Category News of China

Pudong Development Bank earns $6.7b in 2013

Shanghai Pudong Development Bank’s net profit jumped 19.8 percent year on year to nearly 41 billion yuan ($6.7 billion) in 2013, according to a filing to the Shanghai Stock Exchange late Friday.

The financial institution is the first listed commercial bank in China to disclose its 2013 results, Shanghai Securities News reported on Saturday.

Earnings per share stood at 2.195 yuan, up 19.8 percent from a year ago, according to the statement. Operating revenue stood at just over 100 billion yuan, up 20.61 percent year on year.

The lender’s total assets reached 3.68 trillion yuan, up 17 percent from a year earlier. Its total liabilities stood at 3.47 trillion yuan, up 17.1 percent from a year ago.

The lender’s non-performing loans ratio was at 0.74 percent, 0.16 percentage points higher than that at the end of 2012.

Its outstanding deposits totaled 2.42 trillion yuan by the end of 2013, up 13.41 percent from a year earlier. Outstanding loans reached 1.77 trillion yuan, up 14.37 percent from the end of 2012.

Tsingtao Brewery accelerates expansion

Tsingtao Brewery acquired a local beer producer in North China’s Hebei province, and launched a joint venture with another in Shijiazhuang, wrapping up a storm of expansion in 2013.

In a press release, Tsingtao said it would acquire Xinzhonglou, a 64-year-old brewery in Zhangjiakou on Dec 29.

Huang Kexing, president of Tsingtao, said the company will integrate and reengineer Xinzhonglou’s branding and distribution network. In addition Tsingtao will work with Xinzhonglou to invest 400 million yuan ($65.57 million) in a new brewery with an annual production capacity of 600,000 kiloliters.

Earlier, on Dec 16, Tsingtao entered a joint venture with Jiahe Brewery in Shijiazhuang to integrate Jiahe’s marketing network and seek mutual success. Tsingtao and Jiahe will each have a 50 percent interest in the joint venture.

The two projects will enable Tsingtao to enhance its competitiveness in North China by connecting its network across the northern and southern parts of Hebei province and increasing its exposure in neighboring Shanxi province and the Inner Mongolia autonomous region.

Huang said the company now puts more focus on the market network and is striving to ensure continued quality growth and innovation.

“Only with market expansion can we build more factories to expand production capacity,” he said. “As we uphold the principle of rational investment and value investment, the company’s strategic expansion has been yielding delightful market performance.”

In March, Tsingtao broke ground for a new brewery with a capacity of 600,000 kiloliters in Luoyang, in Central China’s Henan province. It began operations in December.

A 400,000 kiloliter brewery started in August in Jiujiang, Jiangxi province. Three relocation projects in Suqian, Wuwei, and Harbin were also completed before the end of 2013. Its breweries in Qingdao and Jinan have increased production capacity to meet strong market growth.

China’s beer industry slowed in the past two years. According to the National Bureau of Statistics, China produced 24.98 million kiloliters of beer in the first half of 2013, a 5.85 percent increase from the same period last year. The growth from January to June 2012 was 4.85 percent while the same period in 2011 saw growth in beer production of 11.4 percent.

Despite the countrywide slowdown, Tsingtao’s yield hit 7.53 million kiloliters from January to September 2013, up 11 percent from the same period in 2012. Net profits jumped 28.7 percent in the first three quarters from last year.

Tsingtao’s stock price at A shares and H shares also hit record highs, according to the company’s Q3 financial report for 2013.

Alibaba’s ‘Leftover Treasure’ hits 43 mln users

Yu’ebao (Leftover Treasure). an Alibaba personal finance product, had 43.03 million users with aggregate deposits of 185.3 billion yuan (30.4 billion U.S. dollars) at the end of 2013.

Yu’ebao is an online fund established by Alipay, China’s largest third-party payment platform and subsidiary of Alibaba, part of China’s biggest online shopping mall, togetheer with the private Tianhong Fund.

“Investments” in the fund have brought 1.79 billion yuan in profits to users since its launch in June 13 this year, according Alipay on Wednesday.

Yu’erbao allows Alipay customers to invest any balance in thier accounts with the Tianhong Fund and has already become the largest fund of its kind in China.

Its users come from all over China: more than 2,000 counties and cities in 31 provincial-level administrative regions with an average deposit of 4,307 yuan per user.

Philips opens lighting center in Chengdu

Philips has officially opened its center for the development and production of advanced lighting technologies in Chengdu, providing it with a second regional base of operations in China.

The Philips LED Lighting Demonstration Park was opened in the Chengdu Hi-Tech Development Zone in the Sichuan provincial capital city, with the formal opening ceremony taking place on Dec 20.

Covering an area of about 40,000 square meters and with an investment of about $34 million, the park includes a manufacturing center for LED lights and a lighting application center.

The manufacturing center will mostly produce professional outdoor and indoor lights and be focused on providing local and global customers with highly customized lighting solutions.

The lighting application center covers 7,000 square meters and boasts Philips’ most advanced lighting technologies and solutions.

It is modeled on “a mini smart city”, exhibiting the effects of lighting through real-life scenarios, both outdoor and indoor. It recreates urban environments such as the home, office, hotel, supermarket, clothing store, street and urban landscape.

All lighting systems in the center can be smartly controlled and managed with an advanced lighting control system, with the aim of simultaneously achieving optimal visual effects and energy efficiency.

“The park reflects our commitment to Chengdu as the second regional headquarters of Philips in China. It is also a part of the execution of our ‘home market’ strategy — establishing China as one of the key innovation and operation hubs for Philips’ global value creation,” said Patrick Kung, CEO of Philips Greater China, at the opening ceremony.

In June 2011, Philips signed a memorandum of understanding for strategic cooperation with the Chengdu Hi-Tech Development Zone management committee, agreeing the establishment of the company’s second regional headquarters in Chengdu.

The company’s aim was partly to extend its operations further into central and western China, part of a plan to implement a localization strategy in China, including the deployment of talent and the creation of marketing channels.

In 2011, when the deal was signed, Yuan Zongyong, deputy director of the Chengdu High-Tech Development Zone’s management committee, praised the decision to establish an operations center in Chengdu.

“Against the backdrop of China’s Go-West Strategy and global industrial restructuring, the Chengdu High-Tech Development Zone is attracting increasingly more internationally famous companies with its advantage in technology, skilled workers, its regional position, market, transportation and costs,” Yuan said.

Philips, which has its international headquarters in the Netherlands, opened its first regional headquarters in China in Hong Kong, but later moved operations to Shanghai.

Shenzhen to Hike Minimum Wage Levels

Shenzhen human resource officials announced last week that the city will raise its monthly minimum wage level by 13 percent to RMB1,808 from February 1, 2014, while its hourly minimum wage will be adjusted from RMB14.5 to RMB16.5.
The new minimum wage standards are expected to benefit about 936,000 workers in Shenzhen, according to the city’s human resources and social security bureau.
In China, local governments are required to raise their minimum wage levels at least once every two years as a matter of State policy. Shenzhen last updated its minimum wage levels in March 2013, raising the monthly minimum pay by RMB100 to RMB1,600.
In 2013, twenty-seven regions in China have adjusted their minimum wage levels including: Shenzhen, Shanghai, Guangdong, Xinjiang, Tianjin, Jiangsu, Zhejiang, Beijing, Shandong, Fujian, Jilin, Liaoning, Hubei, Ningxia, Shanxi, Yunan, Anhui, Henan, Jiangxi, Guangxi, Gansu, Sichuan, Shaanxi and Guizhou. Detailed information can be found in the chart below.

After the latest round of adjustments come into effect, Shenzhen will have the highest minimum wage in the country at RMB1,808, followed by Shanghai at RMB1,620. Shenzhen will also have the nation’s highest hourly wage rate at RMB16.5, followed by Beijing and Xinjiang at RMB 15.2.
The country’s Employment Promotion Plan provides that the minimum wage levels in China should grow by at least 13 percent annually through 2015, and the minimum wage levels in most areas should not be lower than 40 percent of the average local salary. Under such policies, minimum wage levels across the country have registered an average 12.6 percent annual growth rate from 2008-2012.
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EMS withdraws IPO application

China Postal Express and Logistics Co Ltd, China’s largest integrated express and logistics service provider by geographic coverage, also known as EMS, announced on Friday that it has withdrawn its IPO application.

To enhance competitiveness facing dramatic changes in the express delivery market, the firm has decided to fine-tune its original parent and subsidiaries structure to a more effective headquarters and branches management model, the firm said on Friday in a statement. The statement also said that the restructure might affect the firm’s IPO process.

Founded in June 2010, EMS had filed an IPO application August 2011 and gotten approval from the China Securities Regulatory Commission in May 2012. But it did not get listed upon approval due to a sluggish equity market in 2012. EMS might try to enter the capital market after the restructuring is done, it said.

Pilot e-commerce platform launched

The country’s first pilot cross-border e-commerce platform was launched in the China Shanghai (Pilot) Free Trade Zone (FTZ) Saturday, a move that will make it more convenient for consu-mers from the Chinese mainland to purchase products overseas.

Five types of goods – bags, fashion accessories, skin care and cosmetic products, food and beverages, and maternal and children’s products – are already on sale on the online platform, which is called kuajingtong.com.

The operator of the platform, Shanghai Kuajingtong International Co, has already signed agreements with companies from the payment, logistics and retail sectors, and is negotia-ting -coo-peration deals with around 30 -global e-commerce websites including eBay and Amazon, Shanghai Morning Post reported Sunday.

Since the demand for products imported from overseas by Chinese consumers has been growing fast in recent years, the pilot cross-border e-commerce website “will have a bright future if its operator can offer pro-ducts with high quality and reasonable prices, as well as convenient services,” Zhang Yi, CEO of Shenzhen-based Internet research firm iiMedia Research, told the Global Times Sunday.

Currently in China, consumers have limited ways to buy products overseas via the Internet. Some of them buy products directly from eBay and Amazon and then pay a third-party express delivery enterprise for transportation of the goods, a method that can sometimes allow them to evade customs duties.

Other consumers purchase pro-ducts overseas via individual vendors on e-commerce platforms such as taobao.com. But many consumers have complained that the products they bought from the individual vendors are fake.

“Kuajingtong.com will have many business opportunities as the demand is huge,” Zhang said.

But Zhang also noted that it will take at least one to two years for kuajingtong.com to grab a large market share.

Chinese consumers said they will hold a wait-and-see attitude toward the new platform.

“The types of products on kuajingtong.com are limited so far. I will wait until there are more choices,” Xia Tian, a 30-year-old white-collar worker in Beijing who has a one-year-old daughter, told the Global Times Sunday.

Xia has bought maternal and -children’s products via websites such as amazon.com and paid third-party express delivery companies for transportation. “This type of purchasing model is already very common among young mothers,” Xia noted.

“I still prefer to buy goods via vendors on taobao.com, from whom I have purchased products for two years,” Wang Yujing, a 26-year-old white-collar worker in Beijing, told the Global Times Sunday.

Wang said the luxury bags and clothes she buys are 40 to 50 percent cheaper than those sold in domestic shopping malls, mainly because they are tax-free.

Consumers will have to pay tax if they buy products via kuajingtong.com.

But Yan Jing, executive vice-president of Shanghai Kuajingtong International Co, was quoted by Xinhua News Agency as saying Sunday that “the prices for international brands sold at kuajingtong.com will still be 30 percent lower compared with those sold in domestic offline stores.”

“Although the consumers have to pay duties via kuajingtong.com, their purchasing activities will be legal,” Yan noted.

A recent trial involving a former air stewardess who smuggled in products and re-sold them to Chinese consumers via taobao.com has raised discussions about the legality of cross-border purchasing.

The Beijing No.2 Intermediate People’s Court found the former air stewardess guilty last month and sentenced her to three years in jail for smuggling.

Shanghai starts simulated trade in equity options

The Shanghai Stock Exchange has started simulated trading in equity options, part of a drive by regulators to expand investors’ risk-hedging options.

Simulated trading began on Thursday morning, the SSE confirmed to China Daily, and more than 60 securities firms took part.

The shares of Ping An Insurance Group Co of China Ltd, SAIC Motor Corp Ltd, the China 50 ETF and the Shanghai SSE180 ETF were used in the exercise.

The exchange-traded funds track the top 50 and top 180 yuan-denominated stocks on the SSE.

In early December, SSE Chairman Gui Minjie told a forum that preparations “are almost complete” for launching options on individual stocks.

Single-stock options are essentially equity derivatives, giving buyers the right – but not the obligation – to buy or sell a stock at a fixed price within a certain period or on a set date, said Tony Sun, a strategist with Shanghai Tebon Fund.

The options “will allow investors to hedge their positions more effectively. We have limited financial instruments now, but as reform continues and China’s financial markets become more global, innovation is a necessity,” said Sun.

China introduced equity index futures in 2008, and those instruments remain the only equity derivatives in use. The regulators expanded a pilot program in August 2012 to boost margin trading.

In February, a new pilot was launched to enable securities lending and short-selling of blue chip stocks.

“Individual stock options can be seen as a form of insurance that reduces trading risks. However, options trading prices can be very volatile. Investors still have to be aware of the risks caused by leveraging and volatility,” said Xiong Jinqiu, an independent financial commentator.

The China Securities Journal reported earlier this month that the SSE may officially introduce formal equity options trading in April. Some analysts believe the move is meant to stimulate investment in China’s blue chips, which have been trading at depressed valuations.

The average price-earnings ratio for the SSE, where most of China’s blue chip companies are listed, stands at only 11 times 2012 earnings. On the Shenzhen exchange, which is dominated by small-cap companies, the average ratio is 28.

Change for WMPs

Another development involving the liberalization of the financial markets took place on Wednesday, this one involving wealth management products.

WMPs will be allowed to invest directly in fixed-income products on domestic securities markets, the China Securities Depository and Clearing Corp announced.

The notice said that WMPs will be allowed to open accounts at the Shanghai or Shenzhen stock exchanges. Investment will be confined to fixed-income products, including exchange bonds, credit-backed securities and preferred shares. The latter are often classified as fixed-income products because of their fixed dividend.

Analysts said that the move on WMPs is intended to provide a bridge “linking” interbank market liquidity with the nation’s stock exchanges, even though WMPs can’t make direct stock investments at this stage.

The outstanding balance of WMPs stood at 9.92 trillion yuan ($1.63 trillion) as of Sept 30, the China Banking Association said earlier this month.

The figure has more than doubled since the end of 2011, and it’s up from 7.1 trillion yuan at the end of 2012.

ZHAOPIN.COM BEST EMPLOYER SURVEY: CHINESE COLLEGE GRADUATES FIND BEIJING, SHANGHAI AND GUANGZHOU LESS APPEALING THAN BEFORE

Zhaopin.com Announces China’s Top 10 Most Popular Employers for Graduates. (PRNewsFoto/Zhaopin.com)

BEIJING, Dec. 13, 2013 /Emag.co.uk/ — The Zhaopin.com China Best Employer Award 2013 (best.zhaopin.com), co-organized by Zhaopin.com, China’s largest recruitment site, and Peking University’s Corporate Social Responsibility and Employer Brand Communication Research Center, successfully came to a conclusion in Sanya, Hainan province’s capital, also known as China’s Deer City. Zhaopin.com CEO Evan Guo said in his speech at this “Academy Awards” of China’s human resource industry, that he believes that 2014, with the number of graduates spilling out of China’s colleges and universities during the year expected to reach 7.27 million, will be an even more difficult year for job seekers than 2013, a year that had already been considered the most difficult year for employment so far.

(Photo: During 2013, Zhaopin.com joined hands with CCTV in organizing a public-benefit event, Graduates Seeking Employment 2013, with the aim of building China’s largest public platform for the job prospects of university graduates and with the goal of improving social awareness of the plight of college students, in the hope of helping more graduates find suitable positions. “Although the event was purely for the public good, during it we were rewarded for our faith and accomplished the lofty mission of helping thousands of graduates step into society,” Guo said. In the summer of 2013, the “Graduates Seeking Employment” platform ran announcements for 117,389 jobs seeking Chinese college graduates, and one in 100 graduates on average found a job via the platform. In 2014, Zhaopin.com looks forward to working with more companies to offer jobs in an even more difficult employment environment, and expects China Best Employers to play a leading role in the effort.

In China, college students are known as the “favored.” They not only shoulder the hope of the nation, but also are of extraordinary importance to the country’s human resources sector. Today, as China’s HR market shifts to a seller’s market and the population ages, the group of college graduates mainly consisting of the post-90s becomes the vital workforce. Compared to the post-70s and the post-80s, the post-90s generation brings a different perspective to the best employers, and these perspectives will provide important reference points for leveraging the experience of these employers in building leading brands. These factors were the key data points in determining the winner of Zhaopin.com’s China Best Employer Award 2013.

The Zhaopin.com “China Best Employer” report showed that Chinese undergraduates now no longer consider the salary and benefits package as one of the primary factors when looking at all the data points in a prospective employer’s profile. The survey data revealed that “Organizational Management” with 20.6 percent of votes overtook “Salary and Benefits Package” for the first time as the top criterion. This demonstrated that under the growing pressure from the increasingly competitive job market, the undergraduates considered self-improvement as a priority rather than exclusively focusing on material conditions, in a move to be more competitive in the future job market. These findings sound a warning to any employer who is still consider offering competitive salary and benefits packages as the solution to attract top talent rather than improving the quality of their organization.

The report also signaled that there were significant changes in what different types of companies considered their priorities, with one of the obvious trends being that young undergraduates are trying to compete based on their family background. According to the 2013 survey findings, state-owned enterprises (SOEs) are falling in attractiveness, with the number of undergraduates willing to work at an SOE declining by over 8 percent from the 2012 results, although undergraduates are more willing to work in state-owned and foreign-funded companies. Foreign-funded companies are becoming more popular among Chinese undergraduates.

Another interesting finding is that under the growing stress of both life and work, undergraduates now no longer prefer to work exclusively in the most developed cities, including Beijing, Shanghai and Guangzhou. Less than 40 percent of undergraduates surveyed expressed their willingness to work in these three cities, much lower than the percentage in previous Zhaopin.com “China Best Employer” reports. Chinese companies need to pay attention to the high housing prices, long work hours, traffic congestion and air pollution in Beijing, Shanghai and Guangzhou that are forcing more than just undergraduates to want to avoid and get away from these cities.

These findings revealed the obvious changes in criteria that undergraduates apply to the decision making process as they choose what they consider to be the best place to work. The focus on non-material factors among young and sensible undergraduates when considering job opportunities shows the positive trend in the human resources sector across China and in Zhaopin.com’s brand building achievements. Zhaopin.com “2013 Top Employers Gaining Most Attention from Undergraduates” survey is expected to offer more successful brand building cases.

Graduates increasingly willing to work in second and third-tier cities

More undergraduates are willing to leave Beijing, Shanghai and Guangzhou to seek work in second and third-tier cities, says a report by a Chinese employment website, the Nanfang Daily reported.

But demand for labor remained strong in 2013, especially in the financial and real estate industries, according to the “Change, Leading Trend; Mission, Boosting Growth” report released by Zhaopin on Monday.

More college students are willing to leave Beijing, Shanghai and Guangzhou to work in second and third-tier cities, different from 1970s and 1980s trends, the report noted.

About 46 percent of students were willing to go to second and third-tier cities in 2011. The 2013 figure rose to 61 percent. The proportion willing to work in Beijing, Shanghai and Guangzhou was 53.8 percent in 2011, plunging to 38.7 percent in 2013.

Vacancies grew 26 percent in central China, 29 percent in western China and 25 percent in eastern China.

Vacancies in the first 10 months of this year increased 26 percent over the same period last year, according to Zhaopin data, with recruitment rising rapidly in the finance and real estate sector.

The financial industry saw the most growth in vacancies, rising 91 percent from the same period last year. Employment opportunities in real estate grew 53 percent. New manufacturing job positions increased 9 percent. Foreign investment companies saw the weakest growth in recruitment of 3 percent.

Demand for labor and talent on the market was large, summarized Zhaopin chief executive Guo Sheng, but undergraduates often could not find jobs to match their majors. Companies didn’t always need university undergraduates’ skills, but relevant jobs skills.

Companies were more willing to employ workers with experience in society. People born in the 1990s were unwilling to accept a job below expectations, Guo claimed.

“This report for the first time uses the data from the job-hunting Internet, analyzing the relationship between the labor market and macro economy,” Guo said. “The year 2013 is a reform year, but also the biggest year of change in the human resources and labor markets.”