Posts tagged ‘Reuters’

30/11/2016

All-American pick-up trucks aim to lure China’s wealthy | Reuters

Automakers Ford (F.N) and General Motors (GM.N) are aiming the pick-up truck, an iconic staple in the United States, at upmarket buyers in China, where most associate trucks with farmers and construction workers.

“The Chinese call it pika, pika – a very low-end worker’s (vehicle). But the (Ford F-150) Raptor is totally different,” said Wesley Liu, Ford’s Asia-Pacific sales director, ahead of this month’s Guangzhou autoshow.

Trucks are largely restricted to overnight driving in most Chinese cities, but four provinces – Yunnan, Liaoning, Hebei and Henan – have this year launched trial programmes allowing them into urban zones in an attempt to stimulate production as economic growth, and car sales, slow.

With those looser restrictions, U.S. pick-up makers aim to distance their trucks from local models made by Great Wall Motor (601633.SS), Jiangling Motors Corp (JMC) (000550.SZ) and others – and appeal to Chinese premium buyers, like Meng Shuo.

The 32-year-old founder of an investment consultancy, who already owned a Chevrolet Camaro when he bought an F-150 pick-up truck five years ago through an unofficial grey market importer. He has since traded it in for a Toyota (7203.T) Tundra, and also owns a Mercedes (DAIGn.DE) luxury sedan and Porsche (PSHG_p.DE) and Mitsubishi (7211.T) sports cars.

Ford said in April it would bring a high-performance version of its F-series – the best-selling vehicle in the U.S. for 34 years – to China, the world’s biggest auto market. A spokesman said the company is studying whether to also bring a mass-market model such as the F-150 or Ranger pick-up to China, depending on demand and future regulations.

“The people who buy the Raptor maybe own some other premium vehicle already. This is another toy,” Liu said.The truck is aimed at four types of buyers, he said – the wealthy, who want to stand out from the crowd; business owners, who want more than a traditional commercial vehicle; drivers who want a single car for all situations; and “gearheads”, who just like the mechanics.

Even as Chinese authorities throw vast subsidies at green, clean auto technologies, the growing wealth of Chinese consumers has driven a boom in larger cars and sport-utility vehicles (SUV). With margins now under pressure in the crowded SUV sector, automakers see potential profits in high-end foreign pick-ups.

Ford and GM – which displayed its Chevrolet Colorado and Silverado trucks around the Guangzhou show, with t-shirt clad urban cowboys and an all-leather rock band selling the trucks’ macho, all-American appeal – have not yet announced prices for their pick-ups, expected to be launched next year. But they should command a sizeable premium to locally made models as China slaps a 25 percent tax on imports.

PICKING UP

For now, pick-ups are a tiny fraction of China’s market.

IHS Markit sees sales increasing by 14 percent this year to 368,791 pick-up trucks, but that would still be only 1.4 percent of China’s light vehicle market.

By contrast, sales in the U.S. are forecast at 2.7 million pick-ups, about 15 percent of the market.

Yan Ningya, an official involved in the Hebei pilot project, said the province, home to Great Wall and other automakers, accounts for half of China’s pick-up production.

The trial has not yet resulted in higher production, he told Reuters, but the local government will need a year from the pilot project’s launch in May to gauge its impact.

After that, the central government may do more to drive production, possibly reclassifying pick-ups as passenger cars rather than commercial vehicles, he said.

The Ministry of Industry and Information Technology, which directed the provinces to launch the pilot projects, did not respond to a faxed request for comment.

“China’s pick-up truck market will be very large in the future,” said Yan, noting domestic brands would likely upgrade their trucks to meet the tastes of middle-class drivers.

Source: All-American pick-up trucks aim to lure China’s wealthy | Reuters

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01/08/2016

Didi, Uber said to merge in China in $35 billion deal | Reuters

Ride-hailing firm Uber is to merge its China operations with bigger rival Didi Chuxing, and hold a one-fifth stake in the new business, in a $35 billion deal to end bruising competition between the two, according to a source familiar with the matter.

A deal between the two – which have been spending heavily to gain market share and battling fiercely for passengers – could be announced as early as Monday, said the source, who declined to be identified because the deal is not yet public.

The new entity combines Didi’s most recent valuation of $28 billion and Uber China’s $7 billion valuation for the $35 billion market capitalization. Uber China investors will have a 20 percent stake in the new company, the source said.Uber did not offer any immediate comment. Didi could not be reached for comment.

“It makes huge sense, Uber faces an uphill task in China especially since Didi is multiple times larger by transaction value and city coverage,” said Hong Kong-based Richard Ji, co-founder of All-Stars Investment Ltd, which manages about $900 million and owns Didi stock.

“This will lead to favorable outcomes for both companies. The biggest benefit is cost savings, they no longer have to give out subsidies to drivers and passengers. It will give pricing power as the new entity will become the dominant player. That means profitability will come sooner than later,” he added.

Source: Didi, Uber said to merge in China in $35 billion deal | Reuters

25/05/2016

China to replace direct coal combustion with electricity in new plan | Reuters

China will reduce the amount of coal burned directly in industrial furnaces and residential heating systems in order to tackle a major source of smog, the country’s energy regulator said on Wednesday.

The National Energy Administration (NEA) said in a joint announcement with other government bodies that around 700 million to 800 million tonnes of coal is burned directly in China every year, much of it in the countryside, where access to electricity is limited.

Directly burned coal amounts to about 20 percent of China’s total coal consumption volume, much higher than the 5 percent rate in Europe and the United States.

China will aim to replace direct burning with electricity, including renewable power as well as ultra-low emission coal-fired generators, the NEA said.

China currently relies on coal for around 64 percent of its total primary energy needs and for three-quarters of its total power generation. Emissions from the direct combustion of coal are around five times higher than those from coal-fired power plants, which are subject to strict anti-pollution regulations.

During the 2016-2020 period, China plans to raise electricity’s share of the country’s overall energy mix to 27 percent, up about 1.5 percentage points from now and raising total power consumption by around 450 billion kilowatt-hours a year, the NEA said.

Experts have estimated that China will need an additional 600 GW of coal-fired power capacity over the 2015-2030 period in order to replace direct coal combustion.

Source: China to replace direct coal combustion with electricity in new plan | Reuters

14/01/2016

Economists React: China’s December Trade Data May Mean Worst Is Over – China Real Time Report – WSJ

Better-than-expected export and import data in December suggest the beginning of a modest improvement in trade despite recent turmoil in Chinese financial markets, economists say, even as a weaker yuan helps exporters.

China’s exports in December were off 1.4% from a year earlier, a smaller decline than November’s 6.8% or the median 8% forecast of 15 economists surveyed by the Wall Street Journal. Imports were down 7.6%, compared with November’s 8.7% and the 11% median forecast.

Following are excerpts from economists’ views on Wednesday’s trade data, edited for style and length:

The idea that China needs to devalue its currency to reflect a weakening export sector is not borne out by the 2015 trade figures, which show that China gained world-wide market share in a tough global trading environment. The past couple of months, we’ve seen exports surprise on the upside. Worries that something is going on in China behind the scenes, that real compelling economic fundamentals are pushing the yuan weaker, is inconsistent with what we’re seeing on the trade front.—Tim Condon, ING Group ING +0.96%

China’s December trade data was reassuring—indicating that, despite the turmoil on the stock and foreign-exchange markets, growth dynamics in the real economy are evolving more gradually and may actually be improving somewhat. The improvement in exports suggests that the global goods trade gained some momentum toward the end of 2015, with China helped by a weaker yuan. Headline December goods import data were down 7.6%, but import volumes have started to improve. We estimate import volumes were up 7.5% year on year in December, mainly due to better “normal imports” used in China’s own economy (rather than re-exported), implying a pickup in domestic demand momentum at the end of 2015.—Louis Kuijs, Oxford Economics

Better-than-expected trade data hint that the yuan depreciation in December—the currency fell 1.5% against the dollar—could have boosted external demand. For the year, China’s exports dropped by 2.8% and imports plunged by 14.1%. The underperformance of imports reflects sluggish demand for commodities as China moves toward a more consumption-driven growth model. It also highlights the deleveraging under way in China’s manufacturing sector because of the property slowdown. The mixed picture illustrated by China’s trade figures convinced us that growth will be under pressure. Also, China could steer further yuan depreciation at an appropriate pace and time to support economic growth and facilitate the deleveraging in many sectors plagued by overcapacity.—Zhou Hao, Commerzbank AG

China’s better-than-forecast trade figures may signal the beginning of a modest improvement as the yuan stabilizes against a weighted basket of currencies. That could translate into export growth of 5% to 7% and import growth of 1% to 2% this year. Demand may not be a big driver, but China is becoming more competitive with its exchange rate.—Ding Shuang, Standard Chartered STAN.LN +0.35%

China’s better-than-expected export data in December was mainly due to the world’s recovering appetite for exports from China, but its sustainability is still an open question. The devaluation of the yuan might have played a role in boosting exports, though it wasn’t the main driver. To what extent the yuan will influence exports this year is uncertain, given the central bank’s intervention in the foreign-exchange market. But January export figure should be relatively positive since 2015 provided a weak base for comparison.—Ma Xiaoping, HSBC HSBA.LN +0.49%

Source: Economists React: China’s December Trade Data May Mean Worst Is Over – China Real Time Report – WSJ

18/06/2015

China military says two more top officers probed for graft | Reuters

China’s Defense Ministry said on Tuesday that two more former senior officers were being investigated for corruption, as part of a sweeping campaign against graft which has already felled dozens of senior people.

In a brief statement, the ministry said that Kou Tie, former commander of the Heilongjiang military region in northern China, had been put under investigation last November for suspected “serious discipline violations”. He was handed over to military prosecutors last month.

The other officer was named as Liu Zhanqi, a former communications division commander for the paramilitary People’s Armed Police, also suspected of “serious discipline violations”, common wording for corruption. He was handed to military prosecutors last month as well.

The ministry gave no further details. Neither case had been reported before.

Weeding out graft in the military is a top goal of President Xi Jinping, chairman of the Central Military Commission, which controls China’s 2.3 million-strong armed forces.

Serving and retired Chinese military officers have said military graft is so pervasive it could undermine China’s ability to wage war, and dozens of senior officers have been taken down.

The anti-graft drive in the military comes as Xi steps up efforts to modernize forces that are projecting power across the disputed waters of the East and South China Seas, though China has not fought a war in decades.

via China military says two more top officers probed for graft | Reuters.

20/02/2015

Subsidy cuts in budget may disappoint investors | Reuters

India may slash its food and fuel subsidy bill by about $8 billion in next week’s budget, two sources said, but despite the impressive headline, the cut is not as radical as free market champions had hoped for in Prime Minister Narendra Modi‘s first full budget.

A view of the Indian parliament building is reflected on a car in New Delhi April 24, 2012. REUTERS/B Mathur/Files

Most of the 20 percent cut in the budget for subsidies results from lower global oil prices rather than structural changes, with the government’s appetite for reform tempered by a heavy local election defeat in New Delhi this month.

“The total subsidy bill could come down to around 2 trillion rupees ($32 billion),” a senior government official, who has direct knowledge of the matter, told Reuters. That calculation was echoed by another source privy to budget discussions.

via Exclusive – Subsidy cuts in budget may disappoint investors | Reuters.

05/02/2015

Alibaba’s Ant Financial to buy 25 percent of India’s One97 | Reuters

Ant Financial Services Group, an affiliate of China’s Alibaba Group Holding Ltd (BABA.N), has agreed to buy 25 percent of Indian payment services provider One97 Communications, tapping into the country’s smartphone and online industry boom.

The companies did not provide the value of the deal, but a person with knowledge of the matter called the investment a precursor to One97 listing on the stock exchange, and said the stake was worth more than $500 million.

The deal values One97 at more than $2 billion, making it one of the most-valuable start ups in the country. One97 runs Paytm, an online platform through which users can shop or pay utility bills, whereas Ant runs Paytm’s Chinese peer Alipay.

Alibaba spokeswoman Teresa Li and One97 founder Vijay Shekhar Sharma declined to disclose the value. Sharma told Reuters that Ant would buy new shares in his company.

Paytm has benefited from the spread of affordable handsets and internet connectivity which has turned India into the fastest-growing smartphone market in the Asia-Pacific region, according to researcher IDC.

via Alibaba’s Ant Financial to buy 25 percent of India’s One97 | Reuters.

31/01/2015

China expels top police official from Communist Party | Reuters

Fast and furious, the anti-corruption campaign continues to run.

“A top police official under investigation for corruption has been expelled from China’s ruling Communist Party, the country’s top anti-graft body said on Friday.

State media said Cai Guangliao holds the rank of major general in the paramilitary armed police, which is under the powerful Central Military Commission (CMC). He was first placed under investigation last year on suspicion of violating party discipline, a euphemism for corruption.

A statement from the anti-corruption agency said Cai took advantage of his position to seek benefits for others and accepted bribes, illegally engaging in business activities and accepting gifts of money and valuables.

His case has been transferred to the judicial system, the statement said.”

via China expels top police official from Communist Party | Reuters.

29/01/2015

India’s Vodafone decision eases tax worries for Shell, others | Reuters

This action demonstrates the new pro-business attitude of Modi’s government.

“India’s decision to drop a tax dispute with Vodafone Group Plc(VOD.L) is likely to mean relief for Royal Dutch Shell PLC(RDSa.L) and others caught in similar, protracted battles, as the government tries to attract much-needed foreign investment.

A Shell logo is seen at a petrol station in London January 31, 2013. REUTERS/Luke MacGregor/Files

India’s image as an investment destination has been tarnished by a reputation for red tape, unpredictable rules and a tax office long seen as over zealous in its pursuit of foreign firms. Prime Minister Narendra Modi‘s government, seeking to reboot a slowing economy, has sought to change that.

Late on Wednesday, the government said it would not appeal a Bombay High Court ruling in favour of Vodafone, the biggest foreign investor in India.

“It’s a departure from the past when all the high-value tax cases were always litigated,” said Himanshu Shekar Sinha, a partner at law firm Trilegal.

“With this, the government has sent a clear direction that appeals should not be filed routinely.”

Tax lawyers said they expected cases such as those involving IBM (IBM.N), Nokia Oyj (NOK1V.HE), Microsoft Corp (MSFT.O) and others could now be resolved instead through negotiation.”

via India’s Vodafone decision eases tax worries for Shell, others | Reuters.

12/01/2015

Northwest set to push Silk Road links – China – Chinadaily.com.cn

China’s northwest regions are planning to invest more in infrastructure, tourism and tourism-related industries to attract more visitors to the ancient Silk Road that linked China with central Asian nations.

Northwest set to push Silk Road links

Shaanxi province, whose capital, Xi’an, was the starting point of the ancient Silk Road, has launched a tourism investment fund of 5 billion yuan ($804 million).

“Thanks to the rising influence of China’s western tourism, the tourism industry of Shaanxi province has enjoyed a fast and steady growth in recent years,” said Bai Aying, vice-governor of Shaanxi province. “Now Shaanxi province has invested a lot to operate major tourism projects with the theme of Silk Road culture.”

Gansu province, with more than 1,600 kilometers of the Silk Road, is rapidly improving its transportation network as well. According to the provincial tourism authority, in the next five years, Gansu will connect major national scenic spots with nearby cities, counties and major transport roads.

Gansu will also work to attract more overseas visitors by facilitating more international airlines and gradually opening international ports of entry at the Dunhuang and Jiayuguan airports.

In September 2013, President Xi Jinping proposed an economic belt that would revive the ancient Silk Road. The trans-Eurasian project is proposed to extend from the Pacific Ocean to the Baltic Sea.

This year has been set as the Silk Road Tourism Year by the China National Tourism Administration. It is expected to facilitate regional cooperation, deepen mutual understanding and establish mutually beneficial ties for all nations involved

Li Shihong, head of the administration’s marketing and international cooperation department, said CNTA will introduce a three-year plan to coordinate the Silk Road tourism development around the country. It also will help to leverage the economy in less-developed regions.

Industry insiders said they believe this is a new opportunity for China to reintroduce its western regions and upgrade tourism facilities and services.

“The Silk Road is one of the early tourism brands that China introduced to the world. It has cultural meanings and global reputation,” said Dou Qun, a tourism industry professor at Beijing Union University. “And China has developed tourism products along the Silk Road for more than 30 years that all provide a solid foundation for another round of development this year.”

“Besides marketing, tourism authorities should also work closely with other departments including culture, transportation and public facilities to expand the current tourism products and improve the tourism experience,” Dou said.

via Northwest set to push Silk Road links – China – Chinadaily.com.cn.

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