Bamboo Innovator

PBOC Says No Longer in China’s Interest to Increase Reserves

PBOC Says No Longer in China’s Interest to Increase Reserves

By Bloomberg News – Nov 20, 2013

The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation. “It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting. Neither Yi nor Zhou gave a timeframe for any changes. Read more of this post

On China’s roads, where luxury risks becoming ordinary

On China’s roads, where luxury risks becoming ordinary

4:19pm EST

By Samuel Shen and Norihiko Shirouzu

GUANGZHOU, China (Reuters) – Luxury car dealers are resorting to offering customers massages, mini-golf and other gimmicks, hoping this will give them an edge in a ferociously competitive Chinese market where brand loyalty is less common than in the West. Premium car sales slowed in China last year as the economy eased off the throttle and new Communist Party leadership was installed, but momentum is returning, and China is set to overtake the United States as the world’s top luxury car market by 2020 with annual sales of close to 3 million cars. Read more of this post

Luxury Car Dealers In China Are Using All Sorts Of Gimmicks To Lure Customers

Luxury Car Dealers In China Are Using All Sorts Of Gimmicks To Lure Customers

SAMUEL SHEN AND NORIHIKO SHIROUZU, REUTERS 48 MINUTES AGO 633

GUANGZHOU, China (Reuters) – Luxury car dealers are resorting to offering customers massages, mini-golf and other gimmicks, hoping this will give them an edge in a ferociously competitive Chinese market where brand loyalty is less common than in the West. Premium car sales slowed in China last year as the economy eased off the throttle and new Communist Party leadership was installed, but momentum is returning, and China is set to overtake the United States as the world’s top luxury car market by 2020 with annual sales of close to 3 million cars. Read more of this post

ICBC chairman sees inevitable rise in China bad loans

Last updated: November 20, 2013 6:14 pm

ICBC chairman sees inevitable rise in China bad loans

By Simon Rabinovitch and Paul J Davies in Beijing

The head of China’s biggest bank has warned that bad loans will inevitably rise and weaker lenders will be wiped out as the government relaxes its grip on the economy. But Jiang Jianqing, chairman of Industrial and Commercial Bank of China, the country’s largest lender by assets, also hit back at those foreign critics who have raised questions about the resilience of China’s banks after the lending spree that powered the country through the 2008 global financial crisis. ICBC was prepared for the challenges and should not be held to impossibly high standards, he said. Read more of this post

Electric VS hydrogen: China iIs battleground for auto giants

Updated: Friday November 22, 2013 MYT 1:16:52 PM

Electric VS hydrogen: China is battleground for auto giants

GUANGZHOU/BEIJING: German auto giants Volkswagen AG, BMWand Daimler see China’s future as being electric – encouraged by generous government subsidies – but that bet puts them at odds with some of their Asian rivals. While the Europeans were heralding the all-electric vehicle at the Guangzhou auto show this week, Toyota Moto and Honda Motor  were unveiling hydrogen fuel cell cars at shows inTokyo and Los Angeles. Read more of this post

China’s State TV Grapples With Advertising Slowdown

China’s State TV Grapples With Advertising Slowdown

CCTV Departs From Practice of Disclosing Ad-Auction Results as Companies Find New Ways to Reach Out to Customers

LAURIE BURKITT

Updated Nov. 20, 2013 10:38 p.m. ET

China Central Television is feeling the shift of advertising to the Internet. Shown, Communist Party officials with CCTV’s Spring Festival cast. Xinhua/Zuma Press

SHANGHAI—China’s most powerful propaganda outlet is grappling with a problem familiar to media companies world-wide: How to keep advertisers in the digital age. China Central Television this week departed from past practice and declined to disclose results of a closely watched auction for advertising slots for next year. In a written response to questions, the state-run broadcaster said only that its ad-auction sales growth this year was in line with the country’s economic growth. China’s economy grew 7.8% in the third quarter from a year earlier. Read more of this post

China’s Smaller Cities Thirst for the Luxe Life

November 20, 2013

China’s Smaller Cities Thirst for the Luxe Life

By JEN LIN-LIU

CHENGDU, China — Just yards away from the enormous statue of Mao Zedong in Tianfu Square, Chengdu’s two most exclusive malls are doing a brisk business on a Wednesday afternoon. Shoppers in the Louis Vuitton flagship at the Yanlord Landmark mall are buying this season’s handbags in bright purples and blues. Just outside the store, a woman in crystal-encrusted high heels and a man carrying a bulging Dior shopping bag walk by. And two men stroll along arm-in-arm, one holding a black Bottega Veneta hand-braided clutch. Read more of this post

China’s Bribery Culture Poses Risks for Multinationals

China’s Bribery Culture Poses Risks for Multinationals

To the risks of doing business in China — an authoritarian government, sprawling market, worsening pollution — add another one: running afoul of local and U.S. anti-corruption laws. Multinational companies are working to navigate bribery risks in China, where possible corruption by JPMorgan Chase & Co., GlaxoSmithKline Plc and Avon Products Inc. have sparked probes by the U.S. or Chinese authorities. Read more of this post

China regulator drafts new rules to tame shadow banking

China regulator drafts new rules to tame shadow banking

Thu, Nov 21 2013

* Banks use complex deal structures to evade lending curbs

* Risky corporate credit disguised as interbank loans

* Trust firms used for loans to real estate, local govts

* Rules target use of secret “drawer agreement” guarantees

By Hongmei Zhao and Gabriel Wildau

SHANGHAI, Nov 22 (Reuters) – China’s financial regulators are preparing new rules to crack down on explosive growth in complex interbank transactions used to evade lending restrictions, senior bankers who have seen drafts of the regulations told Reuters this week. The measures, likely to be put in place early next year, aim to curb excess credit growth to prevent a debt crisis as China’s economy slows. Despite a string of new rules earlier this year, banks have found ways to expand credit through shadow-banking channels that have raised concerns over the potential for systemic risk. Read more of this post

China corporate financing squeezed as reform plans spark rate spike

China corporate financing squeezed as reform plans spark rate spike

Thu, Nov 21 2013

* 10-year government bond yields at 8-year high

* Market expects interest-rate reform to raise funding costs

* Spike in rates forces firms to delay bond sales

* Policymakers seek de-leveraging to avoid debt crisis

By Gabriel Wildau

SHANGHAI, Nov 21 (Reuters) – Chinese bond yields have surged as the market starts pricing in interest rate reform, a development that makes borrowing more expensive and threatens China’s fragile economic recovery. Chinese bond prices have been hammered in recent days on expectations that reforms to loosen government control of interest rates will cause funding costs to rise. Bond prices move inversely to interest rates so when bond prices fall, their yields rise. Read more of this post

China Central TV: champion of the people with a blurred picture

November 20, 2013 3:15 am

China Central TV: champion of the people with a blurred picture

By FT reporters

At the end of October, a young journalist in handcuffs, green prison jacket and a freshly shaved head appeared on China Central Television, the state-owned national broadcaster, and confessed to taking bribes in exchange for writing negative articles about a large Chinese company. Just days earlier, the newspaper that employed Chen Yongzhou, 27, had published front-page banner headlines calling for his release, while human rights groups had mobilised to defend him. But after his admission on national television, the issue quickly died away. Read more of this post

Canada’s Tar Sands Oil Boom Yields Toxic Wastewater Lakes

Canada’s Tar Sands Oil Boom Yields Toxic Wastewater Lakes

By Jeremy van Loon November 21, 2013

Canada is blessed with 3 million lakes, more than any country on earth—and it may soon start manufacturing new ones. The oil sands industry is in the throes of a major expansion, powered by C$20 billion ($19 billion) a year in investments. Companies including Syncrude Canada, Royal Dutch Shell (RDS/A), and ExxonMobil (XOM) affiliate Imperial Oil are running out of room to store the contaminated water that is a byproduct of the process used to turn bitumen—a highly viscous form of petroleum—into diesel and other fuels. By 2022 they will be producing so much of the stuff that a month’s output of wastewater could turn New York’s Central Park into a toxic reservoir 11 feet deep, according to the Pembina Institute, a nonprofit in Calgary that promotes sustainable energy. Read more of this post

Beijing’s top tipple heads down market after Communist crackdown

November 22, 2013 1:13 am

Beijing’s top tipple heads down market after Communist crackdown

By Patti Waldmeir in Shanghai

The Chinese Communist party’s favourite drink, ultra-luxury baijiu, is heading downmarket to supermarket shelves and restaurants as a result of Beijing’s ban on top-end white spirits. The prohibition is part of the government’s anti-corruption campaign, which is hitting sales of luxury goods from watches to mooncakes. With expensive drinks from baijiu to Bordeaux now off limits for officials, purveyors of tipples from wine to white spirits are trying to cultivate new drinkers and distribution channels in one of the world’s oldest drinking cultures. Read more of this post

Beijing Looks to Markets to Fix Pollution; Leaders Take Aim at Cheap Use of Resources That Has Led to Environment Problems

Beijing Looks to Markets to Fix Pollution

Leaders Take Aim at Cheap Use of Resources That Has Led to Environment Problems

BRIAN SPEGELE

Updated Nov. 20, 2013 5:00 p.m. ET

BEIJING—China’s leaders are taking aim at the cheap use of resources that has let its industries boom but has choked its air and tainted its soil, looking to markets to play a larger role in commodity prices as a way to fix pollution. The strategy change, endorsed as part of a wide-ranging policy blueprint at a Communist Party meeting that concluded last week, promises to grant markets a “decisive role” in allocating resources, while more harshly penalizing polluters. Read more of this post

Surfstitch claims it’s now the world’s largest online sports apparel and fashion retailer

Surfstitch considering IPO

November 20, 2013

Alexandra Cain

The Aussie enterprise claims it’s now the world’s largest online sports apparel and fashion retailer. Having just started to dominate European online fashion retailing, after already becoming the market leader in Asia and Australia, Surfstitch is now considering an initial public offer on the Australian bourse. Co-founder Justin Cameron told Fairfax Media the business is assessing its options, with an IPO or trade sale on the cards. “It’s something being considered currently,” he said. According to Cameron, the business is already the largest online action sports and fashion business in the world. Read more of this post

Profits spike, risks multiply in Asia’s derivatives return

Profits spike, risks multiply in Asia’s derivatives return

4:04pm EST

By Lawrence White

HONG KONG (Reuters) – Investment banks in Asia are taking advantage of a regulatory grey area to reap big returns from rising sales of equity derivatives, increasing the systematic risks to the financial system that regulators are trying to eradicate. Derivatives are tempting for yield-hungry investors and banks facing a slowdown in their traditional deals and trading markets because of the higher returns they can offer both sides. But regulators and academics fear banks are using them to circumvent rules intended to stop them risking their own money to boost returns. Read more of this post

Li Ka-shing’s CKI Relies on Consortiums to Keep Debt Low

Li Ka-shing’s CKI Relies on Consortiums to Keep Debt Low

Tycoon’s Utilities Arm Bands Together With Associate Companies to Buy Overseas Assets

YVONNE LEE

Nov. 20, 2013 4:56 a.m. ET

Hong Kong’s utilities companies have been snapping up assets from London to New Zealand in the past few years, but while electricity company CLP Holdings Ltd.0002.HK +0.72% ‘s debt exceeded its equity in 2011, tycoon Li Ka-shing‘s Cheung Kong Infrastructure Holdings Ltd. has kept its debt levels low. Since the 2008 financial crisis, CKI has spent more than US$22 billion on overseas acquisitions, according to Dealogic, to reduce its reliance on the domestic market, where returns on selling electricity are capped. Hong Kong’s other electricity producer and distributor, CLP, has spent just US$2.3 billion, but unlike Asia’s richest man, the company owned by the Kadoorie family can’t count on associate companies to take on debt to fund overseas purchases. Read more of this post

Aberdeen Sees Sensex Earnings Slowdown on Polls: Corporate India

Aberdeen Sees Sensex Earnings Slowdown on Polls: Corporate India

Profit growth at Indian companies is set to slow from the fastest in six quarters as elections delay projects and higher borrowing costs hurt economic expansion, said Aberdeen Asset Management Plc and Bank of America Corp. Read more of this post

India Confronts the Politics of the Toilet

India Confronts the Politics of the Toilet

On Tuesday, the United Nations marked its inaugural World Toilet Day, designed to draw attention to the fact that more than one-sixth of humanity still lacks indoor sanitation, and that the world needs new ideas and technologies to deal with one of the most basic human needs. If there is any one country toward which such initiatives must be aimed, then that is India, where a combination of ignorance, apathy, embarrassment, deeply ingrained cultural codes, ineffective policy, huge numbers and very different urban and rural sanitation challenges have meant that more than half of the population still doesn’t have access to a proper toilet. Read more of this post

India’s State Banks Need More Medicine

India’s State Banks Need More Medicine

ABHEEK BHATTACHARYA

Nov. 20, 2013 6:56 a.m. ET

India’s state-owned banks need new blood. Weak economic growth has hit these lenders hard. Exposed to politically favored but risky customers like farmers and small businesses, state-owned banks have racked up more than their fair share of bad loans. State banks hold 86% of the system’s bad loans while accounting for 75% of the lending market. To help write off these assets, the government plans to inject $2.3 billion of fresh capital into state-owned banks over the next few months. While this is a step in the right direction, it isn’t enough.

Read more of this post

India: Modi muscles in; Even the politician’s admirers in the business community admit he could be a risky choice

November 21, 2013 6:58 pm

India: Modi muscles in

By Victor Mallet and Lionel Barber

Even the politician’s admirers in the business community admit he could be a risky choice

For the past two months, a cavernous office in the Gujarati capital of Gandhinagar has become the improbable focal point of Indian public life. Flights to the nearby airport at Ahmedabad are packed with politicians, campaign managers, pollsters, foreign diplomats and European arms manufacturers. The man they have come to see sits serenely behind an enormous desk of polished wood, flanked by a portrait of a Gujarati lion: Narendra Modi, chief minister of the state for more than a decade. In September, he was named as prime ministerial candidate for the Bharatiya Janata party, India’s Hindu nationalist opposition. Read more of this post

India’s Modi and the Market

India’s Modi and the Market

India’s opposition candidate can do more to signal his commitment to fixing the economy.

SADANAND DHUME

Nov. 21, 2013 12:14 p.m. ET

Can Narendra Modi revive India’s economy? In some ways, this is the central question Indian voters face when the country goes to the polls next summer. Yet as with most anything that concerns the Gujarat chief minister and opposition Bharatiya Janata Party prime ministerial candidate, opinion in the country is sharply divided. Read more of this post

Moët Hennessy’s Chandon: now made in India

November 19, 2013 4:02 pm

Moët Hennessy’s Chandon: now made in India

By Jonathan Moules

Julian Richer is fretting about catching a train. “I have to be in a taxi at 10,” says his email, explaining that he has an economy ticket for the journey home to York, which means he can travel only on the 10.30am from Kings Cross. He will have to leave our meeting at The George, his Mayfair club, prompt­ly. He usually forswears taxis too, he later adds. He is making an ex­ception today because he is squeezing the meeting in between a visit to one of his shops and hosting a Bible study group at his Georgian mansion in the Yorkshire countryside. Read more of this post

Sugar Mills in India to Extend Shutdown on Record Cane Costs

Sugar Mills in India to Extend Shutdown on Record Cane Costs

Sugar mills in India’s biggest growing region will extend a shutdown to curb losses after the government retained cane prices at a record high, potentially curbing output in the world’s second-largest producer. Factories will remain shut as the mills are unable to pay growers the price set by the state, Uttar Pradesh Sugar Mills Association President C.B. Patodia said yesterday in a phone interview in New Delhi. Producers can only pay as much as 225 rupees ($3.60) per 100 kilograms (220 pounds), compared with the state-set price of 280 rupees, he said. Read more of this post

Toward a uniquely Indian growth model; India can’t afford to emulate China. Mahindra Group chairman Anand Mahindra says the country’s states must compete, not march in lockstep, if India is to develop its own path to sustainable prosper

Toward a uniquely Indian growth model

India can’t afford to emulate China. Mahindra Group chairman Anand Mahindra says the country’s states must compete, not march in lockstep, if India is to develop its own path to sustainable prosperity.

November 2013 | byAnand Mahindra

When I listen to pundits, economists, and multinational CEOs talk about India, often I detect a familiar note of frustration. India, they insist, should be blasting upward like a rocket, its growth rate ascending higher and higher, bypassing that of a slowing China’s. India’s population is younger than that of its Asian rival and still growing. Its democratic government enjoys greater legitimacy; its businesspeople are more internationally adept. And yet the Indian rocket continues to sputter in a low-altitude orbit—growing respectably at 5 to 7 percent each year but never breaking through to sustained double-digit growth. Read more of this post

Indonesia Pain Threshold Looms on Rate Increases: Southeast Asia

Indonesia Pain Threshold Looms on Rate Increases: Southeast Asia

Indonesia’s most aggressive rate-tightening in eight years has barely dented a current-account deficit, prompting calls for more increases and other measures before the Federal Reserve cuts stimulus. Bank Indonesia has raised borrowing costs by 1.75 percentage points to 7.5 percent since mid-June, the quickest since 2005. Following data last week showing the country recorded its second-highest current-account shortfall on record in the three months through September, JPMorgan Chase & Co. and Standard Chartered Plc now see a further 50 basis points of increases in the first half of next year. Read more of this post

Indonesia’s informal dentists bite back on ban

Indonesia’s informal dentists bite back on ban

Friday, November 22, 2013 – 03:00

The New Paper

For more than 30 years, Indonesian Edi Herman has been fixing the teeth of Jakartans in the rusty chair of his tiny shop. He is one of thousands of low-cost, unlicensed dentists, whose small stores with their lurid signs can be found nestled in grimy alleys and wedged between redtiled houses across the capital. But after years of horror stories about people suffering terrible damage at the hands of unscrupulous practitioners with neither clean tools nor training, the government moved to ban them from all dental work in 2011. Read more of this post

BOJ Chief Rejects Idea of Yen, Stock Bubble

BOJ Chief Rejects Idea of Yen, Stock Bubble

Kuroda Says He Will Press Ahead With Easing

TAKASHI NAKAMICHI

Nov. 22, 2013 1:45 a.m. ET

TOKYO—Bank of Japan Gov. Haruhiko Kuroda on Friday rejected the view that the central bank’s aggressive pumping of money into the economy is creating a stock market bubble and excessive yen weakness, instead stressing that he will press ahead with monetary easing to vanquish deflation. “I don’t think there is any bubblelike, abnormal yen weakness right now in the currency market,” Mr. Kuroda said during a parliamentary session when an opposition lawmaker accused the BOJ’s policy of merely causing bubbles in asset prices. “I have no particular concerns that a bubble may be in the making in the asset markets,” he added. Read more of this post

Doubting Toyota Prince Defeats Crisis to Prove Self Wrong: Cars

Doubting Toyota Prince Defeats Crisis to Prove Self Wrong: Cars

He’d heard it so often he began to believe it himself. Too young. Not up to the task. Didn’t deserve it. Only there because of his name. “I probably won’t last a year as president, but at least I can finally do something for the company.” Akio Toyoda says those doubts haunted him in early 2010, eight months into the top job at the carmaker his father once ran and his grandfather founded. Eight months in which he’d been all but invisible as defects in autos bearing the family name were tied to deadly crashes in the U.S. And now he was headed for Washington to apologize to Congress and the American people. Read more of this post