Friday____________________ June 21

Manufacturing sector shows decline

China's manufacturing production may have dropped to a nine-month low in June, according to figures from HSBC Holdings PLC, and economists said that means an accelerated contraction of the manufacturing sector.

The flash estimate of the HSBC China Purchasing Managers' Index fell to 48.3, worse than the final reading of 49.2 in May. A reading below 50 signals contraction.

Qu Hongbin, HSBC's chief economist in China and the co-head of Asian Economic Research at the bank, blamed deteriorating external demand, moderating domestic demand and rising destocking pressures for the latest reading. (Photo 1)

CBRC blocks some bank-loan activities

The China Banking Regulatory Commission has blocked banks' loans to other financial institutions such as lending companies, pawnshops, guarantee companies and private financing activities amid the worst cash crunch in a decade.

The CBRC issued a directive to its local bureaus and commercial lenders, ordering banks to include external risks related to such financial institutions in their risk-management system, the Shanghai Securities News reported.

According to a financial stability report released by the People's Bank of China on June 7, fund sources of private lending have become entangled with the mainstream financial system, "and once the funding chain breaks, risks would spread to traditional lenders and cause regional events and emergencies". (Photo 2)

Monday____________________ June 24

China and Britain do currency swap

China and Britain agreed on a 200 billion yuan ($32.59 billion) line of currency swap that is expected to broaden the Chinese yuan's use in global trade and investment.

Since 2008, China has signed currency swaps with 22 countries, totaling around 1.7 trillion yuan. The moves are part of a bigger plan to make the yuan a global reserve currency along with China's rising economic power.

The swap would also give an edge to London in its plan to become an offshore center of yuan trading in the face of competition from global financial centers including New York, Paris and Frankfurt.

HSBC Holdings PLC has predicted that the yuan will become one of the top three global trade currencies by 2015, settling half of China's trade.

Investment in US creates jobs

Chinese companies in the US are expected to employ between 200,000 and 400,000 Americans by 2020, as Chinese investment in the US tripled in the past five years, according to a new study.

Total foreign direct investment from China in the US surged to more than $22 billion in 2012 from $280 million in 2004, with the figure increasing threefold since 2008, New York-based Rhodium Group Llc found.

Last year saw $6.5 billion worth of new investment, a level expected to be at least repeated again this year. China has remained one of the few sources of investment into the US that is growing, said Rhodium.

Shao Ning, chief executive of the Center of American States, which represents eight US states in China, said that typically less than 10 percent of Chinese transactions went through any formal national security review process.

Tuesday____________________ June 25

Approval process simplified for performers

Getting approval to perform on the mainland will to be easier and faster starting July 1.

Previously, the provincial cultural department would scrutinize a proposal before applying to the Ministry of Culture. The ministry would reply to the provincial department within 20 working days, and then the provincial department would notify the presenter, which could take another 10 working days. The whole process usually took one to two months.

Now, presenters need only apply to the provincial cultural department, which will decide within 20 working days.

According to a report by the ministry, the mainland's performance market reached nearly 60.3 billion yuan ($9.83 billion) in 2012, an increase of 60 percent over the previous year. The number of performances on the mainland last year exceeded 2 million.

The new regulation is part of a campaign initiated by the central government to streamline government functions.

Consumers planning to spend less

China's weakening economy means consumers are planning to spend less, with consumers in smaller cities especially reluctant to spend, according to a report by The Boston Consulting Group.

The study said 27 percent of Chinese consumers said they planned to spend more in 2013 - a percentage much higher than in developed economies -but the figure was an 11 percent drop from last year's 38 percent.

The study was based on an April poll of 1,000 consumers in 12 Chinese cities.

Last year, close to half of consumers said the economy would improve within the next 12 months, but this year's report said that figure is now 38 percent.

While intent on spending less, Chinese consumers are also planning to save more. The household savings rate in China reached a historic high of 38 percent of disposable income in 2012, compared with 23 percent 10 years ago, the report said.

Asked about why they wanted to save more, consumers said they wanted to support their family, or purchase expensive goods such as houses and cars.

But the main reason given for the growing reluctance to spend money, said respondents, was China's soaring property prices, which were exerting a significant "squeeze" on other spending.

Some 34 percent of people not owning property said they planned to spend less, while of those owning property, only 27 percent said they would do so. (Photo 4)

Wednesday

__________ June 26

HP aims for growth in small cities

Hewlett-Packard Co in China is building sales and releasing new products in smaller cities, company executives said.

"More than 60 percent of the demand resides in fourth- to sixth-tier cities. HP only derives about 40 percent of its revenue from small Chinese cities, so we must change the situation to boost our growth," said Yi Xiaohui, HP's senior vice-president and China head of personal systems business.

Although HP remains the world's top PC maker, the industry leader in China is Lenovo, a local brand with a strong edge in sales channels. (Photo 5)

New canal to break ground in 2014

The Chinese businessman behind a plan to build a waterway across Nicaragua to rival the Panama Canal said that the $40 billion project would break ground in late 2014 and complete construction within six years.

Wang Jing, 40, a Beijing native, said the canal is designed for 400,000-ton-class vessels, compared with the Panama Canal, which only allows vessels with capacities below 150,000 tons.

Hong Kong-based HKND Group, an infrastructure development company wholly owned by Wang, will be responsible for financing the project before construction begins.

Thursday________________ June 27

China moves up in FDI ranks

China moved up from sixth to third place in 2012 in outward foreign direct investment - after the US and Japan - while a recent survey listed the world's second-largest economy as "the most promising source" of FDI.

In 2012, FDI outflow from China was a record $84 billion, while total outward FDI from East and Southeast Asia rose 1 percent to $275 billion, amid a sharp decline in global FDI outflows, according to an annual report of the United Nations Conference on Trade and Development.

FDI from China set a record in the US in 2012, with completed deals worth $6.5 billion, a 17 percent increase from the previous record of $5.5 billion in 2010, according to New York-based Rhodium Group, which tracks overseas Chinese investment.

The most alluring sectors in the US were oil and gas extraction, advanced manufacturing operations, utilities, real estate and hospitality, said the group.

IBM cutting jobs on mainland

International Business Machines Corp, which reported lower-than-expected first-quarter earnings, is reducing its workforce in China. One report suggested the New York-based multinational is expected to cut at least 500 staff on the Chinese mainland.

IBM's China office said in an e-mail reply to China Daily on Wednesday that "some level of workforce remix is a constant requirement for our business".

The company didn't disclose the number of cuts, but didn't refute a report by local Chinese news site tech.qq.com of at least 500 cuts.

The report added that affected staff can expect 14,000 yuan ($2,270) for every year of service as compensation. The US company did not refute the report.

In April, Lenovo Group Ltd held talks with IBM on the possible acquisition of its x86 server business, but negotiations broke down when the sides failed to settle on price.

A set of ceramic bowls tailored-made for Chairman Mao Zedong was auctioned at a price of HK$11.68 million ($1.51 million) in Hong Kong on June 20. The bowls were designed and produced for Mao's 81st birthday. The eggshell bowls represent the four seasons and rhyme with Mao's poems, one of his penchants. Xinhua

(China Daily USA 06/28/2013 page8)