Archive for ‘Investment’

28/01/2019

Sandro-owner SMCP eyes growth and investment in China

PARIS (Reuters) – SMCP, the group behind fashion brands Sandro and Maje, will keep up investments in e-commerce and new stores in China this year and expects sales to grow strongly, countering a simmering Sino-U.S. trade war, the French company’s CEO said.

The retail group – whose affordable luxury brands, which also include Claudie Pierlot, sell dresses in the 200 to 400 euro range – had doubled annual revenues in the past four years to 1 billion euros, with a rapid expansion of its shop network and after breaking into markets such as China

Investors are on edge over signs Chinese shoppers might start spending less on high-end brands due to the Washington-Beijing trade spat, which has already hit their overseas purchases as the yuan falls.

Business in Hong Kong, for instance, a magnet for Chinese consumers, was “a little softer” as a result of currency swings, SMCP’s Chief Executive Daniel Lalonde said in an interview.

But he added that the group was still investing in mainland and greater China, which makes up the bulk of its sales in Asia Pacific, SMCP’s third-biggest region after its French home market and the rest of Europe.

“From our perspective, everything is still intact (in China). Any slowdown in our business is related to the comparison base (…) and we still expect to grow that market over 20 percent in 2019,” Lalonde said. “We’re still confident on the region.”

SMCP, controlled by Chinese retail group Shandong Ruyi, earlier on Monday reported a 8.1 percent increase in fourth-quarter sales at constant currencies, which came in at 276.1 million euros (239.4 million pounds), in line with forecasts.

Momentum in Asia Pacific slowed from the previous three months, but mainland China was particularly strong, the group said.

In France, SMCP had to shut some stores on successive Saturdays in November and early December along with its rivals due to anti-government “yellow vest” protests, costing the firm 4 million euros in lost revenue, Lalonde said.

Its French sales fell 1.9 percent at constant currencies in the fourth quarter, less than expected by some analysts and helped by a spike in online sales.

SMCP’s shares jumped more than 4 percent in early trading but were down 4 percent by 1218 GMT, with European shares more broadly in negative territory following underwhelming industrial data from China.

Source: Reuters

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28/01/2019

Chinese envoy calls for more flexible approach in investment treaty talks with EU

BRUSSELS, Jan. 28 (Xinhua) — China and the European Union (EU) could take a more flexible approach by setting phase-based targets in Bilateral Investment Treaty (BIT) negotiations and have some early harvests which would be followed by more to come, the Chinese envoy to the EU has said.

Zhang Ming, head of the Chinese mission to the EU, made the remarks in a recent interview with the Financial Times, according to an edited transcript of the interview provided by the mission on Sunday night.

“The BIT talks is a priority in China-EU relations. Both sides have put in a great deal of effort. Both sides are pushing the talks in good faith,” Zhang said.

Last year, the two sides exchanged the market access offers, which marked big progress and brought the talks into a new phase, he said.

“This year, we hope to make further progress. To conclude the agreement requires both sides to work together in the same spirit. This is a process of making compromise. We hope that our European friends can work together with us,” Zhang said.

“Usually, the negotiating parties tend to set an ultimate goal. Reaching the goal takes quite some time,” he said, proposing that the two sides could set phase-based targets and have some early harvests.

China is now the EU’s second-biggest trading partner while the EU is China’s biggest trading partner.

The two sides launched negotiations for a BIT in 2013 with the aim of providing investors on both sides with predictable, long-term access to each other’s markets, and protecting investors and investments.

Source: Xinhua

08/01/2019

China to expand investment in civil aviation sector in 2019

BEIJING, Jan. 7 (Xinhua) — China’s civil aviation regulator said Monday that the country aimed to expand its fixed-asset investment in the civil aviation sector to 85 billion yuan (about 12.41 billion U.S. dollars) in 2019.

This was compared with 81 billion yuan made in 2018, according to the Civil Aviation Administration of China (CAAC).

Total transport turnover of the country’s civil aviation industry was expected to rise 11.8 percent year-on-year to 136 billion tonne-kilometers in 2019, said Feng Zhenglin, head of the CAAC, at a work conference.

Passenger transport volume as well as cargo and mail transport volume are likely to increase 11 percent and 5.7 percent respectively this year, according to the CAAC.

Feng said the civil aviation industry had made remarkable achievements last year, with the total transport turnover up 11.4 percent year-on-year to 120.64 billion tonne-kilometers.

In 2018, 167 new international flight routes were launched, with 105 of them linking domestic cities with countries along the Belt and Road, taking number of China’s total flight routes to 4,206.

Efforts will be made to push forward the construction of Beijing’s new international airport and ensure its opening to air traffic at the end of September this year, Feng said.

He said as of the end of 2018, 55.49 billion yuan had been invested Beijing Daxing International Airport. The new airport is expected to handle 45 million passengers annually by 2021 and 72 million by 2025.

21/11/2016

U.S.-China Investment Flows Bigger Than Thought – China Real Time Report – WSJ

Would politicians in the U.S. and China be stronger proponents of foreign investment from each other’s nations if the amounts were bigger?

A new study estimates foreign direct investment between the U.S. and China is already two to four times the amount shown by official statistics, and its authors hope the findings will encourage politicians to forge even deeper bilateral links. “We simply did not have a good joint basis for discussion,” said Thilo Hanemann, research director at New York-based Rhodium Group.

With funding by big U.S. businesses and trade groups, Rhodium counted $228 billion in 6,677 U.S. investments into China since 1990, plus 1,200 Chinese investments into the U.S. worth $64 billion. The figures are significantly higher than official numbers produced in each country.

Publication of Rhodium’s “Two-Way Street” comes as investment and trade flows face increasingly skeptical governments in both the U.S. and China. Proponents of open flows express anxiety that, as U.S. president, Donald Trump could favor more protectionism. New policies could mean less business for investment bankers and lawyers who do cross-border deals, plus slower trade and fewer jobs in local communities.

Cool winds were already blowing before Mr. Trump’s surprise election.

Rising trade barriers are blamed for anemic global commerce this year, while cross-border investment is under such threat that Group of 20 leaders in September endorsed guidelines designed to inspire confidence in it. This week, the U.S. Congress was advised by a longtime critic of Beijing, the U.S.-China Economic and Security Review Commission, of an “inherently high risk” in allowing state-run Chinese companies to make acquisitions in the U.S.

A Chinese Foreign Ministry spokesman declined to comment on the commission’s report in a regular briefing Thursday and said the U.S.-China economic relationship is mutually beneficial.

Rhodium argues that the benefits of FDI aren’t widely enough appreciated because the amounts have been underestimated. Its researchers aimed to track every business investment of $1 million or more between the world’s two largest economies over the past quarter century.The researchers found deep impacts throughout China and the U.S., including 1.6 million jobs in China directly resulting from U.S. FDI and U.S. 100,000 due to Chinese money.

The paths into each other’s nations differ, the study determined. Some 71% of U.S. investments into China were greenfield, or new, projects. U.S. companies, including Gap Inc. and International Paper, according to their executives who participated in a launch of the report, initially went to China because it was cheaper. Today they increasingly look at its consumer market. Meanwhile, U.S. business as a whole could do more if permitted into key sectors such as entertainment and energy.

Chinese companies have mostly bought businesses in the U.S. with activity that has been almost all in the past five years, the researchers found. Dealmaking has risen so quickly that China’s flows to the U.S. topped its intake from the U.S. in 2015, with activity increasingly driven by private companies, including financial investors such as Shanghai-based Fosun Group, which also took part in the launch event.

The business community’s near-term anxiety is the election of Mr. Trump, who campaigned on allegations the Sino-U.S. economic relationship has been anything but a two-way street.

Stephen Orlins, president of the National Committee on U.S. China Relations, which sponsored the Rhodium work, predicted the 45th president will adopt open investment policies, saying: “As a business person, he will understand that foreign investment creates jobs in the United States. Trade may be different.”

Source: U.S.-China Investment Flows Bigger Than Thought – China Real Time Report – WSJ

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