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NEWS FOR FOREIGN
COMPANIES IN SHANGHAI (13-19 Oct) |
ENERGY & POWER
Sinopec-Glitnir Cooperation
Sinopec agreed with Nordic financial group Glitnir to strengthen cooperation in developing geothermal energy in China. The two parties will develop technology for individual projects as well as explore opportunities in heating and energy generation.
FINANCE & INVESTMENT
ATM Fees Double
Starting 1 November ICBC will double the charges at its ATM machines for taking out cash using cards from other banks. The bank’s fees for ATM cash withdrawals on the mainland will vary from RMB2 to RMB4. ICBC will also charge RMB4 for overseas ATM account inquiries from November.
AV Import Tariff Cut
China has cut the import tariff on audio and video products and other electronic goods. The import tax on recorded cassettes, compact and digital video discs and floppy discs was cut to 13% from 17% starting from 15 September, according to the Ministry of Finance.
CDB-Barclays Alliance
China Development Bank (CDB) and Barclays formed a five-year commodities strategic alliance focusing on areas of energy, metals and emissions. Under the deal, the Chinese bank will appoint Barclays as its preferred provider of commodity market risk hedging while Barclays will help enhance CDB’s commodities execution and risk management infrastructure. The alliance retains the option to extend beyond the initial five years for a further period agreed upon by both parties.
Fund Company Opens
ICBC won the approval to build an RMB2bn financial leasing company which will be registered in Binhai New Area of Tianjin with a registered capital of RMB2bn. The new leasing company will focus on the aviation, shipping and other large-scale equipment leasing business for global and domestic clients.
JPMorgan Builds Base
JPMorgan Chase Bank officially opened its locally incorporated bank in Beijing, which will allow the bank’s three branches in Beijing, Tianjin and Shanghai access to products, licenses and service areas previously out of reach for foreign bank branches. It is the first foreign lender to set up HQ in Beijing after receiving the approval for local incorporation since the government allowed it last year.
UnionPay-Europay Cooperation
China UnionPay Co. teamed up with Austria’s Europay to let UnionPay card holders have access to ATMs in Austria. Europay, which has a network of about 90,000 point-of-sale machines in Austria, will first open 3,000 ATMs to UnionPay starting from 1 October and boost the figure to all its 8,000 ATMs at the end of 2008, and let cardholders access its POS machines.
MANUFACTURING
Frigoglass Opens Facility
Greece-based Frigoglass Group, a leading supplier of beverage refrigerators, opened its first Chinese facility, Frigoglass (Guangzhou) Ice-Cold Equipment Co., Ltd., with an initial investment of more than RMB150m. The facility is set to produce over 120,000 units annually.
Youngman-ZAP JV
Youngman Automotive Group, China’s leading luxury coach and high-quality commercial truck manufacturer, signed a JV agreement with U.S. electric car firm ZAP to manufacture, market and distribute electric and hybrid vehicles, including passenger cars, trucks and buses. Youngman will hold 51% of the JV with ZAP taking the remainder.
M&A
Buffet Reduces Stake in PetroChina
Warren Buffett’s Berkshire Hathaway Inc. cut its PetroChina Co. stake for the fifth time to 6.97% after the stock gained sevenfold since the company first invested in the oil producer. Berkshire sold 66.614 million shares, worth a total of USD106m on 21 September, also amid calls for U.S. investors to limit exposure in the oil company due to its links to war-torn Sudan.
Minsheng Buys into UCBH
China Minsheng Banking Corp., China’s seventh-largest bank by market value, will buy up to 20% of UCBH Holdings Inc., the San Francisco-based parent of United Commercial Bank. Minsheng will initially buy a 4.9% stake of UCBH for approximately USD96m and will increase its ownership to 9.9% by 31 March 2008, according to a company statement. By June 2009, it may increase its total holding to 20%, becoming the largest single shareholder in UCBH. The investment is pending approval from the China Banking Regulatory Commission and the State Administration of Foreign Exchange.
Raffles Education Acquires Oriental
Singapore-based Raffles Education Corp., a private education provider with 28 schools in Asia, will purchase China’s Oriental University City Development Co. for SGD392m. It’s the company’s second purchase this year, after it bought 24% of Easycall International Ltd. for about SGD262m.
TRANSPORT & LOGISTICS
Air France Adds Flights
Air France added two new weekly flights between Shanghai’s Pudong International Airport and Paris-Charles de Gaulle Airport, raising the number of trips to 12 a week. The new flights use Boeing 777-200 airplanes with 263 seats.
Beijing-Shanghai Rail Link
The Beijing-Shanghai high-speed railway received approval from the central government, as construction is expected to start “before the end of this year,” according to a source at the Ministry of Railways. With a speed of up to 350km per hour, the railway will shorten travel time between the two cities from the current ten hours to less than five. The total cost of the project has been estimated to exceed RMB170bn.
Fourth Bonded Port
China’s State Council approved the country’s fourth bonded port covering an area of 9.21 sq.km in Yangpu Economic Development Zone in Hainan Province. The Yangpu Bonded Harbour Area will be built in three phases. Fixed-asset investments for the port will reach RMB50bn by 2012, and the annual industrial output will hit RMB100bn with annual freight handling capacity reaching 70 million tonnes. In accordance with China's preferential tax and foreign exchange policies, the port will remove tariffs on foreign cargo, offer tax rebates for domestic cargo and abolish VAT and consumption taxes for companies in the bonded area. China’s current three bonded ports are in Shanghai, Tianjin and Dalian.
New Logistics Firm
Toyota Motor Corp. and its two Chinese partners, First Automotive Works Group (FAW) and Guangzhou Automobile Industry Group Co., Ltd., have jointly invested USD5m as registered capital in establishing a logistics company, named Tong Fang Global (Tianjin) Logistics Co., Ltd. Toyota owns a 40% stake in the logistic firm with FAW taking 35% and Guangzhou Auto 25%. The logistics company began operations at the beginning of October.
New Shanghai-Tokyo Air Link
Chinese and Japanese air carriers started operating four roundtrip flights between Shanghai’s Hongqiao International Airport and Tokyo’s Haneda Airport to mark the 35th anniversary of diplomatic relations between the two countries. The new service is operated by Japan Airlines, All Nippon Airways, China Eastern Airlines and Shanghai Airlines.
TRAVEL & HOSPITALITY
Jumeirah in China
Jumeirah, a Dubai-based luxury hospitality group, plans to operate five hotels in China by 2011. The top-tier hotel management firm will open its first flagship hotel – the 338-room Jumeirah Han Tang Xintiandi – in Shanghai on August 1, 2008.
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