Technology in China
China's annual imports from the Yamal natural gas project in the resource-rich Arctic region will further secure China's energy security with increasing supplies of the natural gas, which is currently experiencing a severe shortage especially in northern China, said an executive from China National Petroleum Corp.
China's imports from the Yamal project play a significant role in substantially boosting China's oil and gas reserves, ensuring a steady, long-term supply, said Jiang Qi, general manager of the CNPC Russia, a subsidiary of CNPC, the country's largest oil and gas producer by annual output.
China will take more than 4 million metric tons from Russia's Yamal liquefied natural gas project each year when it is fully operational, said CNPC, which is an investor in the project.
In September 2013, CNPC bought a 20 percent stake in Oao Novatek's $27 billion Yamal project for $5.4 billion.
Jiang said China and Russia have natural complementarities in energy cooperation.
"Long-term oil and gas cooperation framework has been established thorough the Sino-Russia crude oil transmission pipeline and the natural gas pipeline currently in construction," Jiang said.
"The project also promotes the construction of the Northeast Passage in the Arctic Ocean, a sea route directly linking China and Europe."
As many as 54 freight vessels have traveled through the passage. Once the project is expanded, there will be more LNG transported through the sea route, which will significantly lower freight costs between China and Europe, he said.
Many Chinese shipyards have participated in the project, which have accumulated technology and experience in oil and gas exploration in the Arctic region.
Russia's Yamal liquefied natural gas project loaded its first export cargo of 173,000 cubic meters of the super-chilled fuel from its Arctic terminal over the weekend.
Jiang said the Yamal project also helped Chinese enterprises in the manufacturing sector gain experience and technology to work in Arctic region.
Chinese enterprises are responsible for 85 percent of the project's module construction. They have built seven transport ships and are in charge of the operation of 14 out of the 15 LNG carriers, according to CNPC.
The contract amount for the project's construction totaled $7.8 billion, while the shipping contract amounted to $8.5 billion, it said.
China's drive for cleaner energy is leading to a gas shortage this winter, with a severe shortage of natural gas as Beijing curbs coal use.
To ease the rising demand for gas, Qu Guangxue, a CNPC spokesman, said that the company plans to continue negotiating with Central Asian nations for additional stocks to ensure adequate domestic natural gas supplies.
The world's largest floating photovoltaic power station was connected to the grid and started generating power in Anhui province on Sunday, with the remaining capacity to be connected in May, said China Three Gorges Corp, the world's largest hydropower producer.
The company invested 1 billion yuan ($151 million) in the 150MW floating photovoltaic power station, located in Huainan, using the water surface from an area of coal mining subsidence.
Construction of the project started in July and it is set to become fully operational by May, said the company.
"This floating power plant is a new exploration in the development of renewable energy and it lays solid foundations for its nationwide application," said Lu Chun, chairman of China Three Gorges Corp.
"We will make it the largest and most intelligent solar power project with the most advanced technology in the world."
Analysts said currently only small and medium-sized hydropower projects remain untapped in China, which leaves less room for growth.
Joseph Jacobelli, a senior analyst tracking Asia utilities at Bloomberg Intelligence, said the floating PV station is part of the company's efforts to diversify its business as there is a decline in new hydropower projects.
"Hydroelectric power in China in terms of new additions will have limited growth given the exploitable resources have already been grabbed," said Jacobelli.
"Those areas where hydroelectric power plants are easy to build have already been fully exploited and it makes a lot of sense for Three Gorges to look at related clean technologies."
China Three Gorges Corp has been exploring wind, solar, nuclear and other forms of new energy beyond its core business, as potential new hydropower opportunities at home decline.
It said earlier that it plans to build itself into a clean-energy conglomerate, with total installed capacity of 100 gigawatts by 2020.
Orders for China's rebounding shipbuilding industry reached the top place in the world in the past 11 months, surpassing its counterpart South Korea, according to an international industrial analysis agency.
According to the data released by British shipbuilding and marine analysis agency Clarkson Research Services on Friday, from January to November, China's shipbuilding order volume totaled 7.13 million compensated gross tons from 324 vessels, followed by South Korea, which has received 5.74 CGT.
It is the first time in the past seven years China has exceeded South Korea in shipbuilding orders.
The data also show that China's shipbuilding industry secured 36.3 percent of the global market, 7 percentage points more than South Korea, which accounts for 29.4 percent of global orders.
Chinese shipyards have been performing well this year.
This August, French group CMACGM SA ordered nine 22,000 twenty-foot equivalent units container vessels from Shanghai Waigaoqiao Shipbuilding Co and Hudong Zhonghua Shipbuilding Co.
In October, China State Shipbuilding Corp, China Investment Corp and Carnival Corp, the world's biggest cruise operator, signed an agreement to invest total 25.5 billion yuan ($3.85 billion) to build a super luxury cruise ship. It was also the first order of this kind Chinese shipbuilding companies had ever received.
Dong Liwan, a shipbuilding industry researcher at Shanghai Maritime University, said with the orders for high-value-added ships continuing to go to Chinese shipyards, their South Korean competitors will definitely feel the pinch.
China's shipbuilding business is also moving from quantity to quality, as the industry is becoming more intelligent and environmentally friendly.
"China's shipbuilding industry is realizing the transformation with its hardworking spirit to achieve technical breakthrough and innovation," said Sun Licheng, president of China Classification Society.
"While maintaining growth, it is realizing production mode transformation, structural adjustment and transformation, and upgrading, and reinforcing China's shipbuilding status in the world."
Sun said the goal is to become a strong shipbuilding country by 2020, and to accelerate the development of advanced intelligent manufacturing and industrial equipment capability.
At the recent All China Maritime Conference and Exhibition, China State Shipbuilding Corporation has delivered the world's first smart ship, Great Intelligence, with a loading capacity of 38,800 metric tons.
Meanwhile, COSCO Dalian shipyard has signed orders with Thordon Bearings, a marine industry solution provider for its water lubricated propeller shaft bearings, which can use seawater as the lubrication medium instead of oil that could cause pollution.
Alex Li, managing director of CY Engineering Co Ltd, Thordon Bearings' partner in China, said that the latest order is a significant sign showing Chinese shipbuilders' commitment to reducing industry-borne emissions and pollutants.
Chinese carmaker Beijing Automotive Group Co will phase out conventional fuel-powered cars under its own brand by 2025 as part of its ambitious new energy car campaign, according to a top company official.
"Our goal is to stop sales of self-developed conventional fuel-powered cars in Beijing by 2020 and stop their production and sales nationwide by 2025," said BAIC Group Chairman Xu Heyi.
In addition to its own BAIC-branded cars, the group also has carmaking joint ventures with South Korean carmaker Hyundai and Germany's Daimler AG, owner of the Mercedes-Benz brand.
Xu made the remarks over the weekend at an event to commemorate the opening of a new energy car technology and innovation center it set up in Beijing along with 14 institutions, including its new-energy car arm BJEV, Tsinghua University and battery maker CATL.
The facility is expected to build an open platform that will better mobilize global innovative resources and facilitate cooperation among companies, universities, research facilities and even users, BJEV said in a news release.
Xu Qiang, head of the Beijing Municipal Science and Technology Commission, said the center is an important and practical move to promote cooperation and improve innovative capabilities and core competitiveness in the field.
The move comes at a time when new energy cars are gaining momentum in China, which is the world's largest market for such cars.
From January to November, China sold 609,000 new energy cars, a 51.4 percent growth year-on-year, according to the China Association of Automobile Manufacturers, which estimated that overall sales in the category could reach 700,000 units.
BAIC Group is one of the country's leading new energy carmakers, with BJEV selling 21,598 cars in November, an 85 percent surge from October.
The performance has brought its sales in the first 11 months of this year to more than 88,000 units.
At last month's Guangzhou auto show, BJEV Deputy General Manager Zhang Yong said the company will invest some 10 billion yuan ($1.5 billion) on research and development in the next three to five years and launch two to three new models every year.
It also plans to launch 500,000 new energy cars for the taxi and ride-sharing sectors in 1,000 cities by 2022.
To solve the problem of slow charging, the carmaker announced earlier this year that it will invest 10 billion yuan to build 3,000 solar-powered battery changing stations.
China is likely to achieve its goal of reducing coal capacity by 500 million metric tons well ahead of the planned three to five years target, according to a top industry official.
Jiang Zhimin, vice-president of China National Coal Association, said the country will meet the coal capacity reduction goal next year. By the end of this year, the number of coal mines in China will drop to about 7,000 from 10,800 in 2015, he said at a forum hosted by the China Metallurgical Industry Planning and Research Institute recently.
In 2016, China cut coal capacity by more than 290 million tons. This year's target was 150 million tons, which was accomplished in November, according to the National Bureau of Statistics.
"China now has more than 1,200 coal mines with annual production capacity exceeding 1.2 million tons, accounting for more than 75 percent of the country's total coal capacity", Jiang said.
The country has also cut its steel capacity by more than 115 million tons, close to upper limit of capacity reduction target of 150 million tons set for the steel sector during the 13th Five-Year Plan (2016-20), according to Xu Wenli, head of the Iron and Steel Division at the Ministry of Industry and Information Technology.
"The country will continue to cut outdated steel capacity and prevent shuttered or illegal steel mills from returning to the market", said Xu.
China has phased out production of 140 million tons of low-quality steel made from scrap metal by the end of June, according to the NBS.
More than 65 million tons of steel production capacity was eliminated in 2016. The country met the 2017 capacity reduction goal of 50 million tons by the end of August.
China will, however, see increased iron ore imports in 2018, as the country closes small polluting mines to improve air quality, according to Lei Pingxi, chief engineer at the Metallurgical Mines Association of China.
"Iron ore imports are expected to rise by 5.5 percent year-on-year to 1.08 billion tons in 2017 and by a further 3 percent to 1.12 billion tons next year," said Lei.
"The country will eliminate about a third of its iron ore mining licenses, mostly belonging to small polluting mines," he said.
Over 1,000 mining licenses will be canceled under a government-led crackdown on smog and outdated steelmaking capacity, accounting for 15 to 20 percent of the country's total iron ore capacity, according to Lei.
Vehicle sales posted a meager 0.7 percent year-on-year growth in China during November to 2.96 million units, according to data released by the China Association of Automobile Manufacturers on Monday.
Car sales in the first 11 months of the year totaled 25.85 million units, a 3.6 percent growth from a year ago. Although a decent figure if put in the global context, the growth rate is 10.5 percentage points lower than the year-on-year growth figure for January to November 2016.
Xu Haidong, an assistant to the CAAM's secretary-general, said the overall sales growth this year would "definitely fall to below 4 percent", beating the organization's estimate of 5 percent growth at the start of the year.
The lower sales numbers are due to a number of factors ranging from a purchase tax discount that is gradually losing its effect and the overall economic conditions in China.
The tax discount, which stood at 50 percent when introduced in 2015, has been halved from January this year and will expire by the end of this month. "The trend is clear. Growth will slow down even further next year," he told China Daily, without giving an estimate.
Passenger cars, which account for bulk of the car sales, saw even slower growth than the overall figure. A total of 22 million passenger cars were sold from January to November, a 1.9 percent growth year-on-year.
Even that meager growth would have been impossible without sports utility vehicles, whose sales grew 14.5 percent year-on-year to 9.09 million units while sedan sales dipped 2.3 percent. Sales of multi-purpose vehicles fell 16.5 percent, while that of minivans slumped 20.1 percent in the same period.
New energy cars, which consist of electric cars, plug-in hybrids and fuel-cell cars, however, saw solid growth.
A record number of 119,000 units were sold in November, surging 83 percent year-on-year. Sales in the first 11 months reached 609,000 units, a 51.4 percent growth year-on-year.
"Their development is in line with our expectations. It is now almost certain that their sales this year would reach our whole-year estimate of 700,000 units," said Xu.
"We are confident in new energy cars and see no problems in their sales reaching 1 million units in 2018."
Charging networks for such vehicles have also been growing rapidly, with a total of 431,800 charging poles built by the end of November, according to the China Electric Vehicle Charging Infrastructure Promotion Alliance.
Commercial cars, including buses and trucks, also reported a decent sales performance. In November, 368,000 vehicles were sold, a 7.3 percent rise from the same month last year.
That brought sales in the first 11 months to 3.75 million, up nearly 15 percent year-on-year, 11.2 percentage points higher than the industry's average.
Carrier is striving to get flying rights to launch direct service between Shanghai and major cities in the United States
Hainan Airlines, China's largest private air carrier, said it is interested in launching more China-US direct flights, as more Chinese travelers are visiting the US, further stimulating the vitality of the market.
The carrier also plans to extend its cooperation with US airlines. Next year, it will start code sharing programs with Alaska Airlines and Jet-Blue Airways to strengthen its network coverage in the United States, especially on the east and west coasts.
Pubin Liang, regional managing director of Hainan Airlines in the United States, said to further increase its market share, the carrier is striving to get the flying rights to launch direct flights between Shanghai and major US cities, especially those that already offer direct flights to Beijing.
"We launched a number of direct flights between second-tier Chinese cities and major US cities, following the increasing demand from smaller Chinese cities. North America is one of our most important markets, and we have kept looking for potential opportunities in this market," Liang said.
On Oct 20 and Oct 26, Hainan Airlines launched direct flights between Chongqing and New York and Chengdu and New York, respectively. Those are the first direct flights to New York from western China. It also operates direct flights between these two cities and Los Angeles.
"The successful launch of flights between those two Chinese cities and New York has been a significant breakthrough for us, and we are looking to launch more direct flights between New York and Chinese cities in the future," he said.
In 2008, Hainan Airlines started its first China-US direct flights between Beijing and Seattle. To date, it has become the Chinese airline that operates the most direct flights－12 routes－between the two countries, including flights between Beijing and Chicago, Beijing and San Jose, Beijing and Las Vegas, and Shanghai and Boston.
Between January and September this year, Hainan Airlines achieved sales revenue of 2.59 billion yuan ($390 million) from its China-US flights, up 19 percent year-on-year, and the average passenger load ratio of those flights has exceeded 80 percent, according to the company.
During the busy China-US flight season, from June to October, and during December and January, Hainan Airlines has seen outstanding sales performance. During the low seasons, the airline faces some operation pressures and usually adjusts its business by offering promotions, such as package deals that include tourism destination resort tickets and hotels.Sun Jianfeng (left), president of Hainan Airlines who is also a crew member of China's first bio-fuel international flight, checks the airplane's condition report at the Beijing Capital International Airport before departure for Chicago on Nov 21. [Photo provided to China Daily]
Earlier, Hainan Airlines cooperated with American Airlines on code sharing and connecting flights, but the cooperation weakened after Hainan Airlines launched direct flights between Beijing and Chicago, as American Airlines offers the same route.
"This has a significant negative impact, especially on our expansion of networks in the Midwest," Liang said. "Now, we face significant challenges in growing our business in this area with Chicago as the hub."
Lin Zhijie, an aviation industry analyst and columnist at Carnoc, a leading civil aviation website in China, said the flights between major Chinese cities and the United States are quite saturated, and airlines are competing to launch direct flights between second-tier Chinese cities and the United States, although operating cost pressures exist.
"There is still demand for more China-US routes, but the possible fluctuation of Sino-US relations should also be taken into consideration," he said.
Timeline of Hainan Airlines' American routes
・ Oct 2017
Hainan Airlines started direct flights between Chongqing and New York, as well as Chengdu, capital of Sichuan province, and New York.
Those two flights became the first direct flights that connect New York and the two western Chinese cities.
・ Jan 2017
Hainan Airlines launched direct flights between Changsha, capital of Hunan province in Central China, and Los Angeles.
・ Dec 2016
Hainan Airlines launched direct flights between Beijing and Las Vegas. This serves as the first direct flight between Las Vegas and the Chinese mainland.
Hainan Airlines launched direct flights between Shanghai and Seattle, as well as direct flights between Beijing and San Jose, California. Meanwhile, the airline established direct flights that connect Shanghai and Boston.
・ June 2014
Hainan Airlines launched nonstop flights between Beijing and Boston.
・ Sept 2013
Hainan Airlines initiated direct flights between Beijing and Chicago. It was the first such route operated by a Chinese airline.
・ June 2008
Hainan Airlines launched its first China-US direct flights between Beijing and Seattle.
Beijing-headquartered conglomerate China Poly Group Corp said it will continuously promote its business in both developing and developed countries, further expanding its reach abroad.
The company will increase its investment in Western markets while also carrying out investment opportunity studies in economies involved in the Belt and Road Initiative, as a new growth point for its business.
"Poly sees investment projects in numerous Western markets as well as economies involved in the Belt and Road Initiative," said Xu Niansha, chairman of the conglomerate.
"Our overseas projects generate profits and help Poly build a good image there."
Poly currently does business in two thirds of the economies involved in the Belt and Road Initiative, helping local economies in infrastructure construction and livelihood projects.
According to Poly, the initiative gives the company more opportunities for business expansion and Poly will focus more on diversified real estate sectors, including real estate projects in elderly care, commercial retail and tourism, sectors that are all experiencing substantial growth momentum.
China's real estate sector profit margin has slowed down as the industry enters a more balanced supply-demand situation.
Xu said the company has been carrying out cooperation in the cultural sector with the United States, Australia, Europe, Africa and Southeast Asia.
The company has also been pushing forward cooperation in performance and theater management and the arts business, as well as auctions and cinema investment, exporting Chinese cultural products to Western markets, while introducing Western classics to the Chinese market.
"Culture export undertakes the responsibility of cultural communication between different countries and also bears economic significance, helping enhance the soft power of a country," he said.
Xu said the company has great confidence in the prospects for China's economic growth.
"China's determination to further open itself to outside investment shows that China will be an open economy and has more confidence in international markets," he said.
"We are willing to have more extensive cooperation with our international partners."
The Manila-based bank will invest about $2 billion in nation next year
The Asian Development Bank is planning to invest in 31 projects in China from 2018 to 2020 for a total value of $6.17 billion, with about $2 billion planned for 2018, according to its newly proposed sovereign lending program.
"ADB aims to increase its sovereign lending to China in line with the expansion of the bank's total lending capacity. The 2017 sovereign lending will reach $1.98 billion," said Indu Bhushan, director general of ADB's East Asia Department.
The international development finance institution headquartered in Manila, the Philippines, is currently financing 90 ongoing projects in China amounting to $12.3 billion. In the last two years, ADB approved new projects worth more than $1.7 billion annually in China.
Recently, its support has been moving from infrastructure-oriented projects to environmental and social sector support, thus improving the quality of growth. All new projects in China will have innovation elements, according to the bank.
It also put great emphasis on knowledge solutions, which are regarded as powerful catalysts for propelling development in China. The creation, management and sharing of knowledge is an important pillar of ADB's operations in this country.
From the time China joined ADB in 1986 through Sept 30 of this year, the financial institution has approved a total of $37.7 billion in loans to China. This comprised $33.9 billion for sovereign operations and $3.9 billion for private sector operations.
Half of the total assistance was for the transport sector, 16 percent for the energy sector, 15 percent for water and other urban infrastructure and services, and 13 percent for agriculture, natural resources and rural development.
In 2017, the bank's private sector operations department financed seven projects worth $790 million in total, excluding loans offered by commercial banks based on the premise that ADB provided credit guarantees.
For the coming years, as previously requested by China's Ministry of Finance, the bank aims to expand private sector and nonsovereign operations, with a focus on inclusive environmental projects in infrastructure, agribusiness and financial institutions, reflecting China's greater role in promoting environmentally sustainable development.
"We have been looking into public-private partnership opportunities with new concession scope, such as water, energy and food security nexus, cross-jurisdiction along the Belt and Road Initiative," Bhushan said.
ADB's country partnership strategy for China, covering 2016-20, will help the country in major areas of investments, such as managing climate change and the environment, supporting inclusive growth and promoting regional cooperation and integration.
The bank will also collaborate closely with the China-led Belt and Road Initiative and other development partners, including the Asian Infrastructure Investment Bank and the New Development Bank, to promote regional connectivity, trade and investment, and regional public goods.
Lender outlines investment goals
The ADB will support the following major areas of investments in China:
・ Manage climate change and the environment. This theme encompasses the two flagship programs－Beijing-Tianjin-Hebei air pollution control and the Yangtze River Economic Belt development－as well as sustainable urbanization and other environment-related programs.
・ Promote regional cooperation and integration. This theme covers support for Chinese provinces' participation in ADB's sub-regional programs (such as Central Asia Regional Economic Cooperation and Greater Mekong Subregion), the Belt and Road Initiative, and other regional initiatives.
・ Support inclusive growth. This theme covers rural transformation, the revitalization of Northeast China, demographic transition (aging and education), and other social inclusion programs.
・ Support institutional and governance reform. This theme covers public sector management (such as public-private partnerships, central-local fiscal relations, and eco-compensation), the financial sector, and other institution building activities (such as legal and judicial reform).
・ Promote private sector and non-sovereign operations. In the coming years, ADB aims to expand private sector and non-sovereign operations, with a focus on inclusive environmental projects in infrastructure, agribusiness and financial institutions.
Regulators 'need to prevent financial risks more proactively and effectively'
China's money supply growth rate and the newly issued yuan-denominated loans both increased in November to support economic growth, although the monetary authority reiterated that risk prevention should be the policy priority.
The M2, or a broad measure of money supply, increased by 9.1 percent year-on-year last month, accelerating from 8.8 percent in October, but it was still 2.3 percentage points lower than a year earlier, according to data from the People's Bank of China, the central bank, on Monday.
Banks' new lending in yuan surged to 1.12 trillion yuan ($169.69 billion) in November, almost double from October's 663.2 billion yuan, and it was much above the market's expectation of about 800 billion yuan, compared with 1.27 trillion yuan in September, according to the official data.
By the end of last month, the total outstanding yuan loans had increased by 13.3 percent from a year earlier. And the new loans in the first 11 months reached a total of 12.94 trillion yuan, 290 billion yuan higher than the full-year record of 2016.
China's central bank governor Zhou Xiaochuan said at an internal meeting on Monday that financial regulators need to prevent financial risks more proactively and effectively, to balance with economic growth.
"The next step is to identify the key targets of financial reform, opening-up and innovative development," said Zhou.
The top financial regulators have cooled money supply growth and issued new regulations on clamping down on high-risk lending, especially "shadow banking" business, to prevent systemic financial risks.
Louis Kuijs, head of Asia Economics at Oxford Economics, said: "In 2018, we expect policymakers to remain focused on reducing financial risks and deleveraging parts of the financial system deemed particularly risky, foreseeing regulatory tightening with respect to interbank market activity and shadow banking."
He also expects policymakers to aim for a gradual slowdown of credit growth next year. "After probably slightly exceeding the 13.8 percent target for 2017, we project credit growth to ease further, to around 13 percent in 2018."
On Monday, the central bank also issued the data of China's total social financing, a broad measure of credit and liquidity in the economy including off-balance financing, which increased to 1.6 trillion yuan in November from 1.04 trillion yuan a month earlier.
The Asian Infrastructure Investment Bank announced on Monday a $250 million loan for a natural gas project in Beijing, the bank's first such investment in China, to help cut coal use and improve air quality in the capital area.
The loan, also the AIIB's first corporate financing deal, will be extended to Beijing Gas Group Co to carry out coal-to-gas conversion projects that will enable rural households to use gas instead of coal for cooking and heating. The project will involve construction of natural gas distribution networks, pipelines and household connection facilities, the Beijing-based multilateral financial institution said in a statement.
Scheduled to be completed in 2021, the project will help China reduce coal use by about 650,000 metric tons annually through connecting about 216,750 households in approximately 510 rural villages to the natural gas distribution network, according to the AIIB.
China has been fighting pollution by adopting stricter environmental rules including coal-to-gas conversion plans to reduce emissions.
Jin Liqun, AIIB president, said the bank's first investment in China fits its mission of supporting members' green, sustainable development.
"China's commitment to reducing its reliance on coal will change lives and improve the environment, and that is why we are investing in a project aligned with that ambitious plan," Jin said in a statement.
Jin added that it will help China introduce sustainable infrastructure that will reduce greenhouse gas emissions and help stimulate one of the most important economic hubs in Asia.
The energy project funded by the AIIB could mean that the multilateral financial institution will offer more financing for environment-related infrastructure projects in China, an important member of the AIIB, said Zeng Gang, a financial researcher at Chinese Academy of Social Sciences.
"Green financing in China will clearly be an important target for the AIIB," Zeng said. "It is reasonable that the AIIB is the provider of long-term financing with relatively low cost for such infrastructure projects, especially when Chinese commercial banks are facing greater liquidity pressure."
Li Li, energy research director at ICIS China, an energy consulting firm, said AIIB financing should be welcomed, but the nation should also boost investment in seasonal gas storage facilities, diversify import channels and improve the pricing mechanism to address potential shortages.
Although brick-and-mortar retailers have felt the impact of robust online buying in recent years, the in-store shopping experience remains dominant in the retail sector, and online and offline retailing can coexist and cooperate, according to the managing director of HKR International Ltd.
"E-commerce indeed has made its strong impact towards physical retail, but brick-and-mortar stores are irreplaceable and continuing taking the lion's share of retail sector," said Victor Cha, who also serves as deputy chairman of HKR International.
According to data issued by the Ministry of Commerce, China's online retail sales of physical goods totaled 4.19 trillion yuan ($633.5 billion) in 2016, up 25.6 percent year-on-year but still accounting for only 12.6 percent of the retail value of all consumer goods purchased.
Similarly, financial research firm Gordon Haskett said in a recent survey that apart from music, books, movies and small appliances, consumers showed a preference for in-store purchases, especially for experienced-based categories such as groceries, household, health and beauty, pets and automotive products.
"Shopping malls are no longer a place purely for shopping, but a one-stop experience provider for shopping, lifestyle and social ... Retailers have to either embrace this trend peacefully or be phased out," Cha said.
Cha told China Daily that its newly opened, 322,000-square-meter commercial complex HKRI Taikoo Hui aims to draw consumers with bespoke design and quality.
Officially opened in early November on Shanghai's bustling West Nanjing Road, the development, with an investment of up to 18 billion yuan, features a shopping mall, two hotels, one serviced apartment building and two office buildings. HKRI expects the project to generate revenue equivalent to two-thirds of 11 total projects of similar size in 2018.
According to Cha, the projection is based on innovative retail brands attracted by the shopping mall, the interaction made between online and offline, as well as the application of big data to analyze the preferences and habits of their target customers.
In order to stand out from the high homogeneity of shopping malls' brands, HKRI Taikoo Hui mall did not introduce top luxury brands such as Louis Vuitton or Gucci.
Among the approximately 250 diversified brands in the mall, eight had their China debut stores, 22 were opening their first outlet in Shanghai, and 15 are special concept stores, Cha said.
The HKRI Taikoo Hui is also the location of the newly opened Starbucks Reserve Roastery in China, the only such Starbucks of its kind except for Seattle, also home to the company's headquarters.
"On average, more than 70 percent of the brands in Shanghai's departments stores and shopping malls are the same, so what brands the developer chooses will decide how successful it is," said Qi Xiaozhai, head of the Shanghai Society of Commercial Economy.
When more internet retailers such as Alibaba and JD go offline and open physical stores with their advantages in capital and big data resources, traditional retail operators should adopt state-of-the-art technologies to become competitive, according to Cha.
In the past 15 years, HKR International has made a total investment of about 20 billion yuan into the Chinese mainland, accounting for nearly half of the company's total investment during the period.
"Our weighing in the Chinese mainland, especially in the Yangtze River Delta region, will continue to grow, as we are a Chinese company, and we will continuously look for real estate investment opportunities both in residential and commercial sectors, in line with the central government's policies and strategies," Cha said.
"The Chinese people in the past two decades have generated abundant wealth; in regards to their strong attachment in buying property, high-quality residential property will continue to be sought after by the expanding middle class, and that is what we were doing for the past four decades and will continue to do in the coming four decades."
Shanghai bourse leads others in attracting new global public offerings
After two consecutive years in the top spot, Hong Kong is poised to lose its much-coveted title as the world's leading venue for initial public offerings (IPOs) this year, following a drop in the number of blockbuster listings.
Though the number of IPOs in the financial hub is projected to hit a record-breaking 160 for all of 2017, the value of deals is expected to plummet by one-third from HK$195 billion ($25 billion) last year to HK$130 billion－the lowest level since 2012, which will put Hong Kong in the fourth place in the global IPO league table this year, falling behind its counterparts New York, Shanghai and London, according to the latest report from KPMG.
The amounts raised by top 10 newly listed companies in Hong Kong are also estimated to plunge by 45.5 percent from HK$148.2 billion in 2016 to HK$80.8 billion in 2017. Funds raised by this year's biggest offering of Guotai Junan Securities hover at HK$17.2 billion, dwarfed by the mega-size deal of Postal Savings Bank of China in 2016, which raised a staggering HK$59.2 billion.
Despite the fall from the pole position, the stock exchange in the Asian financial hub is embracing a long-awaited shift in the major contributor to the IPO market, from traditional service firms to the highly sought-after "new economy" companies, said Maggie Lee, Hong Kong-based head of capital markets development group at KPMG China.
Financial services-related offerings have long dominated the city's IPO market. Last year, nine out of the top 10 flotations came from the financial services sector.
"This year, the Hong Kong market has been transforming, with four 'new economy' firms making (their) entry into the territory's top 10 largest IPOs," Lee said.
The offering of the mainland's Tencent-backed China Literature, dubbed the city's hottest and most profitable IPO in more than a decade, coupled with headline-making listings of Zhong An Online P&C Insurance, Yixin Group Ltd and Razer, came as a major boost to the exchange and paved the way for other promising tech startups to follow suit.
Lee believed 2017 only marked a year of transition. Over the coming few years, the Hong Kong market will continue to gain momentum from the burgeoning appetite for "new economy" companies.
As Hong Kong remains on track to polish its brand as a magnet for emerging global tech companies, KPMG places high hopes on the local bourse to attract some 160 offerings and raise total funds of no less than HK$200 billion next year.
The accounting firm expects Shanghai Stock Exchange to stand as the worldwide venue of choice for companies undertaking IPOs in 2017 next only to New York Stock Exchange, with the total value of listings hovering at HK$154 billion.
In China, a country where the delivery services industry has been flourishing, couriers were voted as the loneliest occupation by 69.57 percent of the respondents involved in a survey conducted by 58.com, a major online marketplace operator, cyol.com reported.
The delivery work is both heavy and dull as it requires couriers to run around every day, the report said.
Except for the moment when you hand the parcel to the client, you barely have time to communicate with anyone, a courier surnamed Liu told cyol.com.
Following courier, financial staff became the second loneliest occupation with 67.39 percent of the votes.
The report said the job, which is high stress and requires people to keep pace with changes in the industry at any time, can easily make people feel anxious and lonely.
Let's take a look at the full list of the top five loneliest occupations in China.
No 5 New media operatorA 23-year-old new media operator working for a travel agency poses for a photo in her rental room in Wuhan, Hubei province, Aug 11, 2017. [Photo/IC]
No 4 ProgrammerA programmer working for e-commerce giant Alibaba Group Holding applies a mask at the office in Hangzhou, Zhejiang province, Nov 10, 2017. [Photo/IC]
No 3 DesignerA graphic designer designs a logo at a studio in Urumqi, capital of the Xinjiang Uygur autonomous region, Nov 23, 2017. [Photo/VCG]
No 2 Financial staffA financial staff member working for a hotel holds an invoice for value-added tax at the Wuping county office of the State Administration of Taxation in Fujian province, May 1, 2016. [Photo/IC]
No 1 CourierA courier delivering parcels drives on the road in Shanghai, Nov 11, 2017. [Photo/IC]
Chinese big-data companies are on the hunt for cutting-edge technology from the United Kingdom that they can help upscale and commercialize for China's huge domestic market.
On Monday, a group of about 15 Chinese companies began a weeklong visit to the UK in search of such partnerships. The enterprisesvisited leading British universities and research labs, including University College London and the Future Cities Catapult.
"We now face strong demand from our clients to implement cutting-edge innovation, so we are in the UK to look for that expertise," said Xin Haowen, deputy general manager of Sichuan Wisesoft System Integration, which uses big-data technology to provide smart-cities solutions.
Zhou Yuanbo, secretary-general of the Chengdu Big Data Industry Alliance, said China and the UK's data work could complement each other.
"China has an abundance of consumer data available, which forms the basis for data analytics development," Zhou said. "The UK has the infrastructure, talent, and expertise to produce the cutting-edge research and technology."
The trip, organized by the UK's Department for International Trade, follows on from successful visits made by British big-data companies to China last year and earlier this year. Two British companies on the 2016 trip are now close to setting up offices in China, and one other UK company is working with a Chinese supplier.
Big data is one focus of the "golden era" of China-UK relations that began in 2015 with President Xi Jinping's state visit to the UK.
Big data is an important part of the UK's economy, and a highlight of its latest industrial strategy, which was unveiled last month.
Meanwhile, Chinaplans to grow sales from its big-data sectorto 1 trillion yuan ($145 billion) by 2020, according to the Ministry of Industry and Information Technology.
Existing bilateral collaboration around big data includes the Chengdu-based big-data company BBD launching a London office last year, and joint research into the next generation of big-data applications carried out by Chinese telecom giant Huawei and Imperial College, which began in 2014.
Despite these early results, large-scale big-data collaboration is yet to take off.
Andrew Cockburn, head of trade for technology and smart cities at the Department for International Trade, said mentality is a part of the challenge, and bilateral visits will help to alter perceptions.
"Many British data science companies seem to default to the US, but that's not always the right opportunity for them," he said.
Encouraged by China‘s robust growth outlook for automotive and chemical production，German chemical giant BASF SE keeps increasing its investments in China.
After announcing the operation of a world-class chemical catalyst manufacturing plant in Shanghai late last month, BASF kicked off production of its 140 million euros automotive coatings facility, another factory in Shanghai.
The coatings project is an extension of the company‘s existing 50 million euros automotive coatings plant, a joint venture between BASF and Shanghai Huayi Fine Chemical. It will further enhance the company’s local production and better serve the growing automotive market in China and the Asia-Pacific, according to the company.
In 2016, 48.6 million light vehicle units were produced in the Asia-Pacific region, accounting for 52 percent of global production.
China manufactured 28.12 million and sold 28.03 million cars in 2016, up 14.5 percent and 13.7 percent respectively, the eighth year in row of being the world's largest automobile market, according to data from the China Association of Automobile Manufacturers.
The new plant producing thinners, primers, clear coats and waterborne base coats will be supported by a new automotive application center providing automotive manufacturers access to advanced R&D facilities, including a 3-D robot for coatings application at the BASF Innovation Campus Asia Pacific (Shanghai), by the end of 2018.
“The global automotive market is expected to continue to grow significantly, with China as the biggest driver. The inauguration of this new plant in Shanghai will help us to support the growth of our customers and take an active role in developing the Chinese automotive market,” said Dirk Bremm, president of BASF’s coatings division.
The new catalyst manufacturing plant launched Nov 30 is BASF’s first chemical catalyst manufacturing facility in the Asia-Pacific region. Wholly owned by BASF, the plant will serve the growing chemical industry in China and around the Asia-Pacific region, with base metal catalysts and absorbents.
“The start of our new, world-scale production plant for chemical catalysts in Shanghai represents a milestone for our process catalysts business. Sixty percent of the world’s chemical production will happen in Asia by 2020, with more than half in China,” said Detlef Ruff, BASF’s senior vice-president, process catalysts.
According to Ruff, local production will significantly help BASF strengthen relationships with customers from the chemical industry in Asia and further enhance the customer experience with improved product availability and shortened lead times.
"In combination with the BASF Innovation Campus Asia Pacific in Shanghai, we can now offer our customers regional specific development and production of the latest catalyst technologies. The plant also offers potential for additional expansion as well as flexibility to adapt to new customer production requirements in the years to come,” he said.
“Together with our partners, BASF has invested 19.7 billion yuan as of the end of 2016 in state-of-the-art production located in Caojing of Shanghai. What we produce here directly supports the development and modernization of Chinese industry. Our solutions improve efficiency and sustainability in the chemical industry and other industries, and reduce reliance on imports, thus enhancing competitiveness of our customers in light of supply-side reform,” said Stephan Kothrade, president functions Asia-Pacific, president and chairman Greater China, BASF.
China’s supply-side reform aims to manage market capacities and boost innovation.
Transactions in science and technology deals reached nearly 500 million yuan ($75.6 million) during the China (Dongguan) International Science and Technology Cooperation Week, according to the organizers.
More than 100 intentional agreements in science and technology were signed during the three-day event, which concluded Sunday in Dongguan, a traditional manufacturing and trade hub in the Pearl River Delta.
A number of new innovative science and technology projects from more than 300 domestic and overseas research and development institutes were displayed during the event, which was inaugurated in 2004.
"Innovation in technology will help the city better improve its industrial structure," said Bai Tao, vice-mayor of Dongguan.
At a forum focused on science and technology innovation, Robert. F. Curl, who was awarded the Nobel Prize in Chemistry in 1996, shared his views on China's need to develop artificial intelligence, new energy and biology.
"As a rising economy, China will play a major role in research and development of new technologies, which will, in turn, help upgrade its economy," he said.
BEIJING - China's central bank injected a net 20 billion yuan ($3.02 billion) into the market via open market operations Monday to ease the liquidity strain.
The People's Bank of China (PBOC) conducted 80 billion yuan of reverse repos, according to the bank. Meanwhile, 60 billion yuan of reverse repos matured.
A reverse repo is a process by which the central bank purchases securities from commercial banks through bidding, with an agreement to sell them back in the future.
On Monday, the PBOC conducted 40 billion yuan of seven-day reverse repos priced to yield 2.45 percent, and 40 billion yuan of 28-day contracts to yield 2.75 percent.
Maturing reverse repos will withdraw 480 billion yuan from the market this week. The central bank drained a net 510 billion yuan via open market operations last week, the largest weekly withdrawal in nearly 10 months.
The central bank has increasingly relied on open market operations for liquidity management, rather than cuts in interest rates or reserve requirement ratios.
China set the tone of its 2017 monetary policy as prudent and neutral, keeping appropriate liquidity levels but avoiding excessive liquidity injections.
Such a policy stance is crucial for China as it has to juggle the task of financial deleveraging, aimed at defusing risk and curbing asset bubbles, while shoring up the economy.
Hainan Airlines, China's largest private airline, said it plans to launch more direct flights to the countries and regions involved in the Belt and Road Initiative, and to further expand cooperation with overseas tourism groups, hotels and in-flight catering providers.
Currently, the company operates more than 70 flights that connect China and the countries and regions involved in the Belt and Road Initiative. The carrier has extended its flight service from Beijing to Prague, the Czech Republic to Belgrade, Serbia, and it serves as the only Chinese airline operating on that route.
"We plan to launch more flights between China and the countries and regions related to the Belt and Road Initiative, especially those flights where Hainan Airlines may become the sole Chinese carrier," said Zhu Tao, deputy innovation officer at HNA Tourism Group.
"The Chinese government has been supporting the Belt and Road Initiative, and we will expand our investments accordingly. For those overseas projects the government doesn't support, we will definitely not proceed with them."
Zhu added that mergers and acquisitions abroad that the Chinese conglomerate HNA Group carried out have aimed to improve its upstream and downstream industry chains, and create a good synergistic effect. The company is not going to expand to any sectors that it is not familiar with, he said.
HNA Group has expanded rapidly into the US and European markets, taking large stakes in world-renowned companies such as Hilton Hotels & Resorts and Deutsche Bank.
Meanwhile, the company is accelerating its growth domestically. HNA Tourism Group, a subsidiary under HNA Group, has collaborated with local governments to establish local tourism groups. It has helped to integrate advantageous local resources and help to drive the growth of local economies.
So far, it has established five local tourism groups together with the governments of Hainan, Shanxi and Shaanxi provinces, as well as the cities of Guilin and Fuzhou, and those groups have seen favorable performance in sales.
"We plan to set up more local tourism groups, and we are now in discussions with a few provinces. A number of local governments are bullish on the growth potential to cooperate with us, as they are confident in the consumption potential in the aviation and tourism sectors," Zhu said.
BEIJING - Sales of China's new energy vehicles increased over 80 percent in November from a year ago to 119,000 units, the China Association of Automobile Manufacturers (CAAM) announced on Monday.