory called the Phillips curve, which stated that the unemployment rate could be permanently lowered by loose monetary policy. So, the Fed continuously pumped more money into a slowing economy. This worked for short periods, but soon the economy returned to high unemployment and slow growth with even higher rates of inflation. By 1980, the inflation rate reached an all-time high of 13.3 percent with an unemployment rate of 8 percent.

In this desperate situation, new Federal Reserve chairman Paul Volcker, who died recently, sharply raised interest rates, causing what was by far the steepest recession in post-WWII US history. Many businesses failed and unemployment rose steeply. Many people lost their homes because of the incredibly high interest rates, which reached 18 percent on home mortgages. Only very stimulative fiscal policy and large tax cuts saved the country from greater disaster.

The second episode shows the dangers of loose banking regulation that encourages banks to invest in risky assets. The US had long had a special kind of small, local bank, called a savings and loan bank, that received local deposits. Such banks were restricted to making very safe investments, primarily in local home mortgages. George Bailey's bank in the movie It's A Wonderful Life was an S&L bank.

By the mid-1980s, banking deregulation had allowed a few big city banks to outbid the small S&L banks for deposits, so the old, safe S&L business model was no longer viable. Regulators decided the way out of this dilemma was to allow the S&L banks to invest in riskier and riskier assets－primarily large suburban shopping centers and other commercial property in out-of-the-way areas.

As should have been expected, this bet on risky investments did not work and many S&L banks went bankrupt. Since the deposits were insured by the government, the taxpayers were on the hook to pay for the S&L banks' losses, which amounted to more than 2 percent of GDP.

You might think that banks can make reasonable judgments about the riskiness of their investments. The problem is that they are not risking their own money. They are risking their depositors', and ultimately the government's, money.

In the S&L banks case, a successful bet on a risky investment led to a very high return for S&L bank owners and managers. An unsuccessful bet stuck taxpayers with the bill.

In the late 1990s into the 2000s, the US appeared to have a magnificent economy. First, stock prices boomed. After the NASDAQ collapse in March 2000, housing prices soared. The problem is that these booms turned out to be bubbles, driven by loose monetary policy and low interest rates.

The money flowing into the economy had to go somewhere. It drove up the price of assets, mostly housing and stocks－largely to the benefit of upper-income people.

Most disastrously, low interest rates meant that banks could not make money from safe loans, so they turned to riskier investments, especially sub-prime housing loans. Regulation of banks was very loose and little attempt was made to control the immense risks. Any bank employee who did not want to approve the risky investments, which were highly profitable in the short run, was simply replaced.

Naturally, this led to a huge mess, culminating in the crisis in the fall of 2008, and the taxpayers were again stuck with the bill.

QE probably was necessary to prevent an economy-wide disaster after the banking collapse in 2008. The week beginning with the Lehmann collapse on Monday, Sept 15 was certainly scary.

There were very legitimate fears that this could be the start of a new great depression. Any policymaker at the time certainly would have done everything possible, including QE, to help the economy survive in the short term.

But it is much better to adopt prudent monetary policy and strong banking regulations, as China is now doing, to prevent such a crisis from ever arising.

 

 

 

As a city with an area of only 30 square kilometers, Macao has to choose its pillar industries carefully, retain its attractiveness as a city, present itself to the world's tourists in its best shape.

In the past 20 years, Macao's gambling industry had taken on a central role in the local economy, but it also brought about some socio-economic problems at the same time. After many years of casino-fueled growth, it's time to consider which industry will be a good diversification choice for Macao. The answer maybe finance.

Let's first look at the location of Macao. It is southeast of the Chinese mainland and backed by China's Pearl River Delta, one of the wealthiest regions of China connecting Hong Kong, Macao and Guangdong province. The per-capita income is high in these areas, and the accompanying purchasing power laid the foundation for Macao tourism.

What's more, the inland areas are known for their abundant resources, strong manufacturing capacity, widespread logistics and sales networks. All these mean it's unnecessary for Macao to establish a complete industrial structure. Regardless of its past, Macao seems to have a comparative advantage in some unconventional but at the same time indispensable industries.

Let's now also look at Macao from a larger geographical perspective. Facing Vietnam, the Philippines, Malaysia, Singapore, Indonesia and other ASEAN countries across the sea, Macao is an ideal start for travel and business in Asia. In fact, from ancient times, there were frequent trade and other exchanges between Macao and ASEAN countries, and migrants foster common cultural traditions among Macao people and Southeast Asians.

In addition, Macao maintains close ties with Portuguese-speaking countries, and through these ties, Macao extends its relations with other countries in different continents, including Europe, Asia, Africa and South America. If the Spanish-speaking countries are also knit together as close friends, Macao lives up to its reputation as the integrating hub of Eastern and Western cultures.

With casinos and tourism as its key industries so far, and given the advantage of its geographic location, Macao's economic performance can be described as "small but beautiful" over the past few decades. In 2018, Macao's GDP per capita ranked third in the world, and the Macao Special Administrative Region's government revenue from casinos was 113.5 billion Macao patacas ($14 billion), the accumulated fiscal reserves were 505.6 billion Macao patacas.

But as the old saying goes, one coin has two sides. Macao's economy may lose growth momentum if the growth rate of the casino industry declines. Actually, this potential downtrend has emerged in recent years.

Diversification could not only be the source of happiness but a driver of economic growth. When Macao applies this rule to its industrial policy, many potential diversification directions can be evaluated and weighed against each other. Based on Macao's resources and endowments, its existing industrial structure, its positioning in China and neighboring regions, we come to the conclusion that serving the capital flows into and out of the Chinese mainland may be a good choice for Macao, and help maximize the city's economic growth.

Our logic is that economically, China has shifted from a trade-motivated country to a capital-motivated one. Over the past three decades, China has gained revenue from trade activities, boosted economic growth through trade, and accumulated huge foreign exchange reserves.

Now, as a net creditor, China desperately needs to invest its accumulated capital to obtain high investment returns. China's asset allocation will also shift from foreign government bonds to more direct investment and, in the future, more portfolio investment.

This means, on the one hand, there is an urgent need to establish a platform for Chinese enterprises to go global.

On the other hand, China is opening up wider to the world, especially in the finance industry. Macao is one of the most open economies in the world. It is also an independent customs zone with a simple and low tax system. There is no foreign exchange control. Capital can move in and out of Macao freely, and a large capital pool has already formed in Macao.

These features can reassure international investors, especially those who want to share China's economic growth dividend, but still have doubts about China's opening-up policy.

Macao has many reasons for setting up an offshore financial center for two-way capital flows.

The first reason is Macao's capital endowment, including its strong foundation for the financial industry, close relations with Portuguese-speaking countries and other European countries, capital collection capacity and low cost of capital.

The second reason is, the offshore financial industry does not require much space and resource, but usually generates higher profit margins, which can suit a well-connected city like Macao as it has limited land resources.

The third reason is that offshore financial centers can provide services to Chinese and global capital flows, which are increasing quickly and constitute a huge demand. In terms of specific business, Macao can start from investment services, fund raising, wealth management and part of offshore financial services, and gradually expand to other.

However, Macao should limit its services to specialized fields, instead of establishing a global offshore financial center and providing comprehensive financial intermediary services. It may be a bad strategy for Macao to aim to replace or undermine an established global financial powerhouse such as next-door Hong Kong.

WeChat, Tencent's homegrown social media to payment app, has formed a travel alliance in Beijing to call on tourism agencies from various nations to jump on the mobile-centric bandwagon among Chinese tourists.

The bloc, called "Welcome with WeChat Alliance", has an initial 30-plus members, including country-level tourism boards like those of Germany and Sweden, as well as city-and region-level agencies from Dubai to Los Angeles.

The overarching goal is to encourage the greater use of the app, which now boasts 1.1 billion global users, and to co-develop new functions to help travelers better explore foreign destinations.

China is the world's largest outbound tourism market, with some 150 million overseas trips made last year, up 14.7 percent compared with 2017, according to the China Tourism Academy. But the market is maturing as more tourists seek independent travel to explore local experiences, said Zhang Yang, a researcher with the academy.

"When people travel abroad now, they find information on social platforms including WeChat. In the past, they traveled with travel agencies, but now they like to plan their trips themselves," said Zhang.

WeChat has already teamed up with tourism agencies from Dubai, Malaysia, Singapore and New Zealand's Auckland since January, which helped lay the foundation for its new overseas expansion plan. The alliance will support members in digitalizing their content and services, offer training on effective practices, and finance innovative solutions.

It also allows for mini-programs, which are essentially built-in sub-applications that don't require separate installation, and can be customized for various purposes, such as buying coupons, travel insurance or serving as travel guides.

Li Zhaohui, China director with the German National Tourist Board's Beijing Office, said social media is playing an important role in attracting tourists. He hoped more Chinese tourists would be drawn to the European country, following the service empowerment via the alliance.

A research report released by homestay service portal Airbnb in September found that the Chinese are increasingly keen to visit offbeat, unusual or little known destinations.

Those born in the 1990s or later are expected to account for half of the new outbound traveler community, and the group appears to be more enthusiastic about venturing into new territories, the study said.

"As 'trend followers', they tend to follow popular routes on social media apps such as Douyin and Instagram," said Peng Tao, Airbnb China's president.

Chinese are also dispelling stereotypes of visiting mostly landmarks and partaking of luxury goods, and are gradually turning to more experience-driven items. Sales of intra-Europe railway tickets surged 35 percent from the same time last year, according to travel portal Fliggy, whereas satiating palates for durians helped increase trips to Thailand and Malaysia by 59 percent year-on-year.

WeChat's initial overseas expansion could be traced back to 2016, when it launched a "WeChat Go "solution encouraging foreign merchants to accept WeChat as a form of payment. It soon disclosed bolder ambitions: to provide comprehensive solutions from tourist guides to online reservations.

Early adopters of a comprehensive WeChat solution included Japan's Fuji-Q Highland amusement park. Last year, the park introduced a mini program that offers introductions to facilities in Mandarin Chinese, provides special entrance offers and supports mobile payments settled in renminbi.

WeChat has since been looking to work with more smart solutions and service providers, or SSPs, as it seeks to deepen its mobile wallet business' overseas presence.

According to Fan Wei, overseas business director of WeChat Pay, the idea is to make its WeChat app payment function run as smoothly in a foreign market as it does at home, by incorporating more app programming interfaces and payment-to-marketing tools developed by third-party providers.

"The introduction of the SSPs serves to better connect with merchants, users and licensed payment providers," he told China Daily in an earlier interview. "They stand to bring to life a variety of smart commerce solutions inspired by local merchants."

To make it more accessible to Chinese travelers, WeChat has got involved in the tax-refund business. It has partnered with Swiss company Global Blue to offer an instant tax refund service for Chinese tourists departing from Madrid airport.

Called We Tax Refund, the service is a real-time refund mini-program, which easily helps to refund users' money back to WeChat Wallet. To date, it enables users to refund at 85 airports and three harbors in 21 economies, the company said.

Users can receive their rebates in yuan, which are sent to their WeChat Wallet account immediately once their tax refund forms are approved. It is not a default WeChat function, but needs to be processed via the mini-program.

WeChat is also offering instant in-store refunds overseas. For instance, Global Blue and WeChat Pay have joined forces to offer in-store refunds, which means that Chinese tourists no longer need to line up to get their tax refund forms processed at the airport.

Evonik Industries AG, the German specialty chemicals producer, appointed Xia Fuliang (pictured) as president of its China unit. He will take office on Jan 1. Former president Claas Klasen will retire at the end of this year. The company said Xia's appointment can help promote localization in the Chinese market. Xia has more than 20 years' experience in specialty chemicals and cross-cultural region management.

Wong Chi-fai to drive research at JLL China

Real estate consultancy JLL announced that Wong Chi-fai took up the position of head of research for JLL China earlier this month. He will work closely with JLL's team of over 60 researchers across China, to drive synergy and collaboration in the firm's research output. He joined Jones Lang Wootton, now known as JLL, in 1997 in Hong Kong as a regional economist, before he was appointed as the firm's head of research in 2000.

Liu lands key roles at China Energy Investment

Liu Guoyue, 56, was appointed general manager, deputy Party chief and a board member of China Energy Investment Corp in late November. In the past, Liu served as manager of the Shijiazhuang branch of China Huaneng Group in Hebei province, head of its power plant in Dezhou, Shandong province, and deputy general manager. He also worked as deputy general manager of State Grid Corp of China.

A number of Chinese enterprises see Ireland as an ideal gateway to the European market and a solid base for technology innovation, said Martin Shanahan, CEO of the Industrial Development Agency Ireland, or IDA Ireland, the country's inward investment promotion agency.

In the first half of this year, Chinese direct investment in Ireland rose 75 percent year-on-year to $142 million, contrasting with a 26-percent decline in Chinese direct investment in Europe, according to law firm Baker McKenzie.

This surge comes at a time when headwinds that are riddling global cross-border investments are expected to continue.

"We see more and more Chinese companies internationalizing. We want to ensure that if they are thinking about Europe as a destination, then Ireland is the first location they think of," Shanahan said.

In the post-Brexit landscape, the IDA Ireland's value proposition for foreign direct investment, especially Chinese investment, is extremely attractive, he said, citing the solid mandate received by Leave campaigners in the United Kingdom's general election on Dec 12.

"As the only English-speaking country in the (post-Brexit) EU with access to talent across the region and the common law system, Ireland will be uniquely placed to assist Chinese investors," he said.

Once Chinese enterprises set up establishments in Ireland, a stable European Union member, they can operate without impediment within the whole EU market, Shanahan said.

What makes Ireland different from other EU member economies are its "extraordinary" pro-business environment and being an English-speaking country. These factors make it easier for many Chinese investors good at English to do business, he said.

Policy stability, talented labor force, especially in the tech and pharmaceutical sectors, and consistent and transparent taxation regimes are the key ingredients of Ireland's pro-business environment, Shanahan said.

According to IDA Ireland's report Facts of Ireland released in September, the country has a young and educated population, about one-third of whom are under 25 years old. In Ireland, 56.3 percent of people in the 30-34 age-group have tertiary educational qualifications, versus 40.7 percent for the EU on average, the report said.

Moreover, in terms of ease of paying taxes, Ireland ranked fourth among the 190 economies that PWC and the World Bank Group surveyed for the Paying Taxes 2020 report.

"The track record that Ireland has in the area of foreign direct investment gives great confidence to investors in Europe that Ireland is the right place to set up and do business," Shanahan said, adding Ireland is home to many multinational corporations' EU headquarters, such as Apple and Google.

In late November, Chinese biomedical company Wuxi Biologics announced its subsidiary Wuxi Vaccines was planning to invest $240 million to build a vaccine production facility in Dundalk, Ireland. This followed Wuxi Biologics' $359 million greenfield project announced last year.

Wuxi Biologics exemplifies how Chinese investors and Irish stakeholders could achieve win-win cooperation, Shanahan said.

Wuxi Biologics could leverage Ireland's strength as one of the world's largest pharmaceutical exporters to build its vaccine plant and gain access to the whole European market. For its part, Ireland has attracted a fast-growing Chinese company, he said.

Looking ahead, the biggest growth potential for Chinese investors looking at Europe lies in Ireland's pharmaceutical and technology sectors, particularly medical technologies, Shanahan said.

"Our technology sector spans all aspects: hardware, software and the internet. So I think Chinese companies looking at Europe can consider Ireland for any aspect of technology."

Attracting more Chinese investment is strategically important for Ireland to diversify its inward investment portfolio, as China will be an even more important source of foreign investment as the country keeps growing steadily, Shanahan noted.

He said IDA Ireland would encourage Chinese enterprises seeking to expand in Europe to look at the country. His agency, he said, would support their investments.

Throughout the life-span of foreign businesses, IDA Ireland provides them with both "soft supports" such as introducing agencies and research centers they to need to work with, and "hard supports", such as subsidies for hiring more local people, to make doing business in Ireland as easy as possible, he said.

Macao has put China's Constitution and the Basic Law into "full and faithful" practice and struck a proper balance between upholding the power of the central government and ensuring the high degree of autonomy of the Special Administrative Region government, Cui said at a reception marking the 20th anniversary of Macao's return to the Chinese motherland, which fell on Friday.

Since 1999, five elections have been held for the chief executive, and six for the Legislative Assembly of Macao. The legislature, the executive branch and the judiciary fulfill their duties according to the Basic Law, Cui said.

"Hong Kong and Macao host thousands of US companies and tens of thousands of US citizens," the envoy said.

The wide international community, including many United States citizens, supports the policy of "one country, two systems", and they are all "stakeholders" in the long-term prosperity and stability of Hong Kong and Macao, Cui said.

He again warned "some forces" in the US who have "kept meddling in Hong Kong in clear interference in China's internal affairs".

He said the Chinese government stands firm on implementing "one country, two systems", and no attempt that goes against the trend of the times or the will of the people will ever prevail.

Macao has become a booming city with a stellar economic performance since the Chinese government resumed the exercise of sovereignty 20 years ago, Cui told a hall of more than 500 attendees, including diplomats, business executives and representatives of international organizations based in the US.

Macao's GDP has increased by more than 7.5 times in aggregate terms and almost 4.6 times in per capita terms, with the unemployment rate dropping from 6.4 percent in 1999 to 1.8 percent now, and the average life expectancy reaching 83.7 years, he said.

"Facts have proved that Macao's prosperity and stability is grounded on the principle of 'one country' and ensured when the unique strengths of 'two systems' are brought into full play," Cui said.

The envoy noted that "one country, two systems" is a pioneering undertaking of socialism with Chinese characteristics, conducive to the long-term stability and prosperity of Hong Kong and Macao and to the peaceful reunification of China.

"We have full confidence in this policy and will stay committed to it," he said.

US-China Business Council President Craig Allen said he had been to Macao many years ago, and today's Macao is a very different place.

"The progress of Macao since the end of colonization is truly amazing," Allen told China Daily. "I would like to see that with my own eyes."

There are many US companies in Macao, and its economy is booming, and therefore these companies are growing with a rapidly expanding economy.

"The success in Macao will attract more business, and I expect trade and investment to Macao to continue to expand," Allen said. "We want to work with Macao as a steppingstone between the United States and China."

]]> 2019-12-22 14:19:23 http://www.chinadaily.com.cn/kindle/2019-12/22/content_37529745.htm US bank JPMorgan Chase & Co said on Wednesday that its securities joint venture in China had received the necessary regulatory approvals to start operations, a further indication of the increasing foreign investment in the rapidly opening-up Chinese financial sector, analysts said.

The bank said in a statement that its securities venture in China will provide a comprehensive set of financial products and services for its Chinese and international clients including securities brokerage, securities investment advisory, and securities underwriting and sponsorship.

JPMorgan became the first US bank to gain majority control of its securities entity in China after Japanese financial group Nomura obtained the regulatory permission to start business operation of its securities JV last month.

The expansion of foreign banks' investment in the onshore securities business highlighted the importance of the Chinese market in their global business strategy as China's regulators have accelerated the opening of the Chinese financial markets to draw more foreign capital, analysts said.

China will remove foreign ownership restriction in the securities, fund management and futures business next year, meaning that foreign financial institutions can have 100 percent control of their business entities in China.

Jamie Dimon, chairman and CEO of JPMorgan, said in a statement that the bank will continue to invest in and support its business in China, which has become a critical market for its domestic and global clients.

"The establishment of our new securities company further strengthens JPMorgan's domestic platform and our onshore capabilities at a time when China's financial markets continue to evolve and the requirements of our clients continue to develop," said Mark Leung, CEO of JPMorgan China.

Zhang Deli, chief macroeconomic analyst at Yuekai Securities in Guangdong province, said that foreign financial institutions could leverage their strength in the global network, professional expertise and strong capital position to gain a competitive edge in the Chinese market and their presence could lead to industry consolidation in the Chinese securities sector.

"Foreign firms tend to have extensive international experience and they are strong in business areas such as principal securities trading (where the securities firms use their own capital for capital market investments to realize higher profits), capital and fixed-income, foreign exchange and commodities markets. Their presence will bring more competition and force local securities firms to accelerate development, which will help energize the Chinese market, and boost the regulator's goal to further open the financial industry," Zhang said.

Analysts at GF Securities said that foreign securities firms in China have the advantage in areas including derivative trading, asset management and wealth management services over local players. But it is challenging for foreign firms to compete in the onshore securities brokerage and underwriting business in the short run given that they may face limited market channels and higher capital constraints.

China's securities sector will likely see a bigger wave of foreign investment next year as more global financial institutions will seek control of their joint ventures and their participation will bring more competition which is beneficial for the long-term development of China's securities industry, analysts said.

US banks Goldman Sachs and Morgan Stanley have submitted their applications to the Chinese regulator to acquire majority stake in their securities JVs in China. Swiss investment bank Credit Suisse is also in the process of raising the stake in its China securities JV to 51 percent.

Last year, Swiss bank UBS Group became the first foreign bank to gain majority control of its securities business in China.

 

 

 

The service was jointly launched by the Bank of China, Netsunion Clearing Corp, Union-Pay International and the Macao Pass SA. It would allow residents in the special administrative region to easily pay in their travels to the mainland without having to open a bank account in China.

Zheng Guoyu, deputy president of the Bank of China, said the service would be first implemented in Zhuhai, which borders Macao.

"The service, covering major areas in transportation, dining, shopping and daily consumption, would be expanded later to the entire Guangdong-Hong Kong-Macao Greater Bay Area and the whole mainland," said Zheng.

Macao residents could use the BOC's app and MPay, a mobile payment service developed by Macao Pass, to pay for services in the mainland, Zheng said.

Su Qinglong, chairman and general manager of Zhuhai Jiuzhou Holdings Blue Ocean Tourism Development Co, said the online cross-border service would help boost the company's business with its Macao counterparts.

"A growing number of Macao residents have developed interests in visiting the mainland, and we have seen more business revenue generated from Macao tourists," said Su.

Based in Zhuhai, the company is constructing an international sailing and yacht terminal and developing an uninhabited island to attract more international tourists.

"Our business is targeting tourists from the Greater Bay Area, mostly from Hong Kong and Macao. We are expecting a business surge after more online payment interaction between the mainland and the two special administrative regions," said Su.

Su's company was one of the first batch of businesses in Zhuhai that are allowed to adopt the cross-border payment service.

Official statistics showed the number of travels from Macao residents to the mainland reached 25.15 million in 2018.

The first cooperative project between Guangdong and Macao based in Hengqin, it has 159 companies including 39 from Macao.

2. Hengqin-Macao Youth Entrepreneurship Valley

Also known as InnoValley, it is a national business incubator with 374 projects under incubation, 219 of which are initiated by Macao companies.

3. Hong Kong and Macao Young People Startup Space

Located in the Zhuhai Hi-Tech Industrial Development Zone, it was set up to industrialize technological results developed by young Hong Kong and Macao people.

4. Hong Kong and Macao Teenagers Internship and Communication Center

Launched in June, it provides internship programs for the youth from Hong Kong and Macao.

5. Huafa-University of Macau Joint Lab

Sponsored by Zhuhai Huafa Group, the lab will have six centers for incubating high-tech projects with core competitiveness and growth potential.

6. Demonstration centers of University of Macau and Macau University of Science and Technology in Hengqin

New centers will be established for production, education as well as R&D purposes.

 

The bank maintained its prediction that China's economy will grow at a rate of 6.1 percent this year, before moderating to a projected rate of 5.9 percent in 2020 in its updated research released in December, unchanged from the previous forecast in October.

The moderate industrial growth and external risks may add to the pressure of a growth slowdown in the short term, the December edition of China Economic Update, said a brief report released by the bank.

China's GDP growth slowed to 6 percent year-on-year in the first three quarters of 2019, down from 6.6 percent in 2018. The slowdown featured a deceleration in investment growth and weaker investor confidence amid heightened trade policy uncertainty.

The "Phase One" trade agreement between China and the United States has boosted market confidence, and analysts expect the good news can avoid further escalation of trade disputes and lead to higher trade flows.

A permanent resolution of bilateral trade tensions would be essential to reduce the negative impacts on the world's second largest economy, said the World Bank.

Other external risks include a sharper-than-expected slowdown in major economies, particularly in parts of Europe, and weaker global trade and investment, it said.

Domestically, growth may suffer from the potential adverse effects of financial de-risking in the short term, given its asymmetric impact on private sector financing and the risk of a disorderly unwinding of excessive leverage, the bank explained.

"Policies need to be carefully balanced to reduce cyclical risks to growth while staying the course on the necessary deleveraging of the economy," said Martin Raiser, World Bank country director for China. "This may require tolerating slower but safer growth in the short term."

"If downside risks lead to a sharp reduction in growth, the authorities have policy space to act, but this needs to be done in a way that is consistent with the desired rebalancing of the economy toward consumption, services, and private investment and with reducing financial and corporate sector risks," Raiser said.

The annual Central Economic Work Conference has just concluded last week, which set the basic policy tone for next year. It leaves plenty of flexibility in terms of actual policy implementation and the growth target is still highly important, said Song Yu, chief economist of Beijing Gao Hua Securities Co Ltd.

Infrastructure investment, as Song mentioned, is expected to be the major driving force to support the economy and avoid a sharp slowdown.

"At present, China's basic research on nanotechnology is at the forefront of the world, with up to 210,000 nanotechnology patents, however, China's transformation rate of the technological results is still very low," said Zhao Yuliang, director at the National Center for Nanoscience and Technology and an academician of the Chinese Academy of Sciences. "Translating these basic research findings into the productivity of our country is a challenge before us."

Relying on the advantages that the Guangdong-Hong Kong-Macao Greater Bay Area has in talented professionals and advanced industrial capability, Guangzhou Development District is aiming to transform research results in nanotechnology into applicable and marketable technologies and products, Zhao added.

To foster the development of nanotechnology, the district introduced a series of new incentive policies on Tuesday, in Guangzhou.

"The policies are targeted for the nanotechnology industry and provide the strongest industrial support and most complete coverage in China. They are also the only local industrial policies led by academic research," said Xia Jian, director of the science and technology bureau of Guangzhou Development District.

The policies will help the district build an all-around nanotechnology ecosystem and realize high-quality development, Xia added.

Offering multiple supportive incentives and rewards, the policies can grant enterprises up to 170 million yuan ($24.27 million) each.

The policies support the construction of public nanotechnology service platforms, and offer rewards to entities establishing each platform, with a maximum award reaching 50 million yuan.

The public technology service platforms include those focused on nano processing technology, nanotechnology pilot plant testing and application promotion, nanotechnology testing and analysis, nano biological effects and safety research.

According to the policies, if a newly established nanotechnology enterprise with a registered capital of more than 10 million yuan rents property for offices, Guangzhou Development District will offer the enterprise a subsidy equal to 50 percent of the rent for three years, with an annual maximum subsidy of 1 million yuan.

As for companies with a registered capital of more than 10 million yuan that purchase property for offices, the district will provide a one-time subsidy amounting to 10 percent of the purchase price, with a maximum subsidy of 5 million yuan.

The policies also allocate subsidies for high-level nanotechnology industry summits, forums and academic exchange activities.

After the approval of the departments of science and technology of Guangzhou Development District, event organizers can receive a subsidy equal to 30 percent of the event's costs. The maximum subsidy for each event is 1 million yuan.

The incentive policies also support small, medium- and micro-sized nanotechnology enterprises.

The district will select a maximum of 10 small, medium-and micro-sized companies among those with revenues of more than 10 million yuan in the previous year, and offer equity investment. The maximum equity investment for each enterprise is 5 million yuan.

To forge a world-renowned center of high-end nanotechnology industry and a hundred-billion yuan industrial cluster, Guangzhou Development District is committed to promoting the construction of a national institute of nanotechnology innovation and a nanotechnology innovation industrial cluster, or the China Nano Valley, according to local officials.

"To name it (the nanotechnology industrial cluster) as 'China Nano Valley' is to hope to gather and serve nanotechnology research institutions and enterprises nationwide," Zhao said. "In the future, the China Nano Valley will be capable of transforming not only the nanotechnology achievements made in the Guangdong-Hong Kong-Macao Greater Bay Area, but also the ones in any other regions of China."

With a planned construction area of 1.1 square kilometers, the China Nano Valley will have four industrial parks with different focuses of intelligent technology, life and health technology, energy and environment and composite materials.

Nanotechnology can not only help improve the quality of development and efficiency of existing pillar industries, but also help empower emerging industries and cultivate future industries, proving to be strong technical support for Guangzhou Development District to establish a modern industrial system with international competitiveness, said local officials.

At the event on Tuesday, where the incentive policies for the nanotechnology industry were released, 19 nanotechnology cooperation projects were also inked, out of which 15 were signed between the district's national institute of nanotechnology innovation and enterprises from sectors including new material, new energy, intelligent technology, medical treatment and finance.

The national institute of nanotechnology innovation will provide enterprises with research and development platforms and technical resources, which is expected to bring new development opportunities to these enterprises, said a senior official at the event.

It is the second set of US goods to be excluded from China's first round of tariff countermeasures. The move is part of the broader efforts to further ease China-US trade friction following the much-anticipated partial deal between the two sides.

China's exclusions on some US chemical products, such as white oil, will apply for a year starting Dec 26, the commission said in a statement. Duties that have already been imposed will not be refunded.

The remaining US products subject to China's first round of additional tariffs will not be excluded for the time being, the commission said.

The commission said it will continue the exemption process and release the exclusion lists of US goods subject to the second round of additional tariffs in due course.

Last week, the world's two largest economies reached an agreement on the text of their phase-one trade deal on the basis of equality and mutual respect. The US promised to eliminate extra tariffs on Chinese goods phase by phase, Chinese officials said.

Speaking at a weekly briefing on Thursday, Gao Feng, spokesman of the Ministry of Commerce, said the economic and trade teams of the two sides are communicating closely about the follow-up work like the signing of the agreement.

The contents of the deal will be released after the official signatures, Gao said.

Earlier reports said the deal will cover intellectual property rights, technology transfer, food and agricultural products, financial services, exchange rates and transparency. Both nations have agreed to accelerate legal approvals for the deal.

Analysts said the phase-one agreement will benefit both countries and the whole world. But uncertainties still exist, they said.

Ma Jun, a researcher at the Tsinghua National Institute of Financial Research, said that one positive significance of China and US reaching an agreement on the text of the phase-one deal is to avoid losses for both economies, lay the foundation for their relatively steady economic development next year and reduce uncertainties facing the global economy.

Lower uncertainties will help boost the confidence of global consumers and investors, Ma said.

Yang Yewei, a macroeconomy researcher with Southwest Securities, said in a study that the recent moves showed that "China-US trade disputes are developing in a positive direction, and reflected the two countries' willingness to de-escalate risks".

However, uncertainty persists, Yang said, as the details of the preliminary trade pact have not yet been released, and there are several procedures to be completed before brokering the deal.

Zhu Jianfang, chief economist with CITIC Securities, said: "Tariff removal and China expanding imports from the US will have positive impact on trade in electronic products, agriculture and related financial products and services."

The move, which came after the firm invested 1 billion yuan into the same efforts last year, aims to encourage app developers to create gaming, video and other forms of quality content as well as help them go abroad.

The spending speaks for itself. Over the past year, the company has offered such resources to more than 2,000 apps and over 120,000 developers are active in its platforms, said Duan Yaohui, Oppo's vice-president.

Through leveraging its huge presence abroad, the firm's mobile operating system ColorOS has accumulated more than 320 million monthly active users in over 140 countries and regions, Duan added.

At its developer conference on Thursday, the handset maker announced that it will launch its first smart watch in the first quarter of next year. It will also open its system capacities in smartphone function, network, video, media and augmented reality to developers and partners by 2020.

"A new round of technological revolution is coming with 5G and artificial intelligence. With the opening of these capacities, we want to cooperate with app developers in building a world that is connected with everything and mixed with both virtual and real scenarios," said Wu Henggang, vice-president and president of software engineer business at Oppo.

The opening of the platforms shows the smartphone vendor's ambition to boost its technological prowess in the 5G-enabled internet of things era. Just as its CEO Chen Mingyong suggested earlier, Oppo is aiming to be more than "just a smartphone maker".

According to a report from market consultancy IDC, China will be in the driver's seat with respect to the adoption and use of IoT technology. By 2020, the country is expected to spend $300 billion annually on IoT and surpass the United States as the world's largest IoT market.

Tom Morrod, research director at market research company IHS Markit, noted that 5G will give some new impetus to IoT devices in an era where infusion will be omnipresent.

Amid the fierce smartphone competition in the nation, Oppo's rivals including Huawei Technologies Co and Xiaomi Corp have all geared up efforts in developing IoT for new growth engines.

Xiaomi, for instance, has become a consumer IoT titan from a smartphone maker. By end of last year, it had connected over 132 million smart devices excluding mobile phones and laptops.

He had just finished driving for more than an hour on a bumpy and muddy road, which kept him on tenterhooks. Transporting eggs to Antananarivo from his farm in Mahazaza, a town some 30 km north of the capital, is a daily headache for the 26-year-old poultry farmer.

More than 10 percent of Randriamananjara's eggs are broken every day due to jolts while traveling on the poorly maintained road, he said.

Safidy Andriamisaina, another poultry farmer in Mahazaza, said eggs were always sold at half price when damaged, and vehicles have to be repaired frequently due to the bad conditions of the area's roads.

In Mahazaza and the neighboring towns of Mahitsy and Ampanotokana, roughly 30,000 residents rely on the route for their daily travels. Among them, 80 percent are involved in poultry farming, and supply 40 percent of the eggs consumed in Madagascar.

They saw the light when news came two years ago that the Chinese government would provide funding and expertise to build a new road for egg producers in the suburb.

The 19.25-km-long "egg road "consists of a main axis and five branches, and is expected to secure the transportation of 150,000 eggs per day, according to official data.

China's Jiangxi Zhongmei Engineering Construction Company kicked off the project in October 2018. The road is scheduled to be completed in three years, as a five-month-long rainy season every year in the country hinders such projects.

"We hope that the renovation work will be completed as soon as possible," Randriamananjara said.

Project manager Lei Dongsheng said that thanks to the help of local residents, construction has been running smoothly since March, and"70 percent of the earthworks and bridge construction will be completed by the end of the year."

After completion, traveling the 7 km between Mahazaza and Mahitsy will only take 15 minutes, compared to the current journey of 90 minutes. This drastically shorter travel time will bring many new benefits, residents said, citing an example that the sick will be able to reach hospitals a lot sooner.

The arrival of Chinese workers has brought jubilation to local people, said Louis Firmin Rakotomenjanahary, mayor of Mahazaza.

Madagascar's rainy season, which runs from November to April each year, makes roads extremely slippery and causes serious traffic problems. Rakotomenjanahary recalled that when vehicles at times broke down in the mud recently, "it was the Chinese who brought out their equipment to offer help and solutions."

The project has enabled many young people to find jobs as stonemasons, porters, security guards, and truck drivers, among others, he said.

Zhongmei, pledging to recruit about 300 local employees, has already made visible changes to the daily lives of residents.

"My life has changed since I've been with this company, and my children's school fees are paid on time. We have savings at home now," said Michel Randrianasolo, a construction manager at the Chinese company.

The road project demonstrated the efforts made to integrate Madagascar into the China-proposed Belt and Road Initiative, which aims to build trade and infrastructure networks, connecting Asia with Europe and Africa, both on and beyond the ancient Silk Road routes.

So far, the BRI has become a platform of opportunities and a road to prosperity for all its participants.

Egg producer Randriamananjara said locals were grateful to the Chinese people who offered help to them.

"Chinese like to communicate with us. Many kids here can speak some Chinese," he said with an engaging smile.

Qatar's national carrier also said it is actively expanding flights to more Chinese cities as it has seen strong travel demand from China.

The carrier said the brand-new gigantic airport would bring more convenience to passengers. It hopes to have deeper cooperation with its partner, the Guangzhou-based State-owned China Southern Airlines, which will gradually move all of its flights to Daxing airport and will command a 40-percent share at the new airport.

Qatar Airways said the move to Daxing airport would not have an impact on its flight ticket prices, as most of its passengers are transfer passengers.

Among those who fly to Doha, capital of Qatar, 90 percent of them will transfer flights and then fly to their final destinations. China has been an important transfer passenger source, and the number of transfer passengers has been growing steadily, the carrier said.

In Qatar Airways' global network, China has the third-largest number of flights, just behind India and the United States. Every week, the carrier operates 45 flights connecting seven Chinese cities: Beijing, Shanghai, Guangzhou, Chengdu, Hangzhou, Chongqing and Hong Kong with its Middle Eastern hub in Doha.

"Chinese consumers play an important role in today's global tourism market. China has been a critical market for us," said Joshua Law, vice-president of Qatar Airways' North Asia operations.

"We are confident about future growth potential, and plan to launch more flights to China and add frequencies to the current flights. We are also open to cooperate with more Chinese partners in the future."

Qatar has been providing visa-free policies for Chinese citizens. This year, the flights connecting Hangzhou, Zhejiang province, and Doha have changed to the B777-300ER aircraft model from the A330 model. The B777-300ER has higher seating capacity.

This year, the airline has launched several new flights from Doha to Lisbon, Portugal; Malta; Rabat, Morocco; Davao, the Philippines; Izmir, Turkey; Mogadishu, Somalia; Langkawi, Malaysia; and Gaborone, Botswana. By 2020, Luanda in Angola, and Osaka in Japan will be added to the airline's growing network.

"Many of the new flights we have launched would help the growth of the economies involved in the Belt and Road Initiative, and provide more convenience for passengers from those countries and regions and the people who go there. We also expect to embrace more business growth opportunities," Law said.

On the other hand, at a time when many domestic carriers have reduced their investment in in-flight catering services, Qatar Airways has elevated the flying experience of its economy-class passengers.

It has launched new dining services, including healthy seasonal ingredients and localized menus on the flights to and from China, in addition to other global international long-haul flights with a duration of over five hours. The carrier said it has recognized the emerging trend of travelers being more aware of their dietary needs and interested in healthier food options.

The new meal services in the economy class increase portion sizes by 20 percent for appetizers, 25 percent for the main course and 50 percent for desserts. In addition, some foods and beverages such as Godiva chocolate, sparkling wine and cocktails, that were served only in the business class and the first class, have been extended to the economy class.

Foreign airlines are being encouraged to launch international flights at the new Daxing airport, with an option to operate at Beijing's two airports, according to the Civil Aviation Administration of China.

So far, British Airways, Finnair and Polish Airlines are some of the prominent names that figure among the carriers that have moved their operations to the Daxing airport.

US carrier Delta Air Lines said it would move to the new airport in March next year.

Baijiu is the most competitive consumer goods in China. This year, listed companies that make baijiu are expected to achieve total sales revenues of more than 220 billion yuan ($31.4 billion), according to Guotai Junan Securities.

Kweichow Moutai Co Ltd, an iconic baijiu distiller from Maotai town in Southwest China's Guizhou province, said it will establish its own e-commerce platform next year and further promote overseas sales of its products.

"We will speed up the research and development of new products based on market demand, and optimize the market layout and our distribution networks," said Li Baofang, president of Kweichow Moutai.

"Next year, we will provide more specific sales guidelines for our dealers nationwide, and continue to reform our sales and marketing system. The company will be committed to regulating and standardizing the market environment effectively."

Li said Moutai products are in short supply in the overseas market this year, and the demand-supply gap is widening, suggesting that Moutai has become very popular abroad.

This year, Moutai sales started in overseas markets such as Chile, Argentina, Peru, Tanzania, Kenya and Ethiopia. In addition, sales continued in major overseas markets such as the United States, Russia, Germany, Italy and Australia.

Next year, Kweichow Moutai would further expand its overseas footprint, especially in the countries and regions involved in the Belt and Road Initiative, the company said. A promotional push is likely in Dubai. To brighten its brand image, it also plans sponsorship of corporate events at home and overseas, like the China Daily-hosted Vision China series of public talks and discussions.

Moutai products, which have often been in tight supply because of strong demand, have sparked speculative transactions in the China market. On some e-commerce platforms, buyers had to reserve products in advance and complete purchases as soon as the products became available, to avoid a potential out-of-stock situation.

The Shanghai-listed company's market capitalization exceeded 1.4 trillion yuan this year. In June, it became the first stock to see its share price exceed 1,000 yuan after 27 years. It also became the most expensive stock in the A-share market, boosted by continuously growing consumer demand for the company's products and good corporate earnings.

"Baijiu embodies Chinese culture in a sense. It boasts distinguished core competitiveness. Foreign companies are hard to compete with Chinese liquor makers in this regard," said Zi Meng, managing director of Guotai Junan Securities.

"The net profit margin of high-end baijiu makers can exceed 40 percent, higher than the 35-percent gross profit margin of most consumer products. In the future, baijiu distillers may grow further using their strong brand image, popular products and efficient sales channels."

Meanwhile, a number of major middle-end and high-end baijiu distillers in China have raised their product prices. Earlier this year, higher-end spirit makers such as Sichuan-based Wuliangye Yibin Co Ltd and Luzhou Laojiao Group raised their prices.

In early November, baijiu maker Sichuan-based Shuijingfang Liquor Industry Co Ltd announced it would raise the prices of four of its higher-end products. The price of one variety of 500-ml baijiu bottle rose 60 yuan to 1,039 yuan. For three other varieties, prices rose 20 yuan per bottle, according to the company.

"With the hot sales season of Spring Festival fast approaching, many people will buy baijiu for family and business banquets. So, some white spirit makers aim to burnish their brand image by raising prices," said Cai Xuefei, a white spirit industry analyst.

Zi of Guotai Junan Securities said there is a growing trend of people investing in high-end liquors to compile vast personal collections. Liquor bottles as collectibles has become a fad. High-income consumers are not price-sensitive, leading to a continuous rise in prices of high-end baijiu products.

On the other hand, sales of wines, a newcomer in the array of alcoholic drinks in China, have been surging in the past few years, prompted by a growing demand from young consumers who would like to pursue healthy and trendy lifestyles.

China has eight major wine producing areas, including Xinjiang Uygur autonomous region, Ningxia Hui autonomous region and Gansu province. Red grape varieties make up about 80 percent of the total wine market in China, and white wines take the rest.

In the past two years, both the number of online wine buyers and sales grew at an annual rate of 40 percent. Supermarkets and liquor stores still remain the major distribution channels for wines, according to data from consultancy Frost& Sullivan.

Wine consumers aged between 18 and 35 accounted for more than 80 percent of the total, and the proportion of youngsters joining the wine consumption group has been rising, it found.

In the past five years, wine sales in China grew from 66.5 billion yuan to 90.22 billion yuan, at a compound annual growth rate of 7.9 percent, buoyed by the increasing recognition of wines by Chinese consumers. In the next five years, with the wine-drinking culture expected to become even more popular, sales will continue to grow steadily, said Frost& Sullivan.

"Last year, the global average consumption ratio of spirits and wines was equal, while in China, the proportion was about 7:1. The annual consumption volume of wines per capita in China is less than 1.5 liters, while the corresponding number in the United States has exceeded 10 liters," said Neil Wang, president of Frost & Sullivan's China unit.

To tap the significant growth potential, especially among young consumers, more and more domestic wine producers are focusing on adjusting their product structures. They have introduced more wine varieties in smaller (200 ml or 375 ml) bottles.

"Besides, with demand for high-quality and differentiated products growing, the advantages of local and distinctive small-scale production areas have become more prominent. Wines made from small-scale and niche production areas are gradually recognized and favored by an increasing number of Chinese consumers," Wang said.

 

 

 

So, a senior management job with an industrial group seemed appropriate, more so because it involved a lot of work relating to China, the world's second-largest economy that has been switching its emphasis from exports to consumption, supported by high-end technologies and services in various fields.

A DuPont veteran with 28 years of service under her belt, Dembek said that the technology-strong material and ingredients manufacturer will focus on several businesses, including transportation, safety, electronics, water, health and wellness to develop the Chinese market in the long run.

"We will focus on the key trends impacting the society and how our innovative technologies and materials can best help meet those needs," she said.

These trends, she said, also include advancing smart cities and devices, key components for autonomous vehicles, industrial protection materials, providing clean water and healthy food, improving energy efficiency and reducing waste.

"DuPont is thrilled about the fact that China has been encouraging domestic companies to create more high added-value in their product lines, as well as promote sustainable development," said Dembek, who is also the group's senior vice-president, noting the nation's demand for high-end materials therefore will remain attractive for global players.

To better understand local customers' needs and challenges, the Delaware-headquartered company expanded its Shanghai Innovation Center this year. Established in 2014, this innovation facility is a communication and demonstration platform for use with local and global clients, scholars and institutions.

After announcing a significant investment in a new manufacturing hub in Zhangjiagang, Jiangsu province, to support its transportation and industrial businesses in 2018, the company also expanded the manufacturing capacity of its transportation and industrial facility in Shenzhen, Guangdong province, this year.

After entering China and establishing its first office in Beijing in 1984, DuPont grew over the years, and now has around 3,500 employees, two research and development centers and one innovation center across China. Its businesses span nutrition and biosciences to transportation and advanced polymers.

Dembek stressed that China has always been an important part of the company's global strategy. The country's 40 years of reform and opening-up is a process of continuous improvement for the business environment, regulation of business rules and strengthening of business governance.

"We have discovered notable changes in the consumption and manufacturing sectors with evolving patterns and steady expansion," said Dembek.

For instance, more than 400 million of China's population are in middle-income groups, seeking a broader range of dietary options and showing a growing concern for the quality and safety of food, domestic appliances and daily items.

She said the company is benefiting from China's offer of favorable conditions to multinational companies and this in turn enables global businesses to envision future development in a flourishing Chinese market with confidence, working in partnerships and seeking opportunities across the value chain.

Eager to seize more market share and promote brand awareness in China, DuPont showcased a portfolio of products focused on four key themes: connectivity and mobility, healthy living, urbanization and safety, and environmental protection during the second China International Import Expo held in Shanghai in November.

Joining DuPont as a research chemist and a technical manager, and having worked at various posts in areas such as supply chain, operations, sales and marketing, Dembek said that firms don't innovate, their people do. She believes one of the practical ways to motivate people is to make sure they are engaged and excited about the work they are doing.

"At DuPont, we encourage continuous, lifelong learning among our employees and strive to create an environment where employees are empowered to take control of their jobs," she said.

Zhao Ying, a researcher at the Beijing-based Institute of Industrial Economics, which is part of the Chinese Academy of Social Sciences, said demand for high-end manufacturing in China is among the world's fastest-growing. Many domestic companies are seeking new materials and solutions to get products to market faster with decent prices, to improve their asset utilization and cut associated risks.

While large companies are making notable strides in terms of digital transformation, many global technology and material providers have also begun to allocate financial resources to innovation and marketing channel expansion for small and medium-sized enterprises. They are keen to restore their core strength, as well as forming new cross-industry partnerships with other players, he said.

Dembek leads business and innovation strategy alignment to make the most effective portfolio choices for DuPont. Her goal is to make every investment dollar count. Besides, she strives to quickly drive innovation to market. Dembek also serves on the dean's advisory board for the Eberly College of Science at Pennsylvania State University.

Back then, cured ham was a common food in Spain but an exotic and niche product in China. I couldn't imagine it would go on to become popular and widely recognized among Chinese meat lovers.

Well, 2019 marked the year of the pig according to the Chinese zodiac. Eating more pork, already a staple in China, has become something of a habit for consumers.

Chinese consumers' huge demand for Spanish gourmet cured ham has encouraged the European country to further increase production of the meat product, industry reports found.

Production of pork peaked in Spain this year, partly driven by the significant demand from the China market. In the past five years, output grew by an annual rate of 20 percent, according to Spanish newspaper El Confidencial.

By the end of last year, Spanish cured ham makers received green signal to export more varieties of pork such as ham with bone to China, and thus further increased their exports to China.

Pork topped the list of Spain's agricultural export items to China. Spain has also become one of the largest sources of imported pork in China, according to the Ministry of Commerce.

African swine fever earlier had resulted in a shortage of at least 20 percent of China's total pork output this year, and China looks to further boost pork imports.

Despite being relatively new in China, cured ham products carry expensive price tags. For instance, a 70-gram cured ham pack sells for 389 yuan ($55.6) on Tmall, a major e-commerce platform from Alibaba Group. Yet, it has been quite well received among Chinese consumers with sophisticated tastes and willingness to try different foreign foods.

Spanish producers of cured ham attended the Shanghai import expo for two consecutive years now, which has helped them to expand sales channels, fueled by the strong consumption power of the Chinese people and their pursuit of high-quality and healthy lifestyle.

Cured ham appears on the menus of many high-end restaurants and Spanish restaurants in metropolises like Beijing and Shanghai. In addition, it can be seen on the shelves of supermarkets and major e-commerce platforms. I'd even say it has become as distinguished as other imported foods like varieties of cheese and wines.

Samsung Electro-Mechanics Co, an electronic components maker affiliated with Samsung Electronics, said it will shut down one of its Chinese units that produces HDI, a type of printed circuit board used in electronic devices including smartphones and laptops, due to low profitability, a report by Yonhap news agency said.

Samsung Electro-Mechanics said Kunshan Samsung Electro-Mechanics Co in Jiangsu will halt production and sales, adding it plans to sell assets of the Chinese unit, the report noted.

Samsung Electronics did not respond to requests for comment on the closure of the HDI production unit.

The South Korean tech heavyweight will invest an additional $8 billion into its memory chip plant in Xi'an, Shaanxi province, Xi'an Daily reported.

The company has invested $7 billion in the second phase of its chip plant in Xi'an, which will primarily produce advanced flash memory chips and is expected to begin mass production in the first quarter of 2020.

The first phase of Samsung's plant in the Xi'an Hi-Tech Industries Development Zone went into operation in May 2014, with a total investment of $10 billion.

Despite being the world's biggest smartphone maker, Samsung's sales are close to negligible in China.

Statistics from market consultancy Strategy Analytics showed that in the second quarter of this year, Samsung's sales accounted for 0.7 percent of the Chinese market. The company had a market share of about 20 percent in China around 2013.

Hwang Deuk-Kyu, president of Samsung China, said during the second China International Import Expo that the company always attaches great importance to investment, cooperation and exchanges in China, especially in the 5G era.

"The reason for Samsung closing its HDI manufacturing factory lies in its poor business performance in the Chinese market amid mounting competition from local rivals," said James Yan, research director at Counterpoint Technology Market Research.

Yan added the company also entrusted its smartphones to Chinese factories for production, using the original design manufacturer or ODM form to save costs.

"The flash memory chip market is expected to pick up next year, along with the rising demand, so it is reasonable that Samsung steps up its production of such chips," said Huang Yangqi, an analyst at the research institute of integrated circuits under CCID Consulting, a leading Chinese think tank.

Huang added the expanded production capacities will help shore up Samsung's market share and leading position in the NAND flash memory chips sector, while noting the Xi'an plant will further drive the development of the downstream storage industry in the domestic market.

Samsung is currently the world's leading manufacturer of NAND flash memory chips for smartphones, computers and many other devices. 

Fu Xudong, senior vice-president of global pharmaceutical giant Bristol-Myers Squibb, said during the recently concluded World Innovators Meet 2019 held by Equal Ocean, that China has become the world's second-largest pharmaceutical market, following the United States. In 2018, its pharmaceutical market totaled $127.9 billion, growing 2.4 percent on a year-on-year basis. The market is expected to maintain the growth momentum with an average annual growth rate of 5 percent in the coming five years.

"This can be attributed to the improvement of treatment concepts, the optimization of medical measures, the acceleration of new drug access, the improvement of medical service quality, and the dynamic adjustment of medical insurance access," he said.

China's new drug development has begun to catch up in the fields of tumors, diabetes, and antibiotics, Fu added.

In recent years, the Chinese government has introduced a series of policies to narrow the pharmaceutical innovation gap between China and other leading countries. The policies include developing multinational clinical centers, sharing clinical data globally, accelerating the approval process of special medicine, and enhancing the protection of clinical data.

Industry data showed that after the acceleration of innovative drug access, the drug approval speed increased by 62 percent. In terms of biologicals, newly approved biologicals in 2018 surged by 450 percent compared to that of 2017. The process from material submission to final approval now only takes six months.

And the capital market also favored the sector. A recent report from Equal Ocean showed that in 2018, China's medical startups attracted a total investment of $2.7 billion, taking up 7.14 percent of global investment. The figure doubled to $4.5 billion in 2019, accounting for 11.61 percent of global investment.

"China's traditional drug research and development pattern, which was dominated by generic drugs, is undergoing transformation, and new drug development has ushered in new opportunities. From the perspective of supply and demand, the pharmaceutical industry will continue to be one of the main driving forces for investment in China's primary market," said the report.

In recent years, China's demand in the pharmaceutical market has boomed. According to data issued by industry research website chinabaogao.com, in 2018, the terminal market volume of China's pharmaceutical market reached 1.7 trillion yuan ($242.9 billion), 6.3 percent higher than the same period in 2017.

"In the future, demand, policy, and capital will serve as the troika of China's pharmaceutical development," Fu from Bristol-Myers Squibb said.

On Nov 28, the National Healthcare Security Administration announced a total of 70 new drugs that will be included in China's national medical insurance catalog, with their prices slashed by 60.7 percent on average. During the negotiation process, for the first time, there was a situation where Chinese and foreign companies competed on the same stage for innovative drugs in multiple therapeutic areas, such as anti-HIV and anti-hepatitis C.

Market insiders said that because of the rapid rise of local innovative drugs, the monopoly position of new drugs imported exclusively from overseas in the past had been challenged.

Vivian Chen, vice-president of Corporate Affairs at Ascletis Pharma Inc, said that to transform from generic drug-dominated to innovative drug-driven pharmaceutical market, Chinese innovative drug companies should make efforts in the areas of product, capital, talent and policy.

"The implementation of the value-based strategic purchase of the national medical insurance program is the future trend of the pharmaceutical industry. The clinical research of new drugs must not only take into account market demands, the policy direction of market access should also be considered," she said.

The technological leap people will see with 5G lies in the kind of connectivity it brings, according to Gordon Domlija, Asia president and China CEO of media agency Wavemaker.

"I would say in the coming year that 5G changes how we work with manufacturers to create communications and engagement opportunities, which are relevant, targeted, and more beneficial to consumers," said Domlija, whose company is in charge of media purchasing for 120 clients in China.

In the past two years, he has witnessed a "democratization" of digital channels where brands stand to allocate their resources. While the likes of Baidu, Alibaba and Tencent－the so-called tech trinity in the Chinese internet lexicon－used to take the lion's share of online traffic, today roughly 30 to 40 percent of digital engagement is happening outside of the top five players.

Domlija predicted that 5G, due to its high connectivity and low latency, is poised to disrupt the current interactive mode and could potentially even make some of the currently trending channels obsolete.

Paul Cha, head of Media and Digital at Kantar China, agreed that the marketing and communications industry will be one of the key beneficiaries of the 5G era, enabling far greater capabilities to reach and engage with consumers.

In a report predicting media trends in 2020, Kantar identified three key factors poised to bring changes. Increased connectivity means the network can handle far more devices providing the opportunity for anything to be connected to the internet, and lower latency indicates that data transfers will be almost instantaneous, a prerequisite for the takeoff for the likes of autonomous cars.

"Finally, download speeds up to 20 times higher will facilitate advancements in data-heavy technologies such as virtual reality," Cha noted.

These changes will have major implications for "on the go" media consumption, with brands equipping themselves with the ability to connect with customers at any time, in any location, using richer content.

"The 5G era will support the internet of things devices such as smart product packaging, as well as connected technologies like sportswear and facilitate hyper-personalized brand experiences," he said.

The advent of 5G and other technological leaps like artificial intelligence will exert a bigger impact on smart marketing through a more thorough and stratified analysis of user preferences based on algorithms that decode customer activities, said Maggie Wang, president of data marketing technology firm AdMaster.

Based on a survey of 221 brands spanning more than 20 industries, AdMaster and its sister company Miaozhen Systems found in a recent study that digital marketing spending in China is forecast to surge 14 percent year-on-year in 2020.

That is 6 percentage points lower than last year and marks the first spending slip in three years since annual tracking began in 2017.

To be more specific, only 18 percent of surveyed marketers said they plan to increase their budget by 30 percent and more in the coming year, a staggering 11 percentage points lower than a year ago. Almost 60 percent reported their digital marketing budget will grow less than 10 percent.

"Among the majority of the companies we've spoken to, digital marketing budgets take up somewhere between 30 percent and 60 percent of the entire marketing expenditure, which already represents a considerable proportion," Wang said.

Three quarters of the newly allocated marketing budgets will go to mobile devices, with only 9 percent going to personal computers.

"In the 5G era, the distinction between online and offline will become increasingly obsolete, making omnichannel and multimedia marketing (in the forms of video) a business necessity," she said.

Rosy prospects come with challenges. According to Cha, more devices mean there will be even more fragmented datasets to be integrated and consolidated, to gain a holistic consumer view for marketers.

"Additionally, walled gardens will need to connect with other platforms to achieve a complete picture of the consumer, and this is no small task," he noted.

Domlija from Wavemaker also suggested brands should avoid the temptation of being purely data-driven, given the changing mindsets of the younger generation of consumers who uphold brand values.

"Most big Chinese brands and local companies are defining who they are, what their purposes are, and giving something back to the customers ... and that will create much more brand value."

Founded in 2009 by Kouk Tou Ho from Macao, Pachira Information Technology is a pioneer in speech recognition, natural language processing and voiceprint recognition, and is a service provider for many Fortune Global 500 companies.

The company said it will continue investing in AI, big data, autonomous driving and smart city construction to support the development of Zhuhai's smart sector in the upcoming years.

Ho and his team first arrived in coastal Zhuhai in 2018. Their AI project, focused on the development of core components on smart vehicles, won first prize at the inaugural China (Hengqin) Scientific and Technological Entrepreneurship Competition. Since then, Ho has established close business ties with Zhuhai.

"We gained strong support from the Macao, Zhuhai and Hengqin governments in terms of registration, policy consulting, business negotiation and relevant business arrangements. They bolstered us in business expansion, promotion, strategic partnership, and fund raising and investment," Ho said. "All those strengthened our resolve to settle."

Separated from Macao by just a narrow stretch of water, Hengqin has become a gathering hub for young people from Macao, who are keen on seizing opportunities in the Bay Area.

At a news conference on Monday on Hengqin's development in the past decade, Yang Chuan, head of the administrative committee of the Hengqin New Area, said that 2,157 businesses from Macao have settled in Hengqin with their investments totaling $18.83 billion.

As of Monday, there were 745 newly registered businesses run by people from Macao in the Hengqin New Area this year, signaling a rapid inflow of investment from the special administrative region.

Zhuhai, one of the first special economic zones in China and the only city on the Chinese mainland with bridge links to both Hong Kong and Macao, has long helped Macao moderately diversify its industrial development and has become a preferred destination for Macao businesses.

There are 4,111 businesses funded by Macao investors in Zhuhai, with total investment worth $28 billion, and a total of 943 businesses from Zhuhai engaged in multiple industries in Macao.

Zhuhai and Macao signed another batch of agreements for 20 cooperative projects worth more than 19.8 billion yuan ($2.81 billion) on Oct 21 at the Macao-Zhuhai Entrepreneur Summit 2019. They cover areas such as creative-cultural tourism, finance, cross-border commerce and trade, and healthcare.

A demonstration zone focused on promoting financial cooperation between Guangdong province and Macao was unveiled at the event.

"The Zhuhai special economic zone was founded to support Macao's development, and the Hengqin New Area is thriving during the expanding partnership between Zhuhai and Macao," noted Guo Yonghang, Party secretary of Zhuhai, during a press event on Dec 10 in the celebration of the 20th anniversary of Macao's return to the Chinese motherland.

"Macao's matter is Zhuhai's matter," he said. "Zhuhai regards it as the No 1 project to help Macao moderately diversify its industrial development in the city's involvement in the Bay Area."

Looking ahead, some demonstration projects between Zhuhai and Macao that cover technological innovation, finance, healthcare, cross-border trade, culture, tourism and exhibition as well as other professional services will be carried out to jointly build up a globally competitive modern industrial system for both Macao and Zhuhai, the official said.

Zhuhai will work on its urban planning in such a way as to leave sufficient space for the diversified development of Macao, be it urban development or industrial development.

In 2019, Zhuhai implemented a series of measures including removal of some limitations on legal services, cross-border finance, practice of doctors from Macao and access for Macao people to the mainland's pension system, and enrollment of Macao and Hong Kong kids at schools on the Chinese mainland.

New rules for the qualification of professionals in Macao construction companies were also released this year.

"Zhuhai has a strong industrial foundation, preferential government policies and enough physical development space, while Macao has capital resources, innovation results and global platforms. The two can be complementary to each other," said Wang Fuqiang, director of the department of industrial planning at the China Center for International Economic Exchanges.

Wang added that Macao has the potential to establish partnerships with Portuguese-speaking and Spanish-speaking countries and regions. The two can explore international markets together and attract more technologies to Zhuhai to build an innovation hub in the Bay Area.

 

 

]]> 2019-12-20 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/20/content_37529734.htm The first Wanda Vista hotel in Changchun, Northeast China's Jilin province, officially opens on Friday to provide quality service with oriental charm and local characteristics for customers.

Wanda Vista is the luxury brand of Wanda Hotels and Resorts. Located on Hongqi Street, Chaoyang district in Changchun, Wanda Vista Changchun's decor integrates local film culture and the industrial elements, designed by the Wanda Hotel Design and Research Institute.

The institute draws upon the profound industry experience of the proprietor, a high-level internationalized design team and a full-range design philosophy unveiled in 2012.

According to the designers, the design of the hotel lobby was inspired by Tianchi Lake, or Heaven Lake, on Changbai Mountain in Jilin province. One of the most famous scenic attractions in Jilin, Tianchi is a crater lake on the border between China and North Korea. It lies within a caldera on top of the volcanic Changbai Mountain.

In the hotel lobby, there is a huge gold leaf lacquer painting showcasing the spectacle of Tianchi Lake. The crystal chandelier that lights the lobby was inspired by a kaffir lily, the flower of Changchun city. There are also many bronze sculptures and mural paintings.

The hotel offers 235 guest rooms and suites, including 45 luxury apartments. Guests can enjoy delicious food and drink in two elegant restaurants and a stylish lounge in the hotel, where chefs express the art of gourmet dining with exquisite skill and perfect dishes, and convey the delicacy of the four seasons.

Covering more than 2,000 square meters, the meeting venues in the hotel will satisfy all guests' different demands. It has a 958 sq m pillar-free grand banquet hall and five multifunctional conference rooms. The hotel is also equipped with a 90 sq m LED display screen.

Wanda Vista Changchun is equipped for hosting new vehicle launches, weddings and other events, providing one-stop event management service for customers.

On the sixth floor, guests can enjoy wine, snacks, desserts and afternoon tea from around the world at the contemporary bar. The hotel's Shui Spa offers rejuvenating treatment and therapy from ancient India, the West and traditional Chinese medicine.

There are also KTV facilities on the same floor, with three separate rooms featuring modern audio equipment and exclusive musicians.

Wanda Hotels and Resorts has three core business sections: hotel design, hotel construction and hotel management. Currently, the group has six hotel brands: the ultra-luxury hotel brand Wanda Reign, the luxury hotel brand Wanda Vista, the premium hotel brand Wanda Realm, the select-service hotel brand Wanda Jin, the premium mid-scale brand Wanda Moments and the cooperative brand Wanda Allegroitalia. The company manages 79 hotels in 60 cities around the world.

With its combination of international influence and competitive overseas hotel management, Wanda Hotels and Resorts has a unique position in the industry. 

 

 

]]> 2019-12-20 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/20/content_37529743.htm Tiffany & Co unveiled on Thursday its largest Asian flagship store in Shanghai, vowing to bring the full assortment of its jewelry and an experience-driven shopping venue to bolster growth in China, which is the firm's second largest market across the globe.

Located in the city's downtown Huaihai Road, the renovated two-story, street-facing shop almost doubles in space compared to its previous footprint.

It also introduced the first Tiffany Blue Box Cafe in the Chinese mainland, offering guests all-day menus while being immersed in the world of gemstones.

The idea is to offer a one-stop shop for a permanent lineup, limited-edition items, as well as an experience-led journey to Chinese guests closer to home, said the company's CEO Alessandro Bogliolo.

"You see higher spending in China than the rest of the world," Bogliolo told China Daily on the sidelines of the grand opening. "This is because the young generation customers in China－the millennials－are knowledgeable about jewelry and value it as a means of self-expression."

In its latest earnings report released earlier this month, the New York-based jewelry brand reported "strong, double-digit growth" for the quarter which ended in October. Bogliolo confirmed the robust trajectory has been sustained for the past several years.

Bogliolo identified China's rising young professionals, rather than the super-rich, as the backbone fueling exponential growth.

"And they have shifted from buying for the brand per se to delving into the intrinsic value through indigenous researches and the consequent deeper understanding of its propositions," he noted.

Chinese consumers at home and abroad spent 770 billion yuan ($109.9 billion) on luxury items, equivalent to one-third of the global spend last year, according to McKinsey& Co.

The consultancy predicted that their outlay is set to almost double to 1.2 trillion yuan by 2025, when 40 percent of luxury purchases will be conducted by Chinese.

"The China luxury (market) remains driven by the rising upper-middle-income group who desire to premiumize and see luxury goods as 'social capital' to stand out," said Daniel Zipser, a senior partner at McKinsey.

He noticed a rebound in purchasing luxury at home in the past two years due to a combination of exchange rates and relevant tax reforms the Chinese government introduced to spur consumption.

To fuel business acceleration, Tiffany launched its own Chinese language e-commerce platform several months ago to expand the reach of clients on top of its 34 physical stores on the Chinese mainland.

"The objective is to provide the full Tiffany experience rather than having 100 smaller stores where you have fewer assortments, smaller sizes and less experience," Bogliolo said. "So I prefer to keep the number (of stores) as it is... at the same time as having the website."

Zipser said the purpose of a flagship store is not just to drive domestic sales but more importantly as a showroom for brand building and an avenue to forge ties with customers.

"So brands should consider working with China's digital platforms to better engage with consumers and deepen understanding of their attitudes and arising trends," Zipser said.

 

]]> 2019-12-20 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529553.htm ZHENGZHOU－Chartered flights carrying Chilean cherries are arriving every week at the Central China air hub of Zhengzhou, capital of Henan province, from where the fruits are distributed to Beijing, Shanghai, Guangzhou and other second-tier cities.

Chilean cherries used to take regular passenger and cargo flights with transits to reach China, spending more than 100 hours on a single trip. The high logistics cost made the exotic fruit expensive in the Chinese market. With chartered flights, air transport only takes 30 hours.

The logistics efficiency has been further boosted by the entry port of Zhengzhou, which offers fast track customs clearance services for fruit imports, allowing Chinese customers access to fresh Chilean cherries, said Huang Xianhua, deputy secretary-general of the fruit branch of the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products (CFNA).

"Our company tested two chartered flights in 2014, and now the number of chartered flights has reached 140," said Huang, who is also the general manager of the Shanghai Oheng Import and Export Co Ltd.

The Fushun Fruit SpA has been exporting Chilean cherries to China for three years. Alonso Xu, general manager of the company, said the firm's total export volume is expected to reach 1,000 metric tons this year.

He attributed the swift rise in trade to the China-Chile Free Trade Agreement, which came into effect in 2006. An upgraded version of the agreement which became effective in March this year granted Chilean cherries zero-tariff market access to China.

At a fruit stall in downtown Zhengzhou, Chilean cherries are priced at 40 yuan ($5.7) per kilo, compared to more than 200 yuan per kilo two years ago.

Winter in China is summer in Chile.

On a cherry plantation owned by Nativa Foods, 50 km from Chile's capital Santiago, cherry trees are basking in the hot sun. Workers are handpicking cherries from the branches.

The 30-hectare plantation produces 150 to 200 tons of cherries each year, with 95 percent of the output exported to the Chinese market.

Nativa Foods Export Director Pablo Morales said the Chinese market has kept expanding, with growing quality requirements for the business.

"We are constantly adjusting the cherry varieties, based on Chinese consumers' appetite," said Morales, adding he hopes to introduce advanced agricultural drones from China to reduce losses from bird peckings in the orchards.

In Chile, fruit growers know that cherries are a lucrative cash crop.

Chile's exports of cherries to China have been growing rapidly, with the amount increasing to $1 billion in 2018 from $1 million in 2006. The exports total 180,000 tons in volume and account for 88 percent of Chile's total exports of cherries.

The planting area of cherries in Chile now exceeds 40,000 hectares.

"Chile's cherry production is expected to double in four to five years. Only the Chinese market can have such a big demand for cherries," said Huang.

He said many Chilean fruit growers have paid attention to the Chinese lunar calendar to better understand Chinese food habits and customs.

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529615.htm Implementing a proactive fiscal policy will be one of the top six tasks for the central government in its 2020 economic agenda, experts said.

The thrust of the fiscal policy, however, should not be confined to supporting economic growth through investments, but instead focus on boosting the overall quality and efficiency, guaranteeing salary payments, ensuring administrative operations in local government departments and boost people's livelihoods, said the experts while sharing their insights on the recently concluded annual Economic Work Conference.

The basic tone of next year's policies would be to maintain stability, meaning the key economic indicators including GDP growth, employment rate, inflation and other indexes "need to avoid big ups and downs", said Liu Wei, president of Renmin University of China and a member of the central bank's monetary policy committee.

China's policies to counter an economic slowdown have already started taking effect, as seen in the average 9.4 percent annual GDP growth during the past four decades with very moderate volatility, Liu said at a forum held by the National School of Development of Peking University on Saturday.

"Stability is a key gauge to assess the quality of economic growth, other than only focusing on the speed," he said.

To achieve the targets, a "too-large scale" of new tax cuts is not suitable for next year and policymakers may instead focus on implementing the existing tax cut policies, said Chen Changsheng, director-general of the department of macroeconomic research under the Development Research Center of the State Council.

Fiscal deficit is expected to expand next year as strong support from the local government special bonds will help stabilize infrastructure investment. But the funds should be used more for the new types of infrastructure projects, instead of injecting too much into traditional projects, said Chen, without explaining the definition of "new infrastructure".

A statement issued after the three-day policy tone-setting conference had said that proactive fiscal policies should focus on structural adjustments, while government expenditure for general administrative purposes needs to be reduced.

The high-level economic conference stressed that fiscal policy should work in conjunction with the prudent monetary policy, and coordinate with consumption, investment, employment, industrial and regional policies.

The policymakers have emphasized that macroeconomic policies should lead capital into areas of advanced manufacturing, as well as in projects that can improve people's livelihood and infrastructure construction. Both industrial production and consumption should be upgraded, the statement said.

In the face of some uncertainties, especially when the world is still undergoing in-depth adjustments due to the global financial crisis, the basic function of fiscal policy should be to "inject certainties" and reduce the level of public risk, so that the cost of production and living can be lowered, said Liu Shangxi, head of the Chinese Academy of Fiscal Sciences, a research institute under the Ministry of Finance, during the Saturday forum.

The Ministry of Finance said on Tuesday that from January to November, the country's total tax income was 14.97 trillion yuan ($2.14 trillion), with the tax income declining by about 3 percent on average in October and November.

Individual income tax collections fell by 26.8 percent as tax reforms changed the taxation threshold and the tax rates. Value-added tax on imported goods and consumption tax decreased by 8.7 percent during the same period, according to official data.

The central government's fiscal revenue increased by 3.8 percent to 17.90 trillion yuan in the first 11 months, much slower than the growth of 6.5 percent in the same period last year, mainly due to the reduction of taxes and fees. Fiscal spending rose by 7.7 percent year-on-year to 20.65 trillion yuan, up by 6.8 percent over a year earlier, the ministry said.

Falling land prices in some cities and lower income from land sales could be headwinds for China's growth in 2020, said Lu Ting, chief economist of Nomura Securities.

He said the government may need to increase the fiscal deficit and increase the quota for local government special bonds next year to deliver a "truly expansionary fiscal policy".

 

 

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529602.htm China has outpaced the United States in the number of worldwide artificial intelligence-related patent applications, according to a new report issued by the China Industrial Control Systems Cyber Emergency Response team, a research unit under the Ministry of Industry and Information Technology.

China-based companies have applied for a total of more than 440,000 AI patents as of October. Internet search giant Baidu Inc filed 5,712 AI-related patent applications, ranking first in China for the second consecutive year, followed by Tencent (4,115), Microsoft China (3,978), Inspur (3,755) and Huawei (3,656).

The report showed that Baidu is the patent application leader in several key areas of AI, including the deep learning (1,429), natural language processing (938) and speech recognition (933).

The tech behemoth also leads in the highly competitive area of intelligent driving, with 1,237 patent applications, a figure that surpasses leading Chinese universities and research institutions, as well as many foreign automotive companies.

With the launch of the Apollo open source autonomous driving platform and other intelligent driving innovations, Baidu has been committed to pioneering the intelligent transformation of the mobility industry.

"We retained the top spot for AI patent applications in China because of our continuous research and investment in developing AI, as well as our strategic focus on patents," said Victor Liang, vice-president and general counsel of Baidu.

"In the future, we will continue to increase our investment in securing AI patents, especially for high-value and high-quality patents, to provide a solid foundation for Baidu's AI business and for our development of world-leading technology," he added.

After years of research, Baidu has developed a comprehensive AI ecosystem and is now at the forefront of the global AI industry.

It will continue to conduct research in the core areas of AI, contribute to scientific and technological innovation in China, and actively push forward the application of AI into more vertical industries, the company said in a statement.

So far, AI-enabled technologies have been applied in several sectors, such as finance, healthcare, transportation and education. Global consultancy PwC forecasts that AI's contribution to the global economy will leap from $2 trillion in 2018 to $15.7 trillion by 2030.

China has placed great emphasis on tech development, with AI being a key field. The government has laid out plans aimed at building a 1 trillion yuan ($142.1 billion) AI core industry by 2030, which is expected to stimulate related businesses by around 10 trillion yuan.

The report pointed out that AI is taken as an important direction for industrial upgrading, and the country's strategic plan for AI offers a broad space for the research and development of AI technologies and related industries. Moreover, from the perspective of applicants, enterprises such as Baidu and universities have become the main force in driving AI technologies.

It suggested more efforts are needed to strengthen basic AI research and establish intellectual property systems related to AI, as well as introduce high-level talents, in an attempt to grasp the opportunities brought about by AI.

Tech heavyweight Tencent Holdings Ltd launched an AI Lab in April 2016, which places an emphasis on the basic research of computer vision, speech recognition, natural language processing and machine learning.

The tech giant also works to put fundamental research to practical use, applying AI to its key businesses, such as medical, social interaction, online games and cloud computing. It also operates Youtu Lab, which has developed advanced technologies in the fields of facial and image recognition and voice identification.

Zhang Lijun, vice-president of Tencent, said at the sixth World Internet Conference in Wuzhen, Zhejiang province, that the company has filed over 3,000 AI patent applications and has published more than 300 high-quality academic papers on AI.

"China is fast becoming a global hub for innovation, particularly in the field of AI," said Zhu Wei, senior managing director and chairman of Accenture China, while noting Chinese companies have demonstrated great determination to digitize their organizations amid the current complex business environment.

People should not only see China's advantages in AI patent application number, but also give full play to the value of AI, said Hong Jing, founder of Gaocheng Capital, who indicated that AI can be applied in all walks of life, and create true commercial value.

Kai-Fu Lee, chairman and CEO of Sinovation Ventures, a leading venture capital firm, said China and the US are leading the fourth industrial revolution brought by AI that has shown huge growth potential and created value for traditional industries.

Lee noted some traditional industries in China are still relatively backward, but it is the right time to embrace AI. "Traditional companies which embrace AI will win, otherwise, they may disappear."

Global spending on artificial intelligence will reach $35.8 billion in 2019, a 44 percent increase over 2018, according to the consultancy International Data Corporation.

 

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529601.htm Spurred by rising health consciousness and Chinese consumers' pursuit of a high-quality lifestyle, some multinational companies are witnessing strong sales and further promoting their products in China via new growth channels such as e-commerce platforms.

US dietary supplement manufacturer D-Cal has witnessed rapidly growing sales revenues in China, especially in the children's calcium market, boosted by the huge market growth opportunities brought by the consumption classification and upgrading trend, the company said.

D-Cal noted that young mothers prefer to shop online, so it has been critical for maternal and baby brands to make efforts on both e-commerce platforms and brick-and-mortar stores.

"Chinese mothers who were born after 1990 have become the main consumers of maternal and baby products, and they are more willing to pay for professional and quality-guaranteed products and services. The traditional product-to-store model cannot adapt to the new development trend," said Zhang Yuan, brand representative of D-Cal.

"With the increasingly powerful impact of social media, key opinion leaders on online social media are playing an important role now. D-Cal has cooperated with a number of key opinion leaders in the maternal and baby products market, and we have seen positive results," she said.

She added that the company would continue to provide more kinds of calcium products for different consumer groups in China, such as babies, toddlers, pregnant women and adults.

D-Cal said it also plans to expand in third-and fourth-tier Chinese cities, as well as in rural markets, as they boast significant growth potential, and development in major cities has been relatively mature.

Last year, sales of imported calcium in China reached 3.05 billion yuan ($436 million), up 7 percent year-on-year. D-Cal achieved its highest sales for three straight years, and its market share was higher than the aggregate of the second to fifth-placed companies, according to market research company Euromonitor International.

Meanwhile, Herbalife Nutrition, a Los Angeles-based nutrition company, is promoting healthy lifestyles and increasing public awareness of health and nutrition in China. Herbalife said China is its third-largest market and is also one of its fastest growing markets.

The company said it is bullish on the long-term growth prospects of the healthcare market in China, its core strategy market, and it hopes the nation will become its biggest market.

"We will provide more tailored and personalized products in China, and offer different solutions to different consumer groups, such as those who would like to lose weight, fitness enthusiasts and people who are generally pursuing a higher-quality life," said Woody Guo, managing director of Herbalife Nutrition China.

"Our consumers have become increasingly younger, and we have launched more attractive sales and marketing methods such as brand flash shops. We also sponsored the Spartan Race to attract more young consumers," he said.

Besides, with an investment of 100 million yuan, Herbalife will open a product innovation center in Shanghai by the third quarter of next year, which will be the first of its kind globally.

The center will strengthen its local R&D capabilities to deliver more science-backed quality products, and it plans to double the number of products and development speed in the market in the next five years.

Meanwhile, Herbalife partnered with Tencent Holdings Ltd, China's major internet and technology company, to help independent distributors more effectively sell products online.

Yang Yuexin, director general of the Chinese Nutrition Society, said the incidence of chronic diseases caused by poor dietary habits and an unhealthy lifestyle has been on the rise in China in recent years.

Chinese families are paying increasing attention to their health and more people tend to choose imported nutrition products, Yang said. 

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529554.htm Shenzhen in Guangdong province inked 128 new projects worth 560 billion yuan ($80 billion) on Wednesday as part of its ongoing efforts to unlock high-quality and sustainable growth potential in the city.

Dozens of companies, including Siemens AG, Fosun International Ltd, China Gas Group, ByteDance Co Ltd and Xiaomi Group, signed agreements with the district governments in the city during an investment promotion conference for setting up global headquarters, manufacturing bases, data centers and research and development laboratories.

More such deals are expected in the next few days as city officials announced at the meeting that they would offer 36 land plots spread over 30 square kilometers for outstanding global enterprises. Most of the projects that have been inked meet with city's goals of developing sectors such as 5G communication, advanced manufacturing, biomedicine, artificial intelligence, ocean industries and financial services.

A series of preferential policies in these areas have been released this year, including a sum of 7 billion yuan to attract talents and more than 20 billion yuan to reward technology firms.

The move comes as the city, a cradle of tech giant Huawei and drone maker DJI, is stepping up to shrug off concerns about a slowing economy amid the rapidly changing international environment and the city's high-quality development efforts.

Shenzhen's GDP growth rate during the first three quarters of this year fell to 6.6 percent from 8.1 percent during the same period a year ago. However, the ratio of advanced manufacturing in industry and advanced service sector in the overall services domain exceeded 70 percent. In addition, the total profit of large-scale enterprises rose by 18.5 percent during the period.

Shenzhen Party secretary Wang Weizhong said the figures show that the characteristics of high-quality growth has emerged and the city is now on the road to high-quality and sustainable development.

Speaking about the city's future, Wang said he was confident of continuous growth through continuous reform and opening-up and urged global enterprises to be part of the journey.

Wang said Shenzhen, the nation's best economic zone, had transformed from a small fishing village to be window for China to showcase its reform and opening-up achievements.

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529596.htm China's gaming sector has shown strong signs of a robust recovery this year despite tighter regulations, a new report said on Wednesday.

The highly lucrative market generated revenues of 233 billion yuan ($33 billion) this year, up 8.7 percent on a yearly basis, said a report released by Chinese gaming database Gamma Data Corp.

Mobile gaming was the key driving force for growth, accounting for more than 150 billion yuan of revenue and for over 60 percent of the Chinese games market. Mobile game revenues grew by 13 percent on an annualized basis this year, compared to the 15.4 percent increase in the same period a year ago.

"China's gaming industry enjoyed rapid development during the past five years, on the back of an explosive growth in mobile games," said Lu Xiaoyin, chief executive officer of the games segment of Perfect World Co Ltd, a Chinese entertainment firm.

"Due to the slower growth in the number of mobile game players, the gaming market is gradually reaching a saturation point."

Against the backdrop, gaming companies need to shift their focus from rapid expansion to refined management, paying more attention to high-quality games and catering to players growing demand for new genres such as casual games, Lu said.

According to the report, China is now the global leader in mobile gaming and accounted for more than 30 percent of the world's overall mobile gaming market this year. Gamma Data expects to see a growing number of Chinese gaming companies expanding their business to more overseas markets.

Lu from Perfect World said that while the Chinese market tends to be saturated, the overseas mobile gaming markets are still poised for rapid growth.

"Personal computer games and console games were previously the main segments in the global gaming market," Lu said. "Due to the rising popularity of smartphones globally, the number of mobile gamers has been growing steadily in overseas markets."

In fact, overseas markets are now an important revenue earner for several Chinese gaming companies. Driven by strong increase in export earnings, gaming revenues from domestic market and export incomes jumped 10.6 percent to over 310 billion yuan, the report said.

This year, Chinese developers earned $11.19 billion from their self-designed online games in overseas markets, up 16.7 percent year-on-year, according to Gamma Data.

"With the disappearing demographic dividend in the domestic market and the rapid development of overseas markets, Chinese gaming companies are gearing up to expand their businesses globally," the company said.

In fact, many Chinese gaming companies have already been reaping the rewards.

According to the report, the self-designed mobile game turnover of Chinese companies is growing faster than that of the local market in countries like the United States, Japan, South Korea, the United Kingdom and Germany.

"Taking into account the competitive advantages of their self-developed products, we expect Chinese gaming companies to gain more revenues and development opportunities in the global market," Gamma Data said.

 

 

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529594.htm Work on a green aluminum industrial park being set up by the Yunnan provincial government and Shandong Weiqiao Pioneering Group Co Ltd, a Fortune Global 500 company, commenced in Wenshan autonomous prefecture of the province on Wednesday.

Being set up with an investment of 40 billion yuan ($5.72 billion), the project has already attracted nine enterprises across the aluminum industry value chain. When fully operational, its annual sales and industrial output are expected to reach 100 billion yuan and 30 billion yuan respectively and will create 12,000 jobs for local people.

The commencement of work at the park also marked the beginning of Shandong Hongqiao's two-phase relocation of 30 percent of its smelting capacity, totaling 2.03 million metric tons annually, from Binzhou city, Shandong province, to the hydropower-rich prefecture bordering Vietnam, in pursuit of green capacity and more presence in the Belt and Road related markets. Shandong Hongqiao is a sister company of Weiqiao Pioneering.

The phase one capacity of 1 million tons will be in position in late 2020. Currently, the company mainly relies on coal-fired power for the electricity-intensive smelting process, and the capacity in Yunnan will use cleaner hydropower.

"The capacity to be relocated amounts to 5.4 percent of China's total aluminum capacity, and we want to affirm that they are not new capacity, but what is being swapped from coal-power to hydropower," said Yang Congsen, deputy general manager of Shandong Weiqiao Pioneering.

The company wants to demonstrate to the world Chinese manufacturer's commitment and determination regarding green and sustainable development, he said.

"As China's manufacturing and consumption industries upgrade, utilization of aluminum is expanding to more sectors very fast, especially in new energy vehicles, smart home appliances, construction, and commercial aviation, while aluminum consumption per capita in China is only about one third of the global level," he said.

"That creates huge growth opportunities for Chinese aluminum enterprises, but also prompts us to be increasingly aware of the importance of green and sustainable development, and to capitalize on green technology and clean energy, because more customers are buying environmental-friendly aluminum products."

He said Yunnan province's agreeable business environment and gateway position to South Asia, Western Asia, and Southeast Asia, attracted the company, apart from its rich clean energy resources.

Planning to spend 3 billion yuan on the two-phase capacity relocation, the company is also eyeing the related markets in the next 10 years, although currently there are few aluminum factories in the area due to small-scale aluminum demand, he said.

Yunnan province, with its rich hydropower electricity resources and green energy development policies, has become a top destination for Chinese aluminum companies to relocate their capacity in the past two years, according to a recent report from Guotai Junan Futures.

Such relocation was driven by the industry's production restructuring and upgrading, and the quest for lower costs, the report said.

The province has nearly 2.6 million tons of operational aluminum capacity, with a projected capacity of 4 million tons to 6 million tons in the future, according to the report.

Several Chinese aluminum companies, including Aluminum Corp of China, the largest aluminum company in the world, and Shenhuo Group, based in Yongcheng city, Henan province, have been drawn to the region.

Hu Jiachun, a nonferrous metals analyst with Tianfeng Future Research Institute, said China is the world's largest aluminum producer, and must strictly rein in new capacity construction for the sake of environment protection.

Under such circumstances, Chinese aluminum companies are urged to expand up and down the industrial chain proactively to make up for weakness in deep processing capabilities, if they want to keep afloat in face of fierce competition amid the upgrading of the industry, she said.

The abundant hydropower resources in Yunnan, and the local government's coordinated-development policies for hydropower and aluminum, which help speed up the establishment of a high-quality aluminum industrial chain, and reduce electricity costs, a major cost contributor in aluminum production, are the main factors attracting companies such as Weiqiao Pioneering, she said.

Besides, the industrial park's special location, having ample transportation channels to the Pearl River Delta, the Chengdu-Chongqing area and economies in Southeast Asia, makes it easier to access related markets, Hu said.

 

 

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529580.htm Fliggy, Alibaba Group's online travel arm, forged a hotel alliance on Tuesday bringing together independent budget hotels and arming them with technologies to streamline operations.

In one year's time, Fliggy aims to draw the country's 40,000 independent hotels that don't belong to any proprietors and are independently run, and give them a uniform digital makeover, company executives said.

A three-month trial run that ended early December has seen the recruitment of 15,000 such hotels to the bloc. An overarching goal is to raise their average occupancy rate by 10 percent, said Zhuang Hai, who oversees the initiative and also heads the FlyZoo Future Hotel, Alibaba's indigenous, tech-driven hospitality prototype.

"The core of the alliance is to empower these scattered hotels with a shared client pool and help them build up their brands through online traffic injection," he said.

The roughly 920,000 independent hotels, each of which typically hosts 80 hotel rooms or below, claimed over 85 percent of China's hospitality market. The market value stood at nearly 1 trillion yuan ($142.7 billion), the China Hotel Industry Report published in June said.

However, common pain points lie in its weak brand power, lack of membership system and the consequent deficiency in service standardization, the report said.

Zhuang said participating hotels stand to enjoy more prioritized positions on the search page, as each of them bears a conspicuous logo under the bloc.

Other incentives include a performance-based commission rebate system, as well as a membership card system that can give guests an 8 percent discount and conduct personalized marketing based on customer profiles.

In China, the vast yet immature hospitality market is coveted by like-minded players from H Chain Hotel backed by Huazhu Hotels Group to India-headquartered Oyo.

For instance, since its entry into China two years ago, Oyo has penetrated into more than 2,000 cities and townships in the country, signing over 19,000 hotels and boasting some 780,000 rooms, the company said last month.

"Competition is definitely fierce," said Zhao Huanyan, chief analyst at Shenzhen-based hospitality consultancy Huamei. "For platforms like Fliggy, scaling by gathering more hotel resources is a prerequisite before technology can make a difference and generate profits."

Alibaba has long trained its sights on the hospitality market. Apart from inking strategic deals with global industry gurus like Marriott hotel chain in the US and French hospitality firm Accor, the company stepped up efforts in building its own hotel brand where technology meets hospitality.

Run almost entirely by robots that serve food and fetch toiletries and other sundries as needed, Alibaba's Future Hotel eschews traditional check-in and key card processes. It instead allows guests to manage reservations and make payments entirely from a mobile app, sign in using self-service kiosks, and enter their rooms using facial-recognition technology. 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529568.htm ADDIS ABABA－Ethiopia and China officially launched a mushroom project, dubbed "Ethiopia 1550 Mushroom Program," which enables the East African country to develop the sector with modern technology and scientifically.

Situated on the premises of the Technology Institute of the Addis Ababa University (AAiT), the Ethiopia 1550 Mushroom Program incorporates Ethiopia's national mushroom spawn resources development center and Ethiopia's national mushroom technology training center.

A tripartite project involving the AAiT, China Aid, and the Ethiopian Ministry of Agriculture, the mushroom project has established a standard mushroom spawn production, preservation and technology training center that is primarily responsible for mother spawn production and technology training.

Starting on a small scale, the project is designed to be scaled up with more project sites and involving more mushroom farmers for training across the country, promoting Ethiopia's mushroom production and productivity, thereby securing improved benefits from the sector.

The program will develop five mushroom project sites in the capital city and surrounding areas to produce next grade spawns, and of the five sites two have already been built.

Speaking at the project's official opening ceremony on the premises of AAiT, Esayas Gebre-Yohannes, executive director of AAiT, noted that the program would have multifaceted benefits to Ethiopia, promoting mushroom production and productivity, creating job opportunities, as well as knowledge and technology transfer as well as research and development.

In his remarks on the occasion, Abdulsemed Abdo, adviser to the Ethiopian minister of agriculture, said consumer preferences and perceptions has not been studied though mushrooms are an important commodity worldwide in general, and in Ethiopia in particular.

Stating that investing in improved mushroom varieties and associated modern inputs is a critical step toward increased yields, the adviser said the project would help the country address some of the critical challenges in the area of technology development it has faced in the area.

"Some of the specific challenges associated with mushroom production include the limited capacity and lack of role clarity of the different actors, the focus of the system on very few varieties, mismatch between supply and demand resulting in shortage and excess inventory, and quality issues due to inappropriate production, storage, and transport practices and facilities," he said.

Liu Yu, the economic and commercial minister counselor at the Chinese Embassy in Ethiopia, expressed her firm belief that more Ethiopian farmers would produce edible mushrooms under the guidance of the center and earn a better incomes and enjoy better lives.

Alene Admas, an industrial biotechnologist and mushroom expert at AAiT, said that the project would make a significant contribution to the development of the mushroom technology in Ethiopia.

 

 

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/19/content_37529598.htm Companies from China and the United Arab Emirates are expected to have closer ties in promoting the application of artificial intelligence, as the two countries have a strong desire to be fast adopters of the emerging technology, analysts and company executives said.

The comments came after a string of Chinese tech giants and startups inked deals with their UAE counterparts to advance the use of AI in education, transportation, finance, governance and other sectors.

Xiang Ligang, an independent tech commentator, said the UAE sees AI as "new oil" and aims to be a fast adopter of the emerging technology. China boasts some of the world's most pioneering AI companies, which can help the UAE deploy AI in a wide range of aspects.

As the richest country in the Middle East, the UAE has vigorously promoted the development of AI in recent years. In 2017, the UAE appointed its first Minister of State for Artificial Intelligence. And this year, the UAE government officially launched its strategy for AI 2031, which has laid out a vision to become a world leader in AI by 2031, creating new economic and social opportunities for citizens, governments and businesses.

Such strong eagerness to embrace AI has unleashed big opportunities for Chinese tech companies. Recently, Chinese artificial intelligence unicorn UBTech Robotics inked a deal worth $362.4 million to step up AI teaching labs for students in the UAE.

UBTech, backed by Chinese internet giant Tencent Holdings, inked the deal with Royal Strategic Partners, a unit of Abu Dhabi Capital Group. ADCG is a large-scale investment company that manages assets of $20 billion.

Another Chinese AI pioneer SenseTime Group Ltd is also setting up a hub in Abu Dhabi, the capital of the UAE, as its regional research and development center for expansion in Europe, the Middle East and Africa.

The Chinese facial recognition firm, which counts Alibaba Group Holding Ltd as an investor, has started work on the research and development center this year and has built AI capabilities across seven industries including healthcare, remote sensing and education. The Abu Dhabi Investment Office, which seeks to attract businesses to the country, will provide a support package as part of the partnership.

Elham Al Qasim, CEO of ADIO, said: "SenseTime's AI capabilities and developments will be of great value to businesses across the region. It will not only provide large companies across the region with AI technologies, but will also benefit from partnerships and collaborations with early-stage tech startups that are being established out of Abu Dhabi's Hub71."

Xu Li, co-founder and CEO of SenseTime, said: "The opportunity to build a significant operation in Abu Dhabi will allow us to continue to advance the development of our technologies and increase the adoption of AI across the world. Abu Dhabi offers us the ability to focus on innovation in key sectors, opens up a new customer base and importantly, a new talent pool."

China's Sogou, known for its search engine and Pinyin input method, also worked with Abu Dhabi Media (ADM) in developing the first Arabic-speaking AI News Anchor.

Abu Dhabi has been actively investing in the tech sector, especially focusing on AI development. One of its largest state-owned investment funds, Mubadala, invested in Sense-Time and Chinese ride-hailing company Didi Chuxing in 2017. One subsidiary of the Abu Dhabi sovereign wealth fund also backed Megvii, another Chinese AI company.

In October, the Dubai Chamber of Commerce and Industry also revealed an expansion plan in China with the opening of a new office in Shenzhen, Guangdong province.

The new office will be tasked with exploring business potential in the fast-growing technology and innovation hub and attracting innovative Chinese companies to Dubai, according to news website Arabian Business.

Hamad Buamim, president and CEO of Dubai Chamber of Commerce and Industry, told Arabian Business: "Since Dubai Chamber opened its first China office in Shanghai in 2016, the number of Chinese member companies has surged by more than 50 percent to exceed 3,200 today."

 

 

 

]]> 2019-12-19 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529411.htm By partnering with French fashion designer Jean Paul Gaultier, China's largest down clothing company, Bosideng International Holdings, is trying to boost sales of its high-end offerings as part of its strategy to compete with global upmarket players like Canada Goose and Moncler.

The announcement of the partnership in November was marked by a star-studded fashion show in Shanghai. The show featured some of China's A-list celebrities and fashion bloggers wearing the bomber jackets and down capes created exclusively for the Chinese brand by the 67-year-old designer, who is known for creating Madonna's controversial conical bra and as the former creative director of luxury house Hermes.

To keep up the momentum, weeklong ads on Sina Weibo followed, with slogans like "when the naughty boy of fashion meets Bosideng".

"We plan to first consolidate our hold on the Chinese market over the next three years, enter the international market in four to six years, and then become a global industry leader within the decade," said Mei Dong, CEO of the Shanghai-based company, at a recent news conference to announce its strategy.

Having started as a clothing manufacturer in the 1970s in Changshu, East China's Jiangsu province, the now Hong Kong-listed company repositioned itself as a dedicated down jacked maker in 2017 after years of unsuccessful attempts to expand into menswear.

The move was inspired by the more generous budgets Chinese consumers now have for winter coats due to the increasing efforts of foreign brands, who have transformed the traditionally functional attire into a fashion accessory like bags for women or watches for men.

"Down jackets used to be an immensely seasonal and regional product in China. They were such a marginalized category in department stores that they shared space with swimwear when it was out of season," said Ye Qizheng, co-founder of DFO Showroom, one of the largest fashion showrooms in China connecting buyers and designers.

"But today, down clothing brands enjoy prime locations in the top shopping malls in Shanghai and Beijing. What's more, the most surprising thing is that in Shenzhen, a southern city with an average temperature of 23 C, Moncler has a store," said Ye.

According to the National Bureau of Statistics, the number of down jackets sold in China has fallen for three consecutive years since 2016. In 2018, 190 million jackets were sold in the country, down by 32.8 percent from the previous year and the lowest level in the past five years.

However, the average retail price has been increasing steadily, up by 20.8 percent in 2018. As a result, the main price range has grown from 600 yuan ($85) to 800 yuan to more than 1,000 yuan.

The China Garment Association estimated that the total value of China's down jacket market reached 106.8 billion yuan last year, exceeding 100 billion yuan for the first time in history. It is projected that by 2022, the sales value will surpass 162 billion yuan.

China is the world's largest manufacturer, exporter and consumer of down and feather products. Statistics from the Food and Agriculture Organization of the United Nations showed the number of ducks raised in China accounted for 74.2 percent of the world's total, and the number of geese accounted for 93.2 percent. As a byproduct of the duck and goose farming industry, China supplies more than 70 percent of the world's feather and down material.

Yao Xiaoman, director-general of the China Feather and Down Industrial Association, said while the rising cost of down jackets has partly contributed to the increase in retail prices, a key driver is changing perceptions of consumers, which have encouraged them to spend more.

"While the change was started by foreign brands and companies, it's also a good time for domestic players to upgrade to meet the new demands by taking advantage of the opportunity and our expertise in the industry," said Yao.

Bosideng, for example, has lowered the percentage of its products sold below 1,000 yuan from 47.5 percent in 2016 to 12.5 percent in 2018, while raising those above 1,800 yuan from 4.8 percent to 24.1 percent over three years, according to Business of Fashion.

Meanwhile, it has also had collections displayed at the likes of New York and Milan Fashion Weeks in recent years to boost the brand's image as a trendsetter, rather than a mere clothes maker.

In October 2018, it announced the opening of 100 stores in China on the same day, with the largest one occupying 2,000 square meters in Shanghai. Designed by a French team, the Shanghai flagship store features a facade made up of 28 windows, each separated by a LED wall, while inside customers are invited to try on the products in a room kept at minus 15 C to simulate freezing conditions.

But sales recorded on Bosideng's Tmall e-commerce store show its efforts to upgrade are yet to bear fruit.

Among the e-store's Top 10 bestselling products, none is priced above 1,000 yuan. The collection designed by Gaultier, which mostly retails at between 3,000 and 4,000 yuan, has a sales performance similar to the brand's other high-end offerings, with fewer than 100 pieces sold in one month. The bestselling product is a kid's down vest priced at 79 yuan, with 12,000 pieces sold in 30 days.

 

 

 

 

 

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529462.htm Policymakers' emphasis on high-quality and innovation-driven development at the recently held Central Economic Work Conference underscores the country's commitment to continued structural reforms and further opening-up to drive growth, experts said on Tuesday.

"The conference reiterated the country's plan for structural reforms and continuous opening up of its economy. These plans have coincided with the application of governance models for responsive and responsible political and economic leadership which insists on the need to promote sustainable socio-economic development," said Christopher Bovis, professor of international business law at the University of Hull.

China's top policymakers gathered at the annual Central Economic Work Conference held from Dec 10 to 12 in Beijing. The meeting stressed the importance of stabilizing the country's economic growth and maintaining the proactive fiscal policy and prudent monetary policy to ensure high-quality growth.

The meeting also acknowledged that China is at a pivotal stage of transforming its growth model, improving its economic structure, and fostering new drivers of growth. It called for sustained vigorous efforts in deepening supply-side structural reform, and ensuring reasonable growth and steady improvement of the economy.

Bovis noted that China will continue to embrace its reform agenda to put the economy on a more sustainable growth path and to restructure the role of the government and the function of market with the emphasis of make financing more accessible to and affordable for the private sector and small businesses.

"By strengthening its small-and medium-sized enterprises, China will further open its economy by enhancing the regime of intellectual property protection of foreign companies and by lowering tariff on strategic sectors such as the auto manufacturing industry," he said.

"Economic reforms enacted in China have prioritized opening up China's economy to foreign investors in order to boost innovation and competitiveness by attracting more advanced industries and services," he said.

Alan Barrell, director of studies at Cambridge Innovation Academy, said it is encouraging to see that China remains steadfastly committed to innovation as plans for continued opening-up are consolidated at the heart of future policies.

"We can clearly see that the Chinese government's drive for innovation is backed up by real actions and investments. And China's interest and willingness to… export its innovation and import innovation too is all good news for the world," he said.

David Glattstein, a former innovation adviser in Silicon Valley and current chief representative in Israel for Zhongguancun Development Group, said that it is refreshing to see China is grounding its economy in science, entrepreneurship, innovation and openness while the global economy is facing volatility and challenges.

"China's government, as always, promotes sustainable development, but more and more it realizes that this sustainability can only be reached by creating new innovation that both grows new markets and addresses changes to the external environment," he said.

Wilson Lee Flores, an analyst and columnist of the Philippine Star and Pilipino Star Ngayon, said that China's economic policies have been pragmatic, stable and balanced in priorities while responsibly upholding globalization principles.

"This sustainable growth path is based on domestic consumption, services, private enterprises, green energy and increased technological innovations, instead of past reliance on export trade, fixed investments, energy-intensive and high-polluting industries," he said.

Lia Zhu in San Francisco andGeorge Ng in Hong Kong contributed to this story.

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529461.htm Demand for cosmetics and household products, pet, and maternal and infant products witnessed robust growth this year with residents from lower-tier cities and counties leading the purchases and adding new vitality to China's economic growth, a new report said on Tuesday.

The report, released by JD Digits, a leading Chinese digital technology company, said sales of pets, beauty makeup and skin care products surged 50 percent year-on-year, while spending on household products, books, maternal and baby products, medicine and healthcare goods as well as clothing and underwear saw 20 percent to 40 percent growth this year, faster than that in 2018.

It is noteworthy that the consumption growth from fourth-and fifth-tier cities is higher than that from first-and second-tier cities, showing huge potential, as residents in these cities are pursuing high-quality lifestyles along with the improvement in living standards and rising disposable incomes, the report said.

As China's economy is transforming from a phase of rapid development to a new stage of high-quality growth, consumption is playing an increasingly important role amid the pressure of an economic growth downturn.

"In order to bolster consumption, more efforts are needed to increase residents' incomes and expand the scale of middle-income consumers," said Shen Jianguang, vice-president and chief economist at JD Digits.

Shen called for the primary and secondary distribution of incomes to be improved via multiple channels and diversified tax adjustment mechanism. "We should also further enhance consumer's acceptance of credit products in counties."

The per capita disposable income of China's rural residents continued to grow at a faster pace than that of the country's urban dwellers in the first three quarters of 2019, according to the National Bureau of Statistics.

"We expect consumption in lower-tier cities to surge from $2.3 trillion in 2017 to $6.9 trillion in 2030," said Robin Xing, Morgan Stanley's chief China economist in a research note. "Further, these smaller cities could be the engine driving China's overall private consumption market of $11.8 trillion over the same period."

Xu Feifei, associate partner at global consultancy Prophet, said while lower-tier cities are previously less brand-conscious and place more importance on economic value, rising disposable income and diversification of spending behavior will slowly change that.

Xu added in hope of an increased demand for high-quality goods and premium services, brands are establishing their presence early in burgeoning markets in China to capture their market potential before they fully mature.

Statistics from global data analytics company Nielsen show that there are 953 million people living in third-tier cities and below, far surpassing the 427 million people in the first-and second-tier cities. It shows that smaller cities have huge untapped consumption potential.

 

 

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529458.htm Qiu Jiawei, founder of down coat brand Orolay, was astonished when the brand name went viral on the internet overnight among some of the most fastidious buyers in the world.

The last week of February was the most grueling time since Qiu founded the brand in Jiaxing in East China's Zhejiang province seven years ago. Bombarded with phone calls and messages, Qiu said he received interview requests from more than 20 media organizations.

The company's signature garment－an olive green paneled down coat priced under $100－has been given a special moniker by consumers: the Amazon coat. Qiu estimates Orolay's annual sales revenue will hit $40 million this year, while the figure was only $5 million in 2017.

The internet, especially social media, was responsible for Orolay's instant fame and profitability. A news story that appeared in New York magazine in late March 2018 first revealed the passion of buyers in New York's Upper East Side for the down jacket. Lauren Epstein, a Chinatown-based stylist, told the magazine that the Amazon coat reminded her of the Italian luxury clothing brand Moncler or The North Face's black puffy coat that first appeared in the 1990s. The coat even stole the heart of Ana Maria, the fashion director at the US luxury department store Neiman Marcus, who described the coat as a near ubiquitous item.

Apart from its own hashtag, the coat even has its own Instagram account under the name "the Amazon coat", which has registered more than 260 posts since January, showing pictures of people of all ages and from all professions wearing the viral consumer hit.

One year later, the Financial Times described the Orolay down jacket in an op-ed column as "a crucial distinction from past fashion sensation" that would possibly pose disruptive threats for the luxury goods industry.

Overseas buyers have continued to show a preference for the jacket this winter, spurring the company to raise the price from under $100 to nearly $140.

To date, the coat has won more than 7,000 four-star and above reviews on Amazon－its major distribution channel. At the Amazon Global Selling summit held in Shanghai on Dec 11, Jiaxing Zichi Trade Co Ltd－the parent company of Orolay－was named the most innovative seller for 2019. The affordable price, the quality comparable to luxury brands and the interest among global consumers were the reasons that Orolay won the award together with big industry names such as Chinese electronics giant Xiaomi Corp.

When Qiu first launched the brand on Amazon in 2013, he never imagined that Orolay would become the top-seller in North America among all of the 150 million products sold on the platform. During the first year, the company only sold 400 pieces.

With a production base in Jiaxing, the independent design center established in 2016 is key to Orolay's success in the US market, according to Qiu. Over time, the company has built a 20-person design team, the majority of whom have grown up with the brand. As Qiu explained, it is quite difficult to find experienced designers who know the preferences of US and European consumers. Therefore, training designers based on market response is the best approach.

"Most of the down jackets or coats sold in North America have features such as waterproof materials. Fashion elements are less stressed, which is the signature of Orolay down coats," said Qiu.

While the company also produces chairs, storage cabinets and bar stools, more than 80 percent of its annual sales revenue now comes from down coats. Although the exact number could not be released, Qiu said that the annual growth rate was more than 200 percent since 2017. The success in North America helped Orolay move into the European market in 2018. Now, Europe is the fastest growing region for Orolay down coats, he said.

At present, Orolay down coats are only available in overseas markets. During the early days, Qiu tried to set up business on Alibaba's platform. But the intense competition on the domestic e-commerce platforms as well as the continually increasing costs prompted him to choose another trajectory: cross-border e-commerce.

The global selling service launched by e-retailing juggernaut Amazon in 2012 came just in time. A total of 13 overseas sites including those in the US, Canada and Italy are open to Chinese sellers, on which products made in China can be sold directly to overseas buyers in those countries.

A survey from global consultancy Accenture released in April showed that the annual sales revenue growth rate of cross-border e-commerce was double that of domestic platforms. Up to 20 percent of the global e-commerce turnover is contributed by cross-border e-commerce.

Cindy Tai, vice-president of Amazon China, said at the summit on Dec 11 that Chinese companies, which have shown competitive edge in manufacturing and industrial chain mapping in the past, have seen their innovation capability enhanced over the past few years, making an important contribution to the global industrial chain. While Amazon is more competitive in import and export business in China, its focus will remain unchanged for the upcoming year, she said.

After the successful experience with Amazon, Qiu is dreaming big.

"We would like to create a fashion brand loved by people all over the world," he said.

 

 

 

 

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529446.htm Regulators are expected to adopt a tough stance on emerging technology in the financial sector and extend supervision of technology giants in an effort to curb systemic risks, central bank officials said on Tuesday.

Over-innovated financial products with lagging regulation may lead to financial instability and potential losses for investors, said the People's Bank of China, the central bank. China will tighten regulations on all types of institutions doing financial businesses so as to protect investors who are unable to recognize potential risks, PBOC Vice-Governor Pan Gongsheng said in a speech that was read out at the Third China Internet Finance Forum in Beijing.

"Financial activities for the public, whether in the name of technology or not, should be strictly regulated, and we should safeguard residents' money," he said in his speech.

Proper use of financial technology can help reduce financing difficulties for small and micro enterprises, but activities, which lead to funds circulating within the financial system to boost speculative investment should be controlled, said Pan.

The annual Central Economic Work Conference, which was held last week, highlighted prevention and control of financial risks as one of the "three tough battles" and a key task that needs to be carried out next year.

The PBOC established a special work group in 2016 to tackle risks rising in internet financing businesses. In 2017, the government banned so-called "initial coin offerings" or ICOs, a way for startups to raise funds by selling off newly-created digital currencies. All trading platforms for such virtual assets have been closed in the country.

"We have avoided the risk of a massive virtual asset bubble," said Pan. The regulators will build an online financial risk supervision mechanism to improve the disposal of cross-market risks by taking advantage of new technology, he said.

Financial regulators around the world are working on a set of global regulatory standards, and countries standing at the leading edge of financial technology will have more advantages to dominate the rules. Thus China, as one of the global fintech pioneers, should proactively participate in the international rule-making process, said experts.

The development of financial technology is more like a competition among countries. For instance, the PBOC is still in the process of developing its own digital currency, in a race with some other countries. This competition of government-backed cryptocurrency can be seen as a key feature of the "digital era", Wang Xin, head of the PBOC's research bureau, said on Tuesday.

A recent report from US-based CNBC said that China's support for financial technology, represented by blockchain, "could put other countries behind, to the point where the world's second-largest economy could dominate the technology and the way it's developed".

But it is not easy for the private sector to win the digital fiat money making competition. "The right to issue money is important for the government, as it is one of the fundamental measures for the government to raise funds and implement macroeconomic adjustments," said Wang.

In a financial crisis, the central bank can inject liquidity and stabilize the financial system through flexible adjustments such as money supply, a function that privately-issued money, such as Facebook's Libra, may find it hard to implement, he said.

Some large financial technology companies, which have a broad business scale involving a large group of investors, should be regulated as systemically important financial institutions, said Xiao Gang, former chairman of the China Securities Regulatory Commission.

Higher regulatory standards for capital adequacy ratio, asset liability ratio and information disclosure should be introduced to these large companies, including the financial holding groups, according to Xiao. "New regulatory standards are needed, not just copying the supervision system for traditional banks."

 

 

 

 

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529412.htm An African minister said in Beijing that China probably has enough experience to help African countries diversify their economies and overcome existing problems by replicating its success on those nations.

"In all African countries we have almost the same scenario: The economies are not diversified. We have a young unskilled population, untapped natural resources, a deficit in basic services such as electricity, water and telecommunications," said Vera Daves, Angola's minister of finances.

Considering that China once faced the same kind of difficulties until the early 1980s, she said it can capitalize on all existing opportunities through its solid financial resources, technological advancement and scientific knowledge, and by transferring some of its potential to African countries.

"The Chinese authorities have been helping us since the end of our civil war for the national reconstruction process," she said, adding the country located in the western part of southern Africa with some 30 million people is a huge market for China.

Since the two countries established diplomatic ties in 1983, Sino-Angolan trade has shown how important bilateral cooperation can be, she said.

"We export more than $3 billion worth of oil and China is also our main import market. We import a lot of equipment, construction material totaling above $2 billion per year," Daves stressed in an exclusive interview with China Daily during her recent trip to China.

She added: "We are expecting the Chinese private sector to join us in the new era of the Angolan economy, and want them to help us in exploring the potential of Angola in the fields of agriculture, fisheries, mining and tourism for the mutual benefit for both countries."

Angola boasts abundant natural resources. It is the third largest producer of oil in Africa, natural gas and is the fifth biggest producer of diamonds in the world. Angola is China's second largest trade partner in Africa.

Angola's mild climate, fertile soils, plentiful flora and fauna also make the country rich in agricultural resources, the minister said, adding that this is an area Chinese investors can help explore.

With a coastline of about 1,650 kilometers extremely rich in fish, mollusks and shellfish, Angola also has unique and diverse aquatic products awaiting Chinese partners to develop.

She noted: "There is huge economic potential in Angola and there is a huge know-how and technology potential in China and these factors can be mutually advantageous for both countries."

Angola has set up an attractive business environment which will help attract more Chinese enterprises and investors, the minister said.

In this regard, Angola has two important initiatives.

"As from September this year, we have listed 195 state-owned companies to be privatized. Meanwhile, we have identified 54 products in agricultural, fisheries and mining that can be produced in Angola and be exported," she said.

"We are expecting an active participation of Chinese investors to get the ownership of some of the listed companies and help us in developing other spheres," she said. This will help turn Angola into a productive country and export more nonoil products to other countries.

"We have a long ocean coastline and we are in a region whose surrounding countries have huge trade potential. So Angola can be seen as an import hub for China to expand its business, investment and partnership in Africa," she said.

 

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529439.htm The huge demand related to spending leisure time with children during the weekend is creating opportunities for indoor petting zoos in China, a new form of business that has received wide attention from investors amid the "capital winter" this year.

As a mini version of a traditional zoo, the indoor petting zoo mainly houses aquatic animals and animals such as pigs, rabbits and lizards. With an average area of 800 square meters, they are usually located in shopping malls in cities.

"It is just a fantastic way to achieve two things. Kids just naturally love animals while we parents feel relief as we don't need to prepare a lot to go to a big zoo that is usually far away," said Zhao Qinghua, a 31-year-old mother from Shanghai.

It was the third time within a month that Zhao had taken her four-year-old daughter to visit an indoor petting zoo near their home.

"She (her daughter) doesn't seem to get bored because she can feel and touch and even play with some animals there, which is much more interesting than any of the entertainment downtown during the weekend," Zhao noted.

Lin Zhonghang, an investment manager from Cambrian Venture Capital, said: "The traditional way of such science popularization cannot meet the diversified demands from parents and children currently."

"The traditional way boasts less density, services and personalized experience, and thereby needs a more diversified product and solution to meet such new demand," Lin said.

Currently in China, at least 20 indoor petting zoo companies are competing for the big cake with more than 100 such zoos emerging nationwide.

Though most firms have encountered difficulties in raising funds amid the "capital winter", Shanghai-based Mr Zoo has finished three rounds of fundraising this year.

The total funds raised have fallen by 10 percent on a yearly basis to 1.08 trillion yuan ($153 billion) during the first 11 months of this year, according to a report from venture capital and private equity research firm Zero2IPO.

"As we now stand at a turning point of family consumption, Mr Zoo has removed the reliance on location which was the case with traditional zoos. It has found new growth engines," said Liu Fangwei, a partner of Fosun RZ Capital.

To gain more profits, Mr Zoo has found new growth points besides traditional admission fees. The firm has developed derivative products and more learning services.

Zuo Qiang, founder of Mr Zoo, said that such revenue already accounted for over half of the firm's total revenue.

"We have paid more attention in verifying the content. Also, we hope to make parents more engaged in such a process," Zuo said.

The new mode speaks for itself. The company has already five stores and six upcoming stores in Shanghai and Suzhou and plans to open 40 to 50 stores in Nanjing and Beijing next year.

Zhu Lin, managing partner of investment firm Gobi Partners, pointed out that the combination of mall, zoo, parent and child is a brand new business model and is set to have great potential in the future.

 

 

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529438.htm More enterprises feel their financial burden has been reduced this year as the country continues efforts to cut the operating costs of companies and create a good business environment, a new report said on Tuesday.

About 26 percent of more than 6,100 surveyed companies said they feel less of a financial burden this year, compared with a figure of just 14 percent feeling that way last year, the report released by the China Centre for Promotion of SME Development said.

At the same time, 45 percent of the surveyed companies said they have a relatively heavy financial burden this year, but this is down from 57 percent last year, the report showed.

Luo Junzhang, deputy head of the China Centre for Promotion of SME Development, said the nation's unprecedented tax and fee cuts have reduced the burden on companies and boosted their profits.

About 70 percent of surveyed companies said the amount of value-added taxes has dropped significantly, the report said.

At the same time, 90 percent of surveyed companies said they are satisfied with the business environment. Specifically, they are very satisfied with streamlined registration procedures for companies, easy access to affordable electricity, and better protection of intellectual property rights.

The results came after China put in place plans to reduce the tax burden and social insurance contributions of enterprises by nearly 2 trillion yuan ($285.8 billion) this year.

In the first three quarters of 2019, the country has already cut taxes and lowered the costs by 1.78 trillion yuan in total for enterprises, data from the Ministry of Finance showed.

But in the face of economic downside risks and external uncertainties, more efforts are needed to create a pro-business environment and implement all of the tax reduction plans, officials said.

There are also structural differences among the different regions in China.

For instance, the western region boasts low-price electricity supplies. But it is difficult for local enterprises there to access financing and they have to contend with higher financing costs, the report added.

In comparison, companies in eastern China have easier access to financing, but the tax burden and electricity bill are far heavier than their western counterparts, the report explained.

Among the 6,100 surveyed enterprises, some 70 percent are private companies, about 20 percent are State-owned firms, and 2 percent are foreign-owned.

Xin Guobin, vice-minister of the Ministry of Industry and Information Technology, the country's top industry regulator, said as the downward pressure on the economy growth continues, enterprises will face more challenges and they will have a stronger desire for lower operating costs and a better business environment. There is still a long way to go to reduce the financial burden on the country's enterprises. 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529427.htm A new automated container terminal employing hydrogen energy and 5G technology in Qingdao, Shandong province, represents the future trend of port operation with highly efficient and environmentally friendly features, industry insiders said recently.

The second project of the fully automated container terminal at Qingdao Port was officially put into use on Nov 28 and its handling capacity is expected to reach 1.7 million TEUs (20-foot equivalent units) per year, according to port operators.

"Along the 660-meter shoreline, the terminal owns two berths and has high-end automated facilities including nine ship-to-shore cranes, 38 automatic high-speed tract cranes and 45 automatic guided vehicles," said Yang Jiemin, executive deputy general-manager of Qingdao Port Automated Container Terminal Co.

It took only one year and a half to build this terminal, five times faster than it usually takes, with six self-developed innovative solutions at the forefront of relevant fields across the world, said Yang.

The rail-mounted gantry cranes at the terminal are driven by a hydrogen battery pack, which Qingdao Port claimed was the first used in the port sector worldwide.

Lyu Xiangdong, an engineer of the company, said the new energy replaced coal and oil and produced more electricity with zero carbon dioxide emissions.

"What's more, the new method reduced the weight of the facility by 10 metric tons and lowered its complexity as well as maintenance costs," said Lyu.

Lyu added that the hydrogen is mainly leftover from chemical enterprises in Shandong province and it is a perfect way to turn waste into a resource.

The port operators estimated that the hydrogen energy could reduce electricity consumption by 3.6 percent for carrying every container and save about 20 percent of the cost of purchasing every unit of power equipment.

If this terminal handles an annual throughput of 3 million TEU, it would reduce 20,000 tons of carbon dioxide emissions and 697 tons of sulfur dioxide discharges.

The automation at the terminal has been enlarged by application of 5G technology, "which has covered every corner of the terminal", said Li Yongcui, a deputy general manager of Qingdao Port Automated Container Terminal Co.

Qingdao Port started to use the 5G technology early this year, an advantage of which is that the quay cranes could automatically move containers. It is considered to be the first case of 5G-based technology applied in remote-controlled cranes in the world.

The port also joined hands with China's tech giant Huawei and major telecom company China Unicom to give a special solution to communication between different facilities in the port.

"Compared with optical fiber and other means of traditional communication, the 5G technology features flexibility, low costs of construction and maintenance and scalability.

"Earthwork is usually needed before we install optical fiber to connect different facilities, while the 5G network is not confined to a geographical position and numbers of facilities, some of which will be added later," said Li.

Currently, 5G technology has been applied in the operation of quay cranes and rail-mounted gantry cranes, container movement as well as high-definition video data transmission.

The first project of the fully automated container terminal at Qingdao Port was put into commercial operation in May 2017, which was believed to be the first of its kind in Asia.

The project reduced 80 percent of labor work and improved efficiency by 30 percent. The loading and unloading efficiency reached an average of 36.2 containers per hour from 24.2 when the terminal was operated at the beginning. Its peak efficiency reached 43.8 containers per hour, 50 percent higher than in similar terminals in other countries. It has been considered the first automatic terminal to surpass any human-labor dominated terminal in terms of efficiency.

Zheng Qingxiu, an official in charge of waterway management with the Ministry of Transport, said that Qingdao Port has made its way to becoming an intelligent and green port, setting an example for other domestic ports.

Qingdao Port reported its cargo handling capacity as 540 million tons and 19.32 million TEUs in 2018. Qingdao Port merged with its neighbor Weihai Port in July and then become a subsidiary of the consolidated Shandong Port Group in August.

China has been leading in terms of automated port construction with its considerable number of automated container terminals in the country, according to a report on intelligent shipping development in late October.

Another two examples are Xiamen Ocean Gate Automated Container Terminal in Fujian province, the first intelligent green terminal in China, and the Yangshan Deep-Water Port in Shanghai, the world's largest automated cargo terminal. 

 

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529424.htm With less than 30 days to Spring Festival, which falls on Jan 25 next year, a large number of Chinese people, including huge number of elderly people and children, are expected to hit the road starting from Jan 10, a travel agency said.

Traditionally, most people choose to go back to their hometowns and reunite with their families.

Next year, many young people who were born in the 1980s will choose to spend the festival in their own homes and bring their parents and children to the cities where they work, according to Qunar, one of China's largest online travel agencies.

Of the total, nearly 40 percent of Chinese will choose to spend the holiday in a different place. This would be divided into 30 percent who will opt to stay in the country and 10 percent who will travel abroad.

In fact, it would be much cheaper to buy airplane tickets from smaller cities to go to Beijing and Shanghai, compared with flights starting off from major cities.

For instance, on Jan 22, 2020, an economy class flight from Beijing to Harbin, Heilongjiang province, will cost 1,600 yuan ($229). A flight on the same day from Harbin to Beijing will only cost 340 yuan, Qunar found.

"Now, more people don't care about going back to their hometowns for Spring Festival, as long as they are with the family. It would be a reunion no matter where they go," said Ren Tian, a product manager of Qunar.

During the travel period for Spring Festival next year, the number of flights booked by passengers who are aged 60 or above jumped 19 percent year-on-year, including a significant number of senior citizens who plan to travel alone.

The bookings from children who are aged 12 or below climbed 27 percent year-on-year, Qunar found, although it did not disclose specific numbers.

Haikou and Sanya in tropical Hainan province remain two of the hottest destinations. People who travel there mainly come from Shanghai and Beijing, as well as Guangdong, Heilongjiang and Sichuan provinces.

Compared with the previous Spring Festival, the number of people who have booked flights to go to Haikou and Sanya increased by 20 percent and 40 percent respectively.

Warm overseas destinations like Bangkok and Phuket in Thailand, Kuala Lumpur in Malaysia, and Bali in Indonesia continue to be one of the most popular go-to places for the Spring Festival revellers. The number of bookings for Phuket and Kuala Lumpur from Chinese each surged by 50 percent year-on-year.

"Chinese tourists are seeking more personalized experiences while traveling abroad. They are more willing to slow down the pace of life and enjoy in-depth and tailored trips, encouraged by their growing spending power and evolving tastes," said Dai Bin, director of the China Tourism Academy.

 

 

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/18/content_37529445.htm China has demonstrated considerable success in tackling and eliminating risks amid ongoing efforts to curb financial risks, analysts said.

Government support will remain strong for major banks in China, given authorities' overriding objective of maintaining financial and social stability, global credit ratings agency Moody's Investors Service said in a recently released report.

The introduction of regulations for domestic systemically important banks will tighten supervision of larger banks and help maintain financial system stability, Moody's said. The ratings agency expected the People's Bank of China, the central bank, to continue maintaining ample bank funding through accommodative policies.

China's banking and insurance regulator urged relevant financial institutions to take multiple measures to dispose of and mitigate the risk of banks' nonperforming assets, in addition to classifying bank loans strictly according to their inherent risks as "pass, special-mention, substandard, doubtful and loss" to truly reflect their risk level, Xiao Yuanqi, chief risk officer and spokesperson of the China Banking and Insurance Regulatory Commission, said at a news conference on Oct 21.

Till that date, China's banking sector had disposed of 4.9 trillion yuan ($701 billion) bad loans since the beginning of 2017, he said.

The banking and insurance regulator has effectively contained irregularities concerning financial institutions, businesses and transactions by undertaking remedial measures for almost three years, Xiao said.

China Cinda Asset Management Co Ltd, one of the "big four" State-owned asset managers, has played an active part in the mitigation of credit risks of large private companies with the aim of maintaining regional financial and social stability, as Chinese leaders called for solid efforts to win a tough battle against financial risks.

Xiang Dang, assistant president of China Cinda, said credit risks occurred in some large companies in certain provinces and cities due to various reasons. Some were exposed to the risk of maturity mismatch, which led to liquidity crises. Some pursued an excessively large-scale business without making judgments on business quality and efficiency scientifically. Some overtly diversified their business, and some were lagging behind their competitors in terms of technology.

"We paid high attention to private companies which had the above problems and tracked their problems for the long term … Following the principles of marketization and institutionalization, we pushed ahead with mitigation of potential regional financial risks through a package of solutions," Xiang said at a recent news conference in Beijing.

The asset manager either helped these companies increase the value of their assets and clear up inefficient assets through multiple measures, such as introducing strategic investors, restructuring, and implementing debt-for-equity swaps, after the companies encountered crises or helped the companies resolve liquidity crises by intervening in their business before crises happened.

In 2017, a capital chain rupture occurred at Hongye Chemical Group Co Ltd, a large Shandong-based private company whose business segments include chemical and pharmaceutical industries, trade and small loans, because of overexpansion and its irrational structure of financing.

The crisis affected a number of large local companies which formed a mutual credit guarantee scheme with Hongye, involving debt totaling more than 20 billion yuan. Once a wider crisis occurs, it could have an enormous impact on regional economic, financial and social stability.

China Cinda introduced industrial investors to Hongye. They set up a restructuring fund to dismantle and dispose of the group's assets by business segments, realized asset value maximization of each segment, eliminated outdated production capacity, and cleared up loss-making "zombie" subsidiaries of the group, Xiang said.

"We also broke the chain of debt guarantee of Hongye through combined efforts of reorganization under the bankruptcy law and acquisitions of secured claims, in order to give rebirth to the group and reduce hidden financial risks, on the basis of protecting the interests of its employees and small creditors to the greatest extent," he said.

 

]]> 2019-12-18 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529285.htm Rising domestic production, growing imports and new measures to prevent African swine fever in pig farms will help China overcome pork shortages during the second half of next year, the Ministry of Commerce said on Monday.

The Department of Market Operation and Consumption Promotion under the ministry said China will continue to release frozen pork reserves into the market to curb rising pork prices and ensure that there are adequate supplies during the New Year's Day holiday on Jan 1, and the seven-day Spring Festival holiday in late January.

In addition to encouraging companies to expand their import channels via platforms such as the China International Import Expo, the ministry will work with other government branches to prioritize to imported pork and chilled meat in customs clearance inspections and release at various ports across China.

The ministry said China's meat imports are expected to exceed 6 million metric tons this year, and pork and its by-products will surpass 3 million tons.

Attracted by the country's big population base and spending power, over 1,000 global pork suppliers have registered as importers with the Ministry of Commerce to date this year, about 30 percent higher than in 2018.

China imported 1.58 million tons of pork from global markets in the first 10 months of 2019, mainly from the European Union, South America and the United States, data from the Ministry of Commerce show.

The African swine fever has resulted in a shortage of more than 10 million tons of pork, or at least 20 percent of China's total pork output this year. China produced a total of 31.81 tons of pork in the first three quarters this year, down 17.2 percent on a yearly basis, according to the ministry.

The surging pork prices have also boosted the country's Consumer Price Index to 4.5 percent in November, the year's highest.

Li Guoxiang, a researcher at the Rural Development Institute of the Beijing-based Chinese Academy of Social Sciences, said pork shipments ordered by domestic companies after June had arrived at Chinese ports in November and December, and will help to tackle price rises during the holiday seasons in January.

Moreover, the phase one trade deal reached by the Chinese and US governments last Friday will create new options for China to purchase more US pork and other agricultural commodities to meet its domestic requirements, he said.

Under such circumstances, Li believes that pork prices will not cause any further inflation in the first half of next year if the government continues to release pork reserves, enhances matchmaking between sales and production in global markets, and discloses market information in a timely manner.

Earlier this month, the Ministry of Agriculture and Rural Affairs urged local authorities to provide financial support as soon as possible, guide pig farmers to restore production, and honor subsidies offered to pig farmers who have slaughtered pigs to prevent and control the swine fever.

Under the government plan, China will also build another 120 high-quality standardized pig farms within three years, to improve standardized production of pork.

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529352.htm Housing prices continued to stabilize in major Chinese cities during November, with fewer cities reporting price spikes as nationwide curbs continued to bear fruit, experts said on Monday.

Out of the 70 major cities tracked by the National Bureau of Statistics (NBS), 44 cities reported higher prices for new homes, compared with 50 in October. It was also the lowest recorded figure in the last two years, according to the NBS.

Local governments continued to implement tightening measures in accordance with their requirements in November, while the long term mechanisms have helped ensure stability in the real estate market, said Kong Peng, chief statistician of the NBS.

In November, new home prices in the four first-tier cities rose by 0.6 percent on a monthly basis, with Beijing seeing an increase of 1.7 percent, followed by Shanghai (0.3 percent) and Shenzhen (0.2 percent). Guangzhou, however, saw prices drop by 0.5 percent from October, according to the NBS data. Compared to last year, the four top tier cities saw a 4.9 percent growth in their new home prices in November on a yearly basis.

"Beijing's growth in new home prices may be due to the newly completed Beijing Daxing International Airport and the ongoing development work in Tongzhou. The promising development outlook has supported price hikes in the two regions," said Yan Yuejin, research director at the E-House China R&D Institute.

New home prices of 31 second-tier cities monitored by the NBS rose 0.2 percent on a monthly basis, while the 35 third-tier cities saw new home prices go up by 0.5 percent, down 0.3 percentage point and 0.1 percentage point from the previous month.

On an annualized basis, home prices in second-tier cities grew by 7.9 percent, down 0.8 percentage point from October, marking the seventh month that the growth rate has fallen. In third-tier cities it was the eight consecutive month of flat or slower growth rates.

"No matter whether it is on a monthly or an annual basis, the 70 cities' growth ranges have narrowed in comparison with the October data, which indicates that home prices are seeing slower growth rates, and in some cases even a downward trend due to the tightening measures," said Yan.

The secondary market is usually seen as a better reflection of the property market in China. In November, it hit a four-year low as just 32 cities reported monthly price hikes, while 33 cities reported price declines.

Average prices of pre-owned homes in the four top-tier cities rose by 0.2 percent from October. In Shenzhen, prices jumped 1.4 percent while in Beijing they weakened by 0.4 percent. In Guangzhou, prices edged down by 0.2 percent while Shanghai stayed unchanged, according to NBS figures. Transaction prices in the four cities in the secondary market rose by 1 percent on average from a year ago.

Prices of pre-owned properties rose by 0.1 percent in second-tier cities on a monthly basis, the same as in October, while in third-tier cities it went up by 0.3 percent, down 0.2 percentage point on a monthly basis.

The growth rate of used home prices in second-tier cities has declined for seven months in a row, and that of third-tier cities for eight consecutive months.

"Prices of pre-owned homes fell in more than 30 cities during October and November, indicating a turning point for the property market," said Zhang Dawei, chief analyst at Centaline Property Agency Ltd. The tendency will continue into December if the existing tightening policies continue, Zhang said.

According to Centaline data, as many as 160 tightening measures targeted at the property market were announced in the fourth quarter to date, and in the first 11 months there were some 554 real estate restriction policies, 30 percent more than the same period of 2018.

 

Potential homebuyers look at a property model in Nantong, Jiangsu province. XU JINBAI/FOR CHINA DAILY

 

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529351.htm Short videos and livestreaming applications are playing an increasingly important role in helping users in poverty-stricken areas to gain extra income by creating social e-commerce businesses and bolstering local economies as the country aims to eliminate poverty by the end of 2020.

Su Hua, founder and CEO of Kuaishou, said more than 19 million people earned income through livestreaming videos, e-commerce, knowledge payment and advertisement on Kuaishou this year.

This included over 5 million people from national-level poverty-stricken counties, the CEO said.

Empowering residents from the most underprivileged regions in China, the company has launched a series of rural entrepreneurship incubation programs that educate participants on how to set up and run businesses, as well as help rural residents sell locally made products.

According to Kuaishou, the company has helped its users from impoverished rural areas in China generate $2.8 billion in revenue in 2018.

Jiang Jinchun is a Kuaishou user who preferred recording and uploading videos about local specialties and gourmet items from his hometown in Hengfeng county, Jiangxi province. In 2018, he sold more 1,000 kilograms of tea and arrowroot powder, and helped 200 rural households increase their incomes.

Song Tingting, vice-president of Kuaishou, said the company has made substantial efforts in poverty alleviation, including providing data flows whose value could reach 500 million yuan ($71.4 million) for online content creators that sell high-quality agricultural products in poverty-stricken counties.

Song added that the number of short videos from poverty-hit counties uploaded to Kuaishou has so far surpassed 1.1 billion.

In addition, Kuaishou has cooperated with third-party e-commerce platforms such as Taobao and Tmall, both of which are run by Alibaba Group Holding Ltd, mobile e-commerce platform Youzan, which is backed by Tencent Holdings Ltd, JD and online discounter Pinduoduo Inc.

So far, the company has more than 200 million daily active users and over 400 million monthly active users, with more than 200 million content creators recording and sharing their videos on the platform last year.

Short videos are seeing explosive growth in China. The revenue of the short video industry reached 14.01 billion yuan in 2018, up a blistering 520.7 percent year-on-year, and the figure is expected to surpass 55 billion yuan in 2020, said market research company iResearch.

Founded in 2011, Kuaishou allows users to upload short videos of 10 seconds to a few minutes each, with the content ranging from cooking to physical exercise, dancing and family gatherings.

Official figures showed that China's poverty relief achievements have contributed more than 70 percent to global poverty alleviation work in the past 40 years. The China aims to eradicate poverty by 2020, amid its drive to finish building a moderately prosperous society in all aspects.

"The method of publicizing products through short video platforms can greatly solve the lagging sales of agricultural products caused by a lack of resources and channels," said Zhang Xintian, an analyst from iResearch.

Users could learn about high-quality agricultural products through short videos, and further improve their awareness of rural life, Zhang explained.

Zhang added that cooperation between short video and e-commerce platforms is an explosive commercial model as the former can drive online traffic to the latter. Short video platforms could build their own e-commerce platforms and logistics infrastructure in the future, he said.

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529340.htm The State Grid Corp of China has agreed to acquire a 49 percent stake in Oman's Electricity Holding Co, a landmark deal that marks a new step for China and Oman to jointly pursue cooperation under the Belt and Road Initiative.

The State-owned grid operator said on Monday that it has signed an agreement with Oman's Nama Holding, the holding company of Omen Electricity Holding Co, without giving any financial details.

State Grid President Xin Baoan termed the steps as a significant one that will deepen the strategic partnership between the two countries and expand bilateral economic, trade exchanges.

"As a long-term investor in the global power industry, State Grid will give full play to its comprehensive advantages in technology, management, construction and capital. We will work with Omani partners to ensure safe and reliable power supplies for Oman's economic prosperity and social development," Xin said.

Chinese Ambassador to Oman Li Lingbing said the deal is the largest single investment by a Chinese company in Oman and will help expand power and energy cooperation between the two countries.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said going global is a practical measure for the State Grid as there are ample opportunities to invest and operate in the BRI-related economies.

State Grid has strong management capabilities and has the ability to turn loss-making overseas projects into money-spinners, he said.

"SGCC's modern and efficient management ensures that it is able to undertake BRI projects with promising profitability," he said.

Another factor contributing to SGCC's profitability and increasing presence in overseas projects is that Chinese companies have low construction costs, he said.

State Grid supplies power to over 1.1 billion people in 26 provinces, autonomous regions and municipalities in China. It has invested and operated backbone energy networks in countries like Brazil, the Philippines, Portugal, Australia, Italy and Greece.

In recent years, China and Oman has been actively embracing the Belt and Road Initiative and has already made considerable progress.

Chinese companies have carried out a number of projects in Oman with cumulative turnover of more than $6 billion, covering fields such as oil and gas resources exploration and development, electricity, communications, deep-sea fishing and processing sector, ambassador Li said in a recent interview with Xinhua News Agency.

China has been Oman's largest trading partner for several years, while Oman is China's fourth-largest trading partner among Arab countries. Bilateral trade volume between the two countries reached $21.7 billion last year, up 40 percent year-on-year, Li said.

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529337.htm The Yangtze River Delta region, which accommodates one of the most economically vibrant urban agglomerations in China, will become a key conduit for the country's new round of opening-up, experts said.

At the beginning of December, a new master plan was unveiled by the central government to advance the integrated development of the Yangtze River Delta region. As the plan specifies, cities in this region should make joint efforts to promote opening-up at a higher level.

The China International Import Expo, which has been held in Shanghai for two consecutive years, should serve as an important gateway for companies in this region to explore more business opportunities in the world, according to the plan.

Tong Jisheng, chairman of Shanghai-based conglomerate Orient International (Holding) Co Ltd, said the company has helped to build the Hongqiao imported goods exhibition and trading center, which will allow exhibits at the CIIE to take priority when entering the trading center's bonded warehouse. This will help to build Shanghai into an import goods center that serves not only the Yangtze River Delta region, but also the rest of the country.

According to the recently released master plan, the 358,000-square-kilometer Yangtze River Delta region is about the same size as Germany and encompasses Shanghai and parts of Zhejiang, Jiangsu and Anhui provinces. The region accounts for a quarter of China's GPD and a third of foreign trade and investment.

Hu Jiangyun, director of the foreign economy research department at the Development Research Center of the State Council, said the Yangtze River Delta region should not only lead China's economic development, but more importantly become a role model globally in terms of coordinated development of an area.

"China's opening-up has entered a new stage, for which the Yangtze River Delta region should play a key role," he said.

According to Xu Hongcai, deputy director of the economic policy committee of the China Association of Policy Sciences, Shanghai has always been a pioneer regarding China's openingup. Innovative efforts such as the free trade zone, which was first introduced in Shanghai, are now radiating out though the rest of the Yangtze River Delta region. Therefore, the neighboring cities should work even more closely with Shanghai to seek higherquality development.

The Yangtze River Delta region should aim to build a first-rate business environment and a new high standard mechanism for opening-up.

To this end, innovation in human resources management should be introduced initially as this is a prerequisite of industrial upgrading and transformation, as well as for the development of modern high-tech industries.

In this sense, the household registration and social security systems in cities in the Yangtze River Delta region should be connected to facilitate the free flow of human capital, Xu suggested.

The integrated development of the Yangtze River Delta region, especially the smoother exchange of talents, is essential to German industrial giant Bosch's operations in China, said Chen Yudong, president of Bosch China.

About 75 percent of the annual turnover of Bosch China, which has its regional headquarters in Shanghai, is contributed by operations in the region, Chen said.

According to Chen, three-quarters of Bosch China's work force are based in this area. Among the 10,000-plus employees in its Suzhou factory, nearly half are engineers who frequently travel between Suzhou and Shanghai.

"As the development of the cities in this area will be further coordinated, it is our hope that there will be free flow of people, which will benefit companies of our kind," he said.

Shanghai has always been a stronghold for multinational companies in China. So far, a total of 710 multinational companies have set up their regional headquarters in Shanghai, while another 453 firms have built their R&D centers in the city, according to the Shanghai Municipal Commission of Commerce.

The Shanghai facility of German heating and sun roof solutions provider Webasto now works as the company's regional management headquarters and R&D center.

Zhang Lihua, deputy president of Webasto Roof Systems China Ltd, said the production function of the Shanghai venue will be gradually moved to neighboring cities in the Yangtze River Delta region.

"Shanghai, working as a hub for both management and technology talents, is one of the major reasons for establishing the regional headquarters here," he said.

 

A visitor looks at a model of an industrial logistics network made by Bosch during the second China International Import Expo in Shanghai on Nov 8. XINHUA

 

 

 

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529336.htm With the recent release of a new development plan on the integration of the Yangtze River Delta region, all eyes are on how industrial upgrades will be ramped up in the nation's most affluent region.

Under the latest road map, the region will prioritize enhancing innovation capabilities by achieving a number of key, indigenous technological breakthroughs and building major infrastructures on promoting science and technology development.

A noteworthy point in the guideline is to actively turn academic and scientific fruits into concrete products and solutions, as well as create an effective mechanism to facilitate such translation.

The key to achieving high-quality and integrated growth is to strengthen industrial development in a coordinated fashion, said Wang Ronghua, former vice-chairman of the Chinese People's Political Consultive Conference Shanghai Municipal Committee.

"The world-class city cluster we are aiming to build in the Yangtze River Delta region should first and foremost be a global leading science and technology hub. Institutional arrangements should therefore be in place to support its development," he said.

The plan clearly draws on global experience of regional development, such as that of New York Bay or Silicon Valley, specifying respective roles of different cities in driving development, said Petrel Tang, a China-based partner at professional service firm PwC Strategy&.

"The new plan has made explicit the pioneering role of Shanghai in the Yangtze River Delta region－to be a globally renowned science and technology hub and allow China to compete on a global scale," she said. "So relevant policies are highly market force-driven and industry-focused."

The road map said the region should give full play to the role of the technology trading market to promote interconnection and interoperability within the region, constructing a global distribution hub for innovative achievements.

According to Tang, three factors are in place to bolster the goal－the Lingang expansion of the Shanghai Free Trade Zone, the emphasis on strategically emerging industries, and the establishment of the STAR Market, a technology innovation board for listing promising startups.

"These existing mechanisms and policies are critical prerequisites for fostering and accelerating new technological breakthroughs," she said. "The next step is to form concrete mechanisms to give technology exchanges a green light."

According to the plan, policy support will be rolled out for collaborative innovation, including the formulation of a pilot plan for comprehensive innovation reform to spark more inter-regional synergies.

Ma Yanmin, head of the China Private-owned Science and Technology Promotion Association, believed the plan addresses the three keys to a genuine innovation hub－ability to make technological breakthroughs, effective aggregation and allocation of resources, and a business environment conducive to the growth of startup companies.

Another case in point is the establishment of an artificial intelligence technology association earlier this month in Shanghai, bringing together 300 AI firms in the Yangtze River Delta region to share resources and assist each other.

CraiditX, a Shanghai-based company specializing in empowering the finance industry using AI, believed the integrated development plan will help proliferate its unique industrial strength to a broader reach within the area.

"Shanghai's goal of building itself into a global financial center is conducive to our business in gathering data and tapping new frontiers, allowing us to accumulate some novel practices and invaluable experience," said Zhu Mingjie, CEO of CraiditX.

"Thanks to the new plan, we are more likely to bring our technologies and know-how to other cities in the Yangtze River Delta region and improve the overall intelligence level of the financial sector," Zhu said.

Entrepreneurs like Gu Jie, founder and CEO of Fourier Intelligence, are looking to the fast adoption of innovative products in a regional pilot demonstration zone.

"We also hope more policies will be unveiled to facilitate the flow of high-end talents, such as the further relaxation of the household registration system," said Gu, whose company is a domestic leader in rehabilitation robotics.

 

Newly produced cars are ready to be uploaded onto ships at a port in Lingang, Shanghai. XINHUA

 

 

 

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529288.htm Chinese internet search giant Baidu Inc is banking on online paid knowledge services and speeding up its layout in the video content sector in an attempt to entice a new breed of users and grab a bigger slice of the booming knowledge-sharing market.

"Online users have an increasing demand for knowledge, as the average daily search volume for knowledge and content at Baidu's platforms has reached 1.54 billion, and people spent over 630 million minutes browsing content every day," said Ruan Yu, general manager of Baidu Knowledge.

Ruan said she is bullish about the prospects of online paid content and will give top priority to Baidu Wenku, which was launched in 2009 and serves as an online platform allowing online users to read, share, upload and download files, books and documents.

Baidu Wenku has announced plans to invest 500 million yuan ($71 million) in improving knowledge services and supporting premium content creators next year. The platform began to run the paid knowledge business in 2013 and has already obtained membership fees, she explained.

Ruan said they are doubling down on knowledge videos and high-quality content, and planning to incubate 10,000 video creators, buoyed by the knowledge consumption upgrade in the hope that vivid and interesting short videos could make it easier to obtain knowledge.

So far, Baidu's knowledge-sharing platforms own 220 million content creators, along with over 50,000 scholars and experts as well as 60,000 partners. Its knowledge and content products serve more than 230 million people every day. Market research and consulting group iResearch said China's online paid knowledge industry is expected to witness explosive growth in the next three years. Its revenue is expected to skyrocket to 23.5 billion yuan in 2020 from 4.91 billion yuan in 2017.

The Beijing-based tech heavyweight has showed its ambition to expand its presence in content. In August, it poured money into question-and-answer website Zhihu. The financing allows Baidu to add more than 100 million of Zhihu's Q&A posts to its mobile app and distribute the content to different users though the application of artificial intelligence technologies.

The company has also invested in NetEase Cloud Music, one of China's major music livestreaming services, and a series of video-sharing platforms such as Baidu Video, Qingting FM, Pear Video and Renren Video.

Baidu is engaged in a fierce battle with Beijing Bytedance Technology Co Ltd, which is moving beyond its core businesses in news and video and into workplace messaging and music streaming, entering a sector currently dominated by Baidu.

Bytedance owns news aggregator Jinri Toutiao and streaming platform Douyin. It has launched a new search engine In China.

"At present, more and more white-collar workers, college students and other young groups pay more attention to personal development under the existing material conditions, so they have greater willingness to pay for an experience and accept such kind of consumption patterns," said Huang Guofeng, an analyst at Beijing-based internet consultancy Analysys.

Yu Bin, an independent commentator on the internet industry, said the knowledge-sharing industry should be focused on high-quality content and vertical industry, exploring more forward-looking knowledge to attract users.

 

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529314.htm When he woke up at 6 am, Zhao Dong, a 27-year-old programmer in Beijing, looked at the hair on his pillow and sighed. He reached for his phone, and placed another order for anti-hair loss shampoo online.

Zhao has been suffering from hair loss for over a year. Apart from anti-hair loss shampoo, he has tried hair growth serum, a hair growth comb, and a hair growth machine, which cost him 6,000 yuan ($853).

The potential value of China's anti-hair loss market is over 400 billion yuan, and the millennial generation is turning into a major driving force, with the increasing life pressure, and the rising purchasing power of young people, market insiders said.

Chen Qiaoshan, a medical analyst at Beijing-based market consultancy Analysys, said: "The young generation stay up late, and usually eat unhealthy food. In addition, they pay more attention to their appearance, so they spend a lot of money on anti-hair loss products."

Data from Alibaba's e-commerce platform Tmall showed that during the Singles Day shopping festival in November, the post-1990 generation became the largest consumption group for hairpieces, taking up 42.41 percent, making them the generation to suffer most from hair loss among Chinese.

The 1980s and 1970s generations also ranked high, accounting for 25.88 percent and 14.28 percent respectively, according to transaction volume on Nov 11. Shanghai, Beijing and Shenzhen in Guangdong province were the top three cities when it came to the purchase of hairpieces.

"The data released simply rubbed salt into my wounds. Increasing work pressure, staying up late and erratic hours are causing my hairline to recede. I would spend money on whatever makes my hair grow back," Zhao said.

Data from market consultancy iiMedia Research showed that from 2017 to 2018, those suffering from hair loss aged between 26 and 30 took up 41.9 percent, becoming the largest among all age groups.

As is shown by research company CBNData in Shanghai, in 2019, the online consumption volume of anti-hair loss products has been growing, and the number of consumers surged by 40 percent year-on-year. The post-1990 generation turned into a major consumption power, taking up over 40 percent of online transactions.

Specifically, their anti-hair loss choices are diversified. Young female consumers favor hairline filling powder, while male consumers tend to buy hair fiber powder. In the past three years, young consumers' anti-hair loss consumption have experienced structural changes, and they are now more willing to buy relatively expensive products, such as scalp essence and high-tech hair growth machines, according to CBNData's report.

Anti-hair loss shampoo, the most traditional choice for those suffering from hair loss, also showed potential growth. Industry data showed that in 2018, the market volume of anti-hair loss shampoo reached 1.13 billion yuan, up 15.3 percent on a year-on-year basis. It is estimated that the market will surpass 1.5 billion yuan by 2020, and the young generation is estimated to be the main consumption power.

And enterprises are adjusting their marketing strategies to target young consumers. Traditional Chinese herbal anti-hair loss shampoo brand Bawang Group launched an intellectual property (IP)-protected cartoon "Bawang elf family", which was drawn on the product package to attract young consumers. It also teamed up with gaming companies to launch crossover-brand products.

In 2018, it replaced its endorser Jackie Chan with singer Mao Buyi, who is popular among the post-1990 generation, making its brand image look younger.

This year, Bawang held an advertising idea collection activity in universities in China, further enhancing its influence among young adults. Through the activity, the company collects young consumers' thoughts on issues including hair loss anxiety, secrets to make hair denser, as well as their recommended advertising slogans for Bawang.

Luo Tianxiang, public relations manager at Bawang, said: "In recent years, we have been stepping up efforts to revitalize the brand, by focusing on the demands of young people and helping them resolve hair loss problems. As a traditional Chinese herbal brand, we are demonstrating a younger image."

Chen from Analysys noted that the anti-hair loss market among young consumers will continue to expand in the future, as they care a lot about their appearance, but are unwilling to change their unhealthy lifestyle.

"They continue to stay up late, eat junk food, and when their hair falls out, they simply buy more anti-hair loss products," she said.

 

 

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529312.htm China further opened up its financial sector for foreign investment by allowing Intesa Sanpaolo Group, a leading banking group in Europe, to become a fund sales agent in the country.

The Italy-based banking group will offer fund sale services through Yi Tsai (Italian talent), its fully-owned subsidiary, after the unit completed a pilot project in the coastal city of Qingdao, Shandong province, China's designated pilot zone for wealth management initiatives.

This is the first fund distribution license given to a foreign financial institution since China decided to further open up its financial sector in 2017 as part of the overall opening-up process, said Ye Tan, an independent financial analyst.

"It shows the confidence of the European financial community in the Chinese market," said Ye.

"With Yi Tsai, we have taken an important step forward in developing Intesa Sanpaolo's wealth management business on an international scale," said Carlo Messina, CEO of the Turin-headquartered Intesa Sanpaolo in a statement.

Messina said that their objective would be to offer high-end clients a full range of advisory services geared toward long-term wealth management and financial planning.

"After the full launch in Qingdao, we will focus on expanding into other provinces in China with dedicated branches and on developing an attractive product mix for the Chinese market with the support of best-in-class partners," Messina said.

Established in 2016, Yi Tsai is now fully operational in the Chinese market. Besides, Intesa Sanpaolo also holds a 13.85 percent stake in Bank of Qingdao, the second largest shareholder of Yi Tsai.

Under the terms of the fund distribution license, Yi Tsai will distribute public and privately distributed funds, which have been carefully selected from the Penghua product range, an affiliate of Intesa Sanpaolo's Eurizon Capital, and from other asset management companies in China. Distribution will be carried out by Yi Tsai's network of financial advisers.

Antonello Piancastelli, chairman of Yi Tsai, said that with the gradual opening of market access and investment channels, foreign financial institutions are taking up a more active role in China.

"The company is increasing investment in capital and talents, and taking concrete action to express its long-term confidence in China's capital market," said Piancastelli.

Zeng Linghua, a fund analyst at howbuy.com, a third-party investment consulting firm, said foreign investors were attracted by the huge growth potential in the wealth management market for Chinese individuals although the parent companies of wholly-owned foreign enterprises are still not familiar with China's capital market.

Foreign investors are likely to stick to providing services with special features to high net-worth individuals, including mutual funds and private funds, said a person who works for a medium-sized fund sales platform in Shanghai.

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529306.htm ESG investment, which emphasizes sustainable development, is gaining increasing popularity in China as industry experts believe it will have large room for growth given the country's transformation to a high-quality development model and the ongoing internationalization of A-share companies.

ESG (environmental, social and governance) investment is a new kind of strategy that evaluates the comprehensive value of a company's impact on the environment, its social and governance policies rather than focusing largely on its financial performance.

"With China's economic transformation and internationalization of Chinese A shares, ESG investment will have vast room for development," said Wan Qiong, the manager of fund management company Bosera Funds.

"It will not only help avoid 'Black swan incidents' brought by non-financial factors, but could also bring excess earnings to investors."

Financial data provider Wind said ESG investment funds made an average profit of 30.33 percent as of Dec 13, with the highest rate hitting 80 percent.

Compared with Western countries, ESG investment began late in China.

Chinese A-share listed companies have so far insufficient disclosure data on their reports for social responsibility. But Wan believes the increasing inclusion of A shares into MSCI benchmark indexes will improve the situation.

"If Chinese listed companies want to build a good image in MSCI's criteria system, gain attention from overseas investment institutions and enhance their global competitiveness, they will work more actively on social responsibility and attach more importance to the disclosure of related reports. That will, in return, promote the development of ESG investment," she said.

More Chinese listed companies have already realized the importance of ESG in their development and have been making efforts in the field. According to a recent MSCI report, 11 percent of Chinese listed companies scored higher on ESG criteria over the past year.

ESG investment has seen remarkable growth across the globe in recent years. Data from investment research firm Morningstar showed that newly-added capital of ESG exchange traded funds reached a record 4.3 billion euros ($4.79 billion) in the third quarter of 2019.

Financial institutions have also spotted the opportunity and are moving to grab a share of the market.

A number of fund management companies such as Bosera Funds, Hwabao WP and E Fund among others have set up or issued ESG funds. Bosera Funds issued an ESG fund on Monday that tracks the performance of 100 listed companies on the benchmark CSI 300 Index.

Liu Wei, deputy general manager of the investor services department at the Shanghai Stock Exchange, said ESG investment plays an important role in enhancing the quality of Chinese listed companies and promoting further opening-up of the Chinese capital market.

ESG-themed ETFs will inject more vitality into the innovative development of China's capital market, Liu said at the China Sustainable Finance Forum 2019 in Shanghai earlier this month.

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529291.htm International think tanks have suggested that a coordinated approach is needed to build small－and medium-sized cities in the Yangtze River Delta region as robust nodes with distinguished characteristics.

Many such cities have failed to become strong and reliable nodal cities, which may hinder the long-term growth of the region, which is at the forefront of international collaboration and competition, the think tanks said at the 2019 Shanghai International Think Tank Summit earlier this month.

Many of the cities are focusing on their own development, which is resulting in repetitive competition, they said at the summit held by the Development Research Center of the Shanghai municipal government.

The summit followed the unveiling of a master plan regarding the Yangtze River Delta region's development this month by the central authorities to boost vitality in the region, about the size of Germany.

They gave the example of the new energy vehicle industry in the delta region, which produced 2.38 million units last year, accounting for nearly one third of the country's entire production, while only 530,000 such vehicles were sold.

"It revealed obvious overcapacity. There are at least seven new energy vehicle manufacturing towns in Zhejiang cities including Hangzhou, Huzhou, Ningbo and Jinhua, which mainly came into being due to the country's preferential policies since 2010. But some have encountered problems, defaulting on payments to employees and suppliers and laying off employees," said Zhu Hui, a global partner at Boston Consulting Group.

Alex Xu, global senior partner and vice-president of Roland Berger China, suggested that governments in the delta region establish an economic development and innovation road map to make similar resources in the region more visible.

"The German government has set up a map integrating enterprises, research institutes, universities, testing facilities and factories involved in industry 4.0 to contribute to a more coordinated plan for the entire nation," he said.

Japan's experience of building its city clusters through layout of diversified industries from the entire region offers lessons, they said.

"For example, Kawasaki, which is in Tokyo's metropolitan area, has been ranked top in the country for technological service, and Utsunomiya has been forged into a research, development and manufacturing base for robots and precision machinery in the area," said Zhu.

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529290.htm Cities in the Yangtze River Delta region will work together to construct a digital trade platform allowing cross-border e-commerce to play a vital role in driving economic development.

According to a guideline issued earlier this month, the region will speed up the construction of comprehensive cross-border e-commerce pilot zones in selected cities including Shanghai, Nanjing, Hangzhou, Hefei, Ningbo, Suzhou, Wuxi and Yiwu, which will work together to build a global digital trade highland.

Besides, the region will promote the transformation of foreign trade business processes and data sharing, and promote the digital transformation and facilitation of trade supervision.

In addition, new models, rules and standards of global e-commerce will be formulated to strengthen the construction of digital platforms and promote innovation in international trade systems, management and services.

This marks a substantial step forward in combining experiences from some of the region's major trial zones to see what possible synergies can be generated to form new best practices, said Petrel Tang, a partner at professional service firm PwC Strategy&.

"Shanghai has initiated the first nationwide FTZ, and its array of duplicable experiences in negative list, trade facilitation and financial innovation can be referenced by other cities," she said.

Meanwhile, other pilot zones can share their strengths in their respective areas of focus, such as in the field of cross-border online merchandise settlement, she said.

For example, Yiwu, a city in Zhejiang province known for manufacturing and exporting small commodities, is being highlighted in the guideline for its role in promoting free trade and helping Chinese products gain more exposure worldwide through digital sales channels.

The city has taken the initiative to join the so-called electronic World Trade Platform with Alibaba Group, with an aim of lowering barriers to global trade for small and medium-sized enterprises.

Under the agreement, the tie-up will focus on digitizing trade infrastructure and developing additional trade flows for the city. The venture will also focus on innovations in trade finance and establish a smart logistics hub there.

"The signing of the agreement shows that the two biggest markets, online and offline, are joining hands to create new trade rules, together with SMEs and micro businesses around the world," Lin Yi, secretary of the Yiwu Municipal Committee of the Communist Party of China, was quoted by Xinhua News Agency as saying in June.

This is likely to spark cooperation with other like-minded initiatives such as year-round exhibition of imported goods by Donghao Lansheng Group, under the auspices of the China International Import Expo.

Both physical and digital exhibitions have gone online to connect merchants and buyers via logistics, custom clearance, foreign exchange, insurance and payment services, according to company chairman Wang Qiang.

Dora Liu, innovation lead at Deloitte China, believed the traceable flow of information online will facilitate matchmaking of resources by mining relevant data, therefore making cross-border trade easier and more attainable.

 

Customers shop at a brick and mortar store of a cross-border e-commerce firm in Yiwu, East China's Zhejiang province. XINHUA

 

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/17/content_37529326.htm Energy giant State Power Investment Corp signed an agreement with eight strategic investors on Monday to raise 24.2 billion yuan ($3.46 billion) from the China Beijing Equity Exchange for its subsidiary Huanghe Hydropower Development Co Ltd.

In exchange, the investors, including China Life Insurance Group Co, Industrial and Commercial Bank of China, and Agricultural Bank of China, will get a 34.97 percent stake in the subsidiary.

The fundraising is the largest among all the mixed ownership reform programs for State-owned enterprises so far, and also is the largest equity financing project in domestic energy and electricity sector, said Qian Zhimin, chairman of SPIC.

The move reflects the company's unwavering efforts to deepen mixed ownership reform and to contribute to China's commitment to build a clean, safe and efficient energy mix, he said.

Zhou Lisha, a researcher at the research division of the State-owned Assets Supervision and Administration Commission, said the transaction demonstrates win-win cooperation from the participants in mixed ownership reform based on market mechanisms.

"Clean energy development needs large amount and long-term investments, and through equity financing, SPIC's equity shares of the subsidiary are transformed into capital it needs through fair and market-based pricing," she said.

"At the same time, modern corporate management experiences from the investors are brought into the company, and once clean energy projects are on stable track, they will provide steady, lasting cash returns to investors."

The company said money raised through the transaction will be invested in several photovoltaic and wind power projects in Qinghai province with capacity totaling 4.05 million kilowatts, which is close to new clean energy capacity the subsidiary had in the past 10 years.

It will also accelerate the integration of high-quality clean energy assets in related regions and strengthen utilization of capital markets after the equity transaction, to boost its presence as a world-leading clean energy player, the company said.

Data from SPIC showed clean energy capacity accounted for 50.07 percent of its total energy capacity by the end of November, hitting 73.5 million KW. The company's solar electricity generation and clean energy capacity have topped in the world and China respectively.

It has 324 subsidiaries with mixed ownership, which have brought in 25.2 billion yuan of private capital. Through mixed-ownership, the company has built an additional 253 new energy projects, using 6.7 billion yuan of investment from the private sector.

 

 

 

]]> 2019-12-17 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529186.htm Medical treatment in China will increasingly evolve from the current model of patients seeing doctors exclusively in physical hospitals into a combination of initial offline consultations with online follow-up consultations, or the offline-to-online (O2O) model, providing improved efficiency and convenience, industry experts said.

Xie Fangmin, CEO of Jianke.com, China's leading business-to-consumer pharmaceutical e-commerce platform, believes that it is well-positioned to support healthcare providers to embrace this online future.

Jianke's telemedicine software provides each registered doctor with a unique QR code. After an initial offline consultation, patients scan this code using their mobile phone to establish a doctor-patient relationship through Jianke's platform, which facilitates online follow-up consultations and electronic prescriptions and prescription refills.

During its 2019 Partnership Summit, the Guangdong-based company announced its strategic plan for 2020 and beyond, aiming to develop a smart hospital of the future, and expanding from its original "services plus pharmaceutical products" operating model into a true "Hospital to Home", or H2H enabler.

"By leveraging technological advancements, common medical services, drug services and chronic disease management can move from hospitals to patients' homes. This will improve the patient experience, enhance the availability and accessibility of medical services and medicines, thereby providing patients with an improved quality of life," said Xie.

He noted that the H2H model has the potential to break down traditional barriers to healthcare access in China, where medical care is still largely delivered offline at physical hospitals. At the same time, it can also help transform the entire healthcare paradigm from disease treatment to preventive care and comprehensive health management.

"We believe that our model can be especially beneficial to patients suffering from chronic illnesses, such as liver disease, diabetes, cardiovascular and neurodegenerative diseases," he said.

According to a report from Beijing-based market consultancy Analysys, in 2019, the online transaction volume of prescription drugs is estimated to grow by 42.1 percent year-on-year, while that of offline hospitals and retailers will only increase by 4.3 percent.

Meanwhile, data from the National Health Commission showed that in 2017, China's online healthcare market reached 32.5 billion yuan ($4.6 billion), 45.87 percent higher than that of the previous year. Industry experts estimated the market will grow to 90 billion yuan by 2020.

Cheng Ji, deputy secretary-general of the Life Oasis Foundation of the China Primary Health Care Foundation, said that with the help of internet-based healthcare, prescription drugs that would have originally taken over 10 days from prescription to delivery to a patient's home now take only three days.

"Once a patient has purchased medicine from physical hospitals or offline retailers, they can obtain prescription refills online afterward," Cheng said.

Xu Jiawei, China business unit head for Cialis and retail distribution at Eli Lilly and Co, said that e-commerce healthcare has transformed the nature of the digital media.

"Using the communication power of the internet, information can be conveyed to patients directly. E-commerce links hospitals and pharmacies to form a complete healthcare ecosystem, which includes online consultation, offline referral, electronic prescription and drug delivery," he said.

In April 2018, the State Council, China's Cabinet, issued new guidelines to promote internet-based healthcare, encouraging medical institutions to leverage internet-based technologies to improve the efficiency of medical services.

In August 2019, the National People's Congress released an amendment, offering further guidance to expressly permit the sale of prescription drugs online.

Xie from Jianke noted that the H2H model enables doctors to serve patients with greater precision. "In the future, we believe that the H2H model will continue to develop in coordination with changes to social insurance and pensions, while creating value for all stakeholders."

By the end of October, 100,415 doctors were registered on Jianke's telemedicine platform, growing 2,500 percent year-on-year. Jianke's H2H business unit also partnered with 114 pharmaceutical enterprises, ranking first in the industry, while facilitating 1.6 million online electronic prescriptions.

 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529236.htm KUNMING－Vivian Wu, an experienced online travel business professional from the United States, has been busy meeting her Chinese suppliers and seeking opportunities at the 2019 China International Travel Mart or CITM, which concluded on Dec 1 in Kunming, capital of Southwest China's Yunnan province.

Wu has been working in the online hotel business for the China market since 2004 and began to expand her career in the online tour business segment in 2015 for TripAdvisor, an online travel platform.

"In the past 15 years, China's online travel industry has grown rapidly. The China market has huge potential no matter if it's from the perspective of local tour operators or the consumer booking behavior," said Wu, regional manager of Greater China, TripAdvisor Inc.

In early November, TripAdvisor Inc reached a strategic partnership with Trip.com Group Limited, China's largest online travel agency, to expand global cooperation, including a joint venture, global content agreements and a governance agreement.

The strategic partnership will expand TripAdvisor's global reach and help outbound Chinese travelers plan more meaningful trips, said Wu, who has participated in the CITM many times.

"I am here to look for potential targeted suppliers and to understand the latest market trends of China's tourism. Of course, it's also a great opportunity to catch up with many of my existing suppliers from all over China," she said.

Wu said she found that traditional offline tour operators are starting to pay much more attention to online business. They also have a strong desire to cooperate with online travel agencies.

Founded in 1998, the CITM has grown into one of the largest and most influential tourism fairs in the Asia-Pacific region.

The three-day event, sponsored by the Ministry of Culture and Tourism, the Civil Aviation Administration of China and the provincial government of Yunnan, attracts representatives and exhibitors from 75 countries and regions.

Tourism has become an important engine to power global economic growth with the total number of inbound and outbound tourists in China reaching 291 million in 2018, up 7.8 percent year-on-year, according to Luo Shugang, minister of culture and tourism.

China's cultural and tourism departments at all levels will continue to expand the industry, promote international cultural and tourism exchanges and cooperation, and provide more opportunities for all countries, he said.

Jacob Iwikua, journey coordinator of Scenic Luxury Cruises and Tours, an Australian company, said it was his first time to travel in China and participate in the CITM. But he has worked in China's inbound tourism industry for years.

"We send about 3,000 tourists from Australia, the US and the UK to China each year. The top destinations on their list include Beijing, Shanghai, Lijiang and Shangri-La," Jacob said, adding that he will visit some scenic spots in Yunnan this time to find more business opportunities.

"There is certainly a lot of potential in China's tourism market. It's an ever-growing market, especially for Australian guests," Jacob said.

 

 

 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529230.htm Corporate China is embracing in-depth digital transformation, and has led the world in the digitalization of consumer-oriented products or services, backed by its strong market vitality and large talent pool, experts said.

E-commerce, mobile payments, retail, finance, entertainment … China's corporate sector has made significant progress in such segments in terms of digitalization, driven by the internet-savvy consumers, said Jeongmin Seong, senior fellow at the McKinsey Global Institute, a consultancy.

In 2005, the country contributed only 1 percent to global e-commerce sales. But, by last year, that figure skyrocketed to 46 percent, according to McKinsey research. The penetration of mobile payments in China is three times higher than that of the United States, it said.

Seong said China has a large market for digital consumption with its 850 million netizens and over 200 million "data natives"－those 25 years old or younger, who were born and grew up with the rapid development of the internet. They are more willing to pay for new digital services.

Besides, piles of digital companies spring up every year, which creates fierce competition and cutting-edge innovations. The government also provides free space for companies to make early-stage market trail, all resulting in the boom of the digital economy, he said.

Last year, China's digital economy reached 31.3 trillion yuan ($4.45 trillion), accounting for 34.8 percent of the country's GDP, data from the China Academy of Information and Communications Technology showed.

"It is no secret that digitalization has become one of the main arteries powering the pulse of the global economy and also a strong driver of the ongoing, comprehensive transformation of China's economy," said Wang Yanping, general manager of public affairs at LinkedIn China, an online social network for professionals. He was speaking at the release of a report co-published by the School of Economics and Management of Tsinghua University and LinkedIn China in October.

Digital transformation of industries can also be reflected in talent flow from information and communications technology (ICT) industries to various fields, according to the report.

According to another report released by the two institutes in November, by then, the proportion of digital talent in non-ICT industries was higher than that in ICT industries globally. Among non-ICT industries, those with the highest proportion of digital talent were manufacturing, healthcare, finance, corporate services, consumer goods, education and social media.

"This is a promising indication that digitalization is expanding into traditional industries beyond ICT," said Chen Yubo, Party chief of the School of Economics and Management of Tsinghua University.

Shanghai and Shenzhen are among the world's top five most attractive cities for digital talent, together with Dublin, Santiago and Bangalore, the report showed.

The scale of the digital talent pool in the Beijing-Tianjin-Hebei region, the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area－three major city clusters in China－has also grown rapidly in recent years, though the proportion is still relatively low at around 20 percent, compared with other overseas regions with developed digital economy like the Boston-Washington city cluster, the San Francisco Bay Area and Bangalore, it said.

Industries with the largest proportion of digital talent in the above three Chinese city clusters include manufacturing, finance and consumer goods, which conforms to the orientation of industrial development of the regions, Chen said.

Besides, China's digital transformation has also begun to shift from the consumer side to the supply side, as more digital talent is hired by traditional industries, the report showed.

"The continued growth of the digital economy remains primarily dependent upon the digital transformation of traditional industries, and this part of the integrated digital economy has also become the driving force behind China's economic growth," Chen said.

Jia Jin, head of the technology group at Accenture China, said digital transformation is also of key importance to companies to survive in the fiercely competitive market.

The automobile industry, for example, experienced an overall drop in sales in the Chinese market last year. But, three companies－SAIC Motor Corp, BYD and Geely－saw an over 20-percent increase in revenue in 2018, thanks to their effort to adopt digital tools in production and marketing, he said.

"Digitalization helps reduce costs, improves clients' experience and helps brands to differentiate themselves from their counterparts, which helps revenue to grow," Jia said. "It's possible for any company to become a leader in its industry if it advances in digital transformation."

He suggested companies should incorporate a comprehensive digital strategy in their operations from marketing and supply-chain to product design and production, to provide differentiated experiences to consumers.

 

 

 

 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529222.htm Artificial ... no, not intelligence ... artificial skin, anyone?

Specialized application of 3D printing is spawning a multibillion-yuan business segment in the medical and healthcare industry, making customized, even personalized, health and wellness solutions possible in China.

From surgical preparation and guides to manufacturing of dental and orthopedic implants, and medical tools and devices ... all are now products of 3D printing, a term for additive printing that applies successive layers of materials to make a three-dimensional object from a digital model.

The development is part of a global trend. Research firm International Data Corporation or IDC expects worldwide spending on 3D printing to be nearly $22.7 billion with a five-year compound annual growth rate of 19.1 percent by 2022.

As spending by the healthcare industry rises, dental objects and medical support objects will become the fourth-and fifth-largest use cases in 2022.

The fastest spending growth will be seen in tissue, organ and bone (42.9 percent CAGR), and dental objects (33.1percent CAGR), IDC predicts.

Although no reliable reports are available on 3D printing in China's medical industry, Chinese 3D printing companies are making their mark on the medical sector nevertheless. In some areas, they even lead the global pack as the cutting-edge technology is being adopted in China at a rate higher than that in most countries, industry people said.

Medprin Regenerative Medical Technologies Co Ltd, a Guangzhou-based medical device producer, has made biological 3D printing a core technology to develop high-end medical products and devices for precisive medicine.

The company said it is developing a dozen of human tissue repair products, including personalized skull and maxillofacial (relating to the jaws and face) repair system, artificial skin, blood vessels and ligament among many others, to lay the technical foundation for the future development of more advanced artificial tissues and organs.

"Medical 3D printing is developing very fast in China, and in the field of biological 3D printing, our technologies are almost as advanced as international leaders," said Deng Kunxue, director of the company's medical research and development department, and chief technology officer.

"3D printing of cells is the basis for bioprinting functional organs, and we just need more support from government regulation to realize clinical use.

"In the future, organ transplantation may become as easy as changing a component."

The company, one of the top world players in medical 3D printing, has more than 130 patents granted from regulators in the United States, Russia, Japan and China. And more than 130 patent applications are pending approval at home and abroad.

Its flagship 3D-printed biological dura mater (ridge) membrane, called ReDura, a replica of tissue covering the brain, has been used in more than 70 countries and regions benefiting more than 300,000 patients, Medprin said.

The product is closest to patients' autologous cells with the best repair effect, because of a special 3D printing technology applied, the company said.

Only 0.2 millimeter thick, the membrane has multiple and interweaving pore structures formed by numerous microfibers, which is very conducive to the migration and growth of cells, so that new tissues can grow very fast to repair the defective meninges.

Guo Zheng, deputy chief of the digital orthopedics department of the Chinese Medical Association's medical engineering branch, said Chinese companies will be able to design and produce all that is needed in 3D printing within two to three years, from printers, materials, to software, because of their rising R&D investments, although China still needs to import certain printing materials and core printer components.

"Some domestic companies are already capable of producing 3D printers that have even higher precision than imported ones," he said.

"As for clinical research and use of 3D printing technologies, China is already among the pioneers, driven by spirited innovation."

Applications of 3D printing in surgical preparation, and surgical guides and implants design and manufacturing, can maximally customize surgeries to meet individual patients' needs, he said.

China's 3D printing-related clinical research, design and applications caught up fast in the past few years although the technology was first invented in the US, mainly because China's more flexible 3D printing medical research and application regulatory policies, compared with many other countries, give enough room for innovation, he said.

Guo, who is also deputy president of the orthopedics branch of Xijing Hospital in Xi'an, Shaanxi province, said his team has been conducting research on new biodegradable materials to 3D-print orthopedic cages, and their research findings are to be tested by clinical trials soon.

AK Medical Holdings Ltd, a medical device company in China's orthopedic joint implant market, started to apply 3D-printing technology in orthopedic joint and spine replacement implants design and manufacturing in 2009.

In 2015, its first 3D-printed hip implant product was commercialized. Now, it has three 3D-printed orthopedic implant product series in the market, and has become the largest 3D-printed implant providers in Asia-Pacific.

A Hong Kong-listed company, its financial reports showed that sales of 3D-printed products reached 51 million yuan ($7.25 million) in the first half of this year, soaring from merely 10 million yuan in 2015.

Li Zhijiang, chairman and CEO of the company, said the spurt in domestic 3D-printed implants, from an increasing number of Chinese companies eyeing 3D printing market, has become an important force to challenge foreign companies' dominance in the high-end implants market in China, including helping lower high prices of foreign products.

The company's 3D products, approved by Chinese regulators as standardized implants, have already entered some Belt and Road economies, such as Indonesia, Pakistan, and Saudi Arabia.

The company plans to replace imported materials and devices with domestic ones in the manufacturing of its 3D products as soon as the authorities concerned approve them.

It is also co-developing customized 3D-printed implants with top Chinese research institutes, which will have higher compatibility and stability than standardized ones.

The newly released government guidelines on supervision and management of personalized medical devices, which will come into effect in January, will further boost medical application of 3D printing in China, because the new regulation exempts review and approval process for customized medical devices that treat rare conditions or meet unmet clinical needs, Li of AK Medical said.

Kang Xuan, general manager of Becoming Digital Dental, a Shenzhen-based startup specializing in digital dental applications, said 3D-printing technology is reshaping China's dentistry industry.

The world's most populous nation, China faces severe shortage of dental professionals, especially in rural areas, and 3D printing can help ease the situation, because it provides more cost-efficient solutions, she said.

From fabricating customized and accurate dental devices like braces, bridges, and implant guides, helping doctors simulate procedures on special software and 3D-printed models, to training young doctors, 3D printing technology can speed up diagnosis and treatment, minimize risks, and standardize procedures. It can thus help enhance dental care service quality, especially in underprivileged areas, she said.

However, 3D printing applications in the medical field could harm patients if they are not properly used or regulated, said Wang Xudong, a reputed oral and maxillofacial reconstruction specialist with Shanghai Ninth People's Hospital, which is affiliated to the Shanghai Jiao Tong University School of Medicine.

Chinese authorities have approved several standardized 3D-printed medical implants for market use, but personalized 3D-printed medical implants can only be used in clinical trials under current regulation, he stressed.

Although the newly released guidelines on personalized medical devices only ask for registration of some customized products, they still require review and approval of the rest of personalized medical devices. An integrated policy on review and approval of 3D-printed medical devices is expected soon.

With companies plunging into the industry without complete understanding of 3D printing's medical applications or restraint, there could be medical incidents. Even scandals that could damage the healthy development of the sector can't be ruled out, he warned.

 

MA XUEJING/CHINA DAILY

 

 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529187.htm China is currently in the midst of a long-term transformation of its national business model. Earlier growth was based on the nation's comparative advantage at the time－low-cost labor combined with good infrastructure and a business environment that was acceptable for low-wage manufacturing. This business model enabled China's growth for more than 30 years and allowed it to raise almost all of its people out of extreme poverty.

Using this growth model, the country has reached the status of an upper middle-income country. But it is crucial not to get stuck in the so-called middle-income trap.

The Central Economic Work Conference last week, a gathering of China's top leaders to discuss economic issues and reform plans in detail, decided China will deepen supply-side reform and will maintain its proactive fiscal policy and prudent monetary policy.

Contingency plans are prepared to deal with "rising downward economic pressure amid intertwined structural, institutional and cyclical problems."

There has been a lot of breathless talk in the press about the decline of the GDP growth rate in the third quarter of 2019 to 6 percent, which is the slowest in 27 years. And, next year's GDP growth rate numbers are expected to be at around 6 percent or lower.

But this decline in raw GDP growth is to be expected and should be considered a sign that Chinese macroeconomic policymakers are allowing the economy to make the transition to slower but higher quality growth. This is much better than if they were using excessive monetary stimulus to try to maintain the old growth model.

Trees don't grow to the sky and no country can grow at 7 or 8 percent forever. China's 40-year run of growth at that level is unprecedented. Such growth is possible only in a situation where large inputs of capital are needed and where the country is a follower using well-known international technology. China has outgrown that stage and now has to focus on leading-edge technology and on efficiency improvements.

In order to enable the transformation to an economy based on higher value-added production and sustainable demand, the government has emphasized structural reforms and is taking a large number of systematic steps to enable the economy to move up the value scale.

Recently, the government has focused on improving the business environment for both domestic and foreign companies. In the World Bank's latest Doing Business 2020 report, which traces how world economies are implementing reforms to encourage efficiency and support freedom to do business, China's overall ranking climbed 15 places to number 31 in the world.

The October 28-31 Fourth Plenary Session of the 19th Communist Party of China Central Committee explicitly set, for the first time, "promoting modernization of the country's governance system and governance capacity" as the overall goal of comprehensively deepening reform. This stress on the rule of law in economic and other affairs is hugely important in that it provides a level and predictable playing field for competitive companies.

Also, this year, taxes on the private sector were cut by about 2 trillion yuan ($286 billion). The Central Economic Work Conference signaled that these tax cuts will continue or be increased. Furthermore, banking reforms are encouraging banks to make capital available to small businesses.

Recent reforms also encourage international companies to compete in the Chinese domestic market. For example, the government has switched to a negative list－meaning that foreigners can invest in any sector not explicitly prohibited.

Plus, in many sectors, foreign companies are now allowed 100-percent ownership and are treated the same as domestic companies. This foreign competition will increase the competitiveness of the already highly competitive Chinese economy by forcing all companies to compete at the highest international standards.

Investing in scientific and industrial research and development allows China to move to the leading edge of science and technology. Building the infrastructure to take advantage of the coming fourth industrial revolution based on artificial intelligence, 5G, and the internet of things is preparing China for the economic opportunities of the 2020s.

No transition is painless. As new higher value-added industries develop, some of the old industries will have to move or go out of business. Some companies that had business models dependent solely on cheap labor will not be able to keep up with the upgrading process. It is important not to try to preserve zombie companies that cannot compete in the new economy.

The success of many companies in making the transitions is confirmed by the data showing that profits of the high-tech manufacturing sector rose 7.5 percent year-on-year from January to October. Companies are being rewarded for real improvements in product quality or productivity.

Some people will lose their jobs, but that is to be expected and is normal. It is actually good, provided that most of them are able to find other, often better-paying jobs, in rising industries. In recent years, the government has strengthened the social safety net to make the transition easier for workers.

How do we know the transition is working? Though not mentioned as often as metrics such as the topline GDP growth rate, the growth of real average wages is actually the best measure of how well an economy is doing. After all, the whole purpose of economic growth is to make a nation's people better off.

Companies cannot pay workers more unless they are producing and selling more valuable products. Average yearly wages increased from 37,143 yuan in 2010 to 82,461 yuan in 2018, according to the National Bureau of Statistics. Adjusting for inflation, this means that real wages have more than doubled. This would not be possible unless both the value-added of products has gone up and the skill-level of the workers has gone up.

It's also a good thing that workers are able to move out of low-skilled jobs to higher-paying, higher-skilled ones. A list of 100 professions that have major workers shortages recently issued by the Ministry of Human Resources and Social Security found that vacancies for sales positions, cashiers, restaurant waiters, security guards and custodial workers topped this list. Of course, this demand for low-skilled labor will drive up wages－making average people better off.

There is also strong demand for skilled manufacturing professionals, including lathe operators, and porters, according to the ministry.

Some stimulative macroeconomic policy may help smooth the transition and make it easier for companies and workers to adjust. It is crucial that stimulus will not be used to halt the transition to slower but higher quality growth. Instead, enabling China's transition to a higher income, higher tech, higher value-added economic model is the key goal of policy.

 

 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529220.htm Reviewing China's employment data in the first three quarters, 10.97 million new jobs had been created in cities and towns, meaning that 99.7 percent of the annual target had been achieved, which slightly slipped from 11 million new jobs in the same period last year.

In general, employment in the manufacturing sector may be under pressure due to the downward economic cycle, but the overall employment situation in China remains stable.

Since 2010, China's economic growth has been slowing, but it did not increase unemployment. US economist Arthur Okun propounded a theory in the 1960s that the relationship between unemployment and GDP growth rate varies by country. It means higher growth reduces unemployment, while lower growth can make more people lose jobs.

But clearly, that didn't happen in China. The contradiction between the current slowdown and the continuous improvement in the employment level is obviously not in line with the "Okun's Law".

Let's look at the steady increase of new jobs in the urban areas. In theory, during an economic downturn, the unemployment rate will rise because of weaker demand and lower capacity utilization.

But the truth is, in China, instead of seeing any signs of deterioration in the level of domestic employment, the government raised the target of new employment in the urban areas from 9 million to 10 million in 2014. It increased it again to 11 million in 2017. According to 2018 economic data, 13.61 million new jobs were created in cities and towns, 100,000 more than the previous year.

Data from the Ministry of Human Resources and Social Security showed that from the fourth quarter of 2011, the supply-demand relationship in China's labor market has been reversed, and the supply could not meet the demand any longer.

According to Okun's Law, the relationship between the unemployment ratio and the GDP growth rate is this: when unemployment increases by 1 percent higher than the natural rate of unemployment, the real GDP will fall by 2 percent lower than the potential GDP, or the "output gap".

Therefore, if the potential GDP growth rate of a country does not change in the short term, the size of the output gap is directly determined by the real GDP growth rate, which also determines the employment level of the country to a large extent. However, if the potential GDP growth changes, the situation will become more complex.

Thanks to the great contribution of the vigorous services sector in the past few years, an important feature of China's economic development has been the structural reform and industrial transformation and upgrading. The driving forces of economic growth are shifting from exports and investment to consumption, along with the rising share of the services sector.

In 2013, the share of the services sector exceeded the manufacturing sector for the first time, and then exceeded 50 percent for the first time in 2015. As of the first three quarters of this year, the proportion of services had exceeded 54 percent. While the proportion of services has increased, the labor force of the whole society has also been flowing into the services sector.

From 2012 to 2018, labor in the services sector accounted for 46.3 percent of the total amount, up by 10.2 percentage points, but the proportion of labor in the secondary industry (including the industrial sector and the construction sector) decreased by 2.7 percentage points to 27.6 percent in the same period.

So, we believe that the slowdown in economic growth and the stability of the employment market in China are largely attributable to the vigorous development of the services sector in the process of economic transformation in recent years.

Compared with manufacturing, services are labor-intensive. Especially in the initial stage of the economic transformation, the relatively low-end consumer service industry (related to food, clothing, housing and transportation) developed fast, and the features of its labor-intensive nature were more obvious.

The development of the labor-intensive services sector will bring two results: on the one hand, effects of absorbing the surplus labor force are obvious. Even when the surplus labor force is exhausted, there is a situation of competing for labor with manufacturing, resulting in the labor flows from manufacturing to services.

On the other hand, compared with capital-and technology-intensive industries, the labor-intensive services sector always has lower productivity, which will average down the potential growth rate of the whole economy. And this effect will gradually increase along with the expansion of the services sector's share.

China will maintain medium to high economic growth in the future. For, in the process of economic transformation, the central line of China's potential economic growth rate may continue to drop, due to the continuous increase of the proportion of the services sector.

If the government still hopes to maintain the real GDP growth rate at a relatively high level, through the counter-cyclical adjustments of monetary and fiscal policies, it will lead to higher inflation and asset price bubbles.

On the contrary, if the goal of monetary and fiscal policies is to drive the growth rate of real GDP closer to the potential growth rate, the real GDP may remain at a relatively low level, or even continue to decline.

In fact, we have seen that the government will focus more on promoting the structural reforms in the future to improve the quality of economic growth. At the same time, for making the macroeconomic policies, both monetary and fiscal policies should be targeted and more attention should be paid to their effectiveness, while avoiding a deluge of strong stimulus policies.

So, do we need to worry that in the process of transformation, the continuous expansion of the services sector's proportion will endlessly pull down the potential economic growth rate? The answer is "not necessarily".

A large number of studies showed that, in fact, the proportion of labor force in the services sector and the proportion of outputs of service businesses are not necessarily linear with the real GDP growth.

After reaching a certain point in time, the services sector can accelerate economic growth, so it shows a "U-type" relationship between the proportion of the services sector and the economic growth rate, especially when the services sector is the intermediate input of production.

In view of the rapid development of the consumer service industry related to the daily "food, clothing, housing and transportation" of residents during the transformation process, the overall labor productivity of the services sector has declined. But at present, the services sector's production-oriented segments such as finance, communications and business services have also begun to speed up.

These production-oriented segments not only have a large growth space of their own labor productivity but as intermediate inputs of the manufacturing sector, the improvement of their labor productivity will directly promote the improvement of manufacturing labor productivity.

If the development of production-oriented services segments is fully developed in the future, China's economic growth will maintain a medium to high growth in the long run after the current slowdown is ridden out.

 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529216.htm LONGi Green Energy Technology Co, one of the world's largest manufacturers of monocrystalline silicon photovoltaic or PV products by market share, will continue to expand the production capacity of its overseas plants and add branches in economies participating in the Belt and Road Initiative.

Opportunities come from many countries' demand for clean energy products that can help in coping with climate change, achieving emission cut targets and saving on energy costs for their residents, said Li Zhenguo, LONGi's president.

The Xi'an-headquartered group operates a manufacturing base with over 4,000 employees in Malaysia. Now, as it moves to the next development stage, LONGi has plans to build branches in other countries, including India, Australia and Brazil, to further compete with other established rivals. It provides solar-related products from raw materials to monocrystalline silicon PV products to clients across both China and the rest of the world.

Li said China's clean energy revolution has generated a decisive influence on the economies participating in the BRI, and the development of PV technology has made clean energy no longer a luxury power source but an affordable commodity.

The PV industrial chain includes five major components, to wit: silicon materials, silicon wafers, cells, modules, and surface power stations. In the past decade, Li said the cost of PV modules has dropped from about 40 yuan ($5.68) per watt to less than 2 yuan per watt with a drop of more than 90 percent.

The cost reduction refers to the cost reduction of all links in the whole industry chain. It can directly reduce the per-watt investment cost of the power station.

Unlike some developed countries which already have mature power generation infrastructure, facilities in many countries or regions are at the early stages of development, which means more opportunities for Chinese solar power manufacturers, Li said.

Thanks to the growing demand of global markets and trade globalization, LONGi built a plant in Kuching city, Malaysia, the company's first overseas manufacturing facility for monocrystalline silicon wafers, in 2016.

The company expanded its operations in Malaysia by building a 1-gigawatt monocrystalline cells plant, at a cost of 840 million yuan in February this year. The move helped the company to cope with rising operational costs and minimize the effect of the ongoing China-US trade dispute.

The group currently ships 60 percent of its solar products overseas, including to the US, India, Japan, Germany and other countries in Europe and Southeast Asia.

Established in 2000 by Li and his partners, LONGi initially focused on technical innovation in the semiconductor sector. It seized the opportunity in raw material supply of silicon wafers and forayed into monocrystalline silicon wafers in the next few years.

Supported by more than 21,000 employees and years of technology evolution, LONGi today has developed a number of business segments from PV power generation equipment to solar power station systems, as well as a monocrystalline industrial chain.

Its sales revenue in 2018 was 21.99 billion yuan. Sales revenue jumped 54.68 percent year-on-year to 22.69 billion yuan in the first three quarters of this year.

Confident about the future prospects of the PV sector, Li went to Paris to attend the 2019 Fortune Global Forum in mid-November. There, he shared his views that PV power plus energy storage will be the mainstream energy supply solutions in the future.

As a representative of China's private companies, Li said China's ongoing industrial upgrading boom will push innovative companies to seek bigger space in the market.

With the global green transformation on, and led by China's acknowledgement that natural environment is an invaluable asset, new energy, especially PV power, has drawn surging attention at both home and abroad.

Along with the evolution of technology, the cost of energy has been dropping accordingly and PV power generation will shake off the impression of being expensive, said Li.

The National Energy Administration issued a notice on the Publication of the Results of the National Subsidy Bidding for 2019 PV Power Generation Projects in July, announcing that based on the principle of fairness, 3,921 projects with total installed capacity of 22.79 GW in 22 provinces, autonomous regions and municipalities such as Beijing and Tianjin have been included in the 2019 national bidding subsidy, initiating the first step of the marketization of China's PV industry.

Li believes that the entire PV industry in China will usher in fully market-oriented opportunities, after achieving the grid parity, without any need for government subsidies. Fewer subsidies in the overseas markets correspond to the market-oriented practice.

"Therefore, as the cost of establishing PV stations becomes much lower, there is no need for subsidies in China, and the world will also enter the growth phase of demand explosion," he stressed.

Agreed Sun Fuquan, a researcher at the Chinese Academy of Science and Technology for Development in Beijing. He said China's ability in cost control, in terms of unit production cost, will continue to provide companies with an advantage if they bid for projects in overseas markets.

He said the terminal electricity prices in many countries remain relatively high, and the development of renewable energy sources such as PV and wind power offer competitive alternatives.

Apart from the energy cost, it is critical to take steps to deal with climate change. China is willing to continue cooperating with global partners to advance emission cuts, climate adaptation and sustainable development. The country will also push for global free trade and a rule-based multilateral trading system, Sun said. 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529199.htm UL, the Illinois-based safety certification company, plans to add more facilities in China's central and western regions over the next three years, having built a solid presence in the country's coastal regions, said a senior executive.

Boris Feng, vice-president and managing director of UL China, said internet-connected technologies, supply-side structural reform, industrial and consumption upgrades will present more opportunities for testing, inspection and certification services in China.

UL invested in its first global battery laboratory for power storage in Changzhou of East China's Jiangsu province in July. The Changzhou laboratory is expected to be operational in April 2020.

Feng said the group will build more labs in China's inland areas as domestic companies' demand for both exports and digital technologies to improve production efficiency has notably surged in recent years.

Under the plan, the Changzhou lab will provide a clutch of safety tests and solutions. These will include the following: battery safety design, battery performance and reliability verification, battery management system, functional safety, vehicle-to-grid charging solutions, grid integration, battery echelon utilization, energy storage systems and functional safety services to China's new energy vehicle manufacturers and power battery makers.

"China's industrial upgrade was inevitable," said Feng. "Even though many people these days are saying that manufacturing is shifting outward, this is a positive signal, because China's development has reached a certain level and it is reasonable to conduct international industrial capacity cooperation."

He said more digital solutions and sensors are being used on a large scale in Chinese factories. Carried out by industrial robots, the manufacturing process does not require human intervention.

"Our operation in China has to keep attempting to integrate global experience with local demands, and pay more attention to those emerging industries," he said, noting the country's upgrades across both software and hardware platforms must keep pace with manufacturers' high demand for innovative services.

Supported by nearly 3,000 employees in China, UL runs six labs across Suzhou, Shanghai, Guangzhou, Dongguan and Shenzhen. With its certification services and expertise in different fields, it assists domestic manufacturers from different industries exporting their products to global markets

With a growing number of Chinese companies shipping products to various overseas markets, securing foreign certificates has become popular and necessary. Therefore, if these Chinese companies want to expand their businesses abroad, they have to meet other countries' standards for product safety and compliance, he said.

In addition to providing testing and certification services to fire safety and consumer electronics products, the firm has entered the areas of consumer and industrial goods in China, including automobiles, clothes, toys and groceries, as well as non-physical products, such as software and driverless security.

Zhao Ying, a researcher at the Beijing-based Institute of Industrial Economics, which is part of the Chinese Academy of Social Sciences, said that rising incomes, accelerating urbanization and diversified food options in China are further driving demand for safer food and industrial products, as well as quality consumer goods, such as furniture, vehicle parts and cosmetics.

Attracted by China's population base, more manufacturing and consumer goods are now produced and sold in China than anywhere else, he said, adding Chinese shoppers are also keen to know the quality of the products they purchase.

UL's Feng said the Belt and Road Initiative will lead to notable prospective benefits to both China and other parts of the world as it has proved to be a strong force linking people and economies via cross-border activities with the potential that many regions can achieve social prosperity.

Because of the improvement in infrastructure, transportation, and healthcare, digital-related manufacturing in economies is able to restore strength of the global economy, he said. UL will continue to work with its partners such as the Saudi Arabian Standards Organization to provide services for businesses participating in the BRI in the long run.

UL entered the Chinese market in 1980, and has so far provided testing and certification services to over 22,000 local manufacturers across the country.

The US company currently has over 14,000 employees globally, distributed across its connected technologies business unit, and the retail industry business unit. 

 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/16/content_37529221.htm The first time I heard about 3D printing's medical application in China was in 2013, when the orthopedics department of Peking University Third Hospital, a top hospital in China, announced promising results of a clinical trial using enhanced titanium implants produced by a 3D printer.

Since 3D printing can virtually produce implants in any shape as a digital model instructs, 3D-printed implants match better with the bones around them than traditionally manufactured ones, which are usually geometric patterns and cannot attach to bones firmly without additional cement, screws or fixing plates.

In 2016, the hospital doctors implanted 19 centimeters of 3D-printed spine parts to replace a patient's cancer-riddled vertebrae, saving his life. The hospital co-developed those lifesaving 3D-printed implants since 2009 with AK Medical Holdings Ltd, a domestic leader in orthopedic joint implants market. In 2015, the company became the first in China to receive market approval for 3D-printed metal implants.

However, the printer used at that time was imported.

Six years on, the company has grown to co-develop with Tsinghua University China's own version of 3D printers and printing materials for orthopedic implants, which are currently under manufacturing validation, and probably will be used in production lines next year, I was told.

That reflects the bigger picture of how fast 3D printing develops and applies in China.

It is no longer seen as a geek technology to print novel tools or models, but something that can upgrade manufacturing and can make people's life better.

Its medical applications are a good example.

Before surgeries, the technology can be used to replicate patient-specific organs for doctors to design and simulate surgeries. Such preparation, more accurate than the traditional way of using two-dimensional medical images, can help speed up procedures, minimize patient trauma, and enhance treatment outcomes.

The use of 3D-printed surgical guides, and the medical device that helps doctors during surgeries to increase the accuracy of implant placements, make doctors' operation even more accurate, while 3D-printed implants and prosthesis, shaped to fit perfectly with a patient's anatomy, are more stable and comfortable than traditional ones.

3D printing can also be used to produce precisive medical devices and gadgets, and help with new drug development.

Perhaps that is one of the reasons why Xi'an Bright Laser Technologies Co Ltd, a leading 3D printing solutions provider in China, is so widely recognized.

The company was among the first batch of companies to receive the regulator approval to list on the Shanghai Stock Exchange's sci-tech innovation board, commonly known as the STAR market.

It boasts a complete technical solution of metal additive manufacturing and repairing for customers, including customized products, equipment, raw materials, software and technical service.

Most importantly, with strong independent research and development capabilities, it has invented a dozen of metal 3D printing equipment sets, taking a lead in domestic market.

In the world, researchers also are making efforts to push forward the development of 3D printing technology.

As technology evolves, perhaps bioprinting functional organs, one of the most exciting applications of 3D printing, is not that far away.

Not a day passes without some news about breakthroughs in 3D printing using living cells.

A few days ago, 3DBio Therapeutics, a New York-based biologics and bioprinting company, announced its AuriNovo, an investigational combination product using patients' own auricular cartilage cells to 3D-bioprint living, full-sized ear construct, received Orphan Drug designation from the United States Food and Drug Administration, a status assigned to treatments developed for rare conditions.

In October, scientists in Austria were reported to have developed a high-resolution 3D printing technique that uses a novel bioink to embed cells in a 3D matrix.

In April, Israeli scientists in Tel Aviv reportedly 3D-printed an artificial heart using a patient's own cells. The artificial heart was complete with cells, blood vessels, ventricles and chambers, although only of the size of a rabbit's heart.

Think about this: 3D-printed organs, which are customized and constructed with patents' own cells, are transplanted into patients in dire need, saving typical problems related to traditional organ transplants, such as lack of donor sources and immunity resistance.

Perhaps, in the not too distant future, this could well prove a blessing for patients suffering from organ failures.

 

]]> 2019-12-16 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/15/content_37529151.htm The annual Central Economic Work Conference, which ended on Thursday, has set the tone for the real estate market for the coming year, stressing the need to stabilize land and home prices as well as market expectations to ensure the steady and healthy development of the property market, which analysts see as a signal that China's economy will further trim its heavy reliance on property.

"To make sure the property market develops steadily and healthily, we must uphold the principle that 'housing is for living in, not speculation', and implement policies in accordance with each city's requirements whilst the long-term mechanism for stabilizing land prices, home prices and market expectations is being created," noted the Central Economic Work Conference.

Despite slower economic growth, the central authorities reaffirmed that property speculation will be strictly controlled, leaving little room to maneuver for local policies to make any adjustment in this regard, said Yan Yuejin, research director at the EHouse China R&D Institute.

Since the Central Economic Work Conference held in 2016 raised the principle that housing is for living in, not speculation, the country has reiterated the principle, especially during the second half of this year, when several local governments relaxed their restrictions on home purchases.

More than 20 cities announced measures to attract talents in November alone, including Foshan and Zhongshan in Guangdong province, Nanjing in Jiangsu province, Chengdu in Sichuan province, and Shanghai, which have all lowered requirements for talents buying homes, with some of them even offering special subsidies, according to a research report by Centaline Property.

The ban on property speculation has signaled that home prices will remain stable, and measures will be rolled out to address market fluctuations.

The relaxations on first-time buyers and high-end talents purchasing homes are only allowed within particular regions, as the country has no intention of comprehensively relaxing property policies, said Wang Tao, chief China economist with UBS AG.

"Compared to statements from previous years, this year's meeting made it clear that stable home prices will be a priority of any local measures. As such, we will not see continuous house price rises in a single market in the future," said Zhang Bo, chief analyst of Anjuke.

The respective property measures of Chinese cities will further promote stability in the property market, according to a report by the China Real Estate Chamber of Commerce.

"Along with the rising contribution of consumption and emerging economies to GDP, China's economy will hopefully overcome its heavy reliance on real estate and infrastructure for good, which will make the nation's growth and development more resilient," Bian Quanshui, an analyst with Sinolink Securities, wrote in a report.

The Central Economic Work Conference made it clear that work will be focused on increasing supply of homes for low-income workers through renewal and regeneration of existing residential projects and urban communities, and significantly increasing rental housing, according to Xinhua News Agency.

]]> 2019-12-15 14:17:34 http://www.chinadaily.com.cn/kindle/2019-12/14/content_37529140.htm China is expected to attach greater importance to capital market reforms next year and focus on improving institutional arrangements to boost the quality of listed firms as a key part of its pursuit of high-quality development, officials and analysts said.

Their comments came after the tone-setting annual Central Economic Work Conference concluded on Thursday and the meeting prioritized capital markets in financial system reform. This signaled the critical role of capital markets in serving the nation's real economy.

The meeting outlined specific reform measures, including refining fundamental institutions of capital markets, improving listed firm quality, and completing delisting mechanisms, according to Xinhua News Agency.

These requirements are reflected in the recently introduced action plan to improve the quality of listed firms, the top securities watchdog said.

"We will promote the improvement in listed firm quality to lay the foundation for elevating the adaptability, competitiveness and inclusiveness of capital markets," Yan Qingmin, vice-chairman of the China Securities Regulatory Commission, said at a forum on Friday.

By improving market rules, the plan aims to attract more industry leaders to go public, to get companies with low efficiency out of the market, and to encourage listed firms to upgrade themselves through mergers and acquisitions, Yan said.

The high-level meeting also pledged to steadily push ahead with reforms of the ChiNext as well as the National Equities Exchange and Quotations system-which are submarkets established for the financing of innovative enterprises and small-and medium-sized enterprises, respectively.

Yan said securities regulators will learn from the experience of the scitech innovation board, which piloted registration-based reform, and pushed through reforms of the two submarkets. The reforms will help make financing more inclusive to small businesses and high-tech companies as capital markets could satisfy their financing needs more efficiently than the banking system.

The stock market leaped on Friday after the meeting further endorsed the role of capital markets in high-quality development and after investors become more optimistic about Sino-US trade talks. The benchmark Shanghai Composite Index went up by 1.78 percent to close at 2967.68 points, recording its biggest gain in almost four months.

Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, said as the capital markets become inclusive to a wider range of companies, it is important to strengthen oversight over information disclosure and crack down on fraudulent floats to protect the legitimate rights of investors.

]]> 2019-12-14 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/14/content_37529121.htm Steps to support strategic industries, the creation of several advanced manufacturing clusters with international competitiveness and measures to support the growth of digital economy will be the key objectives in China's ongoing efforts to bolster high-quality development, according to a statement issued after the annual Central Economic Work Conference.

Analysts said China is now transforming from the phase of rapid development to a new stage of high-quality development and shifting its focus to nurturing technological innovation and further opening up its economy.

More efforts should be made to increase investment in equipment upgrading and technical reform, reinforce the optimization and upgrading of traditional manufacturing industry, with a focus on promoting the modernization level of the industrial chain, the statement said.

The conference also underscored vigorous efforts in accelerating transformation of scientific and technological achievements, enhancing enterprises' technological innovation capacities, and improving the mechanism of discovering, cultivating and motivating technology talent.

Wang Yuanhong, an economist at the State Information Center, a government think tank, said it is a long-term key task to boost high-quality development. "It is more necessary to rely on such a development approach to transform the growth pattern, optimize the economic structure and address deep-seated structural problems in economic growth, as the country is facing downward economic pressure," Wang said.

Wang said the high-quality development path is beneficial for continuously improving the share of scientific and technological innovation in overall economic growth.

"After years of high-speed development, China is now following a medium to high growth track, paying more attention to the quality and benefits of development," said Tang Jianwei, chief researcher at the Bank of Communications' Financial Research Center. "During this process, there is no need to focus on headlong pursuit of quantity growth, which may bring uncertainties such as an increase in leverage and high risks."

Looking forward, China should continue to follow the new development approach and the strategy of innovation-driven development, Tang said.

"As China's old growth models gradually slow down, we should gradually reduce reliance on old growth drivers like investment, exports and consumption. Instead, we need to develop high-tech and emerging sectors, such as digital economy and advanced manufacturing, to inject fresh impetus into economic development," Tang said.

China's economy has maintained overall stability. The country's GDP expanded 6.2 percent year-on-year in the first three quarters of this year, data from the National Bureau of Statistics showed.

]]> 2019-12-14 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528931.htm Huawei Technologies Co has secured an important vote of trust, with one of Germany's biggest telecom companies selecting the Chinese company as a key telecom equipment supplier for its 5G network.

Telefonica Deutschland, which operates Germany's second-largest wireless network, has chosen Huawei alongside Finland's Nokia Oyj for supplying equipment to its 5G network.

The move came as French and German officials have said publicly that the two countries would not follow the United States in excluding Huawei from its 5G network rollout.

Telefonica Deutschland's decision showcases that mutually-beneficial business partnerships would not be derailed by political interference, and Washington's intensified efforts to ban Huawei on groundless accusations will fail ultimately, analysts said.

A part of the Spanish Telefonica group, Telefonica Deutschland said in a statement that the deal has to be approved by German authorities, who are currently finalizing the security rules for telecom equipment suppliers.

Telefonica Deutschland said it is taking into account the ongoing political process of establishing these security guidelines, but does not want to delay the start of the 5G expansion.

The company has followed in the footsteps of Switzerland's Sunrise which has launched its Huawei-powered 5G network. Sunrise has so far rolled out 5G services in more than 262 Swiss towns and cities, and over 50 percent of telecom equipment in its 5G core and radio networks is provided by Huawei.

On Thursday, Chinese foreign ministry spokeswoman Hua Chunying denied media reports that the Chinese government threatened to cancel a trade deal with the Faeroe Islands if it does not agree to use Huawei's equipment

Hua said the claims "are completely false and have ulterior motives". Huawei, the world's biggest maker of mobile network gear, said it "was not aware of any meeting between the Chinese ambassador and Faeroese politicians in November as reported".

Bai Ming, a senior research fellow with the Chinese Academy of International Trade and Economic Cooperation, said the growing list of Huawei's 5G contracts shows that the US efforts to mix politics with normal business cooperation would fail ultimately, as facts would speak louder than Washington's groundless accusations.

An increasing number of European countries are taking an unbiased approach toward the use of Huawei equipment in their 5G network rollout. French Junior Economy Minister Agnes Pannier-Runacher recently said in an interview with local media that France will not exclude Huawei in 5G.

Germany also said that it would not single out any telecom player, including Huawei, in its 5G build-out.

In late November, German Chancellor Angela Merkel called on European countries to agree to a common approach toward China and Huawei in the rollout of the superfast wireless technology.

Jeremy Ghez, an affiliate professor of economics and international affairs at HEC Paris, a French international business school, said a common attitude toward Huawei is in the common interests of European countries.

All the comments came as the US government has been accusing Huawei of posing security risks but so far it has failed to provide any factual evidences. Washington has sought to ban federal agencies and US rural telecom carriers from buying Huawei's equipment and services.

Huawei CFO Meng Wanzhou is currently detained in Canada following a request by the US. She was arrested at Vancouver International Airport by Canadian authorities at the request of the US on Dec 1, 2018, and has been held under house arrest since then.

Recently, more detailed evidence about Meng's case has emerged, and many media outlets pointed out that the case is driven by political forces.

Canadian newspaper The Globe and Mail revealed in a recent article that "When Washington needed Canada's help to apprehend a top Huawei executive, officials in the White House, Congress and diplomatic corps were informed of what would happen hours before politicians in Ottawa."

Simon Tisdall, columnist for The Guardian, said geopolitical and economic rivalry between China and the US is what's really behind Meng's arrest.

Meng's arrest is not an isolated incident, but one of many actions taken as part of the US government's systematic campaign against Huawei, said Xiang Ligang, CEO of telecom industry website Cctime.

Huawei said in an earlier statement that the company has confidence in Meng's innocence, and it believes that her arrest was an unlawful abuse of process－one guided by political considerations and tactics, not by the rule of law.

 

 

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528988.htm Brazilian aircraft manufacturer Embraer SA, one of the largest plane makers in the world, is eyeing the fast-developing regional aviation market in China's smaller cities to further drive its growth.

The plane maker, which produces commercial aircraft with fewer than 150 seats, plans to introduce its latest and largest-ever jet, the single-aisle E195-E2, to China, its second-largest market after the United States.

By early next year, the aircraft model is expected to receive certification from the Civil Aviation Administration of China. In April, it received airworthiness certificates from the Brazilian Civil Aviation Agency, the US Federal Aviation Administration and the European Aviation Safety Agency.

Embraer is now in discussions with major domestic carriers, including State-owned and private airlines, about potential purchases of its latest E195-E2 aircraft.

Guo Qing, vice-president of sales and marketing at Embraer China, said Embraer attaches great importance to the China market. The regional aviation market is a short board in China. It will have a significant increment of regional aircraft in the next few years, faster than the United States, and the company is confident in the growth potential.

"Many domestic airlines now use mainline aircraft to operate regional flights, which may cause a waste of resources. With the high capacity of mainline planes, airlines prefer to offer fewer flights, which restrains the development of regional aviation markets," Guo said.

"Right-sized jets allow airlines to offer cheaper flight tickets to small market routes with smaller passenger flows. Carriers will become more profitable compared with using mainline aircraft. Domestic airlines should make use of the rich flying rights and time slot resources on regional routes, and launch more such flights," he said.

In October, the E195-E2 conducted its first commercial flight in Brazil operated by Azul Brazilian Airlines. Embraer said the aircraft model, with fewer seats, is suitable to complete trunk line fleets in slack seasons. It is also good for regional flights that connect second-, third-and fourth-tier cities in China.

Currently, Embraer accounts for more than 70 percent share of the regional aviation market in China. Bombardier Inc from Canada, and China's first homebuilt regional passenger jetliner ARJ21 produced by Commercial Aircraft Corp of China account for the remainder.

Last year, China had 169 regional airports, accounting for 72 percent of the total number of airports nationwide. Yet, the number of regional flights available is small. For instance, Guangzhou-based China Southern Airlines owns 852 aircraft, while the number of planes that fly regional routes account for just 2.58 percent of the total.

By Sept 30, airlines on the Chinese mainland operated 3,583 aircraft, including 189 regional aircraft, which made up for 5.27 percent. Now, there are a total of 10 carriers including Xiamen Airlines, Tianjin Airlines, Chengdu Airlines, China Express, Colorful Guizhou Airlines, and Guangxi Beibu Gulf Airlines that operate regional aircraft, according to aviation industry reports.

In comparison, major US carriers serve 37 percent of US airports and regional airlines reach 93 percent of the airports, according to the Regional Airline Association. Meanwhile in the US, the passenger fleet will maintain modest growth in the long term, according to the FAA.

"Carriers must connect as many small cities as possible to their hub airports to remain competitive. The sustainable growth of regional aviation is the core competitiveness of the Chinese airline industry," said Li Guijin, a professor at the Civil Aviation Management Institute of China in Beijing.

"The central and western areas of China have the largest number of high-altitude airports, and it is an area with rich opportunities to develop regional aviation. There should be more types of aircraft that are suitable to fly in high-altitude regions," he said.

 

 

 

 

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528987.htm China's efforts to further open up the senior living market in the country for foreign investment has attracted attention from Lendlease, Australia's largest operator of retirement living communities.

Last month, the National Development and Reform Commission (NDRC) and the Ministry of Commerce jointly published the latest shortened negative list for foreign investment, in which the investment is given access to more new items compared to the version of the list in 2018.

According to Xinhua News Agency, the list permits the establishment of senior living organizations and social welfare institutions.

"We applaud the government really setting positive policies, and giving us certainty around the direction so that is helping our investment confidence in investing here in China," said Tony Lombardo, chief executive officer of Asia with Lendlease.

David Hutton, the managing director of development in Asia for Lendlease, added the policy is terrific because it really improves the living options for senior people in the country.

Chinese culture respects senior people, but modern couples have little time to take care of their family elders, Hutton added.

Given this background, Lendlease is going to welcome the first batch of clients in its first senior living project in China in the suburban Qingpu district of Shanghai in 2021.

About 10 years ago, Lendlease made the decision to be an investor in China for the long term. After years of market research and study, communications with local Chinese real estate developers, along with witnessing policy changes by the government, the company finally decided to focus on the area where it has an advantage and expertise, senior living.

"(It is) the Chinese government's pro-active policy that gives us the confidence to make the investment," Lombardo said, adding the shorter negative list will create more development opportunities for investors from all over the world.

The World Health Organization said the proportion of people over the age of 60 in China will increase to 28 percent of its total population by 2040 from 12.4 percent of the total in 2010.

The Chinese Academy of Social Sciences (CASS) also forecast that the Chinese population aged 60 years old and above will reach 483 million by 2050.

The grey boom has created a problem for the country on how to take care of older people, while at the same time the senior living business is showing huge potential.

With the nation's first batch of middle-income people about to reach retirement age, China's senior living industry is projected to grow sharply in the coming years.

By 2020, China's senior living sector is about to reach a market scale worth 7.7 trillion yuan ($1 trillion), and further balloon to 22.3 trillion yuan by 2030, a report published by CPIC Allianz Health Insurance Co Ltd said.

"The government policy reflects there is an aging demographic, which is important. We feel we could make a contribution and create a differentiated and special product here," said Hutton, who explained how Lendlease decided to expand its presence in the China market by combining its international experience with oriental business practices.

After securing its first project, Lombardo said Lendlease wants to accelerate its growth in China as the company expects to complete and operate several projects in the years ahead.

"The importance for China being in our business is long term," said Lombardo. "Hopefully in the future we can manage and complete five projects. That's our strategy."

He explained that the company will focus on the Yangtze River Delta region, especially Shanghai.

The first project, named Ardor Gardens, looks to provide quality resort-like services and a healthy lifestyle for 1,300 residents in over 850 apartments. The community will include a complete range of facilities and recreational areas, health and wellness facilities such as a spa, swimming pool, restaurant and a large community clubhouse.

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528974.htm GOVT AND POLICIES

Digital economy to be half of GDP by 2023

About 51.3 percent of China's GDP would be digitalization-related by 2023 as the country's enterprises step up digitalizing their businesses, global market intelligence firm IDC predicted. The research firm estimated that by 2025, at least 80 percent of China's new corporate applications would use artificial intelligence technologies. Chief information officers would play bigger roles within companies by planning for innovative development, while there would be rising demand for professionals in ensuring digital security and compliance, IDC said. China is on fast track for digitalization, while firms should take future-oriented strategies to prepare for related changes, said Kitty Fok, IDC China's managing director.

China takes green path in power generation

China took a green path in power generation during the 2014-18 period, with the continuous expansion of clean energy production, the fourth national economic census showed. In 2018, the country's power generation hit 7.1 trillion kilowatt-hours (kWh), up 31.3 percent from 2013, according to a report on the fourth economic census released by the National Bureau of Statistics. The growth of power generation in China's western region led all regions in the five-year period, increasing 42.3 percent from 2013, thanks to the exploitation of clean energy and the construction of power transmission channels, said the report.

COMPANIES AND MARKETS

Volkswagen vehicle deliveries grow by 3.9%

The Volkswagen brand delivered 586,400 vehicles worldwide in November, an increase of 3.9 percent year-on-year, the German carmaker announced on Wednesday. "The Volkswagen brand continues to demonstrate its capabilities even in an overall economic situation that remains challenging," said Juergen Stackmann, Volkswagen sales board member. In Germany, Volkswagen's core brand recorded "significant growth" of more than 20 percent and handed over 54,800 vehicles to customers in November. The brand also increased its market share, according to Volkswagen. "Significant growth" in vehicle deliveries was also recorded in the United States with an increase of 9.1 percent and Brazil with an increase of 12.3 percent, according to Volkswagen.

TUI reports 42.8%drop in group profit

Group profit attributable to shareholders of Europe's largest tourism company TUI declined by 42.8 percent to 416.2 million euros ($461.79 million) in fiscal year 2019, the German company announced on Wednesday. According to Fritz Joussen, chief executive officer of TUI, the company delivered a "successful financial year 2019." At the same time, underlying earnings before interests, taxes and amortization (EBITA) of the company which has registered offices in the German cities of Berlin and Hannover declined by 21.8 percent to 893.3 million euros. The main reason for the "drastic decrease of EBITA" was the grounding of TUI's Boeing 737 MAX fleet. The company's 15 such aircraft were taken out of operation and replacements had to be rented to maintain services.

Boeing 737 Max may not get regulatory clearance

Steve Dickson, chief of the Federal Aviation Administration, said on Wednesday that aviation regulators won't likely clear Boeing's troubled 737 Max airplanes for flight until 2020. "Like I said there are a number of processes, milestones, that have to be completed," Dickson told CNBC, "If you just do the math, it's going to extend into 2020. "Dickson said there is no clear timeline for when the 737 Max will be re-certified and that there are 10 to 11 milestones left to complete before it can be approved. "We're going to follow every step of the process, however long that takes," he said. "I've made it clear that I'm going to support my people and that means they are going to take whatever time it takes to get this process completed and to do it the right way."

AROUND THE WORLD

Consumer prices rise by 0.3% in November

US consumer prices rose moderately in November, which could reinforce the Federal Reserve's intention not to cut interest rates in the near term. The consumer price index (CPI) increased 0.3 percent last month after rising 0.4 percent in October, the US Labor Department said on Wednesday. In the 12 months through November, the CPI rose 2.1 percent. The so-called core CPI, which excludes the volatile food and energy categories, increased 0.2 percent in November and 2.3 percent over the past year, in line with the previous month. The firmer inflation figures would give Fed officials more confidence to keep interest rates unchanged after concluding a two-day policy meeting later on Wednesday, analysts said.

Business sentiment declines in Japan

Business sentiment among large Japanese companies dropped to its lowest level in three years in the October-December quarter, owing largely to a consumption tax hike coming into effect at the beginning of October, the government said in a report on Wednesday. According to a joint survey by the Finance Ministry and Cabinet Office, the confidence index reflecting sentiment at companies capitalized at 1 billion yen ($9 million) or more, stood at minus 6.2 for the reporting period, dropping from 1.1 logged for the previous quarter. The confidence index reflects the percentage of companies surveyed reporting that conditions have worsened subtracted from companies reporting improving conditions.

Brazil cuts benchmark interest rate to 4.5%

Brazil's central bank will cut its benchmark interest rate from 5 percent to a record low of 4.5 percent, the bank's Monetary Policy Committee (Copom) announced on Wednesday. It was the fourth interest cut in a row, after it remained stable from May 2018 to June 2019. With the latest reduction, the rate has accumulated a fall of 2 points this year. The Copom stated that recent economic data indicate that the Brazilian economy is growing, and that they believe this recovery will continue in a gradual pace. Copom put the inflation rate at 4 percent for 2019 and 3.5 percent for 2020.

South Korea banks' bad debt ratio steadies

South Korean banks' bad debt ratio stayed below 1 percent for the fifth straight quarter, financial watchdog data showed on Wednesday. The ratio of bank loans, overdue at least three months, stood at 0.86 percent of the total as of the end of the July-September quarter, down 0.10 percentage point from a year earlier, according to the Financial Supervisory Service. It hovered below 1 percent since the third quarter of last year. From three months ago, the third-quarter ratio fell 0.05 percentage points.

S&P downgrades Romania's outlook

Standard& Poor's has downgraded the outlook for Romania's rating from stable to negative due to rising deficits, local media reported on Wednesday, citing the latest statement released by the rating agency. The agency affirmed the eastern European country's long-term and short-term foreign currency debt rating at "BBB" and that of local currency debt at "A-3". The constraints on ratings include low economic prosperity, relatively poor administrative capacity, unpredictable economic environment, and only medium-level monetary flexibility compared to other countries with similar ratings.

Albania's FDI inflows up in first 9 months

Foreign direct investment (FDI) in Albania increased by 7.3 percent in the first nine months of 2019, compared to the same period last year, Finance and Economy Minister Anila Denaj said on Wednesday in a post on Facebook. According to Denaj, in January-September 2019, FDI in Albania amounted to 810 million euros ($ 898.6 million), reaching the highest historical level of foreign investments for the country. Denaj said this increase in FDI confirms the government's projections that in 2019 FDI will exceed 1 billion euros in total.

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528972.htm Chinese excavator makers posted robust year-on-year sales during the first 11 months of the year on the back of growing fixed asset investment and device replacement requirements, experts said.

Twenty-five leading manufacturers in the construction machinery equipment sector sold 215,538 excavators during the period, a year-on-year increase of 15 percent, according to data released by the China Construction Machinery Industry Association.

The figure in the first 11 months has already exceeded the annual sales of 203,420 units in 2018 and the full year numbers will set a record.

Excavator sales are usually seen as an indicator for economic vitality, because demand for the digging machines is associated with property and infrastructure development.

Zhang Dongming, a researcher on the machinery sector with Bohai Securities, said: "There has been steady sales growth of excavators and other construction machinery products since the beginning of this year."

He attributed such a growth to the uptick in investment in fixed assets like real estate and infrastructure, a strong need for replacing old devices, and strong overseas demand thanks to the Belt and Road Initiative.

Zhang Cheng, a researcher at Huatai Securities, said the excavator industry will witness steady expansion, thanks to the modest recovery in infrastructure investment growth and resilient real estate investment.

Leading companies have witnessed improved competitiveness with good long-term development potential, he said.

From 2012 to 2016, the construction machinery manufacturing sector in China saw a recession of sorts as market demand slipped. After a nearly two-year rapid expansion, the segment's growth started to slow last year.

Earlier this year, China rolled out measures to support infrastructure investment. The local governments' special bond issuance helped promote investment in infrastructure and support economic growth.

Zhang from Bohai Securities said the next five years will be a vital period of opportunities for the construction machinery industry to improve its quality and efficiency, and to transform and upgrade its development.

He said the efforts to boost insufficient infrastructure are expected to continuously increase, as the economy is undergoing downward pressure.

At the same time, construction related to the Belt and Road Initiative, rising labor costs and stricter requirements for environmental protection will continue to underpin the steady sales increase of construction machinery such as excavators, Zhang said.

In November, major excavator producers sold 19,316 units, an increase of 21.7 percent year-on-year, according to the industry association. Sales in the domestic market stood at 17,159 units, up 21.2 percent, the association said.

 

 

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528932.htm China's steel consumption is expected to hit a record in 2019, and this would then be followed by a slight decline in demand in 2020, a new report by the China Metallurgical Industry Planning and Research Institute released on Thursday said. The report added that the country's crude steel output is also expected to fall in 2020 from 2019.

The country's steel consumption is estimated to hit 886 million metric tons this year, higher by 7.3 percent year-on-year, while demand is forecast for 2020 is seen at 881 million tons, down 0.6 percent from the level in 2019.

Crude steel output in 2019 and 2020 are expected to reach 988 million tons and 981 million tons, respectively.

"The unexpected steel consumption growth in 2019 is mainly due to an increase in real estate and infrastructure investments, while downstream industries such as machinery, energy, and home appliance also contributed to the growth under the background of a stable growing domestic economy," said Li Xinchuang, president of the institute.

In 2020, demand from some downstream industries including construction, automobile and shipbuilding is seen to likely fall. Demand from the machinery sector is likely to remain stable, while demand from the energy and home appliance sectors is seen rising, he said.

The report predicted steel consumption in the construction industry would be 475 million tons in 2020, down 0.6 percent from this year. The figure for 2019 is seen hitting 478 million tons, up 11.2 percent year-on-year.

The automobile industry is expected to consume 50 million tons of steel in 2019, down 7.4 percent from 2018. Demand in 2020 is seen slipping further to 48.2 million tons, down 3.6 percent year-on-year.

Demand from the shipbuilding sector is expected to see the sharpest year-on-year decline of 11.5 percent. The industry is expected to consume 11.3 million tons of steel this year, up 3.7 from last year, but the figure is expected to slide to 10 million tons in the following year due to the impact of trade disputes and geopolitical uncertainty.

The machinery industry is estimated to consume 142 million tons of steel in 2019, an increase of 1.4 percent year-on-year, and is forecast to maintain that demand in 2020.

The home appliance sector's demand for steel, however, is estimated to climb 3.7 percent year-on-year to reach 14 million tons next year. Consumption this year is estimated to increase 8 percent from last year to stand at 13.5 million tons.

Demand from the energy industry is also forecast to grow about 1.5 percent year-on-year to reach 34.5 million tons in 2020. The estimated consumption of the sector in 2019 is 34 million tons, higher by 3 percent year-on-year.

The report predicted iron ore demand in China at 1.225 billion tons in 2020, compared to 1.264 billion tons in 2019. Pig iron output in 2020 and 2019 is seen at 775 million tons and 800 million tons, respectively.

Qu Xiuli, deputy head of the China Iron and Steel Association, said at an industry forum in November that China will continue to rein in unwanted steel capacity, especially metal that is substandard and contributes to pollution.

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528949.htm A tramcar using hydrogen energy was finally put into use in Gaoming district of Foshan, Guangdong province, at the end of November, after the local authority announced a plan to develop the hydrogen energy sector in 2014.

"Hydrogen energy will be widely used in buses, trams, trains and ships in the near future, demonstrating the emerging technology development in Foshan," said Mao Zongqiang, a professor at the nuclear energy and new energy research institute of Tsinghua University.

Equipped with six hydrogen tanks, the tram can travel 100 kilometers, with a top speed of 70 kilometers per hour.

Foshan's plan to develop the hydrogen energy industry was part of efforts by cities on the west bank of the Pearl River to facilitate the advanced equipment and manufacturing industry over the past few years.

"We are introducing a number of new industrial leaders to settle down in Gaoming, aiming to develop the district into a world-leading hydrogen energy center in the years ahead," said Xu Dongtao, Party secretary of Gaoming.

As of October, a total of 768 vehicles powered by hydrogen energy had been put into use in Foshan, with six hydrogen energy filling stations already established, according to local government sources.

According to an industrial development plan issued by the local government in 2018, Foshan's industrial output value for the hydrogen energy sector is expected to reach 100 billion yuan ($14.2 billion) by 2030.

In addition to hydrogen energy development, Foshan has also established an intelligent manufacturing technology park in its Shunde district, collaborating with leading robot manufacturer Kuka and Chinese home appliance maker Midea.

With an area of 800,000 square meters, the technology park consists of four areas centered on intelligent manufacturing, logistics, healthcare and smart home.

"The technology park aims to show intelligent technology application scenarios in manufacturing, living, commerce and healthcare," said Fu Shengbin, head of Kuka's operations in Shunde.

The annual output value of the park is expected to reach 240 million yuan by the end of 2019, and 650 million yuan in 2020.

Traveling to the west from Foshan, cities on the west bank of the Pearl River have been also gearing up for development of the advanced equipment and manufacturing industry.

Yunfu, which is about one hour by high-speed train from Guangzhou, the capital of Guangdong, is now home to 24 companies related to the hydrogen energy resources, involving a total investment of more than 5 billion yuan.

Cities on the west bank of the Pearl River include Foshan, Zhuhai, Zhongshan, Jiangmen, Zhaoqing, Yunfu and Shaoguan.

Official statistics showed that the advanced equipment and manufacturing industry grew quickly on the west bank of the Pearl River in the past few years, with the added industrial value growing annually by 11.8 percent from 2015 to 2018 to reach 1.15 trillion yuan.

"There has been an obvious trend of industrial agglomeration on the west bank of the Pearl River, with the strengthening development quality of the advanced equipment and manufacturing industry," said Wu Yuguang, deputy director of the Guangdong Provincial Industry and Information Technology Department.

According to Wu, a total of 345 equipment products reached the provincial-level or above technology standard between 2015 and 2018, after leading companies in the region had been encouraged to facilitate innovation and core technology research and development.

In addition, patents related to advanced equipment and manufacturing industry in the region increased annually by 75.5 percent between 2015 and 2018, according to Wu.

According to an action plan to facilitate the advanced equipment and manufacturing industry on the west bank of the Pearl River, the output value of the industry is expected to reach 2 trillion yuan by 2020.

"The west bank of the Pearl River Delta aims to develop into one of the world's influential and competitive regions in the advanced equipment and manufacturing industry," said Wu.

According to the plan, the region will give priorities to the development of machine tools, robotics, new energy automobiles, advanced ocean engineering and offshore wind power equipment, railway traffic equipment, general aviation and satellite application.

 

 

 

 

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528943.htm Carlsberg China's first craft beer production center started operations on Wednesday in Anhui province in East China as part of the Danish brewery's plan to further invest in the country's high-end beer market, given the sharp increase in consumption of the beverage here during the past few years.

Carlsberg has invested 110 million yuan ($15.6 million) for the Craft and Specialty project in Tianchang city, Anhui. The hub has an accumulated investment of 187 million yuan, with production lines for its Draught Master products, craft brewing and packaging.

The brewing and fermentation capacity of the brewery is 100,000 hectoliters. The center is designed to produce products including Draught Master beer, the 1664 series and Tuborg.

The craft beer produced from the hub in Anhui will also be sold to markets in Southeast Asia.

Carlsberg China has grown 6 percent in terms of volume in the third quarter and 20 percent in net revenue, its third quarter report said.

In China, the revenue for its premium products increased 8 percent, driven by expansion in big cities and the successful premium development of local brands.

Globally, the brewery's organic revenue growth is 3.1 percent year-on-year. Its operating profit growth is around 10 percent.

"We're pleased that we've been able to deliver solid revenue growth for the quarter despite tough comparables from last year. In particular, the Asia region continued its very good performance," Carlsberg CEO Cees't Hart said in a statement.

He added: "The top line in Western Europe was solid in spite of challenging comparables from the very warm and dry summer last year, while we had difficult comparables in Russia and faced challenges that negatively impacted our market share year-over-year."

The CEO said the company's earnings upgrade earlier this week is further proof of its improved geographical footprint, "as solid earnings performance in China and Western Europe more than offset the challenges in Russia."

The National Bureau of Statistics said beer production volumes in the country in the past five years since 2014 have declined. Beer imports though have risen to 821,141 kiloliters, up 14.7 percent, according to Qianzhan.com.

Though craft beer only takes up about 1 percent of the consumption volumes in China in 2018, its annual growth has reached 40 percent. It is estimated there are nearly 800 craft beer brands nationwide.

Zhu Danpeng, a food and beverage analyst, said the rising incomes in China encouraged the development of a big market for craft beer in the country.

"Craft beer is expected to see fast growth at 40 percent at least in the next five years," said Zhu. Therefore, it is crucial for Carlsberg to get into the craft beer category in China and expand its high-end beer presence, he said.

Carlsberg's high-end product 1664 Blanc and medium range beer brand Tuborg have posted quick growth in China in the past few years.

Zhu said: "The new investment in production capacity has shown Carlsberg's confidence in speeding up its presence and penetration in the medium and high-end beer sector in the country."

 

 

 

 

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528941.htm BUENOS AIRES－Trends in China's development offer rising opportunities to Latin American countries with ties to the Asian country, said Argentine-Brazilian academic Santiago Bustelo.

To make the most of bilateral ties, regional governments need "to understand the current stage of China's development process", said Bustelo, a research professor at the Argentina-China Studies Center of the University of Buenos Aires.

Today, China's development is marked by urbanization, middle-income group expansion, rising consumption, and trends that could potentially boost cooperation and trade through economic complementarity, especially between China and Argentina, Bustelo said in a recent interview with Xinhua News Agency.

"China's process of urbanization will continue to demand natural resources and promote the integration of the two economies," he said.

"In addition to the growth of major cities, internal migration from the countryside will spark the growth of medium-sized cities," said Bustelo, noting that Argentina could "take advantage of the huge opportunities that will arise in terms of extracting minerals, such as copper and lithium."

Given the right conditions between the two countries for exploring these ongoing changes, Argentina could not only continue to grow its exports to China, "but also diversify them", said Bustelo.

"In the food sector, we hope that the emergence of a new Chinese middle-income group generates opportunities for agricultural exports," he said.

China's growth coupled with a policy of further opening up its market to foreign goods generates concrete opportunities for countries like Argentina, Bustelo said, citing the recent second China International Import Expo held in Shanghai in November.

Looking ahead, "the Chinese people's expected rise in income will open up a series of opportunities in niche markets" for a range of Argentine products with high degrees of differentiation, including wine, sustainable goods, fashion, design and audiovisual production, said Bustelo.

"However, to spur this potential, Argentina needs a clear strategy for inserting itself" into the international market, Bustelo said.

While underscoring the strong cooperation that already exists between China and Argentina through numerous joint infrastructure projects, Bustelo said "it's true that in Argentina there is still a lot of ignorance about China, which sometimes leads to a lack of understanding of the opportunities and potential of having China as a strategic partner".

"I think both countries can work together to improve mutual understanding and create chances for dialogue, greater knowledge and cultural exchange," he added.

 

 

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528933.htm Further opening-up of the financial market in China will create opportunities for US-based Citigroup Inc or Citi to garner new business and profits in the country, according to Christine Lam, chief executive officer of Citi China.

"We are definitely looking forward to obtaining new business licenses," said Lam during an interview in Beijing on Wednesday.

The bank is interested in many areas including custody and futures businesses, she said.

Citigroup Inc has agreed to sell its 33.33 percent stake in Citi Orient Securities Co Ltd to Orient Securities Co Ltd for 476 million yuan ($68 million). The securities joint venture will be wholly owned by Orient Securities after the transaction is completed.

"It was one of the most successful JVs. The two parties agreed amicably for Orient Securities to take the full ownership. We are actively evaluating how we could best take advantage of the new rules which allow majority or even 100 percent foreign ownership of a securities entity," Lam said.

The China Banking and Insurance Regulatory Commission issued 19 measures this year to further open up China's banking and insurance industries, following announcements of 15 measures in 2018. The policies created sound institutions and a market foundation for the financial sector to improve international competitiveness and its capacity to serve the real economy, the regulator said in a post on its website on Monday.

These efforts are bringing both direct and indirect benefits to foreign banks, Lam said.

"The opening-up of China's capital market is attractive to foreign institutional investors. As the custodian bank and cash management bank for these clients, we have seen increasing flows of capital into China's interbank bond market, and this trend is obvious," she said.

Citi China received the Type-A license to act as a bond settlement agent in China's interbank bond market in 2017. The industry-wide ranking of its business in this segment improved from 17th back then to seventh this year, showing significant progress.

On July 20, the Office of the Financial Stability and Development Committee under the State Council issued a set of measures to further open up the financial industry, including a measure to lift the foreign ownership limits on securities, fund management and futures companies by 2020, a year ahead of schedule.

"With the announcement of these measures, many international companies accelerated their steps to participate in the China market and enlarged the size of their business in the country, which in turn increased the volume of our business with them as a global bank," Lam said.

"The external environment in China has been more challenging this year. The transformation of the Chinese economy and China-US trade friction did impact business sentiment to a certain extent. But we are prepared for these challenges and have adjusted accordingly to actively managing risks and assisting our clients to navigate through the environment."

Over the last three years, Citi China achieved double-digit growth in its new economy and private companies related business. The bank has set up a team dedicated to the new economy segment and targeted niche clients including online travel agencies, and e-commerce, new energy and healthcare companies.

It has also made full use of its global network to offer banking services to new economy companies that are interested in doing business overseas. Citi provides financial services in more than 160 markets, holding a local banking license in 98 of them.

With a network covering over 90 percent of the markets related to the Belt and Road Initiative, the relevant business of Citi grew by more than 20 percent this year, Lam said.

 

 

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/13/content_37528957.htm JPMorgan Chase & Co is looking to substantially increase investment in the business of securities, asset management, and futures and options in China and hopes to gain full ownership of its joint ventures "when the timing is right" to take advantage of the further opening of the Chinese financial sector, the US bank's China CEO said.

Mark Leung, chief executive officer of JPMorgan China, said he welcomes the opportunity presented by the country's new regulation, which allows for 100 percent foreign ownership and the bank will fully leverage its strength in its global network and resources to operate its onshore and offshore China business.

"We think this is the best time for JPMorgan to involve much deeper and invest much broader across our product and service platforms (in China)," Leung said during an interview with China Daily.

The bank has finished all the preparatory work for its securities JV in China in which it owns a majority stake of 51 percent. It is now waiting for final permission from the China Securities Regulatory Commission to officially launch the business.

It has hired a strong team for its securities JV in China and it will engage in business activities including investment banking, research and securities sales, according to Leung.

JPMorgan is also planning to further invest in the growth of China's asset management industry. Its asset management unit, JPMorgan Asset Management (JPMAM), is poised to become the first foreign asset manager to hold a majority stake in a Chinese mutual fund company, after winning an auction bid of 2 percent stake in its mutual fund JV, China International Fund Management, in August.

The bank's asset management business has also formed a strategic partnership with China Merchants Bank. Under the partnership, JPMAM will serve as a preferred product provider for CMB's asset management subsidiary, offering access to its offshore and onshore solutions that are complementary to CMB's investment capability.

"We complement very well with strong local financial institutions. Actually, JPMorgan has long been known as the bank for other banks. Many Chinese banks and financial institutions are either our clients or our partners and we support them to achieve their domestic and global ambitions," Leung said.

"We have various partnership with local financial institutions including Industrial and Commercial Bank of China on cash management, Bank of China on RMB internationalization, Postal Savings Bank of China and many other banks and securities houses to foster partnership, knowledge and experience sharing," he said.

China will further open the financial industry to foreign companies by removing ownership restrictions in the securities, funds, futures and insurance sectors next year.

Leung said that rules and relations are becoming more favorable for foreign banks in China along with the further opening of the Chinese financial sector including the launch of the stock connect programs between the mainland and Hong Kong, the inclusion of Chinese equities and bonds in global indexes and the increase of foreign ownership of Chinese assets.

"We believe this is a very different backdrop against which foreign players can operate. While it depends on the speed of the opening up, I think the conditions are more mature now," Leung said.

Leung said that the trend of the renminbi internationalization, the development of the Belt and Road Initiative as well as the increasing two-way capital flows will enable JPMorgan to better serve as bridge that helps Chinese firms going abroad and global investors coming into the Chinese market.

Meanwhile, the US bank is also interested in getting licenses for securities financing and derivatives trading in the future as China plans to further open the derivatives market to foreign players and offer more hedging and risk management tools for global investors.

"We are working actively with the local regulators to share our experience ... in enhancing derivatives trading and securities financing to help speed up foreign participation into the local markets and to provide onshore investors with the best derivatives and securities financing capability that JPMorgan has provided offshore," Leung said.

 

Mark Leung, chief executive officer of JPMorgan China

 

 

]]> 2019-12-13 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528816.htm Economic and trade cooperation between China and related economies under the Belt and Road Initiative has flourished over the past six years, boosting China's highlevel opening-up and further opening up of the global economy, according to senior commerce ministry officials.

Qian Keming, vice-minister of commerce, said the BRI has made significant contributions to the global economy and humanity development, and has been receiving positive responses from an increasing number of countries and international organizations.

"Based on the principle of achieving shared growth through dialogue and collaboration, BRI upholds the 'Silk Road spirit' of peace, cooperation, openness, inclusiveness, mutual learning and mutual benefit," Qian said.

"It has created a new space for the world economy, built a new platform for international trade and investment, raised up new practices in global economic governance, made new contributions to the well-being of people in the world, and contributed China's wisdom for building a community with a shared future for humanity."

Chu Shijia, director-general of the comprehensive department at the commerce ministry, said trade between China and the BRI economies has been expanding, with two-way investments increasing and key projects progressing. And establishment of overseas economic and trade cooperation zones have accelerated, and cooperation mechanism enhanced.

Currently, China has inked 198 cooperation documents with 167 countries and international organizations under the BRI and established working relations with seven countries on unimpeded trade and with 44 countries on bilateral investment cooperation, to quickly resolve the problems in bilateral economic and trade cooperation.

The country has also established e-commerce cooperation mechanisms with 22 countries and signed third-party market cooperation agreements with multiple countries.

Economic and trade cooperation has been a cornerstone of the BRI with data from the past six years proving the success of the mechanism, said Chu.

Latest data from the General Administration of Customs showed that the growth in China's trade with the BRI economies was higher than the overall growth during the first 11 months this year, as imports and exports with the BRI-related economies reached 8.35 trillion yuan ($1.19 trillion), up 9.9 percent year-on-year, and accounting for 29.3 percent of China's total foreign trade.

The cumulative trade volume between China and BRI economies has exceeded $7.5 trillion and China is the largest trading partner for 25 of these economies, Chu said.

The accumulated investment of Chinese enterprises in BRI-related areas stood at $110 billion, with the value of newly signed overseas contracted projects exceeding $750 billion.

During the first 10 months, China's nonfinancial direct investment in BRI economies surpassed $11 billion, and the value of newly signed overseas contracted projects amounted to more than $110 billion.

Direct investment into China from BRI-related countries and regions stood at $50 billion, with more than 21,000 foreign enterprises being set up. In the first 10 months of this year, BRI-related countries directly invested $6.1 billion into China and established nearly 4,500 foreign enterprises.

Chinese companies have invested $34 billion in overseas economic and trade cooperation zones in related countries, and about 4,500 Chinese companies have established operations in the cooperation zones. They have paid $2.8 billion as taxes and fees to local governments and created more than 300,000 jobs for local people.

Key projects involving construction and operation of ports, railways, highways, and bridges among many other projects along the Belt and Road area have also been making achievements as expected.

The country also has signed five free trade agreements with 13 BRI economies. This year, China has upgraded free trade agreements with the Association of Southeast Asian Nations, Singapore and Chile, signed an FTA with Mauritius and concluded negotiations with New Zealand for an upgrade of the FTA between the two countries.

The protocol of the second phase of China-Pakistan Free Trade Agreement also came into effect this year, and 15 member countries of the Regional Comprehensive Economic Partnership also have accomplished conclusion of negotiations as a whole.

Both of the officials made the remarks at a book release function in Beijing last week. The book－A Bright Shared Future ... Stories Along the Belt and Road－is the first in a series of stories related to the Belt and Road Initiative. The book has been compiled by the Chinese Academy of International Trade and Economic Cooperation of the Ministry of Commerce and a second volume will be launched soon.

 

 

 

]]> 2019-12-12 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528851.htm Chinese artificial intelligence pioneer UBTech Robotics said it will step up efforts to further expand its overseas presence. The company is backed by internet heavyweight Tencent Holdings Ltd.

The plan came about after the Shenzhen-based company inked a deal worth $362.4 million to increase the number of AI teaching labs for students in the United Arab Emirates.

Zhong Yong, senior vice-president of UBTech, said the company now operates services in about 40 countries and regions. Its services and education philosophy are recognized by foreign companies and governments.

"The lack of talents is a big challenge for the development of AI and robotics, so we devote tons of resources to developing a complete AI education system to nurture talents," Zhong said.

The company said it has already established an AI curriculum system covering the primary, junior and high schools, as well as colleges. It held a string of robotics competitions to cultivate the competence and team-building capabilities of students.

Some of the company's curriculum and robots programming learning equipment have been purchased by the United Arab Emirates.

In November, UBTech announced the $362.4 million deal with Royal Strategic Partners, a unit of Abu Dhabi Capital Group. ADCG is a large-scale investment company that manages assets of around $20 billion.

UBTech said it will build AI teaching labs for 1,310 primary and secondary schools in the seven emirates of the UAE over the next four years.

The Shenzhen-based company said in the future, it will work together with the UAE to further promote the localization and development of AI education solutions.

The related courses in primary and secondary schools and universities will provide a steady stream of fresh blood for the AI industry.

Before the deal, UBTech signed agreements on AI education with companies, organizations and government agencies in Russia, Indonesia and Uzbekistan.

It recently reached a strategic cooperation deal with the UNESCO Higher Education Innovation Center on nurturing AI talents and promoting high-quality education.

UBTech said it will step up efforts to tap into overseas opportunities and explore ways to better offer localized products and services in each market.

The company's services are increasingly popular in China, with local students showing mounting enthusiasm toward programming and robotics technology.

Liu Yunjia, a mother of a primary school student, said her son was attracted a few years ago by an advertisement for programming learning at a shopping mall and bought a learning package immediately. Since then, her son has devoted most of his time to learning programming skills.

The coding industry for Chinese children is a market worth up to 4 billion yuan ($558 million) and is forecast to increase about tenfold in the next five years, according to market research and consulting group iResearch.

 

 

 

]]> 2019-12-12 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528818.htm Chinese technology shares may continue to offer considerable upside potential next year, on the back of profit gains from 5G commercialization and deepening capital market reforms, analysts said.

"We expect policy support for technological industries will only strengthen next year. Technology sectors should still be a key focus for next year's A-share investment," said Zhang Xia, chief strategist with Shenzhen-based China Merchants Securities.

This policy stance was signaled by a recent high-profile meeting that stressed the need to improve scientific and technological capabilities and innovation capacity in 2020, Zhang said.

In terms of company fundamentals, the communications technologies sector has entered a new uptrend of its business cycle after China had granted 5G licenses to telecom carriers in June, according to Zhang.

The same may be the case for semiconductor and other tech sectors as 5G commercialization is fueling various new technologies and applications, he said.

Tech shares have been in the limelight recently on expectations of stronger profitability, better investor sentiment and accelerating capital market reforms, analysts said.

"This year marks an inflection point in China's capital market reforms, which had pressed the accelerator of fundamental reforms aimed at quality market development, instead of scale expansion," said Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology.

Last month, the top securities regulator assigned an action plan to improve the fundamentals of listed firms, after allowing reverse mergers on the ChiNext board in October, which could encourage mergers and acquisitions involving listed firms in the innovative enterprise-heavy board.

This followed the debut of the sci-tech innovation board in July, which shows greater inclusiveness to tech firms than older peers and pilots the registration-based new share sales system.

The ChiNext index went up by 5.57 percent as of Wednesday since the beginning of the fourth quarter, outperforming a 0.66 percent increase in the benchmark Shanghai Composite Index over the same period.

On Wednesday, the ChiNext index went down by 0.91 percent to close at 1718.26 points, after ending at an eight-month high in the previous session, according to market tracker Wind Info.

Looking ahead, China's capital markets will become more supportive for tech firms to raise funds, as part of the nation's efforts to boost high-quality capital market development, Dong said.

One major goal of improving listed firm quality－the key to quality market development－is to enhance their research and development capacities and ensure that they are the cutting-edge players in their respective industries, he said.

Cheng Shi, managing director and chief economist at ICBC International Holdings, said sectors that lie on the intersection of advanced technology and consumption upgrade would rank among the most valuable investment opportunities in 2020.

"With the basis of 5G communications equipment, a new series of consumption scenarios and niche markets may emerge and focus on the areas of culture and entertainment, medical care, education, and housekeeping services," Cheng said.

Zhang said that virtual reality, augmented reality, as well as cloud gaming, computer and smartphones, may be the tech segments that have the highest possibility of strong market performance, given their shorter timeline to realize higher margins.

 

 

 

]]> 2019-12-12 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528834.htm Dubai wants Chinese companies to explore opportunities in a dedicated innovation zone in the city that is positioned to be a "powerful enabler" of the Belt and Road Initiative.

District 2020, the legacy site of the six-month Expo 2020 Dubai, is looking to attract Chinese enterprises that fit into its technology-driven innovation system and leverage the cosmopolitan Middle Eastern city as a springboard for international push, said Nadimeh Mehra, vice-president of Legacy Development and Impact at District 2020.

"China and the United Arab Emirates share a long and fruitful history of economic collaboration that we are eager to help continue through the platform of growth that District 2020 will provide," she said.

District 2020's vision is to support the continued development of the UAE's knowledge and innovation economy, with a focus on key growth industries of technology, travel and tourism, logistics and transport, education and construction.

Mehra said Chinese companies are already leaders in a lot of different technologies like blockchain, artificial intelligence to the internet of things, all of which fit into the agenda of District 2020.

And potential investees are not just confined to the technology circle but a broader portfolio of companies in the hospitality, tourism and real estate sectors.

"Because the zone is not only a technology hub but … where technology collaborates with enterprise," she said. "So if a typical tourism company benefits from the technology, it allows the technology to scale much faster."

Apart from incentives like the provision of digital infrastructure and preferential policies like zero corporate and personal tax, District 2020 has an entrepreneur program dubbed Scale2Dubai, aiming to draw startups and small-and medium-sized enterprises to upscale and enter the Middle East and North Africa markets.

"Successful applicants of the program will benefit from free business setup, two years subsidized urban living, a two-year entrepreneur visa, and two years free workspace," she said.

Earlier this year, Sheikh Mohammed Bin Rashid Al Maktoum, vice-president and prime minister of the UAE, reiterated the country's support for Belt and Road Initiative with the announcement of a $3.4 billion Chinese investment in Dubai.

Some Chinese technology powerhouses have entered the nation. For instance, Huawei Technologies has launched over 100 initiatives and deployed over 1,000 smart devices in less than three years to facilitate the Smart Dubai 2021 initiative.

Fliggy, the tourism arm of Alibaba, signed a memorandum of understanding with Dubai's tourism agency to enhance travel experiences for Chinese travelers, while gaming giant Tencent chose Dubai Internet City as its regional headquarters in June.

The Belt and Road Initiative guarantees further access to what is now the world's second-largest economy. In return, Chinese businesses in the UAE gain an important platform from which they can access vast emerging markets in the Gulf region, according to Simon Pluckrose, a Dubai-based director at consultancy firm Brunswick.

 

 

 

]]> 2019-12-12 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528819.htm Nestle Health Science has invested in a product innovation center in Taizhou, Jiangsu province, as it joined several nutrition health brands in tapping the country's growing demand for clinical nutrition.

The center will operate in parallel with Nestle Health Science's product innovation centers in the United States and in Switzerland, sharing global advanced core R&D technologies, localized innovations for China's national standards and consumer needs, and enriching the firm's product systems of Foods for Special Medical Purpose (FSMP) in China.

Nestle Health Science is a subsidiary of Nestle, the biggest food company in the world whose headquarters is in Switzerland.

Having been in the Chinese market for the last three years, Nestle Health Science has posted double-digit in the country, with its products being locally manufactured. It has 11 approved formula products in China, including five for babies and infants and six for FSMP.

The center being built in China reflects the firm's confidence and commitment to the Chinese market but will also serve the Asia-Pacific region.

Products manufactured in its factory in Taizhou serve consumers on the Chinese mainland, Hong Kong and Taiwan, said Cecily Gu, regional business head of Nestle Health Science China.

The first liquid whole protein nutrition formula developed by the Product Innovation Center of Nestle Health Science China called Nutren Novasource GI has successfully obtained registration as a food for special medical purpose in July 2019.

"This innovation will trigger a new era of high-quality FSMP in China and lead the Chinese clinical nutrition to a new level," Gu said.

"Nestle Health Sciences will provide cutting-edge technical support and experience for developing high quality FSMP suitable to Chinese consumers," said Gregory Behar, the global CEO of Nestle Health Science Group.

The Nestle Health Science Taizhou Factory is the first approved liquid full-nutrition FSMP factory in China. It will introduce internationally advanced production technologies and formulas, such as Nutren Novasource GI, into China and has greatly promoted the process of localized production in the Chinese FSMP market.

Gu said: "I believe that FSMP will release great vitality and bring more opportunities for enterprises and consumers in China. The Product Innovation Center will continue to carry out localized innovations, develop formulas according to Chinese tastes and nutritional diet characteristics, and enable more patients to receive nutritional treatment. It also helps to further narrow the gap in clinical nutrition treatment."

She said the factory and innovation center will consider adding more locally adapted flavors for recovering Chinese patients such as dates.

An aging society and the steady improvement of consumption levels meant awareness of nutrition and health practices by the Chinese people has constantly risen.

Michel Gardet, the global business head for Medical Nutrition of Nestle Health Science, believes that "China's FSMP market may face a long-term incubation period. For NHS, we not only must meet the production thresholds required by regulatory authorities, but also understand the health of different consumers through a large amount of research and develop the corresponding formula."

In the future, Nestle Health Science will continue to deepen its presence in the Chinese market. The future of China's FSMP industry is seen as particularly promising.

Another company in Illinois-based Abbott is looking at more market opportunities in the special medical purpose food sector in China.

Its nutrition product Ensure 3 is part of the firm's first batch of products that are registered as food for special medical purpose in China in June this year.

Abbott said it can meet the nutritional demands of people over the age of 10 who suffer from diseases including food intake disorder, digestion and absorption obstacles, and metabolic disorders. Abbott also has special medical nutrition products for patients with diabetes.

Abbott's third quarter report in 2019 showed its worldwide adult nutrition sales increased 3.8 percent to $1.87 billion. The sales performance in the quarter was led by the strong growth of its Ensure nutrition brand, and Glucerna, its diabetes-specific nutrition brand.

The Healthy China Initiative (2019-30) said national nutrition has been raised as an issue to be a part of the national strategy. Chinese consumers have great demand potential for quality FSMP.

The plan pointed out there has been a rise of nutrition-related diseases in recent years, while the Health Promotion For the Elderly will be carried out soon.

China is home to the largest number of senior residents in the world. By the end of 2018, the number of people aged 50 and above reached 249 million, accounting for 17.9 percent of China's population.

Nearly 180 million elderly people in China suffer from chronic diseases, data provided by Abbott showed. The proportion that suffer from one or more chronic diseases is as high as 75 percent.

At the same time, the life span of aging people has grown rapidly, with the expected life time per capita expected to reach 79 by the year 2030.

In its 2018 report of healthcare statistics, China's top health authority revealed that the number of in-hospital patients reached 250 million last year. It will become necessary to provide effective and quality medical nutrition support to this group of patients along with old people as a whole going forward.

 

 

 

]]> 2019-12-12 00:00:00 http://www.chinadaily.com.cn/kindle/2019-12/12/content_37528849.htm Tencent Cloud, the cloud computing arm of internet giant Tencent, is stepping up its artificial intelligence focus with an eye on the burgeoning growth, profit opportunities for the sector in China.

The cloud computing service provider on Wednesday launched a series of new AI products that seek to lower the skill barriers for enterprise customers.

"The blossoming AI, big data and other digital technologies over recent years strongly point toward an inevitable trend of intelligent upgrade of industries," said Wang Long, vice-president of Tencent Cloud. "Companies yearn for more sophisticated AI application scenarios to generate new momentum for industrial development."

Wang said against this backdrop, companies need to offer end-to-end comprehensive AI solutions that can truly generate value and help clients embrace digital transformation.

Tencent Cloud's new products include technologies to identify fake facial images, a language model self-learning tool, graph computing engine as well as a big data platform to help enterprises fend off risks.

The cloud service provider also announced on Wednesday that it has upgraded all its AI and big data products, as part of the larger efforts to reinforce its leading position in the market.

Currently, Tencent Cloud serves data scientists, application developers and business managers, offering big data and machine learning tools and services to help lower the skill barriers. It has also worked with partners to offer digital solutions for various industries such as retail and finance.

With the booming new technologies and supportive government policies, China is fast becoming a fertile market for the development of AI technologies and the applications, powered by leading tech giants such as Alibaba, Tencent and Baidu.

By the end of last year, China had 3,341 AI companies and was ranking second behind the United States, said an AI development report released in May by the Ministry of Science and Technology.

The report said the US, China and the United Kingdom are at the forefront in AI. From 2013 to 2018, global scientists published more than 300,000 papers in AI research, with China leading in the number of published papers at 74,408, followed by the US at 51,766.

According to a national plan released in 2017, China is set to become the world leader in AI by 2030. By 2020, China's AI industry is expected to be worth 150 billion yuan ($21 billion).

"Both AI adoption and spending are picking up fast," Andrea Minonne, a senior research analyst with International Data Corp, said in a recent report. "AI is the game changer in a highly competitive environment, especially across customer-facing industries such as retail and finance, where AI has the power to push customer experiences to the next level with virtual assistants, product recommendations, or visual searches," said Minonne.

 

 

 

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