Archive for ‘Intellectual Property Rights’

11/04/2019

U.S., China agree to establish trade deal enforcement offices – Mnuchin

WASHINGTON (Reuters) – The United States and China have largely agreed on a mechanism to police any trade agreement they reach, including establishing new “enforcement offices,” U.S. Treasury Secretary Steven Mnuchin said on Wednesday.

Mnuchin, speaking on CNBC television, said that progress continues to be made in the talks, including a “productive” call with China’s Vice Premier Liu He on Tuesday night. The discussions would be resumed early on Thursday, Washington time, he added.

“We’ve pretty much agreed on an enforcement mechanism, we’ve agreed that both sides will establish enforcement offices that will deal with the ongoing matters,” Mnuchin said, adding that there were still important issues for the countries to address.

Mnuchin declined to comment on when or if U.S. tariffs on $250 billion worth of Chinese goods would be removed. Although President Donald Trump said recently that a deal could be ready around the end of April, Mnuchin declined to put a timeframe on the negotiations, adding that Trump was focused on getting the “right deal.”

“As soon as we’re ready and we have this done, he’s ready and willing to meet with President Xi (Jinping) and it’s important for the two leaders to meet and we’re hopeful we can do this quickly, but we’re not going to set an arbitrary deadline,” Mnuchin added.

The United States is demanding that China implement significant reforms to curb the theft of U.S. intellectual property and end forced transfers of technology from American companies to Chinese firms.

Washington also wants Beijing to curb industrial subsidies, open its markets more widely to U.S. firms and vastly increase purchases of American agricultural, energy and manufactured goods.

The Chinese commerce ministry on Thursday confirmed that senior trade negotiators from both countries discussed the remaining issues in a phone call following the last round of talks in Washington.

“In the next step, both trade teams will keep in close communication, and work at full speed via all sorts of effective channels to proceed with negotiations,” Gao Feng, the ministry’s spokesman told reporters in a regular briefing in Beijing.

Mnuchin did not address whether the enforcement structure would allow the United States a unilateral right to reimpose tariffs without retaliation if China fails to follow through on its commitments.

People familiar with the discussions have said that U.S. negotiators are seeking that right, but that China is reluctant to agree to such a concession. Alternatively, the United States may seek to keep tariffs in place, only removing them when China meets certain benchmarks in implementing its reforms.

Mnuchin said he and U.S. Trade Representative Robert Lighthizer, who is leading the negotiations, are focused on “execution” of drafting the documents in the trade agreement.
The two sides are working on broad agreements covering six areas: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, according to two sources familiar with the progress of the talks.
“Some of the chapters are close to finished, some of the chapters still have technical issues,” Mnuchin said.
Source: Reuters
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23/02/2019

Trump says he’s inclined to extend China trade deadline and meet Xi soon

WASHINGTON (Reuters) – President Donald Trump said on Friday there was “a very good chance” the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.

“I think that we both feel there’s a very good chance a deal will happen,” Trump said.

Liu agreed there had been “great progress”.

“From China, we believe that (it) is very likely that it will happen and we hope that ultimately we’ll have a deal. And the Chinese side is ready to make our utmost effort,” he said at the White House.

The Republican president said he probably would meet with Xi in March in Florida to decide on the most important terms of a trade deal.

 

Optimism that the two sides will find a way to end the trade war lifted stocks, especially technology shares. The S&P 500 stock index reached its highest closing level since Nov. 8. Oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel. [.N] [O/R]

CURRENCY AGREEMENT

Trump and Treasury Secretary Steven Mnuchin said the two sides had reached an agreement on currency. Trump declined to provide details, but U.S. officials long have expressed concerns that China’s yuan is undervalued, giving China a trade advantage and partly offsetting U.S. tariffs.

Announcement of a pact aimed at limiting yuan depreciation was putting “the currency cart before the trade horse,” but would likely be positive for Asian emerging market currencies, said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

“How can you agree to avoid excessive Chinese yuan depreciation or volatility if you have not made an agreement on trade that could have huge FX implications?” Ruskin asked in a note to clients.

In a letter to Trump read aloud by an aide to Liu at the White House, Xi called on negotiators to work hard to strike a deal that benefits both country.

Trump said a deal with China may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.

The Justice Department has accused Huawei of conspiring to violate U.S. sanctions on Iran and of stealing robotic technology from T-Mobile US Inc.

Chinese peer ZTE was last year prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

MEMORANDUMS NO MORE

Trump appeared at odds with his top negotiator, U.S. Trade Representative Robert Lighthizer, on the preliminary terms that his team is outlining in memorandums of understanding for a deal with China. Trump said he did not like MOUs because they are short term, and he wanted a long-term deal.

“I don’t like MOUs because they don’t mean anything,” Trump said. “Either you are going to make a deal or you’re not.”

Lighthizer responded testily that MOUs were binding, but that he would never use the term again.

Reuters reported exclusively on Wednesday that the two sides were drafting the language for six MOUs covering the most difficult issues in the trade talks that would require structural economic change in China.

Negotiators have struggled this week to agree on specific language within those memorandums to address tough U.S. demands, according to sources familiar with the talks. The six memorandums include cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.

An industry source briefed on the talks said both sides have narrowed differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft of U.S. trade secrets.

Lighthizer pushed back when questioned on forced technology transfers, saying the two sides made “a lot of progress” on the issue, but did not elaborate.

The United States has said foreign firms in China are often coerced to transfer their technology to Chinese firms if they want to operate there. China denies this.

The U.S. Chamber of Commerce on Friday urged the U.S. government to ensure the deal was comprehensive and addressed core issues, rather than one based on more Chinese short-term purchases of goods.

China has pledged to increase purchases of agricultural produce, energy, semiconductors and industrial goods to reduce its trade surplus with the United States.

China committed to buying an additional 10 million tonnes of U.S. soybeans on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter. China bought about 32 million tonnes of U.S. soybeans in 2017. The commitments are a “show of good faith by the Chinese” and “indications of more good news to come,” Perdue wrote.

China was the top buyer of U.S. soybeans before the trade war, but Beijing’s retaliatory tariffs on U.S. soybeans slashed business that had been worth $12 billion annually.

Source: Reuters

27/06/2014

Video sharing site fined $42m for copyright infringement – China – Chinadaily.com.cn

Chinese video sharing site QVOD was ordered on Thursday to pay a fine of 260 million yuan ($41.8 million) over copyright infringement.

Shenzhen QVOD Technology Co., Ltd. should pay the fine within 15 days of receiving the administrative punishment or be charged a late fee of 3 percent of the fine for each day, said Fang Canyu, a law enforcement officer with the Shenzhen Market Supervision Administration.

The firm should pay the fine first even though it can apply for an administrative review within 60 days or file a lawsuit within three months, Fang said.

The hefty fine is three times the illegal earnings QVOD made by violating others’ information network transmission rights, according to the administrative ruling.

The imposition of hefty fines has proved to be very effective in curbing copyright infringement cases, said Zeng Raodong, head of the laws and regulations department under the Shenzhen Market Supervision Administration.

The punishment was given days after a hearing on June 17.

QVOD streamed 24 films and TV dramas even though it was fully aware or should have known that third-party video websites infringe copyright, Fang said.

The company, founded in 2007, used to offer pirated and pornographic videos with peer-to-peer video streaming technology. Its user base quickly grew to 300 million.

via Video sharing site fined $42m for copyright infringement – China – Chinadaily.com.cn.

13/05/2014

China in numbers: building a trading empire, brick by imitation brick | The Times

5,137 . . . is the number of shops on Alibaba’s Taobao ecommerce platform that claim to sell Lego — a favourite toy of a pushy Chinese middle class convinced that the Danish bricks will make their children creative, inventive and generally more brilliant.

Chinese children play with Lego bricks

The prices offered at many of the Lego-selling online stores are often ridiculously and suspiciously cheap. The Taobao trading system, one of the shinier jewels in Alibaba’s crown as the internet titan seeks what could be the world’s biggest tech listing in America, allows customers to haggle directly with the vendor. An aggressive-enough negotiation can land you a substantial bag of Lego-esque bricks for the equivalent of a couple of quid.

Alarms bells rightly ring. Not all of these 5,137 Taobao-based Lego stores, needless to say, are selling genuine Lego. Lego itself does not publicly guess at the extent to which its product is ripped off: lawyers with the battle scars of Chinese infringement suits suspect the proportion of those 5,137 selling fake Lego may be as high as 80 per cent.

The notion that China is a seething, nest of counterfeiting, trademark infringement and fraudulence is not new; nor is the fact that the stratospheric growth of ecommerce in China has significantly enlarged the speed and volume at which fake goods change hands.

The big question, as lawyers and companies arrive in Hong Kong this week for the world’s biggest intellectual property convention, is whether anything much is changing. Jack Lew, the US Treasury Secretary, will arrive today in Beijing and demand greater protection of intellectual property. It is unclear whether that will change much either.

The signals are not great. Last week, the Chinese food and drug authority warned that 75 per cent of foreign-branded drugs sold online (though mostly not through Taobao stores) in China were fake. The extent of the problem was especially grisly for cancer sufferers, whose online pursuit of cheap generic oncology medicine will, eight times out of ten, land them with fake drugs.

The difficulty here is that Taobao’s greatest quality — its huge accessibility for vendors — is also the source of the problem. Even if a store selling counterfeited goods is closed down, there are no barriers to prevent its owner opening a new one, under a new name, hours later. As the operator of Taobao, Alibaba has undertaken a limited range of regulatory functions. But on one critical issue it does not step in: if a company such as Lego believes that fake bricks bearing its brand are being sold from a Taobao store, Lego bears the burden of proving that the product is fake. Crucially, Lego cannot use the laughably low prices of the fake Lego as evidence.

A recent experiment by Taobao to designate all versions of a particular product (not Lego) fake if they fell below a particular price resulted in 42,000 stores being immediately closed. Six months later, almost all had re-opened.

The problem for Beijing is that Alibaba and Taobao are arguably too big to fail. The public cannot live without ecommerce any more and the authorities have identified the encouragement of innovation and the release of entrepreneurial spirits (of the sort being vigorously nurtured on Taobao) as the keys to building a sustainable economy.

As a listed company and as a provider of the medium for immense, minute-by-minute infringement of intellectual property, Alibaba may soon find itself under greater pressure to play the policeman. It may be able to resist that as long as the the plaintiffs are foreigners: it may not find that so easy when the brands being ripped off are Chinese and the complaints are domestic.

via China in numbers: building a trading empire, brick by imitation brick | The Times.

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28/04/2014

Experts: Patent process needs update – China – Chinadaily.com.cn

Spiking demand for intellectual property services shows large room for growth

Experts: Patent process needs update

China’s patent mechanisms need to be upgraded with foreign expertise, amid a growing demand for international intellectual property services from domestic enterprises, experts said.

The number of patent applications, the demand for legal support, and intellectual property consultation in various sectors have soared in recent years, inspired by the central government’s call to develop intellectual property strategies.

But the development also poses challenges to the country’s immature patent services, they said.

The State Intellectual Property Office said China has 1,001 patent agencies and 8,861 professional practicing agents registered under the office. The entire patent agency industry generated income of more than 8.7 billion yuan ($1.4 billion), including application and managing fees, last year.

There is still room for the industry to thrive as lots of IP-related services have not yet been fully developed in China, said He Hua, the office’s deputy director.

“The skyrocketing demand in the patent application processing each year shows how big the industry is going to be, and the industry is far from realizing its potential,” He said at an IP symposium held by the All-China Patent Attorneys Association on Saturday.

China received 825,000 invention patent applications last year, a 26.3 percent increase year-on-year. The 2.38 million patent applications filed was the highest in the world for the third consecutive year, the office said earlier this month.

Chinese companies are paying more attention to international patents, with a rising awareness of their IP edge in the global market. The country received 22,924 international patent applications according to the Patent Cooperation Treaty in 2013, a 15 percent increase from 2012.

But of all the domestic and foreign patent applications filed last year, only 60 percent were processed through patent agencies, a 15 percent drop from 10 years ago.

Local agencies’ lack of knowledge of the international IP system and legal frameworks in overseas markets has forced major innovation companies to seek patents on their own.

Chinese telecommunication giant Huawei Technologies developed a 300-staff intellectual property rights department in 1995 and processed almost half the applications of its more than 30,000 international patents, said Cheng Xuxin, deputy director of Huawei’s IPR department.

via Experts: Patent process needs update – China – Chinadaily.com.cn.

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16/05/2013

* India: Patents and precedents

FT: “Pharmaceutical companies fear that the battle raging in India over patents will inspire other countries to change their laws

Meena, a 45-year-old New Delhi widow with a 10-year-old son, was diagnosed with potentially fatal blood cancer in 2010. To control it, her doctors prescribed an Indian*- made generic version of Novartis’ leukaemia drug.

But her body stopped responding to it and Meena was advised to switch to a more expensive drug, Sprycel, a second-line cancer drug made by Bristol-Myers Squibb. Sprycel costs Rs160,000 ($2,900) per month, far out of reach for a woman living on her late husband’s Rs17,000 monthly pension.

A solution appeared to be at hand last May when Natco, an Indian generic drugs company, started selling its own version of Sprycel for Rs9,000 a month. A charity helped Meena to buy it.

But Meena’s ability to obtain potentially lifesaving medicine became tied up in a dispute pitting the interests of the world’s largest drugmakers – who spend $70bn annually developing drugs – and generic manufacturers in the developing world.

BMS, the US drugs group with revenues of $17.6bn in 2012, accused Natco of patent infringement, prompting the India’s Supreme Court to order the Indian drugmaker to stop making the medicine until a final verdict was reached. While some patients stocked up before the generic disappeared, Meena could only afford a few bottles.

The BMS “access programme” for the poor offered to sell her Sprycel for Rs15,000 per month – a big discount on the market price but still more than she can afford. Friends have chipped in to buy her a month’s supply but she is distraught about the future. “I don’t see a ray of hope,” she says. “Even if I use all my resources, I can only afford it for two months. It’s not sustainable.”

It is this struggle of educated, middle-class patients to obtain cutting-edge medicine that has led to a showdown between India and western pharmaceutical companies over the patents and prices of lifesaving drugs.

Western drugmakers fear India will inspire other emerging markets to challenge their patents. They have accused India of trampling on their intellectual property rights after a series of decisions overriding, revoking or refusing patents on cancer and hepatitis C drugs from Bayer, Pfizer, Roche and Novartis. The companies are also irate that New Delhi is considering compulsory licenses for another three patented cancer drugs, including Sprycel, and Roche’s breast cancer drug Hercepterin.

At a recent US Congressional hearing, Roy Waldron, Pfizer’s chief intellectual property officer, complained that New Delhi had “routinely flouted trade rules to bolster the Indian generics industry”.

Indian generics executives and patients activists say the reality is more nuanced. They argue that India’s courts are trying to balance drug companies’ intellectual property rights against the need for affordable medicine for 1.2bn Indians. India’s public healthcare system has virtually collapsed, with Indians paying 60 per cent of their healthcare costs from their own pockets.

This stand-off is taking place within the framework of a new patent law crafted to preserve India’s manoeuvring room to keep medicines affordable at home – and protect its exports of drugs abroad.

“The portrayal is that India doesn’t respect intellectual property rights but the reality is that it is balanced,” says Leena Menghaney, a lawyer with Médecins Sans Frontières, the humanitarian organisation. “The decisions that go in favour of the MNCs [multinational corporations] never get reported and decisions against them always hit the headlines.”

D.G. Shah, secretary-general of the Indian Pharmaceutical Alliance, which represents India’s biggest generics firms, rejects suggestions of protectionism for domestic companies.

via India: Patents and precedents – FT.com.

06/01/2013

* Pirated Copy of Design by Star Architect Hadid Being Built in China

Spiegel Online: “Star architect Zaha Hadid is currently building several projects across China. One of them, however, is being constructed twice. Pirates are the process of copying one of her provocative designs, and the race is on to see who can finish first.

Star architect Zaha Hadid has become one of the most admired architects in the...

London-based Zaha Hadid, widely regarded as one of the leading lights in the constellation of avant-garde architecture, has likewise become a superstar in China, where her latest designs radiate out through architecture schools and studios across the country. On a recent trip to Beijing, 15,000 artists, architects and other fans swarmed to a talk she gave for the opening of the futuristic Galaxy SOHO complex — just one of 11 projects she is designing across the country.

But the appeal of the Prtizker Prize winner’s experimental architecture, especially since the unveiling of her glowing, crystalline Guangzhou Opera House two years ago, has expanded so explosively that a contingent of pirate architects and construction teams in southern China is now building a carbon copy of one of Hadid’s Beijing projects.

What’s worse, Hadid said in an interview, she is now being forced to race these pirates to complete her original project first.

The project being pirated is the Wangjing SOHO, a complex of three towers that resemble curved sails, sculpted in stone and etched with wave-like aluminum bands, that appear to swim across the surface of the Earth when viewed from the air.

Zhang Xin, the billionaire property developer who heads SOHO China and commissioned Hadid to design the complex, lashed out against the pirates during the Galaxy opening: “Even as we build one of Zaha’s projects, it is being replicated in Chongqing,” a megacity near the eastern edge of the Tibetan plateau. At this point in time, she added, the pirates of Chongqing are building faster than SOHO. The original is set for completion in 2014.

‘China Can Copy Anything’

Zhang has issued an open appeal for help in combatting this massive, open counterfeiting operation, and lamented: “Everyone says that China is a great copycat country, and that it can copy anything.”

Piracy is pervasive in China, where counterfeit iPods, iPhones and iPads are sold openly, and even entire fake Apple stores have proliferated across upwardly mobile cities. Although China has, on paper at least, a series of laws to protect intellectual property, enforcement of these rules is wildly sporadic.

Yet You Yunting, a Shanghai-based lawyer who founded an online journal covering intellectual property issues, said China’s copyright law includes protection for works of architecture. You said he has studied the copying of the Hadid project, and added: “The two versions of the complex are quite similar.”

“SOHO could have a good chance of winning litigation in this case,” he predicted. “But even if the judge rules in favor of SOHO, the court will not force the defendant to pull the building down. But it could order the payment of compensation.””

via Pirated Copy of Design by Star Architect Hadid Being Built in China – SPIEGEL ONLINE.

06/11/2012

* The Rise of Innovation in China: Failed Western Stereotypes

Rainforest Realities: “In the past few months I’ve had the opportunity at several conferences to speak about innovation and intellectual property in China. I’ve come to realize that outside views about intellectual property in China are similar to common misperceptions about sustainability in this land. I’m glad to share my thoughts because I see huge gaps between Western views of China and the reality that is unfolding here.

Failure to appreciate the reality of innovation in China will lead many in the West to miss huge emerging opportunities. China is moving from a nation of low-cost manufacturing to a nation that relies on innovation and intellectual property. There is much progress still needed, but the changes are dramatic. China has gone from a nation with essentially no intellectual property laws 30 years ago to a nation that now leads the world in patent filings.

It is a nation where a small company in the U.S. can take its patents and trademarks to Chinese courts and win against Chinese companies. This happened recently (April 2012) in Shanghai, when a maker of blow-molded tables from my home state of Utah in the United States was able to enforce both its design patent and its trademark against Chinese infringers.

The growth of China’s intellectual property system from essentially nothing to a bustling, world-class system in so short a time is a dramatic example of what can be achieved in China, and should remind us that old stereotypes about China need to be frequently updated or discarded.

Illustrations from China’s 1313 Book of Farming

Today we are on the verge of a renaissance in Chinese innovation, returning China to a historic leadership role in technology and innovation. This historic role, however, is often not appreciated by the West. For example, many in the West, including eminent scholars, still think that Europe invented printing with movable type, and believe that the first mass-produced book printed with movable type was the Gutenberg Bible. This was a brilliant achievement, absolutely, but it came 142 years after Wang Zhen used movable type to mass produce the mammoth Nong Shu (农书) or Book of Farming in 1313, a beautifully illustrated book of agricultural innovation intended to preserve advanced knowledge from across China to help elevate the nation economically. The book not only describes useful agricultural methods and crops, but also details many mechanical inventions with drawings reminiscent of Leonardo DaVinci’s works.

China’s historic role as a great inventor only recently became available in the West with the publication of Science and Civilization in China by famed British scholar Joseph Needham. His 28-volume work details the Chinese origins of gunpowder, the compass, smallpox inoculation, mechanical clocks, paper money, suspension bridges, and numerous other advances long thought to be Western in origin.

The current rise of innovation now in China is not something new, but a return to ancient splendor. There are those who dismiss innovation in China as something the Chinese just aren’t capable of. That flawed viewpoint is squarely defied by the tide of history. While there were many forces that delayed China’s entry into the industrial revolution and led the modern world to see China as far from innovative, the momentum is shifting dramatically now.

Just as the West has failed to credit China for many past innovations, modern innovation from China doesn’t fare much better. APP’s innovation in sustainability, for example, ought to be evidence to anyone who visits our mills or sets foot on one of our plantations.

The water coming from APP’s mills has levels of purity exceeding accepted standards not just in China but in Europe and North America. Air emissions are remarkably low as well. And many advanced and innovative techniques have been developed in our sustainable plantations to provide high levels of productivity and efficiency —a sustainable model that often goes unrecognized.

There have been remarkable progress and achievements as noted in APP-China’s corporate sustainability report and our innovative Paper Contract with China, where APP is taking a leadership role in China in advancing the sustainability of the industry.

I challenge you to think about what you might have heard regarding sustainability in China and at APP. Just as the West gets a lot of things wrong regarding IP and innovation in China, some of what you’ve heard on sustainability may be incomplete or way off. We hope you’ll take a look and see for yourself.”

via The Rise of Innovation in China: Failed Western Stereotypes | Rainforest Realities.

04/10/2012

* IPR awareness rises in China: experts

As China increases its own Intellectual Property and the number of registered and granted patents, it is in its own self-interest to take IPR and copyright more seriously than it has hither to.  This is good news for all innovators whether Western or Eastern.

Xinhua: “An increasing number of patents and trademark registrations is boosting social awareness of intellectual property rights (IPR) in China, which will change the way that the world’s second-largest economy grows, experts said.

The number of trademark registration applications reached 1.42 million in 2011, a sharp rise from the 19,000 applications submitted in 1983, when the country’s trademark law took effect, a national news magazine Outlook Weekly reported.

“The increasing number of patents will be conducive to IPR awareness in China,” said Prof. Liu Chuntian at Renmin University.

Liu said IPR protection is a basic tenet of the modern market economy, adding that China should carry out top-down reforms to further improve IPR regulations and laws.

The government’s previous efforts to protect IPR include a strategic guideline published in 2008 that set a goal of making substantial progress in creation, application, protection and management of IPR by 2020.

China has only 21 of the world’s top 500 brands, despite a large number of patents and trademark applications, the report said, adding that China’s performance in IPR does not match the size of its economy.

However, home-grown technologies, including the TD-SCDMA and TD-LTE telecommunications interfaces, and emerging hi-tech giants, such as Huawei and ZTE, indicate that China is starting to improve its capacity to innovate, the report said.”

via IPR awareness rises in China: experts – Xinhua | English.news.cn.

17/09/2012

* For Beijing, expansion is not a big deal, it’s lots of them

The Times: “China’s slowing economy has failed to dent its global ambitions, with an increasingly hungry dragon scouring the globe for higher-value corporate deals, according to new research.

It made 177 outbound acquisitions worth a combined $63.1 billion last year, five times more than in 2005, the study by Mergermarket and Squire Sanders, the law firm, found. Deals are also growing in value, with the planned $15.1 billion takeover of Nexen, the Canadian oil sands explorer, by the state-owned CNOOC set to be China’s biggest-ever foreign acquisition, if it goes ahead.

Next month China will release its third-quarter GDP data, with some economists suggesting that growth could fall below the 7.6 per cent it brushed in the second quarter, despite assurances from Beijing that the economy would stabilise in the second half.

Natural resources and energy, the sectors most critical to China’s future growth, continue to dominate purchases, accounting for almost one in three M&A targets between 2011 and the year to date. Almost all these buyers are state-owned companies making investments at the behest of the Government.

Mao Tong, a Hong Kong-based partner at Squire Sanders, said: “We are seeing companies becoming more interested in making a strategic play, rather than just adding to their portfolio. These are big deals designed to position them in a global context.

“Even if the Chinese economy slows sharply, I think this will continue for a while. China is still the world’s most important manufacturing base, using huge amounts of iron ore, for example.”

China is eager to deploy its $3 trillion of foreign exchange reserves, mainly held in dollars, to counter the gradual depreciation of the currency and put its national wealth to good use. Yet the number of private sector deals is also expected to increase as the Government encourages state-owned banks to step up lending to the corporate sector.Britain is the favoured destination for Chinese dealmaking in Western Europe, accounting for a third of deals and two thirds of all outbound investment to the region, thanks to its reputation for transparency and a large number of Russian and Central Asian resources companies, Mr Mao suggested.

China has shown an increasing taste for European luxury brands, such as Shandong Heavy Industry’s buyout of the Italian yacht group Ferretti this year. Recent British brands going East include Weetabix, bought by the Shanghai dairy group Bright Food, and the $7.8 billion buyout of Northumbrian Water by Cheung Kong Infrastructure, a Hong Kong group chaired by Li Ka-shing.

The Dragon Index, a quarterly measure of China’s overseas direct investment by the private equity firm A Capital, which was released last week, hit an historic high in the second quarter, with ODI said to grow by 67 per cent between April and June on the previous quarter, to $24 billion.

André Loesekrug-Pietri, founder of A Capital, said: “State-owned enterprises remain the dominant force behind China’s ODI, with 90 per cent of the total deal value in the second quarter 2012.”

European companies accounted for 95 per cent of all non-resources deals in the quarter, the figures suggested. China’s share of US deals has slowed this year, owing to the sensitive political climate before the presidential election.”

via For Beijing, expansion is not a big deal, it’s lots of them | The Times.

See also: https://chindia-alert.org/2012/02/13/pattern-of-chinese-overseas-investments/

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