Category News of China

China’s e-commerce sector sees 27% surge in trade

China’s e-commerce market saw strong growth in the first half of this year, according to a report released Tuesday.

China’s e-commerce trading recorded 13.35 trillion yuan ($2.03 trillion) for the first half of 2017, a 27.1 percent increase year-on-year, China Research Center of E-Commerce said in the report.

Business-to-business transactions reached 9.8 trillion yuan, online retail sales were at 3.1 trillion yuan, and e-commerce trading for life services was about 0.45 trillion yuan.

Cross-border e-commerce reached 3.6 trillion yuan in H1, up 30.7 percent year-on-year, accounting for 26.97 percent of China’s total e-commerce trade volume, with 2.75 trillion yuan for export and 862.4 billion yuan for import.

With policy support and a relatively complete system, China’s e-commerce maintained rapid growth and as China’s economy transforms to the “consumer upgrade” era, e-commerce has created many new consumption demands, said Zhang Zhouping, senior analyst with the research center.

This has triggered a new investment boom, created more job opportunities, increased income and provided the space for mass entrepreneurship and innovation in the country, Zhang added.

As of the end of June, more than 3.1 million people worked directly in e-commerce and more than 23 million indirectly, the report revealed.

Revenue for China’s express delivery business was 257.29 billion yuan in the first half of 2017 and is expected to reach 600 billion yuan with a projected growth rate of 49.8 percent.

Nine listed companies plan offices in Xiongan

Aerial photo taken on April 1, 2017 shows Anxin county, North China’s Hebei province.

Since April 5, nine listed companies have announced plans to set up offices in Xiongan, betting on business opportunities from the construction of the Xiongan New Area, Ifeng Finance reported.

Kaidi Ecological Environmental Technology Co Ltd said in a statement to the Shenzhen Stock Exchange late Thursday that the company plans to establish an office in the new area to promote the environment protection and ecological reconstruction project of Baiyangdian?a freshwater lake in Xiongan.

Eight other listed companies that announced plans to set up offices in Xiongan are Yueyang Forest & Paper Co Ltd, CRRC Corp Ltd, Shenzhen Das Intellitech Co Ltd, Hubei Huitian New Materials Co Ltd, Xuanhua Construction Machinery Co Ltd, Wuxi Taiji Industry Co Ltd, Lingyuan Iron & Steel Co Ltd and Juli Sling Co Ltd.

China announced the plan in April to create Xiongan New Area — about 100 kilometers southwest of Beijing — to promote the coordinated development of the Beijing-Tianjin-Hebei region.

Xiongan-themed stocks have rebounded recently as the planning and design of the Xiongan New Area is expected to be completed by the end of September. Stocks related to infrastructure, finance, technological innovation and real estate all showed upward momentum.

Earlier, some investment institutions also turned more bullish on shares of companies involved in environment protection, garden and architectural decoration.

Zhang Chengyuan, a senior vice-president at China Asset Management, said the demand market of raw materials including steel, cement and glass has been reflected in the construction of the Xiongan New Area.

Zhang added that there will be more investment opportunities in the scientific and technological innovation industry during the construction of the new area.

Advanced city planning, transportation, municipal services and environment protection for new urbanization will not only benefit the Xiongan New Area, but these technologies and services can also be promoted in the whole country, said Ma Tao, chief strategist of BOCOM Schroders.

Guangdong plans international expo to boost B&R cooperation

An international expo featuring trade and economic cooperation between countries and regions related to the 21st Century Maritime Silk Road will be held in late September in Guangdong province, according to the organizers.

More than 1,134 companies from 56 nations and regions will participate in the Guangdong 21st Century Maritime Silk Road International Expo, which is scheduled on September 21-24 in Dongguan, a trade and manufacturing hub in the Pearl River Delta region, according to the organizers.

The expo will highlight investment and economic cooperative opportunities along the countries and regions, as well as their cultural, construction, engineering, food and agricultural products.

Former high-ranking officials from 13 nations related to the 21st Century Maritime Silk Road, as well as 22 international chamber officials have confirmed their participation in the event.

China plans wider foreign investment

China plans to open the domestic market wider to foreign investment in the financial and new energy vehicles sectors in coming months, said a spokeswoman with the nation’s economic regulator Friday.

Meng Wei of the National Development and Reform Commission, said China will open the world’s second-largest economy wider to foreign investors, stepping up efforts to attract foreign funds.

While foreign direct investment dropped a little in the first eight months compared to the same period last year, China retains strong competitiveness compared to other countries, she said.

Too few online security talents

Cybersecurity talents are in short supply in China, and many employers have no choice but to lower their requirements and recruit people with little work experience to fill the gap, a report concludes.

Posts about cybersecurity published on Zhaopin.com, a leading recruitment website, increased from January to June by 232 percent year-on-year, according to the report published by Zhaopin and 360 Internet Security Center.

Work experience was not required for half the posts. On average, the expected salary of job seekers in the field stood at 7,533 yuan ($1,160) a month.

In stark contrast, the average salary employers offer is 25 percent higher, the report found.

Zhaopin didn’t disclose the sample size for the report, calling it a business secret, but said the sample was large enough to ensure solid conclusions – the firm has 135 million users.

The difference between the low salary expectation and high offer suggests the supply of candidates is inadequate to meet the demand in the labor market for cybersecurity talents, said Wang Yixin, a senior Zhaopin consultant.

There are more than enough low-skilled candidates for basic posts, but the demand for the highskilled candidates exceeds the supply, she said.

Only 11 percent of cybersecurity job seekers have an education background in cybersecurity or information security – more majored in computer science, communication and information engineering and network engineering.

More than 70 percent of the job hunters are aged 25 to 34.

The shortage of cybersecurity talents will continue in China for some time, the report said.

Zhao Zeliang, director of the Cybersecurity Coordination Bureau at China’s Cyberspace Administration, said cybersecurity talent education is urgent and important in the country.

“We can catch up with Western countries’ pace of cybersecurity protection by buying their advanced technologies or products, but if we are short of talents, our following generations will be affected,” he said.

He also said the administration has paid high attention to and taken measures in education for talents, considering its importance in cybersecurity protection.

Now the administration has joined hands with the Ministry of Education to set up an academic institute to cultivate cybersecurity talents, “hoping to improve our capabilities in cybersecurity protection and make our talents more competitive in the world,” he said.

Talent is crucial in taking the sector forward

Young visitors interact with a robot at the 2017 World Robot Conference in Beijing themed “Win-Win Collaborative Innovation Toward the Building of an Intelligent Society”.

China is beefing up efforts to attract highly-skilled professionals to work in AI as companies across the world scramble to get an edge in this cutting-edge field.

A report released by Hays showed that Chinese mainland enterprises have stepped up plans to hire staff involved in the artificial intelligence industry from the United States and Europe.

Many firms were offering the right candidates lucrative packages, including a 50 percent salary rise to relocate to China, the global recruitment agency stated.

“We are seeing significant government and private investment in AI across natural language processing, computer vision, speech recognition and data science,” said Simon Lance, managing director for Hays Greater China.

Earlier this year, the government launched plans to invest heavily in research programs.

The aim is to turn the country’s AI sector into an industry worth more than 150 billion yuan ($22.15 billion) by 2020, 400 billion yuan by 2025, and 1 trillion yuan by 2030.

“As a result, employers in the artificial intelligence space are becoming particularly competitive in their efforts to attract top people,” Lance added.

But China faces key challenges and a skill gap compared with the US.

A major problem is that the country lags behind the world’s biggest economy when it comes to employment numbers.

“China’s AI talent (pool) is only half that of the United States, which may (hinder) future development of (the) AI industry (here),” a report from the Tencent Research Institute stated.

The survey, conducted by a division of internet giant Tencent Holdings Ltd, showed China had 592 artificial intelligence companies with nearly 40,000 employees by June, 2017.

In comparison, the US had 1,078 AI businesses with more than 78,000 employees.

The US is also ahead in four key employment areas, including processor and chips, and machine learning applications, as well as natural language processing and smart drones.

More than 20,000 people work in the natural language sector in the US compared to China’s 6,600, the Tencent report highlighted.

Studies also found that Chinese AI staff are concentrated in sectors such as automated vehicles and smart medical treatment.

In the US, the focus is on wider sectors, including the chip industry, big data and storage, as well as technical areas such as image identification and robotics.

Research in automated vehicles was also pioneered there.

“One of the reasons that China lags behind the US in AI is because it started much later”, the Tencent report stated.

Among the world’s top 20 universities for artificial intelligence research, 16 are in the US, including the Massachusetts Institute of Technology and Carnegie Mellon University, according to the American National Science and Technology Council.

Not one Chinese university made the list.

“Up until now, China has not established a system to cultivate talent in AI,” said Yu Youcheng, deputy secretary-general of Chinese Association for Artificial Intelligence.

“For example, artificial intelligence science and technology have not been set up as a first-level discipline,” Yu added. “This may lead to the loss of core AI talent.”

But the problem can be fixed by putting the right pieces of the jigsaw together.

“We should work to develop an ecological chain in the AI field,” Yu said. “This would combine AI talent cultivation, technology standards and products and applications.

“But (doing this we can) transform and upgrade the whole industry,” Yu added.

China National Nuclear Power plans to establish Hebei company

A China National Nuclear Corp stand at an industrial expo in Beijing.

China National Nuclear Power Co Ltd (CNNP), a unit of one of the country’s three largest State-owned nuclear operators, has announced plans to establish a Hebei-based company to promote the development of traveling-wave reactor, or TWR, technology.

The move will be carried out in partnership with Huadian Fuxin Energy Limited Company, Zhejiang Zheneng Electric Power Co Ltd, Shenhua Group and Jointo Energy Investment Co Ltd Hebei, the CNNP said in a statement with the Shanghai Stock Exchange.

The new company, located in Cangzhou city, Hebei province, has a registered capital of 1 billion yuan ($153.23 million). CNNP will own 35 percent of the company; Shenhua Group, 30 percent; Huadian Fuxin Energy, 15 percent; Zhejiang Zheneng Electric Power, 10 percent, and Jointo Energy Investment, 10 percent.

CNNP said, in the statement, the establishment of the new company will be in accordance with the strategy for the coordinated development of the Beijing-Tianjin-Hebei (Jing-Jin-Ji) region, and added it would also help support the development of the advanced TWR technology.

In addition, CNNP Technology Investment, a wholly-owned subsidiary of CNNP, also plans to establish CNNP TWR Technology Investment (Tianjin) Co Ltd together with the four investors, sporting the same investment proportion. The new company, located in Tianjin, has a registered capital of 750 million yuan.

TWR, a new nuclear design using fourth-generation technology, could reduce the need for the enrichment and reprocessing of uranium. CNNP stated the establishment of the TWR demonstration project will be in accordance with, and respond to, the national energy plan arrangement.

Bellevue, Washington-based Terra Power, co-founded by Bill Gates in 2006, is working closely with China National Nuclear Corp to conduct research into the use of the new technology.

Li: Make way for new growth drivers

Technical workers assemble engines at a plant in Yiwu, Zhejiang province.

Companies should consider outside investment, mergers, premier says

Premier Li Keqiang promised more incentives to boost high-end manufacturing in China during a visit to Huaxiang Group, a private steel-casting company in Linfen, Shanxi province?part of a two-day visit to the area on Monday and Tuesday.

The company’s moves to retain top-level professional engineers have brought success, turning it into a major supplier for a number of overseas automobile companies. Huaxiang provides an annual salary of 3 million yuan ($456,000) to some of its top craftsmen, four times that of the company’s CEO.

Li spoke warmly about the approach as he talked with some of the craftsmen from whom young workers have learned, noting that providing better incentives to lure talent in high-end manufacturing is also a key strategy for the country as it seeks to shift from old economic drivers to new ones.

“We should pass on the spirit of craftsmanship from one generation to another, so that the idea of Made in China will be competitive not only in terms of prices but also in quality,” Li said.

Also on Tuesday, Li visited Linfen Iron and Steel Co to learn about the region’s efforts in cutting outdated capacity. The company, which is affiliated with Taiyuan Iron and Steel (Group) Corp, stopped most of its outdated operations in 2016, and 10,000 workers have been relocated with new jobs. Among them, more than 2,500 have started their own businesses.

“These workers may be seen as a burden for a company with outdated capacity, but their talent may be in demand when they find new and more suitable jobs,” Li said, calling on companies to focus on developing high-end products.

Companies that rely on traditional models should be open to private investment, mergers and reorganization, Li said, adding that China is determined to phase out outdated and excess industrial capacity as a key part of its structural reform, especially as coal prices have been rising again in recent months. The idea is to truly make room for new economic growth drivers, he said.

Li also visited the Shigejie Coal Mine, which ceased production of low-quality coal in 2016, and poverty-stricken Chengzhuang village in the Taihang Mountains to learn about local poverty alleviation and medical services.

Ctrip reports strong financial results in Q2

China’s biggest online travel agency, Ctrip.com International Ltd (Ctrip), announced that its net revenue surged 45 percent year-on-year to 6.4 billion yuan ($946 million) in the second quarter (Q2) ended June 30.

The company gained a gross margin of 82 percent in Q2, compared to 72 percent for the same period last year and 80 percent for the previous quarter, according to its unaudited financial results.

Net income attributable to Ctrip’s shareholders for Q2 was 327 million yuan, compared to net loss of 521 million yuan for the same period last year and net income of 82 million yuan for Q1, the company reported.

“Ctrip maintained healthy revenue growth and achieved continual improvement in operating efficiency,” Ctrip CEO Sun Jie said. “We are confident that Ctrip will generate long-term value for shareholders in the years to come.”

The company expected its net revenue for the next quarter to grow by approximately 35-40 percent year-on-year.

Strengthening its position in lower-tier cities has been Ctrip’s focus of action. The company said both its new customer acquisitions and user engagement in lower-tier cities improved significantly in Q2.

Ctrip and Qunar, a domestic rival acquired by Ctrip last year, had opened over 400 offline retail stores by the end of the quarter, with approximately 200 more in the pipeline, the company reported.

Liang Jianzhang, chairman of Ctrip, said the company will continue to expand into lower-tier cities and invest in international markets.

The company said both its accommodation reservation business and transportation ticketing business delivered healthy growth in Q2.

China Guodian merges with Shenhua Group to create new energy giant

China’s State Council has approved a merger between China’s major power generator China Guodian Corporation and coal producer Shenhua Group, an official statement said Monday.

The two companies will be restructured to form a new energy investment company, the State-owned Assets Supervision and Administration Commission (SASAC) said on its website.

The move came with little surprise, as the listed arms of the firms had suspended trading of their stocks on the Shanghai Stock Exchange since early June, a move widely considered to signal a merger.

Following the announcement Monday, the listed arm of Shenhua Group on the Hong Kong Stock Exchange surged more than 4 percent before falling back slightly.

As the world’s largest coal supplier, Shenhua Group had total assets of over a trillion yuan (150.7 billion U.S. dollars) by the end of April this year. It ranked 276th among the global Fortune 500 in 2017.

In the first half of 2017, China Shenhua Energy Company, the listed arm of the group, reported revenue of 120.5 billion yuan, an increase of 53.1 percent year on year.

With total assets of more than 800 billion yuan, China Guodian Corporation is one of the country’s largest power generators with installed capacity of over 143 GW. It ranked 397th among the global Fortune 500 in 2017.

The merger between the two power giants was in line with the country’s aim to cut overcapacity in the coal and power sectors through restructuring state-owned enterprises (SOEs), analysts said.

SASAC has been actively restructuring SOEs this year in a bid to improve their efficiency, with the number of central SOEs falling to 98 after Monday’s announced merger, down sharply from 196 in 2003.