Bamboo Innovator

China conjures up new ‘bad bank’ magic trick; Solution to prospect of growing bad debts is same as in the past

October 24, 2013 6:04 am

China conjures up new ‘bad bank’ magic trick

By Henny Sender

Solution to prospect of growing bad debts is same as in the past

Beijing is authorising the establishment of a second batch of so-called bad banks, this time at the provincial level, as it continues its slow move towards more financial deregulation. This time around the incentive is to prepare for any nasty side-effects as interest rate controls are gradually relaxed. Those include a rise in the cost of capital for already cash-strapped Chinese companies as well as the possible risk of accidents in Chinese banks that have not had to worry about asset liability management in the past. The purpose is also to deal with a new round of bad debts following the stimulus programme adopted in the wake of the global financial crisis. Read more of this post

Michael Petis: Hidden China Debt MUST Still be Repaid

Hidden Debt MUST Still be Repaid

Michael Petis, 2013-10-24 13:57:13

导读：中国庞大的外汇储备是否能用来清理银行坏账？当然不能。用外汇储备纾困银行只能减少央行资产，而债务不会相应减少。换言之，外汇储备转移多少，央行净负债将增加多少。
谁来承担中国银行里的坏账损失？要是家庭部门继续像目前这样承受损失——不管是通过抑制利率这种隐藏的方式，还是以更明显的形式，如税收，来实现——中国银行体系的坏账必将压制家庭消费开支的增长。中国的债务增加的速度似乎比偿还能力的增长快得多，说明未来的增长必定会放缓。

Five or six years ago, a few skeptics first started pointing out that the credit dynamics underlying Chinese growth was creating an unsustainable increase in debt. This, they warned, would ultimately undermine the banking system and cause growth to collapse if it were not addressed in time. There were three standard rejoinders to the warnings. First, analysts argued that investment was not being misallocated, and because credit growth poured mostly into investment, it did not therefore follow, as the skeptics argued, that debt was rising faster than debt servicing capacity. Although I think few analysts still support this argument, there remain some analysts who do not think China has an overinvestment problem. For example my Carnegie colleague Yukon Huang, who has argued, for example in one of the FT blogs that China is actually underinvested: Read more of this post

Traders in Yiwu cashing in on e-commerce shops

Traders in Yiwu cashing in on e-commerce shops

Updated: 2013-10-25 02:19

By YU RAN in Yiwu, Zhejiang ( China Daily) Read more of this post

Spike in China money rates raises cash-crunch fears

October 24, 2013 5:32 am

Spike in China money rates raises cash-crunch fears

By Simon Rabinovitch in Shanghai

China’s money rates shot up on Thursday after the central bank withdrew cash from the financial system, fuelling worries that the world’s second-biggest economy might see a replay of a liquidity squeeze that rattled global markets earlier this year. Read more of this post

Response to a City’s Smog Points to a Change in Chinese Attitude

October 24, 2013

Response to a City’s Smog Points to a Change in Chinese Attitude

By EDWARD WONG

BEIJING — Emergency measures came swiftly in Harbin, the northeastern city blanketed with hazardous smog this week: Schools were shut down, buses ordered off the roads, the airport closed, police roadblocks set up to check tailpipe emissions from cars. City officials even fanned out in the surrounding countryside, ordering farmers to stop burning the cornstalks left in their fields after the harvest. They were reacting to the first notable surge of air pollution in China this autumn. Residents across the nation’s north fear that the smog is a sign of things to come. With winter approaching, cities north of the Huai River are turning on their coal-fired municipal heating systems, whose emissions were found in one study to shorten residents’ life spans by an average of five years. Read more of this post

Muddy Waters Risks Curbing Chinese IPO Demand

Muddy Waters Risks Curbing IPO Demand: China Overnight

By Belinda Cao and Matthew Kanterman – Oct 24, 2013

Short seller Muddy Waters LLC’s call to sell shares of Chinese mobile-security service provider NQ Mobile Inc. (NQ) will hinder initial public offerings from the country, Needham & Co. said. Shares of NQ Mobile tumbled as much as 63 percent in New York yesterday before trading was halted. The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. climbed 0.5 percent to 103.26, led by New Oriental Education & Technology Group (EDU) and Vipshop Holdings Ltd. Read more of this post

Chinese Moviegoers Prefer Local Films to Hollywood’s

Chinese Moviegoers Prefer Local Films to Hollywood’s

By Christopher Palmeri October 24, 2013

A year ago the Chinese government raised the number of foreign films allowed into the country to 34 from 20 per year. Many thought Hollywood studios were set to play a starring role in the world’s second-largest movie market. Instead, Chinese filmmakers are capturing most of the industry’s growth because of booming interest in local productions and talent. A case in point: Journey to the West: Conquering the Demons. The action-adventure film, featuring a Buddhist monk who battles a pig demon and a monkey king, is China’s top-grossing film this year, with $189 million in ticket sales. Read more of this post

China Said to Plan Letting More Companies Sell Short-Term Debt

China Said to Plan Letting More Companies Sell Short-Term Debt

By Bloomberg News – Oct 24, 2013

China plans to let more companies sell short-term debt that matures in 270 days or less, said two people with direct knowledge of the matter. The National Association of Financial Market Institutional Investors, which regulates the sales, will require issuers to have a credit grade of AA+ or above from China Credit Rating Co. in addition to a similar rating from another company, said the people, who asked not to be identified as they weren’t authorized to speak publicly about the plans. Read more of this post

China Party’s Secretive Judicial System Laid Bare in Torture Case

China Party’s Secretive Judicial System Laid Bare in Torture Case

By Sui-Lee Wee on 3:18 pm October 24, 2013.
As Yu Qiyi’s interrogation entered its 39th day, officials from the Chinese Communist Party’s anti-corruption watchdog debated how to get a confession out of the detained man, the chief engineer at a state-owned firm in eastern Wenzhou city. One official noted he had forced Yu’s head under water the night before. A day later, Yu died after being dunked repeatedly in a bucket of ice-cold water. Read more of this post

Betel nut industry in Hunan now worth RMB10bn a year

Betel nut industry in Hunan now worth RMB10bn a year

Staff Reporter

2013-10-25

China’s huge industry supply chain for areca nut — more commonly known as betel nut — involves 2.3 million farmers in the southern island province of Hainan and more than 400,000 workers in Hunan’s betel nut-processing industry, which has a production value of nearly 10 billion yuan (US$1.6 billion), the Guangzhou-based Time Weekly reports. The size of the industry has come under the spotlight after reports that chewing betel nut can lead to cancer. About 1 billion people in the world consume the nut for its mild stimulant properties, chiefly in India, where it is known as paan, and throughout Southeast Asia. It is popular in Taiwan and in mainland China its use is centered on the south-central province of Hunan. India and Taiwan grow betel nut locally which is consumed fresh; Hunan, not originally a producer, imports its betel nuts and processes them with preservatives and flavorings. Read more of this post

‘Beautiful China’ tourism pitch clouded over in smog

‘Beautiful China’ tourism pitch clouded over in smog

October 24, 2013

Beijing: Forget all the headlines about eye-watering pollution in Beijing and Shanghai — the Middle Kingdom’s latest tourism slogan invites visitors to “Beautiful China.” Adorning buses and trains in cities such as London, the marketing effort has been derided as particularly inept at a time when record-busting smog has drawn attention to the environmental and health costs of China’s unfettered industrialisation. Like this year’s typically clunky theme for visitors “China Ocean Tourism Year,” the slogan highlights the tin ear of an industry that has ridden the coattails of China’s rapid economic growth and increased global prominence but failed to keep up with international travel trends. Read more of this post

Baidu Raises Eyebrows by Promising High 8% Yield on New Investment Product; Baidu Can’t Guarantee Returns on Online Fund Products, CSRC Says

10.23.2013 16:28

Baidu Raises Eyebrows by Promising High Yield on New Investment Product

Search engine company pledges 8 percent return, but then deletes the weibo post that made the guarantee

By staff reporter Liu Zhuozhe

(Beijing) – Baidu, China’s version of Google, is in the spotlight over exceptionally high returns it promised for an investment product the company plans to unveil. The search engine firm said on October 21 on weibo, the country’s Twitter-like microblog service, that it will introduce a wealth management service on its website on October 28 in cooperation with China AMC, the largest public fund management company in China. The service, called Bai Fa, will have an annual yield of 8 percent and investors can withdraw money from their account at any time, the announcement said. Baidu did not explain how it works. Read more of this post

South Korea’s education system: The great decompression; There are perils for a country in having all your children working too hard for one big exam

South Korea’s education system: The great decompression; There are perils for a country in having all your children working too hard for one big exam

Oct 26th 2013 |From the print edition

FEW countries have done better than South Korea over the past half-century. Within the span of a single working life, its economy has grown 17-fold, its government has evolved from an austere dictatorship into a rowdy democracy, and its culture, once scarred by censorship, now beguiles the world with its music, soap operas and cinema. Scholars enthuse about the speed and precocity of its “compressed development”. Read more of this post

Mercedes Halves Costs as Gangnam Showrooms Boom: Korea Markets

Mercedes Halves Costs as Gangnam Showrooms Boom: Korea Markets

Mercedes-Benz Financial Services Korea Co. slashed borrowing costs by more than 50 percent as record demand for imported cars in Seoul’s Gangnam luxury-goods district spurs its lending business. The unit of German automotive group Daimler AG (DAI) sold 130 billion won ($122 million) of two-year notes on Oct. 14 at 3.38 percent, 57 basis points more than similar-maturity government bonds, data compiled by Bloomberg show. That’s lower than both the spread on 2014 securities sold in November of 123 basis points and the average premium for two-year A+ rated finance debt of 73. The sale was expanded by 30 percent to meet demand. Read more of this post

Word of mouth has turned Yeti’s sturdy ice chests, which are priced as high as $1,300, into a cult brand

The Most Expensive, Bear-Proof, Thief-Baiting Way to Keep Your Beer Cold

By Keenan Mayo October 17, 2013

When he went fishing, Roy Seiders had a habit of breaking his coolers. It was 2005, and the Austin (Tex.)-based builder of fishing boats was desperate for something tougher than a typical Igloo or Rubbermaid (NWL). “Everything about my boat was durable except for the coolers, which you need to store fish and keep drinks cold,” he says. “But you also need them as seats—or as a casting platform where you can stand and cast to the fish.” So Seiders and his older brother Ryan, who makes fishing rods (their father owns Flex Coat, which creates an epoxy “wrap finish” for fishing rods), set out to make a cooler that could stand up to their own abuse. Read more of this post

Bunge may struggle to lure suitors for loss-making sugar mills bought four years ago for $1.5 billion when they were considered the crown jewels of a burgeoning biofuel industry

Bunge may struggle to lure suitors for loss-making sugar mills

12:25am EDT

By Chris Prentice and Reese Ewing

NEW YORK/SAO PAULO (Reuters) – When Bunge Ltd (BG.N: Quote, Profile, Research, Stock Buzz) bought five sugar mills in Brazil’s Sao Paulo state four years ago for $1.5 billion, they were considered the crown jewels of a burgeoning biofuel industry. Now, they may be little more than millstones, hard-to-sell assets at a time of crushed margins and weak prices. In the industry’s first major capitulation to depressed market conditions, Bunge’s new chief executive announced on Thursday he will explore options, including a sale, for the loss-making business. Read more of this post