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A 100 Yuan note is seen in this illustration picture in Beijing March 7, 2011. REUTERS/David Gray/File Photo
March 13, 2019
BEIJING (Reuters) – China’s banking and insurance regulator on Wednesday urged banks to continue increasing lending to smaller firms and further cut their financing costs, as policymakers work to avert an economic slowdown.
Banks should work hard to achieve targets on increasing loans for small companies and keep the lending rates on a reasonable level, the China Banking and Insurance Regulatory Commission (CBIRC) said in a statement on its website.
Big state-owned commercial banks should increase outstanding loans to smaller companies by more than 30 percent in 2019, the CBIRC said, adding that it would also increase its tolerance for non-performing loans at small companies.
The regulator reiterated its demands for state-owned banks to target faster growth in loans to small businesses as economic growth slowed to its weakest in nearly three decades in 2018.
Chinese banks have been wary of lending to smaller firms with higher credit risks, preferring state-backed customers. But authorities have been urging lenders to help keep cash-strapped private firms afloat, sparking concerns that looser lending standards will expose banks to more bad loans.
China’s central bank chief said on Sunday that lending rates for small firms were still relatively elevated due to high risk premiums and that the country will push ahead with interest rate reforms to resolve the issue.
Commercial banks are also encouraged to issue special financial bonds, and ensure that proceeds raised are used for loans to small and micro firms.
The regulator also said it would support insurers to provide credit-boosting support for smaller firms if the risks are manageable.
Insurance companies are encouraged to invest in financial products including securitisation products backed by loans to smaller firms to ensure more flexible support for those companies.
(Reporting by Lusha Zhang and Se Young Lee; Editing by Jacqueline Wong)
Source: OANN
FILE PHOTO – A man walks near a shantytown to be redeveloped, in front of apartment buildings, in Fu county in the south of Yanan, Shaanxi province, China January 2, 2019. Picture taken January 2, 2019. REUTERS/Yawen Chen
March 12, 2019
By Yawen Chen and Ryan Woo
YANAN, China (Reuters) – Staring at an array of floor plans in a showroom packed with models of apartment blocks set to go up in the northwestern city of Yanan, the young couple was faced with a tough decision.
Even as housing prices in places like Beijing and Shanghai have shown signs of cooling, they remain red hot in many small cities like Yanan, putting pressure on prospective buyers like Jia Luyu, 30, and her husband, to get in now – or be priced out of the market.
After a long deliberation on a recent afternoon, the couple decided to pour their life savings into a 1.1 million yuan ($163,653.95) three-bedroom apartment in a new district carved out of the loess hills that surround Yanan.
“Prices are rising too quickly here,” said Jia, a police department clerk, as she signed the contract. It was important to lock in a place as the couple plans for their first child, she said. Jia’s husband declined to give his name.
While the central government has tamped down property prices in bigger cities across China in an effort to control the longest real estate boom in over a decade, more fragile economies like Yanan have been left alone.
Worried by the effects of a slowing Chinese economy, which has been exacerbated by a bruising trade war with the United States, the government is allowing prices to rise quickly in Yanan and hundreds of other cities across the country.
Easy credit policies and official intervention in property markets are fuelling those price surges, raising fears that local governments may be creating the sorts of housing bubbles and debt burdens that Beijing has vowed to crack down on.
Real estate prices in more than 200 Chinese cities out of 336 tracked by the China Real Estate Association, mostly smaller provincial cities, have been growing at double digit rates in the past year, with Yanan’s rising more than 15 percent year-on-year in December, according to a Reuters analysis of the data.
A dozen home buyers and agents in Yanan interviewed by Reuters said prices had almost doubled for some new projects in 2018.
The building boom has transformed Yanan in recent years from a small town famed as the epicenter of China’s communist revolution in the 1930s into a bustling city of 2 million people.
But Yanan, located more than 800 kilometers from China’s prosperous coastal regions, remains heavily reliant on crude oil production, which has been hit by faltering prices, and local authorities see property as a key to growth.
The city government has intervened in the market by freeing up credit and reducing housing stock by demolishing aging homes to spur sales of new units.
It has also invested heavily in developments like the Yanan New Zone, where Jia and her husband bought their flat, lured by the new schools and hospitals being constructed there. Her office was also moved to the zone from Yanan’s old town, along with a slew of government agencies.
“It’s ironic to think few had wanted to buy in this area not too long ago when prices were less than half of where they are now,” she said.
Much of that soaring demand stems from Yanan’s embrace of a national slum redevelopment program, mainly financed by policy banks such as the China Development Bank (CDB). That has led to the demolition over 90,000 homes in Yanan in the past two years.
Those whose homes were demolished were paid off, with cash compensations ranging from hundreds of thousands of yuan to the millions, according to interviews with half a dozen Yanan residents and government proposals made public online.
Li Xing, a 32-year-old taxi driver, said his mud house behind a vegetable market will be demolished this year and that he plans to use the compensation for a down payment on a new apartment.
Yanan’s housing stock has fallen to “nearly nothing”, said an official at the housing bureau who asked to be identified only as Wang. The official said the city would stick with its current housing policies.
China’s leaders signaled in December that more policy easing at the city level would be tolerated this year as downside risks in the real estate market were increasing. Cities would be given responsibility for “stabilizing” their respective real estate markets based on local conditions, they said.
Still, Yanan authorities appear to be trying to keep the city’s boom under the radar.
Yanan’s housing bureau stopped publishing monthly home price data in September. That followed a report in the official People’s Daily that the city’s price growth was the most robust in Shaanxi province. The housing bureau declined to comment.
‘UP TO THE GOVERNMENT’
As prices soar, developers have flocked to projects like the Yanan New Zone. Yango Group is constructing a residential project in the zone that is about the size of 70 football fields, with homes averaging 8,600 yuan per square meter.
Big-name developers such as Sunac and Future Land are also aggressively bidding for land in the zone, with hundreds of apartments planned.
Zhang Ning, who manages a 24-people sales team at Future Land in Yanan, said he was optimistic despite a slightly slower pace of sales since October.
“I’m hoping we can sell out by the end of this year,” Zhang said, adding that the developer had about 800 apartments planned. He said residential land prices in the Yanan New Zone have soared almost five fold since 2015.
Approving large numbers of new home sales has had a clear impact on the local economy, the authorities say. Real estate spurred Yanan’s economic growth by 0.4 percentage points in 2017, with an “obvious positive impact” on other related industries, the local Statistics Bureau said.
Property investment doubled in 2018 from a year earlier. Land sales totaled 2.8 billion yuan from January to November, up more than 450 percent from a year earlier, Reuters calculated from data from the China Index Academy.
“Whether the market will keep booming depends on whether the government is short of money or not,” Zhang said. “Take a look around, and just imagine how much debt the government has taken on in building this new zone.”
“And I think they will definitely seek to maintain the stability in the real estate market if there are signs of a sharp cooling,” he added.
The local government did not respond to a request for comment.
RISKS IN THE SYSTEM
Sheng Songcheng, a People’s Bank of China adviser, told a forum in January he was concerned about the risks in smaller cities. China’s housing bubble is bigger than Japan’s when it burst in the 1990s, judging by the income-to-price ratio, he said.
“There are indeed some overshooting risks,” said Wang Yifeng, director of the Financial Center of Minsheng Bank’s Research Institute in Beijing.
An official close to the People’s Bank of China told Reuters the central bank would keep property risks in check, although he conceded that local governments would always find ways to let buyers bypass curbs and keep supporting high prices.
However, Liu Yong, CDB’s chief economist, dismissed concerns about a property slowdown dampening local economic growth, saying that the policy bank’s branches were monitoring conditions to evaluate projects and adjust policy accordingly.
“It won’t be a one-size-fits-all approach,” he told Reuters.
Even with the risks, many in Yanan feel the city’s role in Communist Party lore – President Xi Jinping also spent nearly a decade of his youth working in a village in the region – will insulate it from any downturn.
Yang Quan, who manages two apartments on Airbnb in Yanan, said he planned to buy a new home in the city this year.
“As long as President Xi Jinping is in power, Yanan’s property prices will keep rising,” he said.
(Reporting by Yawen Chen and Ryan Woo; Additional Reporting by Beijing Newsroom; Editing by Philip McClellan)
Source: OANN
FILE PHOTO: Newlywed couples attend a group wedding ceremony in traditional Han Dynasty style at Ganzhou, Jiangxi province, China May 20, 2017. REUTERS/Stringer/File Photo
March 12, 2019
By Ryan Woo
BEIJING (Reuters) – Runaway “bride prices” are making marriage unaffordable in rural China and need to be capped, and professional matchmakers should be stopped from overcharging, says a village delegate to China’s parliament.
China’s rapid economic growth in the past decade has sharply raised parental expectations, pushing up the cost of pre-wedding gifts that now commonly include a brand new home.
In the past, a suitor would offer the parents of his bride about 11,000 yuan ($1,639). Now, future in-laws demand at least three “jin” (1.5 kg) of hundred yuan bills, a car and a house, said Zhang Qingbin, a delegate to the annual National People’s Congress from Hebei province.
“In the south of northern China, a young man looking to get married would need to spend around 700,000 yuan ($104,275),” Zhang wrote in a proposal to NPC.
“This is a huge financial burden, with steep bride prices becoming a key reason behind rural poverty,” he added.
In rural areas, where annual per capita incomes of about 15,000 yuan ($2,234) are just a third of earnings in cities, a groom’s need for cash is relatively acute.
With the economy facing a further slowdown this year, the chances of finding a bride are more remote, aggravating a rural phenomenon known as “leftover men” who cannot afford marriage.
Zhang blamed the parents of prospective brides who want to elevate their standard of living by demanding a high price from suitors.
Marriage subsidies could be one way to wedded bliss, he said, pointing to a pilot subsidy program in Taiyuan city in neighboring Shanxi province.
Taiyuan set up a Marriage Consumption Subsidy Fund in 2017 which offers newlyweds rebates on wedding pictures, the banquet, honeymoon travel and even white goods to furnish a new home.
Unaffordable marriages are also a factor in China’s bigger demographic problem – falling birth rates.
Many NPC delegates called for improved maternity benefits to encourage couples to have more babies as the country faces an aging population and shrinking workforce.
(Reporting by Ryan Woo; Editing by Darren Schuettler)
Source: OANN
FILE PHOTO: A company logo of China’s Meituan Dianping, an online food delivery-to-ticketing services platform, is displayed at a news conference on its IPO in Hong Kong, China September 6, 2018. REUTERS/Bobby Yip
March 11, 2019
By Josh Horwitz
SHANGHAI (Reuters) – China’s Meituan Dianping, an online food delivery-to-ticketing firm, said its fourth-quarter operating loss more than doubled as fast revenue growth was offset by sharply rising labor costs as it took on more staff.
The company, which is backed by tech giant Tencent Holdings Ltd and listed on the stock market last September, said its revenue grew 89 percent in October-December to 19.8 billion yuan ($2.9 billion).
Food orders made up the majority of sales in the quarter, as they did in the third quarter and the company reported a growing user base and increasing gross merchandise volume for its delivery service. However, these gains were offset by having to pay higher labor costs as order volumes jumped.
As a result, Meituan reported a net loss of 3.4 billion yuan for the quarter ended Dec. 31, increasing from a 2.2 billion yuan loss in the year-earlier period.
The company, which raised $4.2 billion in its IPO, faces stiff competition from rivals such as Alibaba Group Holding Ltd’s delivery platform Ele.me and also ride-hailing firm Didi Chuxing, backed by Japan’s SoftBank Group Corp.
Meituan said its overall transaction volume grew 32.5 percent in the fourth quarter from a year earlier.
Meituan is a so-called super app, offering many services and is a sort of cross between U.S. discounting platform Groupon Inc and online review firm Yelp Inc.
Revenues from “New Initiatives and others” which includes Meituan’s bike-sharing division Mobike and its new ride-hailing service, made up 21.2 percent of total sales.
Meituan’s September IPO was seen by some as a gauge of China’s tech sector, which seemed poised for a slowdown after years of rising stock prices and free-flowing venture capital funding. But its stock has since lost nearly a fifth of its value.
Tencent, which is due to report fourth-quarter results later this month, has seen slowing revenue growth over the last four quarters while companies such as JD.com and Didi Chuxing have announced layoffs in recent months.
(Reporting by Josh Horwitz, editing by Louise Heavens and Susan Fenton)
Source: OANN
FILE PHOTO: Pigs are seen at a family farm in Fuyang, Anhui province, China December 5, 2018. REUTERS/Stringer/File Photo
March 11, 2019
By Hallie Gu and Dominique Patton
BEIJING (Reuters) – Chinese hog prices marched to their highest in 14 months on Monday and look set to keep rising after weeks of gains, analysts and producers said, as the worst disease outbreak to hit the country’s vast pig herd in years chops supply.
Live hog prices in major consumption and production areas rose 7 percent on average on Monday compared with last Friday to 15.09 yuan ($2.24) per kilogram, according to data provided by consultancy China-America Commodity Data Analytics. Even though demand is typically weak at this time of year, prices across the country surged almost 20 percent since early March.
The surge comes with a months-long outbreak of African swine fever having spread to 111 confirmed cases in 28 provinces and regions across the country. There is no cure and no vaccine for the disease that is highly contagious and fatal to pigs, though it does not affect humans. About 1 million pigs have been culled so far in an effort to try to control the spread.
“The main reason (for rising prices) is there are fewer pigs,” said Yao Guiling, analyst with China-America Commodity Data Analytics. Some farmers are also reluctant to sell now, she said, anticipating further tightening of supplies and higher profits in coming weeks.
“Pig production capacity has been falling in the past two years, then in the second half of last year, African swine fever outbreaks further affected restocking, pushing up prices,” Yao said.
(For a graphic on ‘China’s pig prices soar to 14-month high’ click https://tmsnrt.rs/2CdU9RE)
Some have also abandoned farming, after government measures to tackle the disease pushed prices too low and made trade impossible.
China’s pig herd fell 13 percent in January compared with the same month a year earlier, while the number of breeding sows was down 15 percent from the previous year, according to data from the Ministry of Agriculture and Rural Affairs.
But analysts and traders said farms that can keep out the disease could be in line for bumper profits in coming months.
“Our goal is to survive. If we survive, life afterwards will be good,” said a manager at a major pig producer located in one of the regions that has reported an African swine fever outbreak.
He declined to be named as he was not authorized to talk to the media.
(For a graphic on ‘African swine fever puts China’s pig industry in peril’ click https://tmsnrt.rs/2BjgFIp)
Shares in leading pig farming companies also continued to rise on Monday, as investors bet on tightening pork supplies and strong government support for leading producers.
Top farmer Wens Foodstuff Group Co., Ltd. rose 4 percent, while rapidly growing Tech-bank Food Co., Ltd. was up 3 percent.
(Reporting by Hallie Gu and Dominique Patton; Editing by Kenneth Maxwell)
Source: OANN
A man walks past the entrance to the Hong Kong Exchanges bearing a new logo in Hong Kong, China January 21, 2016. REUTERS/Bobby Yip
March 11, 2019
SHANGHAI/HONG KONG (Reuters) – Global index publisher MSCI and the Hong Kong stock exchange said on Monday they will launch futures contracts on the MSCI China A Index to provide a hedging tool as international investor interest in Chinese mainland shares surges.
The license agreement between MSCI and Hong Kong Exchanges and Clearing Ltd (HKEX), which will launch the new product, comes less than two weeks after MSCI announced it would quadruple the weighting of Chinese shares in its global benchmarks later this year.
HKEX Chief Executive Charles Li said the agreement with MSCI provides “a key risk management tool for international investors who need to manage their A-share equity exposure”.
The new product is among a host of other derivatives launched by global exchanges in recent years to help manage exposure to mainland Chinese markets.
Singapore Exchange Ltd’s A50 Index Futures contract, for example, allows offshore investors to track 50 Chinese A-shares directly.
Li said on a conference call on Monday the new HKEX futures contract will track the entire 421 large- and mid-cap A-shares included in the benchmark MSCI Emerging Markets Index.
HKEX said in a statement it was yet to determine a launch date and that the product remains subject to regulatory approval and market conditions.
China has also been opening up its domestic derivatives market as A-shares enter global indexes.
Draft rules in late January said foreign institutions will have access to onshore derivatives, including financial futures, under the Qualified Foreign Institutional Investor (QFII) scheme and its yuan-denominated equivalent, RQFII.
Fang Xinghai, deputy head of China’s securities regulator, predicted in January that foreign capital inflows to Chinese stocks this year will double to about 600 billion yuan ($89.76 billion) from last year.
Last week, Fang told local media that regulators were studying measures to further open the index futures market.
(Reporting by Samuel Shen and Noah Sin; Editing by Sam Holmes and Darren Schuettler)
Source: OANN
FILE PHOTO: The logo of Alibaba Group is seen at the company’s headquarters in Hangzhou, Zhejiang province, China, July 20, 2018. REUTERS/Aly Song/File Photo
March 11, 2019
By Josh Horwitz
SHANGHAI (Reuters) – Alibaba Group Holding Ltd will take a 14 percent stake in STO Express Co Ltd through a $693 million deal, the e-commerce giant’s fourth significant investment in a Chinese courier company.
Shares in STO Express shot up when trading opened and immediately hit the upper 10 percent limit on the Shenzhen Stock Exchange, according to Refinitiv data.
STO Express said in a statement on Monday its controlling shareholder planned to set up a new subsidiary that will own a 29.9 percent stake in the courier firm.
Alibaba will in turn invest 4.66 billion yuan ($693.44 million) for a 49 percent stake in the new subsidiary, and by extension hold more than 14 percent of STO Express, the statement said.
Alibaba, in a separate statement, confirmed its investment in “one of the top five express delivery companies in China”.
“We will deepen our existing collaboration with STO in technology, last-mile delivery across China and New Retail logistics,” it said.
“This investment is a step forward in our pursuit of the goal of 24-hour-delivery anywhere in China and 72 hours globally,” Alibaba added.
STO Express is Alibaba’s fourth investment in the Chinese courier sector after it acquired minority stakes in YTO Express Group Co Ltd, Best Inc and ZTO Express (Cayman) Inc.
STO Express is one of several companies that works with Alibaba under Cainiao, its logistics division launched in 2013.
Cainiao provides software and shares data with warehouses, carriers and other logistics companies that help deliver packages to shoppers on Tmall and Taobao, Alibaba’s largest e-commerce sites.
Cainiao works with a number of logistics companies to ensure packages are delivered and vendors paid, but relationships between Cainiao and its partners have at times been uneasy.
In 2017, Cainiao temporarily barred Chinese courier SF Express from taking deliveries from Alibaba’s e-commerce vendors in a dispute over the ownership of customer data.
(Reporting by Josh Horwitz and Hong Kong newsroom; Editing by Darren Schuettler)
Source: OANN
FILE PHOTO: Headquarters of the People’s Bank of China (PBOC), the central bank, is pictured in Beijing, China September 28, 2018. REUTERS/Jason Lee
March 10, 2019
By Kevin Yao and Yawen Chen
BEIJING (Reuters) – China’s central bank on Sunday pledged to further support the slowing economy by spurring loans and lowering borrowing costs, following data that showed a sharp drop in February’s bank lending due to seasonal factors.
The central bank is widely expected to ease monetary policy further this year to encourage lending especially to small and private firms vital for growth and job creation.
The central bank’s “prudent” monetary policy will emphasize on counter-cyclical adjustments, said People’s Bank of China (PBOC) Governor Yi Gang, using a phrase that implies the need to fight an economic slowdown.
“The global economy still faces some downward pressure and China faces many risks and challenges in its economy and financial sector,” Yi said at a press conference on the sidelines of the country’s annual meeting of parliament.
There is still some room for the PBOC to cut reserve requirement ratios (RRRs), although the amount of room is less compared with a few years ago, Yi said.
The PBOC has cut the amount of cash that commercial banks need to set aside as reserves five times in the past year to spur lending to small businesses in the private sector. The RRR for big banks is now at 13.5 percent and the ratio for small- to medium-size banks is at 11.5 percent.
Yi said lending rates for small firms are still relatively elevated due to higher risk premiums and the central bank will forge ahead with reforms to lower such risk premiums.
High risk premiums on loans to small firms reflect commercial banks’ traditional reluctance to extend credit to the sector because of concerns about their creditworthiness.
PBOC data on Sunday showed new bank loans in China fell sharply in February from a record the previous month, but the drop was likely due to seasonal factors, while policymakers continue to press lenders to help cash-strapped firms stay afloat.
A pull-back in February’s tally had been widely expected as Chinese banks tend to front-load loans at the beginning of the year to get higher-quality customers and win market share.
Chinese banks made 885.8 billion yuan ($131.81 billion) in net new yuan loans in February, down sharply from a record 3.23 trillion yuan in January, when several other key credit gauges also picked up modestly in response to the central bank’s policy easing.
Yi said combined January-February new loans and total social financing (TSF), a broad measure of credit and liquidity in the economy, could paint a more accurate picture as they showed a rise of 374.8 billion yuan and 1.05 trillion yuan from a year earlier, respectively.
DEBT DEFAULTS
Analysts say China needs to revive weak credit growth to help head off a sharper economic slowdown this year, but investors are worried about a further jump in corporate debt and the risk to banks as they relax their lending standards.
Corporate bond defaults hit a record last year, while banks’ non-performing loan ratio notched a 10-year high.
Pan Gongsheng, a vice governor at the PBOC, told the same briefing that China will control the amount of bond defaults in 2019, using both legal and market means.
Pan conceded that bond defaults increased last year, but the level of defaults was not high compared with China’s average bad loan ratio.
Premier Li Keqiang told parliament on Tuesday that monetary policy would be “neither too tight nor too loose”. Li also pledged to push for market-based reforms to lower real interest rates.
Chinese policymakers have repeatedly vowed not to open the credit floodgates in an economy already saddled with piles of debt – a legacy of massive stimulus during the global financial crisis in 2008-09 and subsequent downturns.
Sources have told Reuters the central bank is not ready to cut benchmark interest rates just yet, but is likely to cut market-based rates.
Yi said the downward trend in TSF has been initially curbed and broad M2 money supply growth will be more or less in line with nominal gross domestic product growth in 2019, Yi added.
Central bank data showed growth of outstanding TSF, a rough gauge of broad credit conditions, slowed to 10.1 percent in February from January’s 10.4 percent, versus a record low of 9.8 percent in December.
M2 money supply grew 8.0 percent in February from a year earlier, missing forecasts, the central bank data showed. Yi said China’s macro leverage ratio, or the amount of debt relative to GDP, was at 249.4 percent at the end of 2018, a fall of 1.5 percentage points from a year earlier, Yi said.
Analysts note there is a time lag before a jump in lending will translate into growth, suggesting business conditions may get worse before they get better.
Most economists expect a rocky first half before conditions begin to stabilize around mid-year as support measures begin to have a greater impact.
China’s economic growth is expected to cool to around 6.2 percent this year, a 29-year low, according to Reuters polls.
Growth slowed to 6.6 percent last year, with domestic demand curbed by higher borrowing rates and tighter credit conditions and exporters hit by the escalating trade war with the United States.
(Additional reporting by Ryan Woo and Lusha Zhang; Editing by Michael Perry)
Source: OANN
China’s social credit system prevented people from buying 17.5 million flights and 5.5 million train tickets in 2018, according to the Associated Press, which obtained a document from the National Public Credit Information Center.
The AP reports that millions were attempting to make travel purchases were blocked because they ended up on the government’s blacklist for social credit offenses. The report didn’t discuss how these people had become “discredited.”
The Communist Party of China (CPC) says the social credit system is an essential component of the Socialist market economic system and the social governance system. Its aim is to encourage trustworthy behavior through a blend of penalties and rewards for citizens to improve a fast-changing society after three decades of economic reform. Offenses can include failure to pay taxes or fines, jaywalking, smoking, shoplifting, or taking drugs. Penalties include restrictions on travel, business, obtaining loans, or access to education. Companies can lose access to low-interest bank loans or be dropped from government contracts.
One government slogan for the scheme says: “Once you lose trust, you will face restrictions everywhere.”
China is implementing a new program that will be able to give you a “social credit” score based on your everyday actions.
The social control system is part of efforts by President Xi Jinping’s Communist regime to use artificial intelligence and surveillance cameras to control more than a billion people.
CPC launched social credit in 2014 and is currently piloting it in multiple cities around China. The system is expected to roll out nationwide by 2020, giving the government control to almost all people and businesses.
Human rights activists warn that social credit is too hard on citizens and might unfairly label people as untrustworthy without telling them.
U.S. Vice President Mike Pence condemned social credit in October as “an Orwellian system premised on controlling virtually every facet of human life.”
AP said some of the offenses last year penalized people for false advertising or violating drug safety rules.
Since inception, the system has caused 3.5 million people to “voluntarily fulfill their legal obligations,” the report said, which included 37 people who paid a total of 150 million yuan ($22 million) in overdue fines or confiscations.
The report gave limited details on how many citizens live in areas where social credit is operating.
In the West, social credit is very controversial and is often portrayed as a futuristic society controlled by the illusion of a perfect society through artificial intelligence and surveillance cameras.
Mike Adams calls upon gun rights advocates to be just as animated about protecting American children from vaccines as they are about guaranteeing U.S. citizens’ their 2nd Amendment rights.
Source: InfoWars
CDH Investments founding partner Wang Lin speaks during an interview with Reuters in Hong Kong, China November 15, 2018. Picture taken November 15, 2018. REUTERS/Bobby Yip
February 27, 2019
By Julie Zhu
HONG KONG (Reuters) – China’s CDH Investments is aiming to raise nearly $1 billion in dollar and yuan funds through its venture and growth capital arm to invest in sectors including healthcare and logistics, said people with direct knowledge of the matter.
The move by CDH, one of China’s largest alternative investment firms, underscores its confidence that investors are still keen on China’s fast-growing new-economy sectors despite its economic slowdown and tighter liquidity following Sino-U.S. trade tensions and Beijing’s war on debt.
CDH’s arm, CDH VGC, is in talks with prospective investors to raise a dollar-denominated fund of $500 million and looks to secure the first tranche of commitments by the first half of 2019, said one of the people.
It is also raising a yuan-denominated fund with a target size of about 3 billion yuan ($448 million), according to the person.
The dollar fund will complement its onshore investments by focusing on Chinese firms using overseas structures such as variable-interest entities, said another person.
CDH declined to comment. The people declined to be named as the capital raising plans were not public.
China-focused private equity and venture capital managers raised a combined $37 billion last year in dollar-denominated funds, slightly down from $40 billion in 2017, according to data provider Preqin.
Beijing-based CDH Investments, co-founded by chairman Wu Shangzhi and CEO Jiao Shuge in 2002 as one of China’s earliest private equity firms, is best known for its dealmaking in traditional industries such as consumption and manufacturing in the early years.
It now manages about $18 billion in assets and has been a major investor in the world’s largest pork supplier, WH Group, and leading appliance maker, Midea Group.
In 2015, it established CDH VGC in a bid to deepen its push into the country’s new-age sectors and build up its expertise in venture- and growth-stage investments. CDH VGC closed its first fund of $850 million in committed capital in December 2016.
FOCUS ON BIOTECHS
In an interview separate to the fundraising plans, CDH VGC’s founding partner Wang Lin said the first VGC fund invested more than $600 million in about 30 start-ups as of the end of 2018, with healthcare-related deals accounting for half of the spending.
Among them are HitGen Ltd, a biotech platform for early-stage drug discovery research based on its DNA-encoded libraries, and Elpiscience Biopharmaceuticals, a biotech firm that develops immunotherapies to fight cancer.
According to Wang, a focus on biotechs has been a key strand of the firm’s investment strategy as he sees immense potential for innovative drug developers in the world’s second-largest drug market.
CDH VGC is also looking for opportunities in other innovative and high-growth sectors, notably logistics and artificial intelligence.
Apart from being an early investor in China’s leading AI firm SenseTime Group, it has also backed domestic couriers including U.S.-listed ZTO Express, and new entrants Yimidida and Shansong Express.
“In industries such as logistics which are worth over 1 trillion yuan, there are quite a few young companies that have the potential to develop quickly into elephant-sized firms,” Wang said.
(Reporting by Julie Zhu; Editing by Muralikumar Anantharaman)
Source: OANN
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