China banks face daunting money squeeze

September 26, 2013 9:19 am

China banks face daunting money squeeze

By Henny Sender

Fears banks lack risk management skills for brave new world

The path of financial reform in China is becoming ever more tortuous. Bankers gathered at a Singapore summit last weekend say the next step on the path is interest rate deregulation, which could come in the next 18 months, bringing in its wake myriad headaches both for the banks and for many of their customers. It is a logical next step. By deregulating rates, Beijing hopes to stem the growth of the shadow banking system, which has been largely driven by the desire of those with excess cash to earn more interesting amounts on their savings while borrowers who cannot get loans at the artificially low rates at the banks currently hope to attract funds by paying more for them unofficially. Read more of this post

Mortgage Trouble in Chinese City; Borrowers Walk Away From Homes in Wenzhou

Updated September 26, 2013, 7:42 p.m. ET

Mortgage Trouble in Chinese City

Borrowers Walk Away From Homes in Wenzhou

ESTHER FUNG

SHANGHAI—Tighter credit and falling housing prices in the eastern Chinese city of Wenzhou have led to a wave of mortgage defaults and abandoned properties in the city, where persistent property-price drops have flown in the face of a national upturn in prices. Homeowners in the city have abandoned 580 homes and there are another 15 cases of mortgages in default, according to a national state-radio broadcast citing a local official in charge of investigating mortgage defaults. The broadcast, which followed local-media reports of more widespread defaults, didn’t give a timeframe for the cases cited, and the official numbers are hardly staggering. Read more of this post

Shanghai’s new zone: lots of hype, little detail

September 26, 2013 10:58 am

Shanghai’s new zone: lots of hype, little detail

By Simon Rabinovitch in Shanghai

The anticipation for China’s new free trade zone, set to be launched this weekend, is at fever pitch. Homes next to the zone in Shanghai’s far-flung suburbs are sold out. The stocks of companies expected to benefit have surged, some rising by more than 300 per cent over the past month. Economists have hailed it as China’s most significant reform push in more than a decade. Read more of this post

Shanghai Free-Trade Zone Splits Analysts on Benefits to Economy

Shanghai Free-Trade Zone Splits Analysts on Benefits to Economy

By Bloomberg News – Sep 25, 2013

China’s plan to set up a test zone in Shanghai with reduced state control over policies from interest rates to foreign investment has split analysts over whether it will boost the economy across the nation. Eight of 17 respondents to a Bloomberg News survey said the so-called free trade zone will have no effect or a negligible impact on growth, while eight said it will boost annual expansion by 0.1 percentage point to 0.5 point over the next five years. One economist in the survey, conducted from Sept. 18 through yesterday, said growth would increase by 0.5 point to 0.9 point. Read more of this post

Shandong Shipyard’s Lesson: Don’t Rock a Bank; A shipbuilder stung by European clients has spent years fighting a major bank, so far in vain

09.26.2013 19:33

Shandong Shipyard’s Lesson: Don’t Rock a Bank

A shipbuilder stung by European clients has spent years fighting a major bank, so far in vain

By staff reporters Pang Jiaoming and Wu Jing

(Beijing) — What was initially billed as a lucrative order from a European customer has pushed a Shandong Province shipbuilding company to the brink of bankruptcy and ruined its relationship with one of China’s biggest banks. Rushan City Shipbuilding Co. is fighting for survival after filing a lawsuit recently against the Rushan branch of the Agricultural Bank of China (ABC) – the latest in a series of ugly legal battles involving the bank and shipping companies that began in 2010. Read more of this post

Population Control Is Called Big Revenue Source in China; Nineteen province-level governments in China collected a total of $2.7 billion in fines last year from parents who had violated family planning laws

September 26, 2013

Population Control Is Called Big Revenue Source in China

By EDWARD WONG

BEIJING — Nineteen province-level governments in China collected a total of $2.7 billion in fines last year from parents who had violated family planning laws, which usually limit couples to one child, a lawyer who had requested the data said Thursday. The lawyer, Wu Youshui of Zhejiang Province, sent letters in July to 31 provincial governments asking officials to disclose how much they had collected in 2012 in family planning fines, referred to as “social support fees.” He said he suspected that the fines were a substantial source of revenue for governments in poor parts of China. Read more of this post

NDRC Lets Firms Pay for Shantytown Work with Bonds

09.26.2013 14:53

NDRC Lets Firms Pay for Shantytown Work with Bonds

Cabinet says companies can pay up to 70 percent of the costs for the renovations through debt financing

By staff reporter Yang Na

(Beijing) – The government’s top planning agency beefed up financing for companies involved in rebuilding shantytowns by allowing them to cover nearly three-quarters of the cost via bonds. Rebuilding shantytowns is a major part of the government’s urbanization plans. A notice published on the website of National Development and Reform Commission (NDRC) on September 25 said that companies involved in shantytown projects can issue corporate bonds. Read more of this post

Chinese TV show “Legend of Zhen Huan” gets ready for US market

Chinese TV show gets ready for US market

(CNTV)    12:42, September 23, 2013

The “Legend of Zhen Huan”, a Chinese TV drama which depicts the power strugglebetween the concubines of an emperor, has already been a success in Asian countries. Now,it’s about to land in the US, a positive sign that Chinese TV is increasingly ready to moveinto the international arena. The desperate housewives are about to get some competition from the “desperateconcubines”. As the most popular Chinese TV series of 2012, the Legend of Zhen Huan has charmedboth domestic and foreign viewers. The “Legend of Zhen Huan”, a Chinese TV drama which depicts the power struggle between the concubines of an emperor, has already been a success in Asian countries. Read more of this post

China: Culture crash; Apollo Tyres’ $2.5bn bid for Cooper Tire is being held back by an unusual obstacle

September 26, 2013 6:35 pm

China: Culture crash

By Tom Mitchell, James Crabtree and Robert Wright

Apollo Tyres’ $2.5bn bid for Cooper Tire is being held back by an unusual obstacle

The Cooper Chengshan Tire factory in eastern China has the feel of a place that is slowly coming back to life after a long siege. Three months after the factory’s 5,000-strong workforce first downed tools to protest about the proposed acquisition of their US parent by an Indian rival, employees in dark blue uniforms go about their tasks. But evidence of their continuing industrial action is festooned across the compound. Read more of this post

China state sector a honey pot for corrupt officials

China state sector a honey pot for corrupt officials

Filed 10 hours ago

By Charlie Zhu

HONG KONG – In March last year, after getting government approval to go ahead with a $900 million refinery expansion in China’s southeastern Fujian province, state-run oil giant Sinopec Corp warned the team handling the project against taking bribes. “Project engineering and construction has been a main area for corruption at Sinopec,” the Fujian unit of Asia’s largest refiner said in a blunt memo, according to a Sinopec source who read it to Reuters. “All members, especially those in key posts, must treasure their positions, stay guarded and resist temptation.” Read more of this post

China Seeks to Repeat Deng’s Shenzhen Success in Shanghai Zone

China Seeks to Repeat Deng’s Shenzhen Success in Shanghai Zone

Three decades after Deng Xiaoping’s experiments with capitalism in the southern city of Shenzhen began lifting millions from poverty, his successors are applying that same strategy to the tougher task of making China rich. Playing the role of Shenzhen is 11 square miles of low-rise office buildings, white warehouses and concrete parking lots on the outskirts of Shanghai. The zone, set to open in two days, will test policies that reduce state controls on interest rates, the currency and investment. By giving markets and the private sector a bigger economic role, China may become a high-income nation by 2030, according to the World Bank. Read more of this post

China policy bank sells first asset-backed securities to strong demand; 32 billion yuan in securitised products were outstanding end June; 4.2 trillion yuan in trust loans are often packaged into wealth management products

China policy bank sells first asset-backed securities to strong demand

Wed, Sep 25 2013

SHANGHAI, Sept 26 (Reuters) – Agricultural Development Bank of China completed its first-ever sale of asset-backed securities (ABS) on Wednesday, as regulators push securitisation as a tool to enable banks to support the economy with new credit. ADB, one of China’s three policy banks devoted to non-commercial lending, sold 1.27 billion yuan ($207.5 million) worth of ABS, with each of the three tranches attracting strong demand from investors, official media reported on Thursday. Read more of this post

LM boss Peter Drake’s assets frozen; Latest blow for embattled Gold Coast businessman Peter Drake in the investigation into the collapse of his LM Investment Management empire

LM boss Peter Drake’s assets frozen

September 27, 2013 – 5:22PM

Georgia Wilkins

Slim pickings for LM investors

Embattled Gold Coast businessman Peter Drake has had his passport revoked and assets frozen during an ongoing investigation into the collapse of his LM Investment Management empire. The Supreme Court of Queensland ordered Mr Drake to surrender his passport on Friday, following an application by the Australian Securities and Investments Commission. The court orders also prevent Mr Drake from selling any assets he holds, excluding his Mermaid Beach, Queensland home, which is expected to be sold this weekend, the regulator said. Read more of this post