Archive for ‘Pearl River Delta’

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07/04/2020

Coronavirus: nearly half a million Chinese companies close in first quarter as pandemic batters economy

  • Some 460,000 Chinese firms shut in the first quarter amid fallout from the coronavirus
  • Registration of new firms between January and March fell 29 per cent from a year earlier
Many Chinese businesses are struggling from the economic fallout of the coronavirus. Photo: Reuters
Many Chinese businesses are struggling from the economic fallout of the coronavirus. Photo: Reuters

More than 460,000 Chinese firms closed permanently in the first quarter as the coronavirus pandemic pummeled the world’s second largest economy, with more than half of them having operated for under three years, corporate registration data shows.

The closures comprised of businesses whose operating licenses had been revoked, as well as those who had terminated operations themselves, and included 26,000 in the export sector, according to Tianyancha, a commercial database that compiles public records.

At the same time, the pace of new firms being established slowed significantly. From January to March, around 3.2 million businesses were set up, a 29 per cent drop from a year earlier.

Most of these new companies were in traditional centres of economic power, such as Guangdong province in southern China, and close to half of them were in distribution or retail.

Coronavirus: Is the gig economy dead, and should the self-employed worry?
The number of business closures underlines the challenges facing China as it tries to revive its economy, which is at risk of a contraction in the first quarter for the first time since 1976.
“China has managed to get the Covid-19 outbreak largely under control and domestic supply disruptions have now mostly dissipated,” Yao Wei and Michelle Lam, economists from French bank Societe Generale, said in a recent note.

“However, there are signs of lasting damage to domestic demand, and on top of that the external shock resulting from widespread lockdowns in other major economies is arriving fast and furious.”

In Dongguan, a once thriving industrial hub in the Pearl River Delta, rows of empty shops and closed factories are becoming a noticeable feature of the landscape as companies grapple with slumping international demand.
Coronavirus: Chinese companies cut salaries and staff in industries hit hardest by Covid-19
In March, a local export-oriented manufacturer of tote bags and toys in the city, Dongguan Fantastic Toy Company, collapsed after overseas orders dried up, leaving some workers with unpaid salaries, the local labour authority said last month. The government has ordered the factory’s landlord to pay the outstanding wages.

Chinese business owners who can no longer afford to maintain operations face a number of hurdles before they can walk away from a company.

If an insolvent firm wants to cancel its company registration, it needs to go through bankruptcy procedures or show a liquidation report confirming it had no unpaid debt or other obligations.

Once shareholders or creditors file for bankruptcy, it can take months for courts to accept the case, followed by a long process of verification, creditors’ meetings and asset sales, said Li Haifeng, a partner at Baker McKenzie FenXun.

A new phase of coronavirus blame game: what is the legacy of Covid-19 on global supply chains?
“I expect a surge shortly after the situation settles down. We know many enterprises are already on the verge of bankruptcy. It’s just that they don’t have to declare or file for bankruptcy immediately,” Li said, adding he had received many queries on the matter in recent months.
Given the costly nature of bankruptcy proceedings, particularly for small businesses
 struggling with cash flow or without sufficient assets, the number of bankruptcy filings this year would not be high, said Zhu Bao, a Beijing-based lawyer.
Fears over a growing number of companies going bust also appears to have played some part in Chinese courts rejecting and delaying bankruptcy filings, according to lawyers and official documents.
Creditors who filed on behalf of suppliers that helped contain the coronavirus or companies on the brink of bankruptcy as a direct result of the pandemic usually had their claims knocked back, dozens of court documents filed over the past two months showed.

We know many enterprises are already on the verge of bankruptcy. It’s just that they don’t have to declare or file for bankruptcy immediately – Li Haifeng

The courts in these cases encouraged the creditors to reconcile with the struggling firms and ride out the difficulties.
This – along with disruptions to court proceedings due to virus lockdowns – helped slow the review of bankruptcies in Chinese courts to 1,770 in February and March, from 2,160 filings in January, according to the national enterprise bankruptcy information disclosure platform.
“The delay and rejection of taking corporate bankruptcy cases is certainly intended to keep the economy going. Too many bankruptcies cases do not do much to help economic recovery,” Zhu said.
China’s central leadership has maintained it wants to hit economic targets for this year, even as the country braces for a possible second wave virus outbreak.

The delay and rejection of taking corporate bankruptcy cases is certainly intended to keep the economy going – Zhu Bao

The odds of a first quarter economic contraction for China are growing, however, and economists are debating whether it still makes sense for Beijing to set a specific gross domestic product (GDP) growth target for 2020.

Ma Jun, an academic member of the People’s Bank of China’s monetary policy committee, is one prominent voice that has suggested Beijing drop a set target amid the uncertainty caused by the virus outbreak.

However, others like Yu Yongding, an economist from Chinese Academy of Social Sciences, said it was necessary to anchor the country’s economic expansion, though the government should be realistic about the goal, reported the Beijing-based financial media group Caixin.

Source: SCMP

Posted in Baker McKenzie FenXun, bankruptcy proceedings, batters, Caixin, Chinese Academy of Social Science, Chinese businesses, Chinese companies, Chinese courts, Chinese firms, close, closed factories, closed permanently, coronavirus, Coronavirus pandemic, cut salaries, Dongguan Fantastic Toy Company, economic fallout, economy, empty shops, fallout, gross domestic product (GDP), Guangdong, half a million, industrial hub, international demand, monetary policy committee, pandemic, Pearl River Delta, People’s Bank of China’s, registration, second largest economy, shut, slumping, Société Générale, staff, tote bags, toys, Uncategorized, virus outbreak, world’s | Leave a Comment »

06/10/2019

Xinhua Headlines: China’s Greater Bay Area busy laying foundation for innovation

As China aims to develop its Greater Bay Area into an international innovation and technology hub, innovation and entrepreneurship resources are shared in the area to provide more opportunities for young Hong Kong and Macao entrepreneurs.

The provincial government of Guangdong has stepped up efforts to improve basic research capability, considered the backbone of an international innovation and technology hub, by building large scientific installations and launching provincial labs.

by Xinhua writers Liu Yiwei, Quan Xiaoshu, Wang Pan, Jing Huaiqiao

GUANGZHOU, Oct. 5 (Xinhua) — Hong Kong man Andy Ng was surprised his shared workspace Timetable was rented out completely only six months after it had started operation in Guangzhou, capital of south China’s Guangdong Province.

While studying economics at City University of Hong Kong, Ng set up his first business, developing an online education platform, but soon realized the Hong Kong market was too small. After earning a master’s degree in the UK in 2017, Ng returned to China and chose Guangzhou as his new base.

Timetable is now accumulating popularity and even fans in Dianping.com, China’s major online consumer guide. Ng feels lucky that his business caught the implementation of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) development plan.

The bay area, covering 56,000 square km, comprises Hong Kong and Macao, as well as nine cities in Guangdong. It had a combined population of about 70 million at the end of 2017, and is one of the most open and dynamic regions in China.

Aerial photo taken on July 11, 2018 shows the Hong Kong-Zhuhai-Macao Bridge in south China. (Xinhua/Liang Xu)

In July 2017, a framework agreement on the development of the bay area was signed. On February 18 this year, China issued the more specific Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area. One of its major aims is to develop the area into an international innovation and technology hub.

OPPORTUNITIES FOR YOUTH

The plan proposes that innovation and entrepreneurship resources be shared in the bay area to provide more opportunities for young Hong Kong and Macao entrepreneurs.

An incubator for entrepreneurship, Timetable is home to 52 companies, including 15 from Hong Kong and Macao, such as Redspots, a virtual reality company that won the Hong Kong Information and Communications Technology (ICT) Awards 2019.

“I persuaded them one by one to come here,” Ng said. “I told them of my own experience that the GBA is a great stage for starting a business with ever-upgrading technologies, ever-changing consumer tastes and a population 10 times that of Hong Kong.”

Timetable is a startup base of the Guangzhou Tianhe Hong Kong and Macao Youth Association, which has assisted 65 enterprises founded by Hong Kong and Macao young people since its establishment in October 2017.

The association and its four bases provide a package of services from training and registering to policy and legal consultation, said Chen Jingzhan, one of the association founders.

Tong Yat, a young Macao man who teaches children programming, is grateful the association encouraged him to come to Guangdong, where young people enjoy more preferential policies to start their own businesses.

“The GBA development not only benefits us, but paves the way for the next generation,” Tong said. “If one of my students were to become a tech tycoon in the future and tell others that his first science and technology teacher was me, I would think it all worthwhile.”

In the first quarter of this year, there were more than 980 science and technology business incubators in Guangdong, including more than 50 for young people from Hong Kong and Macao, said Wu Hanrong, an official with the Department of Science and Technology of Guangdong Province.

INNOVATION HIGHLAND

As the young entrepreneurs create a bustling innovative atmosphere, the Guangdong government has stepped up efforts to improve basic research capability, considered the backbone of an international innovation and technology hub, by building large scientific installations and launching provincial labs.

Several large scientific facilities have settled in Guangdong. China Spallation Neutron Source (CSNS) operates in Dongguan City; a neutrino observatory is under construction in Jiangmen City; a high intensity heavy-ion accelerator is being built in Huizhou City.

Aerial photo taken on June 23, 2019 shows the construction site of the Jiangmen Underground Neutrino Observatory (JUNO) in Jiangmen, south China’s Guangdong Province. (Xinhua/Liu Dawei)

Guangdong also plans to build about 10 provincial labs, covering regenerative medicine, materials, advanced manufacturing, next-generation network communications, chemical and fine chemicals, marine research and other areas, said Zhang Yan, of the provincial department of science and technology.

Unlike traditional universities or research institutions, the provincial labs enjoy a high degree of autonomy in policy and spending. A market-oriented salary system allows them to recruit talent from all over the world, and researchers from other domestic organizations can work for the laboratories without giving up their original jobs, Zhang said.

The labs are also open to professionals from Hong Kong and Macao. Research teams from the universities of the two special administrative regions have been involved in many of the key programs, Zhang said.

For example, the provincial lab of regenerative medicine and health has jointly established a regenerative medicine research institute with the Chinese University of Hong Kong, a heart research center with the University of Hong Kong, and a neuroscience research center with the Hong Kong University of Science and Technology (HKUST).

Photo taken on July 24, 2019 shows a rapid cycling synchrotron at the China Spallation Neutron Source (CSNS) in Dongguan, south China’s Guangdong Province. (Xinhua/Liu Dawei)

Guangdong has been trying to break down institutional barriers to help cooperation, encouraging Hong Kong and Macao research institutions to participate in provincial research programs, exploring the cross-border use of provincial government-sponsored research funds, and shielding Hong Kong researchers in Guangdong from higher mainland taxes.

NANSHA FOCUS

Located at the center of the bay area, Guangzhou’s Nansha District is designed as the national economic and technological development zone and national free trade zone, and is an important pivot in building the area into an international innovation and technology hub.

The construction of a science park covering about 200 hectares started on Sept. 26. Gong Shangyun, an official with the Nansha government, said the park will be completed in 2022.

Jointly built by the Guangzhou government and the Chinese Academy of Sciences (CAS), the science park will accommodate CAS research institutes from around Guangzhou, including the South China Sea Institute of Oceanology, the South China Botanical Garden (SCBG) and the Guangzhou Institute of Energy Conversion.

Ren Hai, director of the SCBG, is looking forward to expanding the research platforms in Nansha. “We will build a new economic plant platform serving the green development of the Pearl River Delta, a new botanical garden open to the public, and promote the establishment of the GBA botanical garden union.”

Wang Ying, a researcher with the SCBG, said the union will help deepen the long cooperation among its members and improve scientific research, science popularization and ecological protection. “Predecessors of our botanical garden have helped the Hong Kong and Macao counterparts gradually establish their regional flora since the 1950s and 1960s.”

HKUST also started to build a new campus in Nansha the same day as the science park broke ground. “Located next to the high-speed rail station, the Guangzhou campus is only a 30-minute journey from the Hong Kong campus. A delegation from the HKUST once paid a visit to the site and found it very convenient to work here,” Gong said.

Chief Executive of the Hong Kong Special Administrative Region (HKSAR) Carrie Lam hoped the new campus would help create a new chapter for the exchanges and cooperation on higher education between Guangzhou and Hong Kong, and cultivate more talents with innovative capabilities.

Nansha’s layout is a miniature of the provincial blueprint for an emerging international innovation and technology hub.

“We are seeking partnership with other leading domestic research institutions and encouraging universities from Hong Kong and Macao to set up R&D institutions in Guangdong,” said Zhang Kaisheng, an official with the provincial department of science and technology.

“We are much busier now, because research institutes at home and abroad come to talk about collaboration every week. The GBA is a rising attraction to global scientific researchers,” Zhang said.

Source: Xinhua

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02/07/2019

China Focus: China starts implementing tougher vehicle emission standards

BEIJING, July 1 (Xinhua) — Several provincial-level regions on Monday started implementing the “China VI” vehicle emission standards ahead of schedule to ramp up efforts against a major source of air pollution.

Sales and registrations of new vehicles in regions including Beijing, Shanghai, Tianjin, Hebei Province and Guangdong Province now have to comply with what is believed to be one of the world’s strictest rules on automobile pollutants.

In Beijing, all new buses and other heavy-duty diesel vehicles shall follow the new emission rules, while all new vehicles are expected to follow suit starting Jan. 1, 2020.

All existing vehicles on the roads are obliged to meet the previous “China V” emission standards.

According to official data, emissions from some 6.2 million vehicles were responsible for 45 percent of Beijing’s concentration of small, breathable particles known as PM2.5, a key indicator of air pollution.

Compared with the “National V” standards, the new rules demand substantially fewer pollutants such as nitrogen oxides and particulate matters and introduce limits on particulate number and ammonia.

The new emission standards were initially set to take effect nationwide from July 1, 2020. A three-year action plan on air pollution control released last July urged early implementation in major heavily-polluted areas, the Pearl River Delta region, Sichuan Province and Chongqing Municipality.

Automakers and the market have been preparing for the tougher rules.

Manufacturers have completed the development of most “China VI” models and have entered the stage of mass production and sales, said Liu Youbin, a spokesperson with the Ministry of Ecology and Environment.

By June 20, 99 light vehicle makers had unveiled environmental protection information of 2,144 new models and 60 heavy-duty vehicle manufacturers unveiled information on 896 green models, Liu said.

“The market has basically accomplished a smooth transition,” Liu said.

Li Hong, an official with the China Association of Automobile Manufacturers (CAAM), said roll-outs of “China VI” vehicles as well as preferential tax and fee policies would boost China’s auto market.

“The production and sales of new energy vehicles (NEVs) will continue its relatively fast growth,” Li said.

Car sales in China continued to drop in May, with about 1.913 million vehicles sold, down by 16.4 percent year on year, CAAM showed. Bucking the trend, sales of NEVs kept growing that month, edging up 1.8 percent year on year.

China saw robust sales growth of NEVs in the first four months this year with 360,000 NEVs sold, surging by 59.8 percent from the same period a year earlier.

Chinese authorities have announced that the tax exemptions on NEV purchases will continue through 2020 to boost the country’s green development and retain a strong domestic market.

Source: Xinhua

Posted in Beijing, Chongqing Municipality, guangdong province, Hebei province, implementing tougher vehicle emission standards, Ministry of Ecology and Environment (MEE), new energy vehicles (NEVs), Pearl River Delta, Shanghai, sichuan province, strictest rules on automobile pollutants, Tianjin, Uncategorized | Leave a Comment »

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