Updated: 2013-05-24 07:26
Deals worth more than 175b yuan signed in Chengdu
Companies from the Hong Kong and Macao special administrative regions signed contracts pertaining to 138 projects with an investment value of more than 175 billion yuan ($28 billion) in Sichuan province on Thursday. The deals took place during a large-scale investment promotion fair launched in the provincial capital Chengdu in the wake of a magnitude-7 earthquake that jolted Lushan county in the province on April 20. The investments from Hong Kong and Macao will find its way into agriculture, industry and the service sector.
EU to open negotiations with China amid disputes
The European Commission announced on Thursday it was ready to open negotiations with China, one of the EU's most important trading partners, on an investment protection accord. As a first step, it will ask the 27 EU member states to approve a negotiating mandate with China, which counts the EU as its single largest export market. The announcement comes in the midst of a series of tit-for-tat trade disputes between Brussels and Beijing and as the EU begins talks with Washington on what could be the largest-ever free trade agreement.
Bicycle anti-subsidy tariff threat dropped
The European Union dropped a threat to impose tariffs on bicycles from China to counter alleged subsidies for Chinese exporters, marking a respite in the EU's wider battle to protect its producers. The EU recently closed a probe into whether Chinese bikemakers receive trade-distorting government aid. The European Bicycle Manufacturers Association withdrew its subsidy complaint on March 22, the European Commission said on Thursday. The commission opened the subsidy inquiry in April 2012 as a result of the bicycle group's complaint.
PetroChina to boost imports of natural gas
PetroChina will boost natural gas imports to try and ease the country's growing supply gap, its chairman said on Thursday, a move that could pressure the earnings of China's dominant oil and gas producer. "PetroChina will boost natural gas from overseas, including Central Asia and Russia, to meet the demand for clean energy," chairman Zhou Jiping told reporters after the company's annual general meeting. China imported 42.5 billion cubic meters of natural gas in 2012, up 31.1 percent from the previous year.
Tightening of copper trade to hurt outlook: Goldman
New rules from China to control capital inflows are likely to end commodity-financing deals, hurting the short-term outlook for copper, analysts at Goldman Sachs Group Inc wrote in a research report on Thursday. The regulations from the State Administration of Foreign Exchange, effective from June, will probably mean an end to Chinese use of copper as a tool to enable interest rate arbitrage, Goldman said. The new policy follows severe discrepancies in China's trade data in the first four months that aroused suspicions about companies using trade deals to evade capital controls and take advantage of interest-rate arbitrage between China and overseas.
Commodities fall as manufacturing shrinks
Commodities fell for a third day, paced by declines in copper and oil, as manufacturing in China unexpectedly shrank for the first time in seven months and the head of the Federal Reserve hinted that stimulus may be tapered. The Standard & Poor's GSCI Index of 24 commodities dropped as much as 1.2 percent to the lowest level in a week, and was 0.5 percent lower at 623.11 in London. Copper in London, seen as an indicator of economic activity because of its use in construction, lost 2 percent to $7,324 a ton. Oil in New York sank 0.7 percent.
Note sales by property developers increase
China Properties Group Ltd is considering a sale of US dollar-denominated notes after an issue by Central China Real Estate Ltd, as builders in the mainland and Hong Kong more than double offerings from April. China Properties will meet investors in Hong Kong on May 27 and in Singapore on May 28, a person familiar with the matter said, asking not to be identified. Central China sold 57 percent of its five-year notes, which pay 6.5 percent, to funds, a separate person said on Thursday. Real estate companies from the mainland and Hong Kong have sold $1.9 billion of bonds in May, more than double offerings last month. They issued a record $13.5 billion in the first quarter, according to Bloomberg data.
Regulator tells banks to step up document checks
China's foreign-exchange regulator told banks to improve checks of customer documents related to special trade zones amid speculation that the areas have been exploited to disguise capital inflows as exports.
Banks shouldn't provide cross-border payment services to companies in the so-called bonded zones that aren't pre-registered with the foreign-exchange authority, according to a notice issued on Wednesday by the State Administration of Foreign Exchange that takes effect on June 1. If an exporter decides to deposit its revenue overseas, banks must know the size, duration and remittance arrangements, SAFE said.
Italian menswear firm Canali expands presence in China
Canali Holding SpA, the Italian menswear retailer, expects sales in China to grow 15 percent this year as the company expands its footprint in the world's second-largest economy. The closely held retailer, which reported sales growth of 15 percent in 2012, plans to open five new boutiques across China to tap the rising income of Chinese consumers. The company currently has 60 outlets in the country. While the growth in the Chinese economy "is slowing a little bit, it will be one of the most important markets for us", said Stefano Canali, the group's general manager.
(China Daily USA 05/24/2013 page18)