News
6/29/2007

Defying Skeptics, Hong Kong Stays Resilient Under Beijing__Wall Street Journal
Hong Kong's prospects were never guaranteed under Chinese rule, and China's desire for political control has sometimes crimped freedoms there. But the country's ability to defy skeptics and prosper as one of the world's great cities says much about the former colony's resilience.

Major Chinese Bank to Update Its Retail Risk Management__Wall Street Journal
Bank of Communications said it will begin designing methods to rate the creditworthiness of the Chinese lender's customers.

Beijing Uncovers Violations at 3 Big Lenders__Wall Street Journal
China said it uncovered illegal activities involving $2.04 billion at three of China's largest banks, as well as poor oversight on lending to real-estate projects and in foreign-exchange transactions.

HSBC Seeks China Insurance License HSBC Holdings__Wall Street Journal
PLC has applied with a Chinese partner for a life-insurance license in China and expects the business to start operations by 2008, said HSBC's regional head of insurance for the Asian-Pacific region.

Air China Hopes for Olympic Gold __Wall Street Journal
Sometimes a good investment can be right under one's nose. Consider Air China, which already is relatively strong in the Chinese aviation business and now is poised to cash in on next year's Beijing Olympics.

China hits out over ‘hot money’__Financial Times
Ten international banks, including HSBC and Standard Chartered, have been punished by China’s foreign exchange regulator for breaching strict capital controls.



6/28/2007

China Shuts 180 Food Plants in Safety Push__Wall Street Journal
Chinese officials shut 180 food makers for using industrial chemicals in their products, admitting the practice is widespread.

Chinese Residential Developers: Good Location With Room to Grow__Wall Street Journal
Shares of Chinese residential-property developers have been riding a wave of swelling incomes and investment fervor. Yet, even with official curbs on development to keep the economy from overheating, there might be space for growth in the sector.

China Plans Bonds for New Agency__Wall Street Journal
China plans to capitalize its new foreign-exchange-investment agency by issuing a local-currency bond valued at more than $200 billion, clearing a key hurdle for the sovereign-investment fund that will be formally established in coming months.

Auditors Find Faulty Loans At China Banks__Wall Street Journal
Two Chinese banks said a routine check by government auditors last year uncovered lending irregularities and suspected economic crimes at some of the banks' branches, but don't expect the findings to have an impact on their results.

China investment body gets first funds__Financial Times
China’s new state investment agency is poised to secure its first significant funding with the announcement that the finance ministry will issue $200bn in bonds.


6/27/2007

Chinese Shift Bank Savings Into Frothy Stock Market __Wall Street Journal
Chinese bank savings fell $21 billion in April and by $37 billion in May as households poured money into stocks.

Chinese-Currency Bonds To Hit Hong Kong Market __Wall Street Journal
China Development Bank said it will sell up to $656 million of yuan-denominated bonds in Hong Kong, the first such issue outside mainland China.

China's Hu Takes Aim at Corruption__Wall Street Journal
Chinese President Hu Jintao, in a high-profile speech, called on government officials to help China develop more equitably, reinforcing a key message of his leadership amid scandals that have embarrassed the ruling Communist Party.

Cosco IPO raises fears of ‘systemic under-pricing’__Financial Times
Shares in Cosco Holdings nearly doubled on their first day of trading in Shanghai after China’s largest shipping group received record subscriptions for its $2bn offering.

Protectionist law hinders M&A growth__Financial Times
Local regulations and management culture across Asia have been cited as obstacles most likely to derail cross-border acquisitions, a survey has found.


6/26/2007

China's Other Market Boom: Insider Trading __Wall Street Journal
Regulators who are seeking to cool the booming Shanghai stock market are also trying to contain an unwelcome growth industry: insider trading.

Accident Raises Safety Concerns On Chinese Tires__Wall Street Journal
Some 450,000 Chinese tires sold in the U.S. may lack an important safety feature designed to make them more durable, regulators and the distributor said.

China Retailer Sets Price Range For Initial Shares__Wall Street Journal
New World Department Store China Ltd., a unit of blue-chip conglomerate New World Development Co., aims to raise as much as US$302 million in a Hong Kong initial public offering of shares, according to a term sheet seen by Dow Jones Newswires.

(Entire) SEC Makes House Call__Wall Street Journal
In the latest sign Congress is turning a skeptical eye toward Wall Street, an influential House committee is set to hear testimony from all five commissioners of the Securities and Exchange Commission today -- the first time that has happened in at least 10 years.

Fosun to list in Hong Kong__Financial Times
Fosun International, a Chinese company with investments in steel, pharmaceuticals and property, is raising up to $1.4bn in an initial public offering in Hong Kong next month.


6/25/2007

Chinese officials to run three banks__Financial Times
Reassignment of three senior Beijing representatives revives concerns over independence in the financial sector -

China to Consider National Security In Deal Regulation __Wall Street Journal
The most recent draft of China's antimonopoly law will add a requirement that regulators reviewing foreign purchases of Chinese companies consider issues of national security, not just antitrust, the official Xinhua news agency reported , citing a lawmakers meeting.

China Revises Draft Law That Could Have Muzzled Media __Wall Street Journal
China is reviewing a draft of an emergency-response law that would ban the spread of "false information" during accidents and disasters but removes conditions that could muzzle the media.

Xinhua Offers Real-Time Data Service __Wall Street Journal
Xinhua news agency said it launched a real-time financial-data service as part of efforts to expand its operations.

6/21/2007

Foreign Affair: Is End Near For 'U.S. Only' Accounting? __Wall Street Journal
The SEC voted to propose allowing companies based outside the U.S. to file financial results using international financial reporting standards.

China Funds Create Opportunity to Short__Wall Street Journal
Savvy U.S. investors put their money in a few mutual funds that invest directly in Chinese stocks as that market took off, and now investors are using these funds to bet on a big decline.

Chinese Firm May Invest In Airbus Parts Factories__Wall Street Journal
China's AVIC I plans to buy or invest in as many as six Airbus parts factories in Europe, in what would be an important first step overseas for the state-owned aviation company.

China Expands Program For Overseas Investments__Wall Street Journal
China's securities regulator issued detailed rules on overseas investments by securities companies and funds yesterday in a move that expands its overseas investment program for domestic investors.

PetroChina Surges on Shanghai IPO Plans __Wall Street Journal
PetroChina Co. surged to a record close yesterday in Hong Kong after it disclosed plans to issue as many as four billion Class A shares in an initial public offering in Shanghai.

Bad debt makes ABC a Chinese puzzle __Financial Times
China is in the middle of the last and most difficult restructuring of its large lenders: that of Agricultural Bank of China, a behemoth with nearly half a million employees, 27,000 branches and a stack of bad loans on its books.


6/20/2007

China Will Use Bond Sale To Finance Riskier Assets__Wall Street Journal
China disclosed a bond-sale plan that moves the nation closer to launching an investment company for some of its $1.2 trillion in foreign-exchange reserves, a process that is being closely watched by investors for its potential impact on global financial markets.

China Cuts Export-Tax Rebate__Wall Street Journal
China's finance ministry announced that export-tax rebates will be scrapped or reduced on more than 2,000 goods, in the government's latest attempt to address the growing economic and political pressures brought by its massive trade surplus.

China Life, Aetos of U.S. To Seek Real-Estate Deals__Wall Street Journal
China Life Group, the biggest insurer in China, has reached an agreement with New York-based Aetos Capital to hunt for deals in China's white-hot property market, people familiar with the matter said.

China Raises Its Reliance On Imported Crude Oil__Wall Street Journal
A recent surge in China's crude-oil imports to a record is driving speculation that the country's dependency on foreign crude will top 50% in a matter of months.

Warning on illegal Shanghai share deals __Financial Times
State-owned companies and government agencies in Shanghai, including those responsible for education and pensions, misappropriated Rmb6.3bn for illegal investment in the stock market over the past three years.

PetroChina eyes $5.7bn Shanghai listing__Financial Times
PetroChina announced it would launch one of the biggest ever initial public offerings on the mainland market, raising about $5.7bn in a Shanghai listing.

China warns IMF over renminbi__Financial Times
The central bank has warned the International Monetary Fund not to support pressure for a faster appreciation of the renminbi in a planned review of global exchange rates.

6/19/2007

China to Punish Banks, Citing Loan Oversight__Wall Street Journal
China's banking regulator said it will punish eight domestic banks for improper oversight of loans that allowed two state firms to funnel money into the country's red-hot stock market and property investments.

Microsoft Will Buy Stake In Chinese TV-Set Maker__Wall Street Journal
Sichuan Changhong Electric Co. said Monday that Microsoft Corp. plans to take a small strategic stake in the firm, sending the Chinese television maker's shares sharply higher.

Finally Rescued, China's 'Slaves' Detail Their Plight__Wall Street Journal
Chinese police have rescued hundreds of "slave workers" in an assault on a vast underworld of forced labor. The events, which have turned into a national scandal, show the ability of citizens and the media to exert pressure on China's political leaders.

Bombardier signs China joint venture__Financial Times
Bombardier of Canada, the world’s third-largest aircraft maker, has signed one of the most far-reaching co-operative jet development deals made by a western group with China.

China is test bed for new ad techniques__Financial Times
China and other Asian media markets are likely to turn into exporters to the West of advertising on mobile and other interactive media over the coming year, executives at international media buying groups predict.


6/18/2007

China's Investors Gain Respect -- in China__Wall Street Journal
Two of China's biggest companies, China Construction Bank Corp. and shipping concern China Cosco Holdings Co., plan billion-dollar-plus stock offerings in Shanghai, the latest blue-chip companies to take advantage of mainland China's strong share markets.

China's Banks Launch Efforts to Be in the U.S__Wall Street Journal.
Chinese banks are stepping up their presence in the U.S. amid booming demand from U.S. units of Chinese companies.

Wahaha Brings Arbitration Claim Against Danone__Wall Street Journal
France's Danone is facing a legal challenge in China from its joint-venture partner over use of the Wahaha brand.

Chinese Data Raise Expectation Of Tighter Policy__Wall Street Journal
China's urban fixed-asset investment between January and May rose faster than expected, adding to expectations of another policy tightening by the central government.

$1bn IPOs opt for listings in HK__Financial Times
Another batch of mainland companies has sought to list in HK in spite of a push by Chinese regulators to force more listings on the Shanghai or Shenzhen exchanges.

Tsang backs cross-border share trade__Financial Times
Donald Tsang, Hong Kong’s chief executive, has endorsed proposals to begin trading Hong Kong and Shanghai-listed shares on each other’s exchanges, and confirmed that talks are under way.

6/15/2007

Danone's China Strategy Is Set Back__Wall Street Journal
Danone's strategy of relying on joint ventures for global expansion is being called into question amid a rare public battle between the French company and a Chinese partner over the Wahaha beverage brand.

Pace of Chinese Output Quickens, Raising Odds for More Tightening__Wall Street Journal
China's value-added industrial output rose a faster-than-expected 18.1% in May from a year earlier to reach its highest level since February, pointing to a rebound in manufacturing activity that boosts the case for further tightening.

China's Booming Power Utilities May Get Pinched By Cost Of Coal __Wall Street Journal
This summer, a big surge in demand for electricity could actually hurt some of China's utilities because coal is probably going to be costlier and harder to get, even as some parts of the country face power shortages.

China set to tighten as investment soars__Financial Times
China’s spending on fixed assets such as roads and power plants accelerated in the first five months of the year, prompting predictions of imminent policy tightening.


6/14/2007

Retail Sales, Corporate Dollars Boost China__Wall Street Journal
Both retail sales and foreign direct investment in China continued to expand quickly in May, underscoring how vibrant consumer demand and active corporate expansion plans are supporting rapid economic growth.

China Venture Partner Blames Feud on Danone__Wall Street Journal
The multimillionaire founder of drinks maker Wahaha, one of China's most famous brands, said yesterday that his longtime joint-venture partner, Groupe Danone SA, deserves blame for the breakdown in relations over who controls the Wahaha name.

China Sets Corporate-Debt Rules__Wall Street Journal
The China Securities Regulatory Commission issued draft rules on corporate-bond issues as the regulator begins to take on some of the responsibility for these securities from the state planning agency.

Asia Stock Funds Post Big Outflows Driven by China__Wall Street Journal
Asian equity funds have had huge outflows in recent weeks as money moved away from last year's favorites, China and India, into "value plays" and developed-market funds, Citigroup Inc. said in a recent report.

Three arrested in Chinese trading probe__Financial Times
Three men have been arrested on charges of insider trading in the shares of a Chinese construction company, the Xinhua news agency reported.

China under pressure over currency__Financial Times
China came under increased pressure to revalue its currency as a bipartisan group of US senators introduced legislation designed to push the Bush administration towards a full-blown trade dispute with Beijing.



6/13/2007

China Deal May Embolden Hedge Funds__Wall Street Journal
Hedge fund JANA bought a 30% stake in Shenyang, a Chinese state-owned machine-tool maker, for $132 million.

China's Path Remains Rocky__Wall Street Journal
China's ability to establish a market for credit derivatives, a keenly awaited step in the nation's overhaul of its financial sector, may hinge on the mundane details of legal footnotes.

ICBC Combats China's Deposit Decline__Wall Street Journal
Industrial & Commercial Bank of China Ltd. said yesterday it plans to spend three billion yuan ($391.5 million) to set up 3,000 wealth-management centers in China in the next three years.

ICBC sets its sights on US and Russia__Financial Times
Industrial and Commercial Bank of China, the country’s largest lender, has applied for banking licences in the US and Russia as it seeks to expand outside its home market, the bank’s chairman said. -

China struggles to define democracy__Financial Times
In the lead-up to this year’s Communist party congress, which will set the country’s top leadership for the next five years, Chinese leaders have been discussing a concept alien to the secretive conclave – democracy.

Congress bill targets Chinese exports__Financial Times
Economic relations between the US and China were facing a major push by Congress to force the Bush administration into a full-blown trade dispute with Beijing.


6/12/2007

China Toughens Real-Estate Rules For Foreigners__Wall Street Journal
Chinese authorities have issued new rules making it harder for foreigners to invest in the property sector in another attempt to cool the nation's real-estate market.

Hong Kong Eases Process For Hedge-Fund Managers__Wall Street Journal
Hong Kong's securities watchdog said it is simplifying licensing requirements for overseas hedge-fund managers looking to set up in the territory.

Two Chinese Insurers Invest in Minsheng Bank__Wall Street Journal
China Life Insurance Co. and a wholly owned unit of Ping An Insurance (Group) Co. of China Ltd. said they invested a combined 10.9 billion yuan (US$1.42 billion) in China Minsheng Banking Corp. through a private placement.

Google Teams Up With Sina To Better Compete in China __Wall Street Journal
Google Inc. and Sina Corp. said they plan to cooperate on search services and advertising, giving the U.S.-based search giant an ally as it seeks to wrest market share in China from local search leader Baidu.com Inc.

China’s Chalco buys Peru Copper for C$840m__Financial Times
Aluminum Corporation of China – also known as Chalco – China’s largest diversified metals and mining company, has bought Vancouver-based Peru Copper for C$840m.

Beijing minister critical of urban growth __Financial Times
The rapid growth of Chinese cities has led to ‘senseless actions’ that have ‘devastated’ historical buildings and cultural relics, according to Qui Baoxing, the vice-minister for construction.

China closes in on Europe’s R&D spending__Financial Times
China is just two years away from catching up on Europe’s level of spending on research and development, a study showed.

Still waters run deep in dispute at Wahaha__Financial Times
The dispute between Wahaha and Danone could lead to their joint venture, one of the most successful in China, falling apart.



6/11/2007

Shenzhen Bank Holders Approve Share Overhaul__Wall Street Journal
Shenzhen shareholders approved a share-overhaul plan, clearing a hurdle for GE to buy a 7% stake in the Chinese bank.

Fast Pace, High Stakes Lure Business Chiefs To Private Equity__Wall Street Journal
Many corporate executives like David Calhoun of Nielsen are leaping to private-equity-backed companies. If they make their targets, they are well-rewarded. Plus, they have more operating flexibility.

China Trade Surplus Rose 80% in May__Wall Street Journal
China had a trade surplus of $85.72 billion in the first five months of 2007, up more than 80% from the same period a year earlier, a government official said. Exports in the first five months were $443.5 billion, while imports totaled $357.8 billion, said Yang Hongbin, a vice special commissioner with the Ministry of Commerce. The figures suggested that China's trade surplus in May was $22.41 billion. May trade figures are expected this week.

Ten IPOs From China Set Record__Wall Street Journal
It's only June, but it's already a record year for the number of Chinese companies going public on U.S. exchanges. The debut of a fourth Chinese solar company on the New York Stock Exchange last week, Yingli Green Energy Holding Co., took the number of Chinese initial public offerings in the U.S. to 10, according to data tracker Thomson Financial. That compares with seven for all of 2006 and nine in 2004, the busiest year for Chinese IPOs until now.

Nikko boosts stake in Rongtong to 40%__Financial Times
Japan’s third-largest fund house increases its exposure to the red-hot Chinese mutual fund market by lifting its stake in Rongtong Fund Management to 40%.

Ashmore awaits China nod on BJITIC stake__Financial Times
The UK’s Ashmore Investment Management is awaiting final approval from the Chinese government to buy a 19.99 per cent stake in Beijing International Trust and Investment Corporation.



6/8/2007

Danone China Joint-Venture Chief Quits Amid Feud __Wall Street Journal
Danone said its head of joint ventures in China quit, deepening a split between the French company and the partner firm.

Danone win in Wahaha tussle__Financial Times
Danone won a partial victory in its dispute with Chinese partner Wahaha when Zong Qinghou, the founder of the Chinese company, resigned as chairman of their soft drinks joint venture.

Boost for Chinese private equity__Financial Times
Beijing has established a legal framework that is expected to boost the development of China’s nascent domestic private equity players.

SEC Probes Activision's Stock-Options Practices__Wall Street Journal
Activision Inc. said the Securities and Exchange Commission's investigation into its stock-options grants turned formal, following the company's disclosure late May that it completed a review of the grants practices.



6/7/2007

Beijing opens door to foreign buy-outs__Wall Street Journal
China signalled it was prepared to accept foreign private equity groups, following last week’s introduction of a law to encourage its fledgling domestic private equity industry.

China publishes first food safety five-year plan__Wall Street Journal
Beijing has published a five-year plan to improve food and drug safety, amid concern sparked by exports of contaminated ingredients in pet food and toothpaste.

China stocks continue rise on reassurance__Wall Street Journal
Chinese stocks rose moderately, as calm returned to the market following reassuring comments from the central bank and a major institutional investor.

More Chinese Companies Turn to OTC to Raise Cash__Financial Times
As regulatory restrictions limit options for private companies at home, Chinese firms are increasingly turning to the U.S. over-the-counter market as an alternate way of fund raising.

China Backs Gold-Exchange Plan__Financial Times
China's central bank has given approval to the Shanghai Gold Exchange to allow foreign banks as members, an official familiar with the situation said.



6/6/2007

China stocks continue rise on reassurance__Financial Times
Chinese stocks rose moderately, as calm returned to the market following reassuring comments from the central bank and a major institutional investor.

Danone files US lawsuit against Wahaha__Financial Times
Danone has stepped up its campaign against Wahaha, its Chinese joint venture partner, by filing a lawsuit in the US against one of its subsidiaries and two people connected to it.

Showdown Looms on China Trade__Wall Street Journal
A showdown is brewing between the White House and Capitol Hill over how best to address China's undervalued currency and other alleged unfair trade practices.

Large Investors Lift Chinese Shares__Wall Street Journal
Chinese stocks rebounded from early declines, helped by demand from institutional investors. Shanghai's key index finished 2.6% higher, after falling as much as 7.3% intraday.

Bezos Says Amazon Will Boost Investment in China__Wall Street Journal
Amazon.com Inc. Chief Executive Jeff Bezos said the online retailer will increase its investment in China, which he said is the company's fastest-growing market but where Amazon has lagged behind its chief local rival.

Merger Party's Newest Invitees: The Insurers__Wall Street Journal
Private-equity firms taking part in corporate buyouts are increasingly bringing in insurance brokers to help put a price tag on the liabilities of target companies.



6/5/2007

Big Stock Drop Tests Anew Beijing's Balancing Act__Wall Street Journal
China's main stock index fell 8.3% in its biggest one-day drop since February, but the losses were confined to China, as other markets in the region finished higher.

Hands Off in Hong Kong__Wall Street Journal
Hong Kong won't intervene in the currency market if the Hong Kong dollar stays in its trading band, a top official said.

China Says Stand On Carlyle Group Is Unique to Deal__Wall Street Journal
China remains committed to investments by foreign companies despite the difficulties Washington-based Carlyle Group LP has faced in investing in a Chinese construction-equipment company, Assistant Commerce Minister Chen Jian said yesterday.

Ping An Plans to Increase Purchase of Foreign Stock__Wall Street Journal
Ping An Insurance (Group) Co. of China Ltd. said it could pour as much as $9.7 billion into overseas equities markets when the Chinese insurance authority relaxes restrictions on investments abroad.

China's Rich Get Catering__Wall Street Journal
China's legions of newly rich have given rise to a niche for private banking that once would have been unthinkable in the Communist nation, a trend that analysts expect to continue as banks look beyond corporate clients.

Why Investors Look Past China's Slide__Wall Street Journal
In February, a tumble in Chinese shares helped spark a world-wide selloff. But in the past week, investors have shrugged off two drops in China's stock market.

China finds action better than words__Financial Times
The days when the Chinese government could control the level of the stock market with a well-placed editorial or two are well and truly gone.

China’s taste for luxury comes with risk__Financial Times
China’s attraction as a fast-growing market for luxury goods needs to be counterbalanced by its lack of suitable distribution channels and various economic and political threats, say industry experts at a luxury goods conference.

Shanghai shares rebound to end higher__Financial Times
Chinese stocks rebounded in the afternoon from a morning plunge, buoyed by rumours that the government might take imminent action to restore investors’ confidence.


6/4/2007

Chinese Textile Company Approved to List in Korea__Wall Street Journal
The Korea Exchange, or KRX, said it has approved the listing of China-based Huafeng Textile International Group on South Korea's main exchange.

Latest Chinese Solar IPO Generates Scant Gain__Wall Street Journal
The IPO market ended the week on a disappointing note as investors had second thoughts about a Chinese solar company and shied away from a health-care stock.

Open a Bank Account and Test Drive a Ferrari __Wall Street Journal
Foreign banks are trying to tap the swelling ranks of China's well-off by offering high-end freebies such as wine tastings and luxury goods.

China stocks plunge 8% on policy fears__Financial Times
China’s stock market fell more than 8 per cent despite government reassurances, extending last week’s big losses after the government increased the trading tax to cool market frenzy.

Beijing could reap $40bn tax bonanza__Financial Times
China will gain an annual windfall of as much as $40bn from the tax increase on share trading announced last week if turnover on mainland markets stays at its current striking levels.

Beijing takes 22% stake in New China__Financial Times
China’s insurance regulator is to use an industry protection fund for the first time to buy a controlling share of the country’s fourth-largest life assurer.