Posted inChina, Japan, North Korea, Northeast Asia, Pakistan, South Asia

The Daily Brief for Friday, 28 April 2017

China-Pakistan, Economic Corridor: Initially hailed as a key part of China’s ‘One Belt One Road’ vision, the US$56 billion China-Pakistan Economic Corridor has yet to translate into the ‘game changer’ envisioned by its sponsors. F.M. Shakil writes that the imported labour from China, tax exemptions for Chinese firms and security costs have combined to bring debt of over US$2.5 billion and Pakistani analysts are now asking how Islamabad will see any benefit.

Pyongyang-Washington, conflict possible: US President Donald Trump said that although a solution through diplomacy and economic sanctions is still being sought, a major conflict with North Korea is still possible. Asia Times reports that Chinese Foreign Minister Wang Yi responded by warning that the situation on the Korean peninsula could escalate or slip out of control.

Duterte, court charges: Just as the Philippine president rolls out the red carpet as Asean summit meeting host, a complaint was filed against him and 11 Philippine officials at the International Criminal Court. George Amurao writes that the complaint accuses Duterte of “repeatedly, unchangingly and continuously” committing mass murder and crimes against humanity through extrajudicial killings allegedly conducted by the so-called “Davao death squad” beginning in the 1990s.

Japan-Sharp-Sony, results good: Sony said it expects operating profit to rise 73.2% while Sharp reported a lower than expected loss in the year just ended, as new owner Foxconn cut costs, reports Asia Times. Sony’s outlook is helped by the reopening of an earthquake-damaged image sensor factory while Sharp looks to build on its unpredicted results by considering a bid for the chip unit of beleaguered Japanese conglomerate Toshiba Corp.

Posted inAustralia, Beijing, China, Oceania, Shanghai, Tianjin, World

China Digest for Friday, 28 April 2017

Communist Party lays emphasis on finance sector, supply side reforms

The Communist Party of China concluded a two-day work-study session on economic reforms with a focus on finance sector, the Shanghai Securities Journal reported on Thursday evening. The party laid emphasis on financial security, and said it will continue to push supply side reforms this year, the report said. Reforms of capital markets and state-owned enterprises will also intensify. Other areas of reform indicated include the financial sector, where there will be an emphasis on regulatory oversight. The CPC stressed that economic and financial reforms will be to the fore ahead of the 19th Party Congress later this year.

Anbang units see heavy negative cash flow in 1Q 2017

Anbang Insurance Group’s units Anbang Life and Anbang Property & Casualty Insurance had negative cash flows of 5.7 billion yuan (US$827million) and 19.1 billion yuan respectively for the first three months in 2017, Caixin reported. The China Insurance Regulatory Commission’s tightening grip on the sector since 2H 2016 may have pressurised the insurer, the report added, citing an industry expert.

China Eco Watch Table 0427

Beijing to use price controls, low-cost commercial housing to cool market

Beijing city sold eight parcels of land for a low-cost commercial housing scheme this month, Caixin reported on Thursday evening. Under the scheme, housing will cost typically 30% less than surrounding properties, the report said. The capital city intends to use this scheme, alongside price curbs, in an attempt to reign in the property market this year, Caixin said.

Market key to yuan internationalisation, PBOC says

Caixin reports that the People’s Bank of China deputy director, Fan Yifei, has stressed that the market will dictate the internationalization of the yuan. This is the second time in a month that central bank management have delivered this message. Internationalization is about the opening up of Chinese financial markets and is a long term goal, Fan told an audience in Australia.

Cities in Shanxi province introduce property subsidies

Linfen, Luliang, and Jinzhong, all cities in Shanxi province, are to attempt to reduce housing inventory by subsidizing targeted groups – including farmers, migrant workers and village doctors and teachers – in purchasing property, the Economic Information Daily reports, with payments ranging from 150 yuan (US$21) to 400 yuan per square meter.

Former Zhejiang province party chief named NPC committee vice chair

Xia Baolong, the former party secretary of Zhejiang province, has been made a vice-chairman of the National People’s Congress Environment Protection and Resources Conservation Committee, Caixin reports. Xia worked alongside president Xi Jinping at provincial government level, the report adds.

CBRC sanctions AMCs in seven provinces, to reduce local debt

The China Banking Regulatory Commission announced the setting up of local asset-machine companies (AMCs) in seven provinces on Tuesday, Shanghai Securities Journal learnt on Thursday afternoon. The provinces mentioned are Yunnan, Hainan, Hubei, Fujian, Shandong, Guangxi and Tianjin. Local-level AMCs are in charge of restructuring and dealing with bad debt, mainly from local government. The CBRC announced back in October last year that all local governments would be allowed to set up one local AMC.

China Minsheng says value of investments in fraud case previously overstated

China Minsheng has put the value of investments tied up in a fraud case it is investigating at close to 1.65 billion yuan (US$240 million), less than the figure of 3 billion yuan previously reported by media, the Shanghai Securities Journal reported on Thursday evening. A banking executive is alleged to have sold fraudulent wealth management products. Close to 150 clients were affected, the bank confirmed on Thursday, adding that it will continue to cooperate with authorities and work to improve its internal controls.

China becomes world’s sixth largest gas producing country

China’s annual natural gas production increased to 137.1 billion cubic meters in 2016, more than doubling from 67 million cubic meter cubes in 2007, Xinhua state news reports. The country’s underground storage was the ninth largest in the world, more doubling to 12.98 trillion cubic meters in 2016, from 6.1 trillion cubic meters in 2007.

Chinese foreign investment grows in belt and road countries

China has made US$2.95 billion in new non-financial direct investment in 43 countries under the belt and road initiative, accounting for 14.4% of total foreign investment for the first quarter of 2017, the Economic Information Daily reports. This is in contrast to the 50% drop in Chinese overseas investment overall during the same time, the report adds.

China Construction Bank Q1 net profit increases 3%; NPL ratio at 1.52%

China Construction Bank posted its first quarter results on Thursday evening, registering a net profit of 70 billion yuan (US$10.15 billion), Yicai reported, up 3% from a year earlier. The bank’s Non-Performing loan (NPL) ratio, an indicator of potential defaulting loans, was 1.52% at the end of March, in line with the end of last year. The volume of NPLs stood at 184.5 billion yuan, an increase of 5.82 billion yuan over the first three months of this year, the report said.

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