Archive for D.Collins
The year 2018 as seen the RMB have unprecedented gains.The currency had
its strongest monthly rally in almost 40 years. Analysts have now jumped
off “China will collapse train” and are now forecasting the RMB to continue
its ascent higher. The RMB has now broken the 6.3 barrier. Is 6.0 in sight?
The RMB has been held underwater like a ballon and as we all know pegged
currencies eventually skyrocket or collapse once the peg is broken. As we
have reported previously , the RMB continues to rise in parallel with
China’s FX reserves continuing to increase back towards the $4 billion mark.
This shows there is continued pressure for the RMB to rise.
UniCredit on Thursday said it expects the renminbi to hit Rmb6.20 per dollar by
the end of the year, echoing a similar call from HSBC on Wednesday. ING, which
already had a more bullish view on the currency, expects even more strength,
with a 2018 forecast of Rmb6.10.
Some forecasters are pointing to the increasing RMB hurting exporters, however,
China has labor rates now 400% higher than places like Vietnam and several hundred
percent higher than Mexico. Competing on low -cost labor is no longer a strategy
for China. A stronger RMB will support outgrowth of Chinese capital into the
One-Belt, One-Road projects and support acquisition of foreign companies and
infrastructure. As an example, JD.Com today announced it is going into Europe
to compete with Amazon. A stronger RMB will allow it to more easily buy up the
logistics infrastructure it will need.
Final GDP numbers to come out soon are expected to show Chinese GDP
(including HK & Macao) to be 82.8 trillion RMB or around $13 trillion
That would make Chinese GDP now larger than the combined GDP’s of
Japan ($5t),Germany ($3.4t),U.K. ($2.6t), France ($2.4t), and India ($2.2t)
The US GDP for 2017 is expected to be about $19.7 trillion.
Asian venture capital companies funded $70.8bn in deals in 2017 almost
surpassing the U.S. which recorded $71.9bn according to the latest report
Total global VC funding was up 50% year over year to $164b USD. Asian Funding
doubled while funding in the U.S. was up 17%. Socialist Europe as fallen way
behind recording only $17.6b over 2,483 deals.
Didi Chuxing late last month announced a $4bn investment from a consortium that
included Japan’s SoftBank and Abu Dhabi state fund Mubadala Capital as well as
domestic investors. That valued the ride-hailing group at $56bn, making it the
world’s biggest unicorn behind US rival Uber.
Other top-ranked Chinese unicorns, including Meituan-Dianping, an app that enables
users to book and buy meals, manicures and many other services, raised $4bn late
last year for a valuation of $30bn.
In 2018, we can expect the handset maker and consumer goods juggernaught, Xiaomi,
go public which could fetch a valuation of over $150bn. Expect strong Chinese demand
for that company’s equity.
Germany’s central bank has decided to include the Chinese yuan in its own reserves, in a further boost to the international status of the currency. Speaking at an event in Hong Kong on Monday, Bundesbank board member Andreas Dombret said the decision was taken last year following an investment of 500 million euros ($611 million) by the European Central Bank, of which the German authority is a part. He said he wouldn’t comment on the amount that would be allocated. “The renminbi is used increasingly as part of central banks’ foreign-exchange reserves — for example, the ECB included the RMB but also other European central banks did so,” Dombret said during a speech in Hong Kong Monday. Following ..
The global market for Crypto currencies should go over the $1 trillion dollar
mark in 2018. According to coinmarketcap.com,the top 100 crypto-currencies are
already worth over $800b USD.
While well-known Bitcoin whales and players in the crypto-space such as the
Winklevoss twins,Roger Ver, Mike Novogratz,and others get a lot of attention in
the West one must remember 4/5 of global computational power dedicated to mining
is in China. Not to mention that all manufacturers of ASIC miners used to mine
Bitcoin and others currencies are manufactured in China.
There are many, many bitcoin millionaires and some billionaires in China. However,
in 2017 as prices skyrocketed, cryptocurrencies have finally caught the attention
of the Chinese government. This massive, quick run-up in prices is the worst thing
that could have happened to the local crypto community in China.
There is a reason the Chinese have a saying ” Make a fortune in Silence”.
China has since banned Initial Coin offerings and the conversion of crypto-currencies
into RMB. They have not yet banned mining of crypto currencies or investing or holding
crypto currencies, however, moves are afoot now to clamp down on crypto currency miners.
Local officials have been asked to investigate the mining operations of Bitcoin miners.
China has been in a major struggle to reduce energy usage for the last several years
and now these mining companies have emerged with very energy-intensive computer
networks solving equations in order to earn crypto currencies. In most cases, sweetheart
deals have been struck with local electrical grids to provide cut-rate electrical fees.
The People’s Bank of China (PBOC) outlined the plan last week to go after and ask
mining companies in China to exit the business soon.
The price of Bitcoin, the most popular and highly valued cryptocurrency, has seen a
roughly 20-fold rise in 2017. China is also the world’s capital of the Bitcoin mining
industry with around 80% of total newly mined Bitcoins mined in China. Chinese Bitcoin
miners are able to take advantage of cheap electricity prices in some areas in the
country to increase their profitability.
China is home to four of the five largest Bitcoin mining pools during the past year,
including Antpool,F2Pool, BTCC and BW Pool. The latest policy moves, however, are
likely to force these miners and others in China to move elsewhere or find other
ways to exist.
After Beijing shut down Bitcoin exchanges and banned initial coin offerings last
year, investors and traders sought ways to continue trading or issue new tokens via
offshore hubs such as Hong Kong. Some Bitcoin exchanges in Hong Kong, such as
Bitfinext and OKEX, allow Chinese investors to register and trade Bitcoins.
Notching up an 11th straight month of gains, the reserves rose US$20.2 billion
in December to US$3.14 trillion, the highest since September 2016 and the
biggest monthly gain since July, central bank data showed.
For the full year, China’s forex reserves rose US$129.5 billion from US$3.011
trillion at the end of 2016. That is the first annual rise since 2014.
The yuan has risen for 11 months in a row, a sharp contrast to a year ago when
it fell to nearly 7 to the US dollar, pushing the forex reserves below the
psychologically important US$3 trillion mark as the central bank sought to
defend the currency’s value.
“The rise of the yuan is due to many factors, but the combination of capital
controls and the US$1.5 trillion-plus goods trade surplus accumulated in
2015-2017 could have played the most important role.”
The value of the country’s gold reserves rose to US$76.47 billion at the end
of December, up from US$75.83 billion a month earlier, according to the People’s
Bank of China
Traditional finance houses now being seriously challenged in the wealth management market by emerging internet financial companies
Tencent has been granted a licence to sell mutual funds, as it continues expanding its financial services offerings.
Before gaining the licence, the tech giant was only able to act as a platform for fund houses and third-party fund sales companies to sell their products through qian.qq.com, its online wealth managing platform and its popular instant messaging tool, WeChat. Qian.qq.com is for users to access the service on PC, while a similar service on WeChat is for mobile users.
Tencent says it doesn’t store WeChat conversations 
China’s market for reliable wealth management products is expected to explode in coming years, through the sales of funds and banking products, and traditional finance houses are now being seriously challenged in the market by emerging internet financial companies.
The Shenzhen Bureau of the China Securities Regulatory Commission, the nation’s top securities watchdog, has given Tencent subsidiary Tengan Funds Sales (Shenzhen) the licence to sell funds directly.
It has already gained financial licences for mobile payments, insurance, and micro financing.
The new licence will also give Tencent more say on what products are sold on its platforms, and grant users more options to help boost funds sold on WeChat – home to more than 980 million users, analysts said.
“With its new licence in hand, Tencent will have more leeway in building its wealth management segment on WeChat, instead of acting just as a platform, having to rely on third-party partners,” said Wang Pengbo, an analyst at consultancy Analysys.
Here are five of the best hi-tech investments of 2017 
“The new licence should pave the way for more structured and stable growth for Tencent, allowing it to expand further into financial services, in what’s becoming a tighter regulated financial market,” he said.
Tencent has already teamed up with Howbuy, an online distributor of mutual funds, and a number of fund houses to line up nearly 100 mutual funds products via WeChat.
The new licence should pave the way for more structured and stable growth for Tencent, allowing it to expand further into financial services, in what’s becoming a tighter regulated financial marketWang Pengbo, an analyst at consultancy Analysys
More broadly, it also reflects Tencent’s drive to transform its “Tenpay” from a pure payments service into a comprehensive financial services platform, Wang noted.
Also on Thursday, the tech giant launched the promotion of a new service that will allow users to pay their credit card bills via using the money-market funds available on Licaitong, or WeChat’s wealth management app.
If, for instance a user gets a credit card-bill on December 5 due on December 20 for 5,000 yuan, if they automatically transfer their outstanding amount into one of the funds, they can enjoy interest from the fund in the December 5-20 period and have no need to worry about forgetting to pay the due.
Users will avoid having to pay a 0.1 per cent charge on a credit card payment of more than 5,000 yuan (US$770) monthly. Tencent is also offering users cash incentives, capped at 88.88 yuan, for those who use the promotal service until February.
The four products are sold by big-name fund houses: Efund, China Universal Asset Management, China Southern Fund Management and China Asset Management.
Their combined scale, via various sales channels, had topped 220 billion yuan as the end of December, 2017, according to China Fund, a mainland China newspaper affiliated to People’s Daily.
China’s Kuaizhou-11 rocket will send six satellites into space in 2018, greatly boosting China’s competitiveness in the field of commercial rocket launches.
The solid-fuel carrier rocket is scheduled to launch for the first time in the first half of 2018, according to the rocket’s developer and producer China Aerospace Science and Industry Corp (CASIC), Xinhua News Agency reported.
Zhang Di, deputy head of the Fourth Academy of CASIC, told the media that sending multiple satellites into space will satisfy different users’ requirements and meet commercial demand.
The launch cost of the Kuaizhou rockets has been reduced to $5,000 per kilogram of payload, which is considerably lower than its international competitors, according to Zhang.
Liang Jiqiu, chief designer of Kuaizhou rockets at CASIC, said that compared with the Kuaizhou-1A rocket, which sent three satellites into space in its first commercial mission in January 2017, the Kuaizhou-11 rocket will see a huge improvement in launch capacity, decrease costs and boost international competitiveness in commercial rocket launches.
With a lift-off mass of 78 tons, the rocket was designed to launch low-Earth and Sun-synchronous orbit satellites.
Kuaizhou is a low-cost solid-fuel carrier rocket with high reliability and a short preparation period. It has been developed since 2013.
The annual handling capacity of Shanghai Port surpassed 40 million TEUs (twenty-foot equivalent units) on Friday, breaking an existing world record, according to the Shanghai International Port Group.
As one of China’s largest ports, Shanghai Port started container transportation in 1978 with a handling capacity of 7,951 TEUs that year. The port’s throughput exceeded 30 million TEUs in 2011.
In December 2017, Shanghai Yangshan Deep Water Port, the world’s biggest automated container terminal, started trial operations.
The project uses automated handling equipment designed and manufactured in China, as well as a domestically developed automated management system.
It has helped consolidate the port’s standing as the world’s busiest container port and supported Shanghai’s efforts to become a world shipping center.
In a directive released on Tuesday, the National Development and Reform
Commission said that all foreign investment deals by Chinese firms,
including those conducted by their overseas affiliates, must be reported
through a new online, government-run information system.
Furthermore, all deals involving “sensitive” countries – those that no have
diplomatic ties with China or are engaged in civil war – or sensitive
industries – weapons manufacture and the media – will be subject to Beijing’s
approval, the country’s top planning agency said.The current regulations list
telecommunications, land development and power grids as sensitive sectors.China
seeks to rein in overseas investment with 36-point code of conduct for private
In the case of non-sensitive deals, those valued at US$300 million or more must
be registered with the NDRC, while those below that figure must be registered
with local authorities, the statement said.With the revised regulations Beijing
is seeking to strike a balance between encouraging outbound investment to support
its “Belt and Road Initiative” – an intercontinental trade and infrastructure
development plan – and preventing an unbridled exodus of capital.
According to Wang Jun, chief economist at Hong Kong-listed Zhongyuan Bank, the
new rules are about creating a clear operating framework for businesses seeking
overseas expansion, rather than “simply blocking some deals”.
While the NDRC statement said that outbound business expansion should not damage
the national interest, such “irrational investment has been largely curbed”, he
said.China moves to close overseas investment deal ‘loophole’
China began targeting “irrational” deals – often involving high-profile hotels,
cinemas and sports clubs – after outbound investment last year rose to an all-time
high of US$170 billion,causing the value of the yuan to slump and leading to massive
After President Xi Jinping described rampant outbound investment as a “national
security matter”, the banking regulator this summer began scrutinising several of
the country’s top private sector deal makers, including Wanda, HNA Group and Anbang.
China conglomerate goes offshore with US$803m UK wind farm deal
In a statement explaining the rule changes, the NDRC said they were aimed at cutting
red tape.Most notably, the revision removes the requirement for Chinese firms involved
in overseas deals valued at more than US$300 million to seek “pre-approval” from the
commission before starting the bidding process.China will support qualified firms to
“go out” and guide the direction of investment, boost the belt and road plan, and
promote international capacity cooperation, NDRC vice-chairman Ning Jizhe said at a
forum over the weekend.
YTD gain: 111.5 per cent
The Shenzhen-based internet firm, which ranks as the world’s largest video game company by revenue, has continued its phenomenal run in the Hong Kong stock market amid a series of strategic acquisitions as well as the spin-off of its e-book arm China Literature, which became the city’s most profitable initial public offering in nearly a decade.
In November, Tencent became the first Chinese technology company to top US$500 billion in market value. A US$1,764 investment in the company’s 2004 public offering would be worth US$1 million, after taking a 2014 stock split into consideration. That represents a 500-fold rise in the stock value of China’s biggest social network operator.
As this year winds down, tech stocks have posted remarkable gains. The S&P North American technology index has jumped 38 per cent against a 20 per cent increase for the S&P 500 index. The Hang Seng Composite Information Technology Index has surged 88 per cent against the broader benchmark’s 33 per cent rise.
Market experts expect to see continued rosy prospects in 2018.
YTD gain: 166 per cent
The Nasdaq-traded Chinese social media operator, which runs the Twitter-like microblogging service Sina Weibo, had eclipsed its US rival in terms of market capitalisation in February this year.
Headquartered in Beijing, Weibo added 79 million monthly active users year on year in the third quarter to swell its total user base to 376 million – about 46 million more subscribers than Twitter.
Weibo also made a net profit of US$101.1 million in the quarter ended September 30, while Twitter reported a net loss of US$21 million in the same period.
YTD gain: 219.4 per cent
The Beijing-based biopharmaceutical company hit a home run this year amid a global boom in the immunotherapy market. It has developed four clinical stage therapies designed to boost patients’ immune system in cancer treatment.
It recently completed building a manufacturing plant in Suzhou Industrial Park, located in the eastern-central coastal province of Jiangsu. With a market capitalisation of about US$4 billion, BeiGene landed a US$1.39 billion deal in July with American biotechnology giant Celgene that marked the biggest overseas licensing of drugs developed in China to date. That represented the second major endorsement for BeiGene after it signed a global partnership with Merck Serono, the biopharmaceutical division of Merck, in 2013.
YTD gain: 277.2 per cent
The Shenzhen-based provider of internet services, including network download, video playback, digital content and online games, is among a growing number of small publicly traded companies to benefit from the rapid increase in value of cryptocurrencies.
Xunlei was recently on a tear – its share price rising about six-fold to become one of the best-performing stocks on the Nasdaq – after a subsidiary introduced a cryptocurrency project called “Wanke coin mining” in October.
The company, however, later distanced itself from that project amid the Chinese government’s clampdown on initial coin offerings. Worries over the project led to an internal scuffle with an associate company, Shenzhen Xunlei Big Data Information Services.
Wang Chuan, a co-founder of Chinese smartphone supplier Xiaomi, recently took over as chairman of Xunlei, putting an end to that dispute.