The Nation Newspaper

Tag: china

  • China to stabilise stock market

    China’s market regulator said it would continue to stabilise the stock market for “a number of years.”

    It said the role of the state-backed China Securities Finance Corp to stabilise the market would not change.

    However, it added that it would allow market forces to play a bigger role in setting stock prices.

    The comments come after wild swings on the stock market earlier this month, which saw the main index slump 8.5% in one day.

    “With market fluctuations gradually shifting to normal, from wild and abnormal, we should let the market exercise its function of self-adjustment,” the China Securities Regulatory Commission told a news conference in Beijing.

    On Friday, mainline shares edged higher as the country’s central bank raised the trading range of the yuan.

    The benchmark Shanghai Composite closed up 0.3% at 3,965.33 points, although Hong Kong’s Hang Seng dipped 0.1% to 23,991.03.

    The central bank set the yuan rate at 6.3975 to the dollar, compared with Thursday’s close of 6.3982.

    The rate is set daily and allows a 4% fluctuation. Over the past week, the bank had guided the yuan to a record low, sparking fears of a currency war to help lagging Chinese exports.

    Japanese shares traded lower, with the Nikkei 225 index closing 0.4% lower at 20,519.45 points.

    Investors are anticipating Monday’s release of Japan’s economic growth for the past three months.

    In Australia, the S&P/ASX 200 also fell by 0.5%, finishing at 5,360.90 points, as investors took a cue from Wall Street’s flat close and the continuing uncertainty over the yuan.

    The Chinese currency is important to Australia, as China is the main export market for the country’s natural resources.

    In South Korea, the Kospi index remained closed on Friday, ahead of a national holiday on Saturday.

    German Finance Minister Wolfgang Schaeuble (left) has criticised Greek delays in the past

  • 2015 All Africa Games: Egypt, Algeria camp in China for Nigeria

    2015 All Africa Games: Egypt, Algeria camp in China for Nigeria

    In readiness for Nigeria at the 2015 All Africa Games, Egypt and Algeria are at present in China honing their skills in table tennis for the multi-sports championship in Congo Brazzaville.

    After dominating the just concluded ITTF Africa Senior Cup in Cameroon, Egypt returned to Asia this week to continue with their build-up under the tutelage of their Chinese coach.

    Also, 15 Algerian players were sighted at a training camp in Shanghai under the watchful of their French technical adviser, Cedric Rouleau.

    For the Egyptians, this year’s games hope to be excited as Omar Assar, El-Sayed Lashin and Mohammed El-Beiali as well as Dina Meshref and Nadeen El-Dawlatly are in the best form of their lives considering their performance at the Cameroon tournament.

    Before the Cameroon competition, the Egyptian team has embarked on a one month training tour in China and they have also decided to return to perfect their skills for the games.

    Unlike their Egyptian counterparts, Algeria were camped in Algiers for the Cameroon championship and having seen their level during the ITTF Africa Senior Cup, the team moved to China to continue their training as well.

    Host – Congo Brazzaville will also be rounding up their one-year training tour of China this month having perfected formalities for the engagement of their Chinese players who are also expected to feature for the Central African region during the championship.

    Vice President, Africa Table Tennis Federation (ATTF), Olabanji Oladapo told NationSport Tuesday that Nigeria must brace up if its hopes to clinch any medal in Brazzaville.

    “I don’t think we should be relaxed this year because with what I saw at the Cameroon championship, it is clear that everybody is after Nigeria. They all know that we are capable of springing surprises and I am sure they know that they have to be at their best to overcome Nigeria. I know we have the quality in terms of talents, but we just need to harness these talents to achieve the optimum results in Brazzaville. I believe that with a technically sound coach, we can do better in Brazzaville and this I believe is the only way we can perform beyond every expectation,” Oladapo said.

  • Vivendi to expand universal music’s reach in Africa, China

    Vivendi SA announced a five-year plan to expand the reach of Universal Music Group by investing in digital channels, new countries and adding partnerships.

    Universal Music’s Chief Executive Officer Lucian Grainge has agreed to stay on at the record label until at least 2020, the French media group said in a statement Friday.

    Chairman Vincent Bollore is working to transform Vivendi, selling off the company’s telecommunications assets and making acquisitions in media and entertainment. Revenue at Universal Music rose in the first quarter after declining in 2014 as the company’s digital sales and improvements in its licensing business paid off.

    In the next five years, Universal Music will invest in Africa, India and China, which are “high-potential markets for music,” and “accelerate the monetisation of music on digital channels.”

    The plan may point to a shift to more paid subscription models, where labels and artists take home most of the subscription fee, instead of ad-funded “freemium” services such as Spotify Ltd., Liberum analyst Ian Whittaker said in a note. It also means that Vivendi is committed to Universal Music, and won’t sell or spin off the label in the near term, he said.

    Vivendi said last week that it sold its remaining shares in Telefonica SA’s Brazilian phone company, exiting Brazil and further reducing its exposure to phone-company assets. The company’s already disposed of assets in France, North Africa as well as its holding in video-game maker Activision Blizzard Inc., freeing up resources to buy media and content businesses.

    Vivendi rose 0.3 percent to 23.76 euros at 1:30 p.m. in Paris. The stock has gained 15 percent this year.

    A weakening currency, rising inflation expectations and a desire to stay a step ahead of the Fed were among reasons cited by South African Reserve Bank Governor Lesetja Kganyago when he raised the policy rate for the first time in a year last week, to six percent from 5.75 percent.

    The consumer inflation rate, which rose for a fourth month in June to 4.7 percent, is forecast by the central bank to peak at 6.9 percent in the first quarter of next year, and remain outside the three percent to six  percent target for two quarters. The government projects the economy will grow two percent this year, after expanding 1.5 percent in 2014, the slowest pace since the 2009 recession.

    The low growth rate means a steep rate-hike cycle is unlikely, said Jonathan Myerson, head of fixed-income investments at Cadiz Asset Management Ltd. in Cape Town. That makes longer-maturity bonds attractive at current yields, he said.

    “The value is there,” Myerson said by phone on Thursday. “I certainly wouldn’t be running away from them. I would, if anything, be adding to my positions.”

     

  • Photo: Construction workers protest poor welfare

    Photo: Construction workers protest poor welfare

    CHINA CIVIL ENGINEERING CONSTRUCTION COMPANY WORKERS PROTESTING OVER POOR WELFARE PACKAGES IN LAGOS ON TUESDAY
    CHINA CIVIL ENGINEERING CONSTRUCTION COMPANY WORKERS PROTESTING OVER POOR WELFARE PACKAGES IN LAGOS ON TUESDAY

  • Indian economy to overtake China’s

    When India released data on last week that is expected to show the economy growing faster than China for a second consecutive quarter, sceptics could be forgiven for asking: Why does it feel so slow?

    Celebrating his first year in office, Prime Minister Narendra Modi has basked in the success of transforming India into the fastest growing major economy.

    But there are nagging doubts over whether a new way of calculating gross domestic product, introduced by the government earlier this year, has distorted the macroeconomic view.

    “The economy is not as strong as the GDP numbers might suggest,” said Shilan Shah, India Economist at Capital Economics. “The numbers should not have any bearing on policies and both the central bank as well as the government should look at other activity indicators.”

    The robust headline growth is hard to square with weak industrial activity, grim corporate earnings and an elusive recovery in bank credit.

    The median estimate from a Reuters poll of economists put GDP growth at 7.3 percent in the January-March quarter, slowing from 7.5 percent in the previous quarter.

    For the 2014/15 fiscal year ending in March growth is expected at 7.4 percent, up from 6.9 percent in 2013/14, using the new series.

    That is a startling turnaround from the previous data series that showed the economy was still struggling to gather steam after posting two successive years of growth below 5 percent – the longest spell of such low growth in a quarter century.

    If India was doing so well there might be far less need for the central bank to lower interest rates for a third time this year, as analysts expect it to do at a policy review on Tuesday.

    But, the economy is still suffering from slack. Corporate sales and industrial production are down.

    Merchandise exports have fallen for five months in a row.

    Output of cement and steel, a proxy for construction, has been extremely weak. Growth in bank credit in the fiscal year ending in March was the slowest in two decades.

    Arvind Subramanian, the government’s chief economic adviser, this week likened the state of the economy to flying on “one-and-a-half engines”.

    “Bad stuff has stopped happening, but the good stuff is still waiting to happen,” he said.

    Whereas India’s statisticians changed their calculation of GDP to come into line with global practices, it has left economists inside and outside government groping for a clear interpretation of the data.

    The Reserve Bank of India (RBI) has warned the new series is clouding the picture, and reckons growth is still slow in picking up. Still, the economy is in better shape than when Modi took the reins a year ago with the slogan “good days are coming”.

    He has been helped by a dramatic slide in global crude prices that has cooled inflation and helped narrow the fiscal and current account deficits, giving the RBI leeway to cut interest rates.

    Modi’s drive to make it easier to do business in India has generated optimism, and has led to a marked increase in foreign direct investment.

    A massive increase in the government’s planned spending on roads, railways and ports this year is expected to break a persistent investment logjam.

    Yet, businesses complain that too little has changed and are reluctant to ramp up investment, as their balance sheets are already stretched. Banks, saddled with mounting bad debt, are also cautious lenders.

    “So far, not enough has been achieved to suggest that India can fulfil its economic potential over the medium term,” said Shah of Capital Economics.

  • China’s firms improve performance

    China’s factories struggled to expand in May despite recent interest rate cuts and other policy stimulus, a Reuters poll showed, suggesting the government may have to do more to halt a protracted slowdown in the economy.

    The official manufacturing Purchasing Managers’ Index, is forecast to inch up to 50.2 from April’s 50.1, according to the median forecast of 14 economists in the poll.

    A reading above 50 points indicates an expansion in activity while one below that shows a contraction on a monthly basis.

    “Although the government has unveiled a series of policy stimulus measures, the effect has yet to show up,” said Nie Wen, an economist at Hwabao Trust in Shanghai.

    The flash HSBC/Markit PMI released last week showed factory activity contracted for a third month in May and output shrank at the fastest rate in just over a year, indicating persistent weakness in the world’s second-largest economy that requires increased policy support.

    The private survey focuses on small and mid-sized firms, while the official one looks at larger, state-owned companies.

    China’s annual economic growth slowed to a six-year-low of seven percent in the first quarter, and recent data showed a further loss of momentum heading into the second quarter.

    Economists at HSBC lowered their forecast this week for China’s 2015 GDP growth to 7.1 percent from 7.3 percent, and cut their export growth forecast to 4.2 percent from 7.1 percent.

    “Weaker exports will weigh on corporate spending and sentiment. Meanwhile, policy easing is behind the curve, further cutting into investment growth,” they said in a research note. Given weak conditions, HSBC has doubled down on its projections for further policy easing this year.

    It now expects the central bank to cut interest rates two more times this year, by a total of 50 basis points (bps), and slash banks’ required reserve ratio by a total of 250 bps in cuts to encourage more lending.

    HSBC had previously forecast a further 25 bp cut in interest rates and 100 bps of RRR cuts for the rest of the year.

    In a bid to spur growth and reduce borrowing costs, the central bank already has delivered three interest rate cuts since November, lowering the benchmark lending rate by 90 basis points, and cut bank reserve ratio by 150 bps this year.

    Weighed down by a property downturn, factory overcapacity and high levels of local debt, China’s economic growth is expected to slow to a quarter-century low of around seven percent this year from 7.4 percent in 2014.

    The PMI factory numbers will be released today alongside the official services PMI and the final HSBC/Markit PMI.

  • World’s biggest Disney store opens in China

    World’s biggest Disney store opens in China

    The world’s biggest Disney store, and the first in mainland China, opened in Shanghai’s bustling Lujiazui financial district on Wednesday, a statement said.

    The statement said that 860-square-metre shop featured a castle at its centre with an hourly music and projection showing the California-based company.

    It stressed that more than 2,000 products, including clothing, bags and mobile phone accessories, were available for purchase at the store.

    According to statement from Disney, the store gives visitors a taste of what to expect for the much-anticipated opening of the 5.5 billion-dollar Shanghai Disney Resort, which is scheduled to open next spring in Pudong.

    “The park is one of nearly 60 theme parks currently under construction in China’’, it said.

    It added that there has been a boom in the building of theme parks in China in recent years, as the domestic tourism industry has scrambled to cater to the growing middle class.

    Report says Shanghai Disney Resort is a joint venture between the Walt Disney Company and Shanghai Shendi Group, which hold 43 per cent and 57 per cent of total shares of the owner companies respectively.

    Disney, the world’s largest entertainment company, already has parks in Japan and Hong Kong

  • China faces pressure on exports

    The pressure is on Chinese exports as the euro sinks against the yuan, Ministry of Commerce spokesman Shen Danyang said last week. The yuan was up 10.8 percent against the euro until March 13,  2015 when the euro devalued 13.2 percent against the U.S. dollar.

    The price advantages of Chinese exports to the European market has been softened by the euro devaluation, said the spokesman. The weak euro will also incite eurozone exports to other markets, adding competitive pressure to China’s high value-added exports.

    Imports from the eurozone have not been affected much by the fluctuation, as China mainly imports mechanical, electrical and chemical products from Europe, but investment and merger opportunities for Chinese companies have increased as asset prices tumbled, said Shen.

    In the first two months this year, Chinese non-financial direct investment in the European Union rose almost ten fold.

    China’s exports fell 3.2 percent year on year in January but rose 48.9 percent in February, according to the General Administration of Customs.

    Growth of exports to the U.S. and the EU hit 48.5 percent and 44.2 percent, respectively, in February thanks to a mini economic recovery there at the turn of the year.

    Shen attributed part of export growth in February to a low comparative base in the same period last year. It is common for the Chinese economy to fluctuate in January and February due to the Lunar New Year holiday, which fell in February this year and January in 2014.

    Exports of both textiles and clothes nearly doubled in January compared with the same period last year, driven by higher export rebates since the start of this year.

    Meanwhile. China will look into on how local governments can mobilise their unused fiscal funds, the Ministry of Finance said on Thursday, in the latest bid to support the slowing economy.

    China’s cabinet has called on debt-laden local governments to “revitalise” their fiscal resources and channel any leftover funds into public facilities and infrastructure projects. The finance ministry will conduct a nationwide check on local governments’ efforts in “revitalising the stock of fiscal funds” during a month from March 20, it said in a statement on its website.

    The government plans to run its biggest budget deficit in 2015 since the global financial crisis to support growth, as top leaders push reforms to improve fiscal discipline and deal with the root cause of local government debt.

    Weighed down by a property downturn, factory overcapacity and local debt, China’s economic growth is expected to slow to a quarter-century low of around 7 percent this year from 7.4 percent in 2014, even with expected additional stimulus measures.

  • China to unveil $46b super highway to Pakistan

    The building of a China-Pakistan Economic Corridor (CPEC) – a network of roads, railway and pipelines is on course.

    It will run some 3,000km (1,865 miles) from Gwadar in Pakistan to China’s western Xinjiang region.

    The projects will give China direct access to the Indian Ocean and beyond.

    This marks a major advance in China’s plans to boost its economic influence in Central and South Asia, correspondents say, and far exceeds US spending in Pakistan.

    “Pakistan, for China, is now of pivotal importance. This has to succeed and be seen to succeed,” Reuters quoted Mushahid Hussain Sayed, chairman of the Pakistani parliament’s defence committee, as saying.

    Pakistan, for its part, hopes the investment will boost its struggling economy and help end chronic power shortages.

    China plans to inject some $46billion – just a little less than three times the entire foreign direct investment Pakistan has received since 2008. Many say Mr Sharif’s penchant for “thinking big” and China’s increasing need to control maritime trade routes may well combine to pull off an economic miracle in Pakistan over the next four years, when officials say most of the projects being finalised today will reach completion.

    But there are questions over Pakistan’s ability to absorb this investment given its chronic problems with militancy, separatism, political volatility and official corruption.

    China is worried about violence from ethnic Uighurs in its mostly Muslim north-western Xinjiang region and fears hardline separatists could team up with Uighur Islamic militants fighting alongside members of Pakistan’s Taliban.

    In Pakistan, a decade-old separatist insurgency in Balochistan province, where the economic corridor starts, makes that area extremely volatile. Many observers believe however that the incentive of an economic miracle may make Islamabad work a bit harder to stabilise the situation.

    Leaders are also expected to discuss co-operation on security.

    Xi will spend two days holding talks with his counterpart Mamnoon Hussain, Prime Minister Nawaz Sharif and other ministers. He will address parliament.

    Deals worth some $28billion are ready to be signed during the visit, with the rest to follow.

    Under the CPEC plan, China’s government and banks will lend to Chinese companies, so they can invest in projects as commercial ventures.

    A network of roads, railways and energy developments will eventually stretch some 3,000km (1,865 miles).

    Some $15.5billion worth of coal, wind, solar and hydro energy projects will come online by 2017 and add 10,400 megawatts of energy to Pakistan’s national grid, according to officials.

    A $44m optical fibre cable between the two countries is also due to be built.

    Mr Xi will hold talks with Pakistan’s president and prime minister

     

  • Venezuela gets $5b lifeline from China

    Venezuela has received $5billion (£3.4billion) in financing from China, Venezuelan President Nicolas Maduro says.

    The money was for “development”, he said, but gave no details.

    The announcement comes three months after Mr Maduro travelled to China – a major investor in the region.

    Venezuela is suffering from an acute economic crisis, as the price of its main export, oil, has almost halved over a year. The opposition accuses the government of mismanagement.

    Maduro, who visited Beijing in January, said then that China would invest more than $20billion in Venezuela.

    He did not make clear in Sunday’s announcement if these latest $5bn were part of that larger sum.

    China’s influence

    Loans by China’s state-owned banks to Latin American countries rose by 71% to $22billion (£14billion) last year, according to estimates published by the China-Latin America Finance Database.

    The Chinese loans exceed the combined worth of those by the World Bank and the Inter-American Development Bank, according to the database.

    The $5billion will be a boost to Venezuela, which has been hit hard by falling oil price. According to reports, 96% of its export revenues come from oil.

    Figures from Venezuela’s oil ministry suggest the price of Venezuelan oil has dropped from $97 in April 2014 to $50 this month.

    Inflation in 2014 stood at more than 60% and there are widespread shortages of basic staples such a flour, cooking oil and milk.