Yuan
Page: 9
FILE PHOTO: Xiaomi founder and CEO Lei Jun attends a launch ceremony of the new flagship phone Xiaomi Mi 9 in Beijing, China February 20, 2019. REUTERS/Jason Lee/File Photo
March 22, 2019
By Josh Horwitz
SHANGHAI (Reuters) – Smartphone retailers in China say it’s a tough sell of late with consumers reluctant to upgrade, put off by chill economic winds.
Even so domestic brands led by Huawei have made big strides, wooing consumers with top-notch hardware and innovative features as they move upmarket in the $500-$800 price range. The result: a loss of share in a key segment for Apple Inc and fresh price cuts for iPhones by Chinese retailers.
“Of those people who are upgrading, there are many switching from Apple to Chinese brands but very few switching from Chinese brands to Apple,” said Jiang Ning, who manages a Xiaomi store in the northern province of Shandong.
Huawei Technologies Co Ltd, Xiaomi Corp, Oppo and Vivo once sought to grab share in the world’s biggest smartphone market with value-for-money devices, but consumer demand for better phones has prompted strategic rethinks.
“People are more attached to their phone than ever and have higher expectations for the function and experience it offers. The response has been constant upgrading of hardware specs,” Alen Wu, global vice president at Oppo, told Reuters.
He Fan, CEO of Huishoubao which buys and resells used phones, said he has seen a consumer shift to Huawei from Apple, driven by the Chinese love of selfies and emphasis on camera quality. Huawei has had a tie-up with German camera maker Leica since 2016.
“Huawei’s cameras have become noticeably better than Apple’s in that they suit the tastes of Chinese consumers more,” he said.
Compared to dual-cameras common in most smartphones, Huawei’s P20 Pro device boasts three rear-facing cameras, with the additional one improving zoom capabilities.
It is one of several new devices in its P20 and Mate 20 lines, which helped Huawei’s share of the $500-$800 segment in China surge to 26.6 percent last year from 8.8 percent, data from research firm Counterpoint shows.
Apple, by contrast, saw its share of the segment tumble to 54.6 percent from 81.2 percent, also hurt by its decision to move even further upmarket with the iPhone X series.
“Most Chinese smartphone buyers are not ready to shell out beyond $1,000 for a phone,” said Neil Shah, research director at Counterpoint. “This left a gap in the below-$800 segment, which Chinese vendors grabbed with both hands.”
(For a graphic on ‘Chinese smartphones increase share of home market’ click https://tmsnrt.rs/2HvsyQi)
Shipments of phones priced above $600 in China grew 10 percent in 2018, data from research firm Canalys shows. By contrast, the overall market shrunk 14 percent, marking a second year of contraction.
OVERSEAS GAINS
The weaker cachet for Apple in China was underscored this month when several major retailers simultaneously cut iPhone prices for a second time this year.
A 64GB iPhone 8 sold at Suning.com Co Ltd now costs 3,899 yuan ($580), roughly 25 percent less than it did in December. That’s also lower than its $599 price tag in the United States, where iPhones typically cost less to buy than in China. Most iPhone models through to the iPhone 8 series have seen prices in China cut, albeit not equally.
In earnings too, it seems to be a tale of divergent fortunes. Apple’s October-December revenue from the Greater China region fell by about a quarter from a year earlier. Greater China currently accounts for 15.6 percent of its overall revenue.
Huawei, the world’s No. 2 smartphone maker, has estimated revenue for 2018 rose 21 percent, which analysts attribute in large part to robust smartphone sales.
More broadly, fewer sales for Apple means fewer customers for its App Store and media streaming services. The shift to higher-end phones by Chinese brands has also meant greater inroads in overseas markets.
Huawei’s shipments in Europe jumped 55 percent in the latest quarter and it now has 23.6 percent market share, according to Canalys. That’s not far behind Samsung Electronics and Apple which saw small declines in shipments.
OPPO, VIVO
If Huawei is taking the lion’s share of turf that Apple once had in China, Oppo and Vivo – brands owned by electronics hardware conglomerate BBK – are the newest threats.
In June, Vivo launched the Nex which starts from 3,898 yuan ($610) and in July, Oppo launched the Find X, priced at 4,999 yuan ($755).
The models mark the first time the brands have priced a phone above $600, a sharp departure from their roots selling $300-$500 models to young consumers in second-tier cities.
The devices came with features unavailable in the iPhone, including under-the-glass fingerprint sensors and “notchless” displays, both of which increase the size of usable screen.
Xiaomi too is going upmarket, announcing in January it would split off its low-budget Redmi range of phones into a sub-brand. In doing so, it is taking a leaf out of Huawei’s book which has for years sold cheaper devices under the Honor brand, helping differentiate its products.
Redmi will target international markets and e-commerce sales, while the flagship Xiaomi brand will target China and offline retail markets, company founder Lei Jun told reporters.
Last month, Xiaomi unveiled the Mi 9, its latest flagship device with a price tag of 2,999 yuan ($450). But the company also said it might be the last time a Xiaomi flagship phone would be priced under 3,000 yuan.
“Xiaomi’s flagship series phones were once always set at 1,999 yuan,” said Lei. “This was a contributing factor to our rise, but it also became an obstacle to our growth,” he said.
(For a graphic on ‘Chinese smartphones increase share of home market’ click https://tmsnrt.rs/2Hx2KD4)
(Reporting by Josh Horwitz; Additional reporting by Stephen Nellis in San Francisco, Paul Sandle in Barcelona and the Shanghai newsroom; Editing by Jonathan Weber and Edwina Gibbs)
Source: OANN
Logos of Tencent are displayed at a news conference in Hong Kong, China March 22, 2017. REUTERS/Tyrone Siu
March 21, 2019
HONG KONG (Reuters) – Tencent Holdings said on Thursday net profit for the quarter ended December fell a sharper-than-expected 32 percent, the most on record for a quarter, as a regulatory review weighed on its gaming business.
Net profit at Asia’s second-most valuable listed company for the September-December quarter was 14.2 billion yuan ($2.12 billion), against the 18.3 billion yuan average estimate of 16 analysts, according to Refinitiv data.
Revenue in the quarter rose 28 percent to 84.9 billion yuan, slightly ahead of an average estimate of 83 billion yuan from 19 analysts. Tencent attributed that in part to strong growth in sponsorship advertising revenue.
Tencent declared a final dividend of HK$1.00 per share versus HK$0.88 in 2017.
(Reporting by Sijia Jiang; Editing by Muralikumar Anantharaman)
Source: OANN
FILE PHOTO: A worker walks past coal piles at a coal coking plant in Yuncheng, Shanxi province, China January 31, 2018. Picture taken January 31, 2018. REUTERS/William Hong/File Photo
March 21, 2019
By David Stanway and Andrew Galbraith
SHANGHAI (Reuters) – Chinese regulators are close to releasing new “green bond” standards that would exclude polluting fossil fuel projects from corporate financing channels designed to lift environmental standards, people familiar with the matter told Reuters.
Beijing has in recent years promoted new green financing methods to help industry pay for its transition to cleaner modes of growth.
But China’s inclusion of “clean coal” in a 2015 central bank list of technologies eligible for green bonds has put the country at odds with global standards, a point of contention for some international investors and many environmental groups.
Two sources with direct knowledge of the situation say China’s central bank, which regulates financial institution debt issuance and whose 2015 guidelines were adopted by other market regulators, has already revised the eligibility list. One of the people said the list is due to be published later this month. The People’s Bank of China did not immediately respond to Reuters’ request for comment.
“If confirmed, ending the policy of financing coal with green bonds would be a much-needed step in the right direction,” said Liu Jinyan, senior campaigner with environmental group Greenpeace in Beijing.
“With no new coal projects taking money from the green bonds market, those funds can actually accelerate China’s energy transition and green development,” she said.
Of the $42.8 billion worth of green bonds issued in China last year, only $31.2 billion would have met global criteria, according to a report published at the end of February by the Climate Bonds Initiative (CBI), a non-profit group backing green bond standards.
The share of what CBI calls “internationally aligned” green bonds has been steadily increasing as China’s institutions move to align themselves more with global markets.
The PBOC’s revised criteria, however, would not apply to green “enterprise bonds”, which are regulated by the National Development and Reform Commission (NDRC), the state planner, and are primarily issued by state-owned enterprises and unlisted companies.
In its “green industry” catalog of approved environmental sectors, the NDRC in February still included the production and utilization of “clean coal”, allowing coal companies to issue “green enterprise bonds” to finance the installation of low-emission technology.
The NDRC did not immediately respond to request for comment.
Green bonds have already financed a number of big coal projects in China. Tianjin SDIC Jinneng Electric Power Co Ltd issued 200 million yuan ($29.81 million) in commercial paper on the interbank market in mid-2017 to finance a low-emissions coal-fired power plant.
Coal-to-chemical plants have also received billions of yuan in financing through green bonds, despite criticism from environmental groups.
Industry experts say the two-tiered regulatory framework – one under the PBOC and one under the NDRC – means some coal-related projects could still issue green bonds, although access to the most active green finance markets would be restricted.
“Many of the international investors and financiers have publicly announced plans to reduce their coal portfolio,” said Herry Cho, head of sustainable finance for Asia Pacific at ING.
She said the NDRC catalog is already “largely aligned” with international standards, and even includes some categories, such as equipment related to renewable energy and resource recycling, that are not yet included in global guidelines.
Shengzhe Wang, counsel at Hogan Lovells in Shanghai, who has worked on green bonds in the U.K.-China Green Finance Taskforce, said it was unrealistic to expect the sudden exclusion of coal from all green financing in China.
“For the time being perhaps we have to put up with, make a compromise with clean coal,” she said.
While that compromise may limit foreign involvement in the market, Peter Corne, managing partner at legal firm Dorsey & Whitney in Shanghai said green financing was still required to help clean up China’s coal sector.
“I don’t think it necessarily means there will be more coal projects because of it, because there has already been a moratorium for quite some time,” said Corne, who follows China’s environmental policies.
“Coal’s not going to go away, and it will greatly accelerate our progress towards achieving emission goals if we do clean up the coal sector.”
(Reporting by Andrew Galbraith and David Stanway; Editing by Sam Holmes)
Source: OANN
FILE PHOTO: The Geely Automobile Holdings logo is pictured at the Auto China 2016 auto show in Beijing, China April 25, 2016. REUTERS/Kim Kyung-Hoon/File Photo
March 21, 2019
BEIJING (Reuters) – China’s Geely Automobile Holdings Ltd said on Thursday higher sales drove its 2018 net profit up 18 percent, even as growing political uncertainty affected overall domestic demand.
The company, which is China’s most globally high-profile car maker thanks to the Geely group’s investments in European manufacturers Volvo and Daimler, posted a full-year net profit of 12.55 billion yuan ($1.88 billion), up from the previous year’s 10.63 billion.
That compared with the 12.8 billion yuan average estimate of 34 analysts, according to Refinitiv data.
Total revenue for the year was 106.60 billion yuan, up from 92.76 billion yuan in 2017, it said. That slightly missed the 108.59 billion yuan estimated by analysts, according to Refinitiv data.
(Reporting by Yilei Sun and Brenda Goh; Editing by Muralikumar Anantharaman)
Source: OANN
Police officers and workers in protective suits are seen at a checkpoint on a road leading to a farm owned by Hebei Dawu Group where African swine fever was detected, in Xushui district of Baoding, Hebei province, China February 26, 2019. Picture taken February 26, 2019. REUTERS/Hallie Gu
March 20, 2019
By Dominique Patton
BAODING, China (Reuters) – When pigs on the Xinda Husbandry Co. Ltd breeding farm in northern China began dying in growing numbers in early January, it looked increasingly likely that the farm had been struck by the much feared African swine fever, an incurable disease that has spread rapidly across the country since last year.
But after taking samples from some pigs, local officials in the Xushui district of Baoding city, about an hour’s drive from Beijing, said their tests came back negative, said Sun Dawu, chairman of Hebei Dawu Agriculture Group, the farm owner.
As hundreds of pigs began dying daily on the 20,000-head farm, the company obtained a test kit that showed some positive results for the virus. But after further lobbying by Xinda, officials just offered the company subsidies for farm buildings and other investments, said Sun.
Sun’s account of events and pictures taken by farm staff of dead pigs lying in rows and a pile outside the farm could not be independently verified.
Xushui district said in a faxed response to Reuters on Tuesday that it was opening an investigation into the case, adding that it had found some “discrepancies” with the reported version of events.
“If there is illegal behavior, relevant departments will handle it according to the law,” added the statement from the local government’s investigative committee.
Farmers and other industry insiders told Reuters that China’s African swine fever epidemic is far more extensive than official reports suggest, making the disease harder to contain, potentially causing pork shortages and increasing the likelihood that it will spread beyond China’s borders.
“Our full expectation is that the number of cases is under-reported,” said Paul Sundberg, executive director at the Swine Health Information Center in Ames, Iowa, which is funded by American pork producers.
“And if there’s so much of that virus in the environment in China, then we are at increased risk of importing it.”
China does not permit the commercial sale of African swine fever test kits, though many are now available. Official confirmation must come from a state-approved laboratory.
“Public confirmation of disease is the government’s job,” Sun told Reuters at his company headquarters in Xushui in late February.
Frustrated by the lack of action and mounting losses from the disease, Sun eventually published details of the suspected outbreak on China’s Twitter-like platform Weibo on Feb. 22.
Two days later, it became the first African swine fever case in Hebei province, one of the north’s top pig producing regions, to be reported by China’s Ministry of Agriculture and Rural Affairs, about seven weeks after the company says it had alerted local authorities.
By then, more than 15,000 pigs on the Xinda farm had already died, said Sun, and the company even sold on thousands of pigs – potentially spreading the disease further.
Sun said officials did not explain why their first test had been negative, though he suggested it may have been because they took samples from live pigs on the farm and did not test the dead ones.
China’s Ministry of Agriculture and Rural Affairs did not reply to a faxed request for comment on the case.
The agriculture ministry has warned against covering up outbreaks of the disease, and in January highlighted two large farms that had tried to conceal outbreaks.
UNCONFIRMED OUTBREAKS
Detailed accounts of unconfirmed outbreaks shared with Reuters by two other farm company managers suggest Sun’s experience is not unique.
In one case in northern China last year, local officials declined to even carry out a test. In another case in Shandong province, official test results came back negative, despite clinical symptoms that strongly pointed to African swine fever and a positive test result obtained by the company itself.
Neither manager was willing to be named because of the sensitivity of the issue.
Once an outbreak of African swine fever (ASF) is confirmed, all pigs on the farm, as well as any within a 3-km (1.8-mile) radius, must be culled and disposed of, according to Chinese law, and farmers should be paid 1,200 yuan ($180) per pig culled.
For some cash-strapped county governments, avoiding compensation payments could be an incentive not to report disease, said a senior official with a major pig producer.
When the disease hit one of the company’s 6,000-head sow farms in the northeast in November, local authorities did nothing, the official said.
“It was never tested by the government. We couldn’t do the test because we didn’t have the capability. But there’s no question it was ASF, based on the symptoms and lesions,” he told Reuters, declining to be identified because of company policy.
A county official in northeastern Liaoning province told Reuters in January that the local government had poured so much money and resources into preventing and controlling African swine fever that it risked bankrupting the county.
But wealthy Shandong province, northern China’s biggest producer of hogs, has only confirmed one case of the disease, on Feb. 20.
Insiders at one company said four of its farms in the province had suffered swine fever infections, however, suggesting more unconfirmed outbreaks may have occurred.
After the company’s first outbreak in early January the local government tested and the results came back negative, said an executive, who declined to be identified because of the sensitivity of the issue.
Shandong province’s animal husbandry bureau did not respond to a fax seeking comment on unreported cases.
‘SPATIAL RANDOMNESS’
There is no cure or vaccine for African swine fever and it kills about 90 percent of infected pigs.
Analysts forecast pig production in China, which eats about half of the world’s pork, will fall more than during the 2006 ‘blue ear’ epidemic, one of the worst disease outbreaks in recent years, with some expecting a decline of around 30 percent in 2019.
That would send meat prices soaring and trigger huge demand for imports.
The agriculture ministry said last week the pig herd in February had dropped 16.6 percent year-on-year, and sow stocks were down more than 19 percent.
China also has a patchy record of reporting disease. Details of the blue ear outbreak, which infected more than 2 million hogs, did not emerge until months after the damage had already been done, and the number of pigs that died is still disputed.
Like blue ear, African swine fever does not harm people. But it is classified a reportable disease by the Paris-based World Organization for Animal Health (OIE), a global body that promotes transparency, and member country China is obliged to report each outbreak.
“You need to move faster than the virus, it’s a very simple equation of how to control disease,” said Trevor Drew, director of the Australian Animal Health Laboratory at the national research agency, the Commonwealth Scientific and Industrial Research Organization. “If you don’t know where the virus is, you can’t stop it.”
Since August 2018, Beijing has reported 112 outbreaks in 28 provinces and regions. The increase has slowed considerably in 2019 and the agriculture ministry said earlier this month the situation was “gradually improving”.
But some suspect the disease is worse than the official data suggest.
“I am very much hoping that I am wrong, but if I consider the epidemiological characteristics of this virus disease, I would have to be extremely skeptical,” said Dirk Pfeiffer, a professor of veterinary epidemiology at the City University of Hong Kong.
He pointed to the “spatial randomness” of the reported outbreaks, unusual for an infectious disease, which normally develops in clusters.
The high rate of detection of the virus in food products carried from China to Japan, South Korea, Taiwan and Australia, as well as domestically, also indicated a much higher presence of the virus in Chinese pigs than reported, said Pfeiffer and others.
LARGE FARMS, LARGE LOSSES
With extremely high density of pigs, raised largely on low-biosecurity farms, tackling disease is widely recognized as a major challenge for China.
But the disease has hit both small farms and large producers, say industry insiders, despite better hygiene and training at factory farms.
“The large producers have not been spared,” said a manager with a company that supplies several of China’s top pig producers. “Everyone is trying really hard on biosecurity, but they’re still getting outbreaks, and they’re frustrated and losing hope.”
He said he knew of eight large breeding farms that had experienced outbreaks, including two on very large, 10,000-head sow farms. None were officially reported.
He declined to be named or to reveal the names of the producers because of client confidentiality.
Beijing has not officially reported any swine fever on the farms of large listed producers, whose shares are trading at record levels as investors bet the big producers will benefit from tighter supplies.
Qin Yinglin, chairman of China’s No.2 producer, Muyuan Foods Co Ltd, which raised 11 million pigs for slaughter last year, said most large companies were likely to be infected.
“If you checked carefully, testing one-by-one, then for sure everyone has it,” he told Reuters in an interview. “This is a high probability event.”
He said it was “not yet known” if his firm had been hit.
(For a graphic on ‘African swine fever in China’ click https://tmsnrt.rs/2QMhmzL)
(Reporting by Dominique Patton and Beijing Newsroom; Editing by Tony Munroe and Alex Richardson)
Source: OANN
FILE PHOTO: The Nissan logo is seen at Nissan car plant in Sunderland, Britain February 4, 2019. REUTERS/Phil Noble
March 20, 2019
BEIJING (Reuters) – Nissan Motor’s China joint venture with Dongfeng has not made any changes to its mid-term China sales plan, a company spokeswoman told Reuters on Wednesday, responding to a report that it has cut its sales target.
“Dongfeng Motor Company Limited has not changed its mid-term China plan. We will study whether to change the plan based on the future market situation” the spokeswoman said.
Dongfeng Motor Company Limited is the joint venture between Nissan and Dongfeng in China.
Bloomberg reported earlier on Wednesday that the JV cut its 2022 China car sales target by about 8 percent, citing unnamed sources.
Reuters reported last year the Japanese carmaker plans to invest 60 billion yuan ($9.5 billion) in China over the next five years with its joint-venture partner as it seeks to become a top three automaker in the world’s biggest market.
(Reporting by Yilei Sun and Brenda Goh; Editing by Kim Coghill)
Source: OANN
Tencent Music Entertainment company is seen officially listed on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 12, 2018. REUTERS/Bryan R Smith
March 19, 2019
(Reuters) – China-based music streaming company Tencent Music Entertainment Group on Tuesday posted an in-line quarterly adjusted profit, in its first earnings report since going public.
The company’s shares, which have gained about 43 percent since their market debut in December, fell 6.3 percent to $17.36 in extended trading.
Tencent Music, controlled by Chinese tech giant Tencent Holdings Ltd, said quarterly revenue jumped 50.5 percent to 5.4 billion yuan ($804.7 million), beating analysts’ average estimate of 5.29 billion yuan.
The company reported a net loss of 875 million yuan for the fourth quarter due to a one-off share-based accounting charge.
Excluding items, the company earned 0.57 yuan per American depositary share, in line with analysts’ average estimate, according to IBES data from Refinitiv.
Tencent Music, in which its Swedish competitor Spotify Technology SA owns a stake, said full-year profit was 1.83 billion yuan.
A combination of music and social features such as online karaoke and livestreaming, which are popular in China, has made Tencent Music more profitable than international peers.
(Reporting by Munsif Vengattil in Bengaluru and Sijia Jiang in Hong Kong; Editing by Shailesh Kuber and Sriraj Kalluvila)
Source: OANN
FILE PHOTO: People walk past a Xiaomi store in Shenyang, Liaoning province, China June 12, 2018. REUTERS/Stringer
March 19, 2019
SHANGHAI (Reuters) – Chinese smartphone maker Xiaomi Corp said on Tuesday its fourth-quarter net profit more than tripled to 1.85 billion yuan ($275.59 million), on stronger revenue.
That profit exceeded the 1.7 billion yuan average estimate of 10 analysts, according to Refinitiv data.
Revenue for the period increased 27 percent to 44.4 billion yuan, lower than the 47.4 billion yuan average estimate of 13 analysts, according to Refinitiv data.
For the full 2018 calendar year, Xiaomi brought in revenue of 174.9 billion yuan and made a net profit of 8.6 billion yuan.
This marks the third set of financial results for the company since its IPO in Hong Kong. Xiaomi shares have rallied nearly 30 percent since early January, though they remain well below their July listing price.
(Reporting by Josh Horwitz; Editing by Muralikumar Anantharaman)
Source: OANN
FILE PHOTO: The logo of Germany’s biggest retailer Metro AG is pictured at a Metro cash and carry in Berlin in this June 10, 2009 file photo. REUTERS/Fabrizio Bensch/Files
March 19, 2019
By Kane Wu and Julie Zhu
HONG KONG (Reuters) – German wholesaler Metro AG has kicked off the sale of its China operations by calling for bids, in a deal that would value the business at between $1.5 billion and $2 billion, two people with direct knowledge of the deal said.
Metro, which owns 95 stores in China and real estate assets in major cities such as Beijing and Shanghai, is planning to offload a majority stake in its China business, said the people.
The sale move is part of a global reorganization of the wholesaler and comes as China’s wholesale and retail sectors are experiencing disruption from e-commerce players.
Metro’s China business could yet be valued at up to $3 billion, said two separate sources with direct knowledge of the matter.
Potential bidders include electronics retailer Suning Holdings Group, supermarket chain operators Wumart Stores Inc and Yonghui Superstores, according to three of the people.
Private equity firms such as Hillhouse Capital Group and Bain Capital are also studying a potential deal, they added.
Property makes up the bulk of the value in Metro’s China business, the people said, cautioning, however, that there is a large gap between price expectations among buyers and the seller.
A Metro spokeswoman in Germany said the company is in talks with potential partners concerning the further development of its China business but declined to comment on details of its exchanges with potential partners or the sale process.
Bain and Suning declined to comment. Yonghui and Hillhouse did not immediately respond to requests for comment. Calls to Wumart went unanswered.
First-round, non-binding bids are due in the second week of April, said two of the people. Citigroup and JPMorgan are advising Metro, the people said. The banks declined to comment.
All the sources declined to be named as the deal talks are not public.
E-commerce giant Alibaba Group Holdings has also been in talks with Metro about taking a stake in the China business, Reuters previously reported.
Tech giants such as Alibaba and Tencent have been investing in supermarkets and shopping malls to help develop their online-to-offline strategy.
Alibaba in 2015 poured $4.6 billion into Suning’s listed entity – Suning.Com Co Ltd and holds a 19.99 percent stake, its biggest step towards integrating online and store-based shopping at the time.
Tencent, which has invested 4.2 billion yuan in a 5 percent stake of Yonghui, is also forming a partnership in China with Europe’ s largest retailer Carrefour.
The German wholesaler opened its first China store in Shanghai in 1996 and now has over 11,000 employees in the country. Its sales in the country reached 2.7 billion euros ($3 billion) in the financial year of 2017-2018, according to its website.
Once a sprawling retail conglomerate, Metro has been restructuring in recent years to focus on its core cash-and-carry business, selling Kaufhof department stores and then splitting from consumer electronics group Ceconomy.
Metro is also trying to offload its loss-making Real hypermarkets chain.
(Reporting by Kane Wu, Julie Zhu and Sumeet Chatterjee in Hong Kong; Additional reporting by Matthias Inverardi in DUESSELDORF; Editing by Jennifer Hughes and Muralikumar Anantharaman)
Source: OANN
FILE PHOTO: Illustration photo of the Dianrong logo on the company’s website April 13, 2017. REUTERS/Thomas White/Illustration
March 18, 2019
By Shu Zhang
SINGAPORE (Reuters) – Dianrong, one of China’s biggest peer-to-peer (P2P) lenders which is laying off staff and shutting stores, blamed the government for its troubles saying the absence of clear-cut policies was proving to be a heavy burden.
“Some people wonder why Dianrong’s growth has slowed in the past two years. It was not because we did not want to or could not grow. It was because we were told not to grow,” Guo Yuhang, Dianrong’s co-founder, said in an internal memo seen by Reuters.
“While the industry has expanded quickly to a large and complex scale over the years, regulatory directions keep changing and different regions have different rules,” Guo said, in rare criticism of policy-making in China.
Dianrong was shutting down 60 of its 90 offline stores and laying off an estimated 2,000 employees, Reuters reported earlier this month.
The Shanghai-based company was co-founded by Soul Htite, who was also behind U.S. online lender LendingClub Corp, and is backed by Singapore sovereign fund GIC Pte Ltd and Standard Chartered Private Equity.
Beijing’s multi-year crackdown on risky lending practices and excessive leverage have caused a wave of P2P collapses and triggered protests by angry investors who lost their savings.
“Grey rhino” risks, or highly obvious yet ignored threats, are on the rise, including risks from internet finance such as P2P lenders, a central bank official wrote in an official publication on Monday.
The industry could face a fresh wave of regulatory scrutiny after several fintech companies were slammed by state-run CCTV during the country’s annual consumer rights day TV show on Friday.
Dianrong, which expanded rapidly in 2017-2018 in a loose regulatory environment, had to cut back in the second half of last year, Guo said in the memo.
He added that many highly promising businesses Dianrong developed as part of its aggressive expansion have turned into “heavy burdens with unbearable high costs” for the company as regulations unexpectedly tightened.
The company’s outstanding transaction volume has shrunk to 10 billion yuan ($1.49 billion) from its peak of 14 billion yuan, Guo said. Some employees were not paid for two months, he said.
China’s central bank has yet to respond to a faxed request seeking comment.
The central bank said earlier this month that it would gradually set up a system of rules to regulate fintech and cultivate conditions conducive to the development of the industry.
“We hope regulators can give the industry a clear, and definite timetable, and give guidance and a ray of hope for companies that stick to compliance,” Guo said in the memo.
“The situation of the industry shows that the one-size-fits-all rule will definitely curb innovative businesses.”
Guo did not comment further when contacted by Reuters.
(Reporting by Shu Zhang; Writing by Samuel Shen and Ryan Woo; Editing by Muralikumar Anantharaman)
Source: OANN
MAGA One Radio