China pledged on July 2 to improve financial services for small and medium-sized enterprises (SMEs) by offering them better access to finance.

 

The People’s Bank of China (PBOC), China’s central bank, outlined principles to facilitate the development of the country’s SMEs in a joint statement released with China’s banking, securities and insurance regulators.

 

“Loans to SMEs by banks and financial institutions this year should exceed the amount last year and their growth rate should outpace that of all loans,” the statement on the PBOC website said.

 

The statement ordered financial institutions to establish independent criteria for approving loans to SMEs and to improve their efficiency in processing loan applications submitted by SMEs.

 

The statement encouraged SMEs to use Renminbi for trade settlement in cross-border trade when possible.

 

The statement affirmed the central bank’s support for SME’s purchases of foreign exchange for overseas investment and Chinese companies’ foreign borrowings.

 

Strike ends Japanese plant in north China

 

Workers at Tianjin Mitsumi Electric Co.Ltd., a Japanese-owned plant in north China’s Tianjin Municipality, returned to work on July 3 after a four-day strike, the company said.

 

The plant has resumed production after an agreement was reached between the workers and the employer. The workers’ lawful demands were satisfied, said a company statement, but it gave no details about the agreement.

 

Workers had previously told Xinhua they wanted pay rise and better social security packages.

 

Mitsumi was established in Tianjin in 1992 with a registered capital of 40.8 million U.S. dollars. It produces electronic components and computer parts and employs 3,000 people.

 

It has two factories in Tianjin: the one in Dongli District, where the strike occurred, and another at the New Technology Industrial Park.

 

EU approves Chinese carmaker Geely’s takeover of Volvo

 

The European Commission said on June 6 that it had approved the takeover of Swedish carmaker Volvo by Chinese rival Geely and China’s state-owned investment firm Daqing.

 

“The commission concluded that the transaction would not significantly impede effective competition” in the European Union (EU), the EU’s antitrust watchdog said in a statement.

 

Geely is a fully integrated manufacturer of cars, motorcycles and scooters in China. Currently, the vast majority of its passenger cars are sold in China.

 

Daqing is owned by the government of Daqing city, in northeast China, and is solely engaged in the investment and management of state-owned assets.

 

Volvo manufactures, distributes and sells a wide range of passenger cars under the Volvo brand worldwide, and it is also active in supplying components.

 

The transaction did not initially qualify for the EU’s one-stop shop review because the acquirers did not meet the triggering turnover threshold, but since it was modifiable in at least three EU member states, the parties asked the commission to examine the deal and the countries concerned agreed to it.

 

Geely signed a deal with Volvo in March, under which Geely would pay 1.8 billion US dollars in exchange for the whole shares. Part of the money came from Daqing.

 

China has no new property tightening measures in Q3

 

China has no plans to launch a new round of property market tightening, in the third quarter. A senior official with the Ministry of Housing and Urban-Rural Development made the remarks, refuting earlier media reports.

 

The official added the government would step up efforts to implement existing tightening measures, which have already been carried out to rein in the red-hot housing market.

 

The Ministry of Land and Resources said over the weekend that property prices would fall in the third quarter, as the tightening campaign continued. This was interpreted by some media as indicating that the government was planning a new round of curbs.

 

IMF raises China’s 2010 GDP growth projection to 10.5%

 

The International Monetary Fund (IMF) lifted China’s GDP growth forecast for 2010 to 10.5 percent from the earlier projection of 10 percent, the IMF said in a latest world economic outlook released on July 8.

 

The body also revised the country’s GDP growth projection for 2011 to 9.6 percent, down 0.3 percentage point from the previous estimate released in April.

 

With the revised figures, China still ranks first in terms of GDP growth among all economies listed in the World Economic Outlook Projections, followed by India, which is forecast to grow 9.4 percent in 2010 and 8.4 percent in 2011.

 

The IMF attributed the upward revision of China’s 2010 GDP growth to the strong rebound in exports and resilient domestic demand so far this year in the country.

 

The organization said that China could take further measures to slow credit growth and maintain financial stability, and thus comes the lower growth estimate for 2011.

 

China to continue to fight hot money inflow: SAFE

 

China’s State Administration of Foreign Exchange (SAFE) said on July 9 that it would step up efforts to monitor and fight hot money inflow.

 

This is the fifth time for the country’s foreign exchange regulator to respond to the issue publicly within a week. The regulator posted a question-and-answer statement on its website each time.

 

Investigations into speculative hot money starting in February have found 190 cases or 7.35 billion US dollars of hot money flowing into China this year, according to the SAFE.

 

Capital flows into and out of China for purposes other than payments related to exports and imports are strictly controlled by the SAFE, which manages China’s 2.45 trillion US dollars in foreign exchange reserves. 

 

Changan, PSA sign contract to create new joint venture in China

 

China Changan Auto Group Corporation (CCAG) and French leading carmaker PSA Peugeot Citroen signed a contract on July 9 on the creation of an equally owned joint venture in China.

 

The contract was signed by Xu Bin, president of China South Industries Group Corporation, Changan’s main shareholder, and Philippe Varin, chairman of the French part’s Managing Board, at a ceremony attended by Wu Bangguo, chairman of the Standing Committee of the National People’s Congress, Bernard Accoyer, president of the National Assembly of France.

 

Their initial cooperation will focus on introducing the Citroen DS line in China and launching a dedicated new brand for the venture, the two companies said in a joint statement.

 

The contract also allows for the joint venture to market, at a later date, further vehicles under the partners’ other brands, Peugeot and Changan, they said.

 

Based in Shenzhen, southeast of China, the joint venture will have initial annual production capacity of 200,000 vehicles and engines, which will meet the highest environmental standards. The contract also outlined two production lines, a specific range of vehicles by each side and a research and development center.

 

The new joint venture will be capitalized at 4 billion yuan (USD 590 million), to be shared equally by the two partners, and backed by an initial investment of 8.4 billion yuan (USD 1.24 billion).

 

The first vehicle is scheduled to be launched in second-half 2012, provided the joint venture is finally approved by the relevant authorities, the statement concluded.

 

Recalling the decision to withdraw from China years ago, Varin said that was regretful movement for PSA, now the Europe’s second- largest carmaker in volume saw expanding market in China and would like to continue to explore it with Chinese partners.

 

CCAG President Xu Liuping said he believed the cooperation with PSA would present high-quality products to Chinese customers and help Changan to better tackle challenges facing global auto industry.

 

China’s economy grows 11.1 pct in first half

 

China’s economy expanded by 11.1 percent year-on-year in the first half of 2010, the National Bureau of Statistics (NBS) said on July 15.

 

The growth was 3.7 percentage points higher compared with the same period last year, when China was still wrestling with the global financial crisis.

 

China’s economy increased 10.3 percent year on year in the second quarter, lower than the 11.9-percent growth in the first.

 

According to preliminary statistics, China’s gross domestic product (GDP) reached 17.28 trillion yuan (USD 2.55 trillion) in the first six months of this year, NBS spokesman Sheng Laiyun told a press conference.

 

“China’s economy performed generally well in the first half and has developed according to the government’s macro regulation,” Sheng said.

 

The government set the annual economic growth target at around 8 percent for 2010.

 

GE says outlook bright

 

A high-level executive of General Electric Co (GE) said on July 16 that the China market will outstrip the United States in the years ahead, and the company will expand its business in China through partnerships with State-owned enterprises.

 

“I think the future outlook for China is very bright. There will come a day when the size of the China market is as big or bigger than the size of the US market,” said John G. Rice, vice-chairman of GE and president & chief executive officer of GE Technology Infrastructure.

 

“As economic progress is made in this country, the standard of living will be improved. There will be benefits for lots of people and there will be a lot of economic value created. Many companies and investors would benefit from that,” he added.

 

According to Rice, one of GE’s future strategies for the China market is to create more partnerships with State-owned enterprises.

 

“State-owned enterprises are very much a part of the Chinese economy. I think over the last 10 to 20 years in China, we have come to recognize the important role that the State-owned enterprises play and our need to form the right partnerships and develop the right capabilities so that we and they can be successful together,” he said.

 

On July 12, GE Aviation Systems, via a venture with China’s Aviation Industry Corp, was chosen as the lead supplier for on-board electronics systems for the country’s C919 aircraft.

 

This cooperation is regarded by GE as the most important and strategic program in China and a good example of its partnership strategy.

 

“We are contributing our commercial avionics business to the formation of this joint-venture,” said Rice. “Our expectation is that this work will not only benefit the domestic requirements for the C919 aircraft, but also maybe export opportunities at some point in the future,” he said.