Mainland bonds approved for Hong Kong issue
Mainland banks will be allowed to apply for the right to sell RMB-denominated bonds in Hong Kong, China Economy reported. The bank must have a minimum core capital adequacy ratio of 4% and have made a profit and committed no wrongdoings for at least three years in a row, the central bank said. Issuance of RMB-denominated bonds by mainland banks in Hong Kong – which was approved in January – will tie Hong Kong’s economy more closely to the mainland as the port city celebrates the 10th anniversary of its return to China, the newspaper said.

Shanghai set to become world’s biggest port
Shanghai is set to overtake Singapore as the world’s busiest container port in 2008, the 21st Century Business Herald reported. Shanghai, supported by government plans to make the city an international shipping hub, almost doubled its container capacity over the past three years, outpacing growth in Singapore. Shanghai’s container turnover surged 26% in the first five month of 2007 to 10.3 million units and it is expect to operate 25 million containers this year, an increase of 15% on 2006. It overtook Hong Kong as the world’s second busiest port city by containers in the first quarter. The US$16 billion Yangshan deep-water port is designed to boost Shanghai’s container business to at least 30 million units by 2010. The first phase of the port has been operating for 1.5 years.

Chery and Fiat to cooperate
China’s Chery Automobile will team up with Italian Fiat to make and sell Fiat-branded autos in China, China Auto News reported. They will be produced at Chery’s Wuhu factory from 2009, provided assembly lines have been completed. The alliance follows a joint announcement at the 2007 Shanghai Auto Show that the two automakers were considering working together. The statement also mentioned Chery could take over Fiat’s stakes in its joint venture with Nanjing Automotive Industry Corp. Nanjing Fiat reported sales of just 30,000 vehicles over eight years, compared to Shanghai GM’s 400,000 over the same period. Fiat is concerned about its Nanjing partner’s attempt to develop its own models, which it feels could detract from the joint venture.

Swedbank launches first Asian branch in Shanghai
Swedish lender Swedbank has opened its first Asian branch in Shanghai, the Shanghai Financial News reported. The bank will initially offer lending and deposit services in foreign currencies, but it will qualify to conduct RMB services if it can register profits for two consecutive years. Swedbank has followed seven other foreign banks into China – Singaporean DBS, Hang Seng Bank of Hong Kong, Japanese Mizuho Corporate, HSBC, Citibank, Standard Chartered Bank and Bank of East Asia – but the earlier arrivals have already been locally incorporated and granted a license to provide RMB services.

Expat health insurance launched
China Life Insurance has collaborated with Goodhealth – a global healthcare insurer – to become China’s first insurance company to provide group medical insurance to expatriates valid across the globe, the Shanghai Securities News reported. Annual premiums range from around RMB5,000 to RMB160,000 per person, depending on cover and ages, and policy holders can claim medical expenses at 4,000 hospitals around the world. The product is currently available in RMB only, but US dollar-denominated products are expected to be launched soon, making it the first policy available in two currencies in China. It is estimated that over 400,000 expatriates in China are not covered by proper health insurance, revealing a huge market potential.

First foreign refiners granted wholesale license
Sinopec’s two joint ventures with foreign operators have been granted licenses to refine and sell fuel products wholesale, Economy Daily reported. Sinopec SenMei – a gas station venture – and Fujian Refining – a petrochemical venture – are the first foreign companies to be granted wholesale selling licenses, even though the market was opened to the rest of the world in late 2004. The approval follows 12 years of talks. However, 18 joint ventures or wholly foreign-funded companies have gained permission to sell fuel products through retail businesses. These 18 companies control just 2,600 gas stations, or less than 3% of China’s total. China’s oil market is monopolized by the two giant state-owned refiners – PetroChina and Sinopec.

Power supplier sells bills for expansion
Datang International Power Generation – China’s second largest listed electricity producer – said it had sold RMB3 billion worth of short-term bills to raise expansion funds, the Shanghai Daily reported. The central bank gave the Hong Kong-listed company the green light to issue up to RMB4 billion in debt, but until now it had only issued RMB1 billion in bills. The power supplier is going to spend RMB1.8 billion on a 55% stake in a northeastern counterpart, Jinzhou East Power. Datang International power reported RMB869 million profit in the first quarter, during which power generation increased 39% year-on-year to 27.5 billion kilowatt hours.

United Laboratories raises $105M in IPO
Hong Kong-based United Laboratories International – a generic antibiotics producer with factories in China – raised US$105 million (HK$825 million) through its Hong Kong IPO, the Hong Kong-based Wenhui Bao reported. The company sold 300 million new shares at HK$2.75 to raise capital to boost productivity and distribution and repay bank loans. China’s per capita healthcare spending rose 12.8% pa between 2000 and 2004 to US$77 (RMB585) - still tiny by global standards but representing an enormous market given China’s 1.3 billion population. Central government plans to boost rural healthcare coverage are expected to boost per capita spending. HSBC coordinated the offering.

You are currently reading words of total words in this article.
To continue reading this article, you must be a subscriber. Log in now..

Finish this article for free.
Related Articles
@2017 China Economy @ China Perspective.
All Right Reserved.
Server SSL Certificate