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TOP CHINA BUSINESS NEWS

China still most attractive destination for FDI in 2017

China will continue to be the world's most attractive destination for global investment this year, with new materials, new technologies and the healthcare industries being the new focus, experts said on Tuesday. The reasons behind the trend are the mainland's relatively fast economic growth, structural reforms and policies to further open China up to international markets. That's according to a report released by the China Center for International Economic Exchanges, a government think tank. The growth rate of China's foreign direct investment was expected to reach over 15 percent in 2017, up from 4.1 percent growth in 2016, CCIEE vice-president and former vice-minister of commerce Wei Jianguo told a news conference on Tuesday, at a Beijing economics seminar organized by the center.

China's manufacturing activity expands for 7th month

China's manufacturing sector expanded for the seventh month in a row, adding evidence that the world's second largest economy is stabilizing amid uncertain global outlook. The country's manufacturing purchasing managers' index (PMI) came in at 51.6 percent in February, 0.3 percentage points higher than that recorded in January, according to data released Wednesday by the National Bureau of Statistics (NBS). A reading above 50 indicates expansion, while a reading below 50 reflects contraction. NBS statistician Zhao Qinghe said February's reading remained above 51 percent for five months in a row and pointed to steady expansion of the manufacturing sector. The sub-index for production was 53.7 percent, 0.6 percentage points higher than that recorded in January. The sub-index for new orders was up 0.2 percentage points to 53 percent. Zhao attributed the acceleration of production and new orders to the recovery in market demand and robust production activities. In addition, the sub-index for equipment manufacturing sector expanded to a three-year high of 53.3 percent, 1.7 percentage points higher than the overall manufacturing industry.

China 'seriously concerned' by increasing EU protectionism in steel industry

The European Union (EU) on Tuesday decided to impose definitive anti-dumping duties on imports of heavy steel plates from China, after which China said it is "seriously concerned" by the EU's increasing protectionism in the steel industry. The European Commission, or the EU executive body, said Chinese exports of heavy steel plates will be taxed with anti-dumping duties ranging from 65.1 percent and 73.7 percent. The duties are the same as those imposed provisionally in October and are at the level of the injury margin, based on the lesser duty rule. According to the Commission investigation initiated in February 2016, the dumping margins are between 120 percent and 127 percent and this so-called "unfair competition" is causing "material injury" to the EU producers.

Infineon aims to maintain China growth in 2017

German semiconductor company Infineon Technologies AG said it aims to maintain double-digit growth in China this year, as it benefits in part, from the overseas expansion efforts of China Railway Rolling Stock Corp Ltd, the country's railway vehicle and equipment maker. Infineon, the producer of key semiconductors that help transform high-voltage electricity into power to drive CRRC's high-speed railways, posted a revenue of 1.6 billion euros ($1.69 billion) in the Chinese mainland in its 2016 fiscal year which ended in October, said Su Hua, president of Infineon in China.

E-commerce giant hits out at fakes

E-commerce titan Alibaba Group Holdings Ltd has called for tougher laws, stiffer enforcement, and harsher penalties to crack down on fake products, in the latest attempt to shed its reputation as a haven for selling knockoffs. While identifying 4,495 leads related to counterfeiting last year through its local taskforce, the company said a low conviction rate was hampering the imposition of tougher criminal sanctions against such illegal activity. "Alibaba is the victim of counterfeiting," said Jessie Zheng, Alibaba's chief platform governance officer. "The only way out of this is to impose tougher criminal sanctions on every individual involved in the chain of operation."

Startups race for position in China's new energy market

China's electric car startups are racing to position themselves with a first-mover advantage with the aim of seizing the burgeoning market, which the government hopes will sell 2 million cars a year by 2020. Beijing CHJ Automotive Technology inked a deal with local authorities last week to build its second production facility in Changzhou, Jiangsu province, within six months of its first plant starting operation in the same city. The plant, with an investment of 3 billion yuan ($436.7 million), will start construction in the second quarter. When completed in 2018, it will be capable of producing 100,000 electric and plug-in SUVs a year, according to a statement from the company.

Prices of petrol, diesel increased

Based on presumed higher tax rate, the government on Tuesday increased the prices of petrol and high speed diesel (HSD) by Rs1.71 and Rs1.52 per litre, respectively, with immediate effect for a month. The announcement was made by Finance Minister Ishaq Dar who said that the government had passed on to consumers a partial increase recommended by the Oil and Gas Regulatory Authority (Ogra) and would absorb an additional Rs3 billion by not fully transferring the impact of higher international oil prices.

Matiari-Lahore transmission line: FBR protests at tax relief

The Federal Board of Revenue (FBR) has protested against a waiver of withholding tax (WHT) on dividends allowed last week by the government to a Chinese company for setting up of $1.5 billion Matiari-Lahore Transmission Line Project. Informed sources said another transmission line of the size and length of 878-kilometre Matiari-Lahore line was being envisaged by the power ministry to evacuate future power generation from Thar-based plants and the same tax breaks would need to be extended to that line, too. Informed sources said the Ministry of Water and Power claimed last week at a meeting of the Economic Coordination Committee (ECC) of the Cabinet that a three-member committee comprising secretaries of water and power, finance, and FBR chairman reached a consensus to allow exemption from WHT on dividends to the transmission line project.

SECP to check brokers closely

Securities and Exchange Commission of Pakistan Chairman Zafar Hijazi on Tuesday said that the regulator has advised the Pakistan Stock Exchange (PSX) to initiate ‘market intelligence’ methodology to check brokers overstepping the legal limits. He was addressing a press conference while PSX Chairman Munir Kamal and Managing Director Nadeem Naqvi participated via a video link. The chairman SECP also mentioned concerns expressed by brokers over the counter checking measures. He said three brokers who defaulted recently were warned repeatedly against purchases beyond their capital capacity. Mr Hijazi said that the prime responsibility of the regulator is to secure small investor, bring transparency and ensure growth of the capital market.

Tax exemption for companies investing in SEZs

Local and foreign companies who wish to make investments and set up industries in the Special Economic Zones (SEZs) would be exempted from taxes, Minister of State and Board of Investment (BoI) Chairman Dr Miftah Ismail said on Tuesday. Addressing the business community at the regional office of Federal of Pakistan Chamber of Commerce and Industry, he said the government was also reviewing relaxations given to China under the Pak-China Free Trade Agreement as exports to Beijing are a mere $2 billion against imports of $18bn. He said the BoI has recently conveyed to the federal government that provinces must not charge two taxes from investors. In the upcoming budget, the government will consider reducing number of taxes, he added. Investors who want to set up textile units before June 2020 would be given special concession in taxes, he said.

PPL quarterly profit down 5.91pc

Pakistan Pet¬ro¬leum Limited (PPL) ann¬ounced on Tuesday a consolidated profit-after-tax (PAT) of Rs5.41 billion for the quarter ended Sept 30 2016, down 5.91 per cent from Rs5.75bn year-on-year. Ana¬lysts said the results were above market expectations for the first quarter, largely on account of lower exploration expense than expected. Earnings fared better than expectations on the back of lower field charges, which were down 20pc YoY. PPL had booked higher field expenditures last year owing to increase in seismic acquisition cost in respect of Sadiqabad, Shah Bandar, Bela West, Naushahro Firoz, Khipro East and Ghauri blocks. Lower oil prices during the outgoing quarter (Arab Light Crude down 14pc YoY to US$43 oil barrel) affected PPL’s net sales, which declined by 9pc to Rs18.9bn from Rs20.8bn YoY. PPL’s oil and gas volumes crawled up by 2pc YoY each in the first quarter. Oil reached 13,500 barrels of oil per day while gas volume stood at 850 million cubic feet per day (mmcfd)

Full-day report: Pakistan stocks close flattish in mixed session

The Pakistan Stock Exchange's benchmark 100-share index managed to close Tuesday in the green, recovering from a bout of selling on the back of interest in undervalued stocks. The KSE-100 Index gained 13.5 points to close at 48,534, up 0.03 per cent. 87.7 million shares of indexed companies changed hands in the Tuesday session, with a total worth of nearly Rs7.7 billion. The market had remained range-bound in the early hours of trading. However, as the second half of the trading session picked up, traders resorted to profit-taking, pushing the index to the day's low of 48,147 points. Subsequently, however, the market adopted an upwards trajectory as investors cherry-picked stocks at lower valuations to help the index slightly above yesterday’s close. Overall, 228.6 million shares were traded on the exchange, with a total value of Rs10.7bn. 371 scrips were traded on the exchange, of which 162 gained in value, 201 declined, while 8 remained unchanged. Volumes were led by commercial banks, with engineering, cement, power generation and chemicals rounding off the top five sectors traded. Volumes were led by: • Aisha Steel Mill: 17m shares traded (-0.84pc);
• K-Electric: 14.4m shares traded (-0.31pc);
• Power Cement Ltd: 14.4m shares traded (-4.45pc);
• Sui North Gas: 11.1m shares traded (+4.08pc); and,
• B.O.Punjab: 10m shares traded (+3.18pc)
Commenting on the session, Nabeel Haroon, an analyst at JS Global, said the market saw continuing volatility as volumes stood low.



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