Sri Lanka's foreign minister, Mangala Samaraweera said that his government would welcome Chinese investment during a visit to Beijing on Friday.
His visit comes as doubs remain over whether the new government will allow China's proposed Colombo Port City development project, agreed to by the former Sri Lankan government, to go ahead as planned.
Stating that the issue was not explicitly discussed, Mr Samaraweera said that Sri Lanka would not make any decision on Chinese projects without consultation with China.
"Anything relating to Chinese investment will be shared and discussed with the government of China before we take any final decision," he told reporters following a meeting with his Chinese counterpart, Wang Yi, on Friday.
"We are trying to ensure that there is a level playing field for all investors and a conducive environment for investment based on the restoration of the rule of law, democracy, good governance and transparency," Mr Samaraweera added.
"All proposals in future will be considered totally on merit."
Mr Wang Yi said: "China is willing to continue being a trustworthy and reliable development partner [and] will also keep doing its best to provide assistance for Sri Lanka's social and economic development."
Sri Lanka's foreign minister, Mangala Samaraweera left for China on Thursday, for a two day visit aimed at strengthening ties between the two countries.
Mr Samaraweera is expected to meet with his counterpart in China. The visit comes ahead of the Sri Lankan president's expected visit next month.
The number of Chinese visitors to Jeju has exploded, bringing wealth and jobs, but also the generation of tension between the local population and some resentment towards tourists. Locals say that occasionally erupt clashes between Korean and Chinese visitors in shops and bars.
An increase in investment in China is also transforming the local economy and juice land prices. Condominiums, hotels and casinos are popping up around the island, a development welcomed by local officials eager to boost the economy of the dream island but opposed by some residents and businesses. A Korean-run hotel has raised a flag to deny rumors that had been bought by China after it was boycotted by some locals.
The lands of the Chinese people and developers in Jeju, known for its white sand beaches, volcanic landscape, clean air, more than double last year. A catalyst is offering South Korea permanent resident status for major foreign investors in Jeju, which are of the same medical benefits, education and employment that South Koreans.
Kim Tae-il, a professor at Jeju National University, likens it to a real estate frenzy in Hawaii in the late 1970s among Japanese investors who bought skyscrapers, apartments and other property as the yen rose against the dollar.
"The Chinese have come to the city and have started buying without having to worry about the price, as did the Japanese in Hawaii," he said.
Reflecting rising incomes and travel restrictions eased, the Chinese were the world's travelers abroad last year larger group, having more than 100 million trips outside the mainland. The research firm CLSA expects that figure to double by 2020, a potential boost economic attractiveness for countries that can attract Chinese travelers.
South Korea has been particularly welcoming for Chinese visitors to Jeju, waive the necessary visas to visit other parts of the country. The popularity of pop music and Korean TV dramas South China and a gradual appreciation of the Chinese currency has also helped attract visitors. So has the geography: Jeju is a one hour flight to Shanghai and 2 hours from Beijing. "The main reason for most people travel to Jeju is that without a visa. And the price of group travel is so cheap," said Willa Wu, Hangzhou, China, businesswoman who has traveled to Jeju several times.
The number of Chinese visitors to Jeju jumped 58% to 2.9 million people last year, almost half of a record 6.1 million Chinese tourists to South Korea in 2014. In another move to revive the local economy The authorities relaxed investment rules in February 2010, leading to permanent residency to foreigners who purchase goods worth at least 500 million won ($ 450,450) in the designated districts and hold them for five years.
"The increase in tourists and investment from China are helping to raise tax revenue and enhance brand of Jeju as a global tourist destination," said Kim Nam-sun, a director in the government of the province of Jeju.
Wealthy Chinese have regarded abroad as the property market in Asia's largest economy cools. Since the introduction of the program, more than 1,000 foreigners have applied for resident status. Chinese citizens account for 98%.
The total area of land in Jeju owned by Chinese investors jumped to 8.34 million square meters last year of 1.42 million square meters in 2011, the government of South Korea.
The wave of Chinese visitors and investment in Jeju also reflects the deepening economic ties between the two countries. China is the largest trading partner of South Korea and is the main source of South Korean tourists, visitors surpassing Japan in 2013. On Wednesday, countries took the first step towards the conclusion of a bilateral free trade and relationship has also been boosted by the warm ties between the presidents of both nations, Park Geun-hye and Xi Jinping.
But with economic boost to the economy of Jeju China there has been controversy about the social impact. Tickets for Chinese funds have worried some residents of Jeju, because much of the money is being channeled into the development of new casinos, hotels and theme parks. Some complain that the casinos and hotels are coming up near schools and residential areas, as well as increased traffic congestion.
A spokesman for the Chinese Consulate in Jeju could not be reached for comment.
Tens of thousands of trees must be felled to make way for the sites of hotels and theme parks, says Kim Jung-do, responsible for the policy of the Korean Federation for Environmental Movement and other activists principal.
On February 12, a consortium of Genting Singapore PLC and Landing International Development Ltd. held a ceremony to Resorts World Jeju, a huge complex, casino and other leisure facilities. But only the largest foreign investment of $ 1,800,000,000 plan Jeju increasingly faces objections from residents and civic groups.
Lee Gil-hoon, a native of Jeju, says the integrated tourism project has boosted real estate prices in your neighborhood near the construction site, where her parents have been growing garlic for decades.
"My parents have dreamed of buying more fields for growing garlic. But land prices have risen so high that they can not afford it," Lee said.
Regarding more aggressive increase Chinese investment, the government of the island has submitted a proposal to the Seoul government to double the threshold for foreign permanent visas 1 billion won and set limits on the type of land available for potential foreign investors .
The street where the shop of Mrs. Kim was once full of pubs and karaoke bars, is now full of shops selling goods that Chinese tourists look like cosmetics, clothing and ginseng. Ms. Kim says he is considering opening a new store in another shopping district, after working in several part-time jobs, including a carwash.
"Visitors Chinese are big spenders. I want to see them keep coming. But I do not want to lose my job again because of them," he said.
Chinese investors became more than a quarter of Australian hotels that hit the market last year likely to be stimulated further by the Australian dollar drops a shopping spree aggressive.
A surprising 28 percent of Australians hotels sold in 2014 went to Chinese buyers, with $ 2.75 billion changing hands across Australia and New Zealand, figures show JLL.
The sharp fall in the value of the Australian dollar was likely to overfeed Chinese investment this year, Mark Durran of JLL Hotels & Hospitality Group said.
"There is no reason to expect that Chinese investment will not continue this year and hope to represent approximately 50 percent of all hotel transactions in 2015," he said.
JLL figures show domestic investment was 46 percent in 2014, up 24 percent from the previous year, suggesting Australian investors were also willing to buy high quality hotel assets.
Last year the Sydney Sheraton on the Park sold for $ 463 million, is expected to sell the only hotel in Australian hotels history.Queensland who will become the next target larger assets, JLL predicted. "There is no doubt that Queensland, in Brisbane, and in areas such as the Gold Coast and Cairns, offer some quality hotel assets," said Mr. Durran. "Do not be surprised to see a number of regional operations pass around Australia in 2015. For several years, since the GFC, the market has been in decline, but now we are seeing a combination of foreign investors, high wealth and operators Hotel is back on. "
Switch China's growing exports to promote growth of the domestic market is triggering a wave of investments abroad by Chinese companies and open doors for foreign companies to invest more in the country.
The policy change is increasing China's appetite for technology, brands and resources other commodities such as resources of labor and capital. It is integrating the country into the global economy and Chinese consumers will make an engine of global economic growth in the future.
China has become a major economic player on the world stage. His USD 9400000000000 economy represents 12% of world GDP and the country has USD 4.01 trillion of foreign exchange reserves. But direct investment assets and portfolio of China have plenty of room to grow. They represent only 6% of USD 1.46 trillion of foreign direct investment world, but this picture is changing.
For some time, the country has been dependent on exports and encouraging the growth of domestic consumption, manufacturing and services with higher added value weaning off. To accelerate this process, policymakers in China are turning to the promotion of investments and acquisitions abroad - buying overseas resources, technology, brands and knowledge.
Last year, China's outbound direct investment (ODI) increased 14.1% to a new high of USD 102.9bn. The increase in growth ODI was much more important than the growth of foreign direct investment (FDI) in China, which rose 1.7% to USD 119.6bn.
This is the first time the nominal capital flows two ways have been almost in balance. Based on current trends, Beijing predicts foreign investment could exceed inward investment for next year. Government has already begun simplifying procedures for foreign investment is allowing foreign flows to keep growing.
Geographically, Europe has become the preferred destination. Chinese investment in the European Union nearly tripled in 2014. His motivation is the acquisition of technology, brands and manufactures high quality to increase domestic competition in China and help improve trust and confidence of Chinese consumers.
We have seen a massive increase in Chinese investment flows into North America and Europe, mainly through mergers and acquisitions (M & A). The UK has been strongly oriented to Chinese acquisitions, but Germany still holds the lead in terms of total turnover. In 2013, 25 of every 120 Chinese offers mergers and acquisitions in Europe took place in Germany. France, the Netherlands and Italy are close behind.
Private companies, instead of state enterprises, have been the main Chinese buyers of European companies. The acquisition of known brands is an effective way for Chinese enterprises to accelerate its internationalization and diversification differentiate themselves from other national players and take the leading technology in the world.
This surge of Chinese investment has the potential to contribute to European growth. Although the impact of Chinese investment in the EU level has been lower so far, there are already signs of substantial income and employment generation in the host country in sectors such as telecommunications.
Perhaps the most intriguing possibility is that China's new rich could offer a broad new market for the manufacture of struggle in Europe.
Because Chinese consumers move goods more expensive and higher value added wage costs relating to European producers have become a less important factor, opening new opportunities for the relatively high costs of Europe staff high productivity.
China still maintains significant controls on capital inflows and many sectors remain closed to foreign investment, especially in services. ODI growing China is providing opportunities for European companies who have gone through M & A - companies, mainly small and medium - to enter emerging markets. And the increase of Chinese ODI also provides Beijing with a good reason to accelerate the pace of opening at home.
The winners in the growing investment abroad of China in Europe are the countries that offer the most welcoming atmosphere. The authorities should ensure that their country captures the opportunity of this increasingly important source of capital.
The ongoing liberalization of the renminbi is another reason why it is easier for Chinese companies to invest abroad. The use of the renminbi to settle cross-border transactions helps reduce currency conversion costs, reduce exposure to fluctuations in the exchange rate, to simplify the procedures for payment and improve the efficient use of funds.
In 2013, renminbi was used around 60% of FDI, but only accounted for only 15% of the ODI. We expect the renminbi more of China's ODI comprise over time. The next phase of investment flow renminbi will focus on the strategy of "going-out" of China.
A number of M & A abroad, for example, have been achieved with payments or capital contributions remitted in China outer continental renminbi. Chinese corporations are aggressively seeking overseas acquisitions. Private equity funds also invest offshore.
China has emerged as a major economic power in the world scene for over three decades. In recent years, the rapid development of investment determined by China and the growing importance of the renminbi as a currency for trade and investment deepen their growing influence in global financial affairs. Expect to see more headline making investments ahead of China.
The euro crisis in 2010 led to a "Scramble for Europe" as indebted EU member states - especially in the so-called periphery - desperately for investment, especially in its sovereign debt and infrastructure. But since then, the race for Chinese investment has spread from the periphery to the center. The UK leads the race, and even France now intends to Chinese investment in infrastructure - for example, in December 2014, the French government announced the sale of a 49.9 percent Toulouse airport a Chinese consortium, with Lyon supposed to follow.
This makes it even more urgent for the EU to sign a Bilateral Investment Treaty (BIT) with China. China, which prefers to deal bilaterally with Member States of the EU, was until recently reluctant to accept the treaty. However, the appearance of a series of mega-trade deals such as trade and investment Transatlantic Partnership (TTIP) seems to have changed the minds of China. As China's long-term "go-global" strategy changes the producers of resources to developed markets - and the renminbi becomes stronger each time -China has to invest in Europe.
"The European interest in an investment treaty with China" by Francois Godement and Angela Stanzel, explores what Europeans have leverage to negotiate the BIT long wanted to China.
The authors note that:
The competition between Member States directly affect the negotiations bit, decreasing the influence of the EU and China can play in bilateral relations whenever discussions in the EU seat. Europe must now convert this disunity in a common negotiating position.
The key priorities of the European Union must have settlement mechanism investor-state dispute under the BIT, and to improve access to European companies have in the Chinese market, which currently remains limited. Furthermore, the EU should prioritize transparency of capital flows and the identity of investors in negotiations TBI.
The EU needs to maximize its influence in the negotiations. The EU has a positive influence, as the financing of special bonuses to attract Chinese investment in the EU and national infrastructure projects. The EU should also use its negative influence, and demonstrate that China can do without moving forward with other FTAs, starting with Japan, and TTIP.
In the letter, write:
"Like the EU, China is a global actor's trade and investment negotiations can not be considered in isolation from movements with third Chinese economic agents -.. From state enterprises become multilateral companies, sovereign wealth funds or private actors more scattered - are in a decisive phase of the internationalization of capital as China maintains a large current account surplus China can not sustain the past pattern of large payouts at the right time for the European economy, while improving access. direct European companies to the Chinese market. "
Late last year Aussie fans of live music were given a bit of a shake after a landmark was secretly listed for sale, sellers who suggest the space would be ideal residential developments, and this week has revealed that the beloved home of live music has been sold to investors.
Prince Of Wales Hotel Melbourne, located in Fitzroy Street St Kilda, has been sold to Chinese buyers, with planning permission for 66 luxury apartments, as reported by The Age.
The building comprises the notorious up Bandroom, pub, a boutique hotel of 39 rooms, a restaurant and a day spa was said that he was snatched by Port Melbourne signature bar Li City staggering $ 45 billion, more than the initial estimate hotel $ 25 million.
The current lease in The Prince Bandroom is not until 2021, so it is not necessarily a reason to grow wild with concern that St Kilda is about to lose one of his musical performing live favorites immediate spaces, however the lease, of course, can be broken early.
Most troubling is that the lease on 7,000 square meters Parking Prince ends next month, and as the Age report, and speaks of a proposed three-level apartments to the rear of the complex, which could be the beginning a domino effect on the rest of the building.
Of course, Melbournians Do you have reason to fear for the future of the prince, if recent precedent is anything to go by, the hotel could end up with the same fate as the headquarters historic Melbourne CBD, The Palace. The case of Prince has very similar characteristics similar to The Palace, whose disappearance started with a simple "for sale" online list earlier this year, being quickly snapped up by international investors who see the place fell into a resort Luxury.
It was a bit of a rocky year for live music venues in Australia, Perth to not lose one, but two important venues, not to mention Sydney and Adelaide, too.
Anbang Insurance Group of China is paying $ 1 billion to buy a controlling stake in Tong Yang Life Insurance South Korea, which extends overall procurement unit has already been seen to spend $ 10 billion in less than four months.
Anbang agreed to buy a combined share of 63 percent in the eighth largest life insurer in South Korea from three independent shareholders to ₩ 1.13 trillion ($ 998 million) or ₩ 16.700 per share, Tong Yang said in a presentation to the regulators on Tuesday.
This emerges from a dark time Anbang deal announced just a day before buying a insurance division of Dutch bank and insurer SNS Reaal for at least EUR 1.4 million ($ 1.6 billion).
The insurer and asset manager of private capital, according to a media report is considering an initial public offering this year, recently sealed a purchase $ 1.95 billion Landmark Hotel Waldorf Astoria New York. He also bought the Belgian banking Dutch insurer Delta Lloyd NV for 219 million euros.
The flurry of deals shows the global ambitions of Anbang and comes as financial enterprises in China are increasingly pointing away from home assets for growth.
"In 10 years, companies have Anbang all continents of the world," said Wu Xiaohui President of Anbang at an event at Harvard University last month, his first US high profile public appearance.
Led by Wu, who is married to a granddaughter of the late Chinese patriarch Deng Xiaoping, the politically connected Anbang has also accumulated shares owned domestic firms and banks, including China Minsheng Banking Corp, which owns 19.3 percent share.
Anbang officials could not be reached immediately for comment. Anbang has previously declined to comment on its acquisitions or participations.
KOREA IN FOCUS AGAIN
Anbang buy the 57.5 percent stake in Tong Yang power of private equity firm Vogo South Korea Investment and shares owned by two minority shareholders.
An additional ₩ 33900000000 Anbang will be paid by the sellers once the deal wins regulatory approval Seoul, according to a person with direct knowledge of the operation. The person was not authorized to discuss the matter with the media and spoke on condition of anonymity.
Both the seller and he hopes to apply for regulatory approvals in China and South Korea in late February, hoping to close the deal in late May or June buyer, the person said.
Tong Yang shares ended 3 percent to ₩ 11.850 on Tuesday. The stock has risen 7.7 percent this month amid reports of a possible sale to Anbang.
This is not the first attempt by the Chinese insurer to buy a financial firm in South Korea.
Anbang bid of $ 2.7 billion in November for control of Woori Bank - which failed after not competing bid emerged, as required by law in South Korea.
His firm won regulatory approval this month to acquire the Waldorf Hilton Worldwide Holdings Inc. for $ 1.95 billion. The Chinese company bought the Belgian insurer Fidea NV in October and agreed to buy the Belgian banking operations of Delta Lloyd NV in December.
The company will increase the capital of Vivat Dutch insurer up to € 1 billion ($ 1.14 billion) after your purchase was approved by the Dutch government, the Foreign Minister Jeroen Dijsselbloem of the nation said Monday. Vivat is the oldest insurance division of bank seized SNS Reaal NV.
Founded in 2004, the first Anbang shareholders include state-owned enterprises SAIC Motor Corp. and China Petroleum & Chemical Corp., known as Sinopec. The company is one of China 'largest conglomerates insurance ", with assets of more than 700 billion yuan ($ 112 billion) and more than 30,000 employees and 3,000 outlets, according to its website.
Tongyang closed 3 percent to ₩ 11.850 in Seoul on Tuesday, taking its rise this year to 10 percent. The number of shares sold to Anbang represents about 63 percent of the outstanding shares of Tongyang.
Disruptive technology in the United States obtains an advantage with the new strategic investors from China
Chinese technology is globalizing. You do not have to look far to see the signs. As one of the biggest indicators, technology titans China are investing heavily in new technology companies in the United States, particularly those with a disturbing edge.
Social Finance Lender market (SOFI) in San Francisco has funding that has its roots in China. Joe Chen Renren is earlier Sofi investor and one of his biggest sponsors also.
Chen and CEO Mike Cagney Sofi first connected at a meeting of Stanford in 2011 through an acquaintance, and Chen had suddenly invested $ 4 million in Sofi, advice Cagney funds needed to be more aggressive. A year later, Sofi raised $ 81 million, again with Chen on board and David Chao venture firm DCM. Cagney credited Chen's enthusiasm for service, specializing in refinancing student loans and provided $ 1,750 million since its inception in 2011 to help open the door to additional funding.
Earlier this February, Sofi closed a $ 235 million funding, bringing its total capital increased to $ 399 million with such big names as Peter Thiel participants.
A second example of this trend is EyeVerify, a startup biometric technology in Kansas City. EyeVerify raised $ 6 million in Series A equity financing in August 2014. Chinese mobile security company Qihoo 360 was one of three investors, Sprint and Wells Fargo also participate.
EyeVerify CEO Toby got fever introduction to strategic investor Qihoo 360 across China business development pro David Sullivan and his team in Group Development Alliance. Fever Sullivan credited for helping him get comfortable with an investor of China. "It's a different world, with different expectations," says Rush. Another hesitation was like dealing with Qihoo could affect "where we go in China in the future" with other potential partners.
But having NYSE listed Qihoo 360 as a door opener to additional contracts within the company and expand its reach elsewhere was a no-brainer. Mike Liao, recently appointed director of strategic initiatives Qihoo 360 in the Valley - another indication of the scope of China technology - is on the board of EyeVerify.
Once funding is secured, Rush is now focused on making their patented incorporate biometric technology, which is used in the financial services, healthcare, mobile security and government.
Smaller lenders, including Bank of China, are leading the strong growth of loans to investors of residential properties, according to the Reserve Bank (RBA) credit data.
The data showed mortgage balances grew by 7.1% in December. Owner-occupier mortgage balances grew by 5.6% annually, while the investor mortgage balances grew by 10.1%.
The total value of outstanding loans to owner-occupiers is $ 936,000,000,000 and loans to real estate investors feel around $ 487 billion.
The Australian Prudential Regulation Authority (APRA) Bank statistics show lenders that have grown their books over the system include ANZ, NAB, Macquarie Bank, Teachers Mutual Bank, Bank of Defense, QT Mutual Bank and Bankmecu.
Emergence of the investment loan lenders include Bank of China, Arab Bank, Bank of Defense, Macquarie Bank and Bank Mutual Teaching.
An investment management company based in Sydney is planning to establish the first privately owned Chinese bank in Australia.
It will raise close to $ 200 million with the aim of an initial active workbook $ 1 billion project director Howard Ting told Reuters.
"Instead of being backed by a government company that will be backed by Chinese private individuals who make us the first in the Australian market," Ting said.
Parent company of the proposed bank, Australia Capital Investment Group, has yet to formally ask the regulator.
Recently Glenn Stevens, governor of the RBA, noted the opportunities for Australians and Chinese investors to invest in financial markets of others could grow significantly in the coming years.
"By increasing their familiarity with the RMB as an international currency transaction, local financial institutions, investors and companies tend to be better able to exploit these future opportunities that may arise," Stevens said the Bank of China (Sydney) at the official launch of the RMB clearing systems in Sydney.
"This is an important step in what remains a fascinating journey step."
Rainbow Medical raises $ 25 million from Chinese investors, and establishes an Office of China for Strategic Partnerships.
Rainbow Medical, a R & D and operational investment company, specializing in planting and incubation of new medical device companies and development of innovative medical technologies, has raised $ 25 million from investors in China and opened an office in China to promote strategic partnerships.
"We opened the office in Shanghai to capitalize on rapidly growing China market for our products and to foster collaboration with Chinese medical device companies," said Efi Cohen-Arazi, Co-founder and CEO of Rainbow Medical.
"These investments by major industrial and financial institutions Chinese it is an expression of the high esteem with which they see our technologies and products that we are developing," he said, adding: "There is a strong demand in the industry of Chinese health fast growth of advanced technologies of medical Rainbow ".
Participants in the current round of fundraising include holding largest private insurance company China Ping An, investment and management company financial YongJin, the Chinese telecom giant ZTE Corporation, and venture capital funds Chinese.
Rainbow Medical invest the funds in planting new startup companies based on intellectual property owned by Rainbow Medical, and to provide additional funding for existing portfolio companies including medical Rainbow:
Nano Retina, the developer of an ultra-small artificial retina designed to restore vision to the blind; Biomedical Enopace, the developer of a neuro-stimulator aortic minimally invasive treatment of chronic heart failure; Medical BlueWind, the developer of a platform minimally invasive neuro stimulation to treat a wide range of neurological indications wireless implant; GluSense, continuous developer implantable glucose sensor for diabetes patients; and Vascular Dynamics, such a developer to an implantable stent for the treatment of hypertension device.
About Rainbow Medical:
Rainbow Medical, a privately operating investment, currently has a portfolio of 12 companies that are developing products for the treatment of a wide range of chronic indications such as heart disease, diabetes, hypertension, blindness, uterine fibroids, neuropathic pain chronic, and others.
Rainbow Medical raised significant funds for strategic entities worldwide, including giant Medtronic and Abbott, the European Sorin Group and Japan's Sony Corporation medical devices.
Rainbow Medical was founded by GLENROCK Israel, an investment company specializing in private equity technology and life sciences are owned by Leon Recanati, one of the leading business figures from Israel; Yossi Gross, an industry world-renowned entrepreneur medical devices; Efi Cohen-Arazi and one of the executives in the life science industry's most respected widely in Israel.
Smaller financial firms emerge as a target for Chinese companies looking to diversify, take advantage of cheap prices.
Chinese investors, investment burned in large European banks during the financial crisis, are refocusing on a new target: small, struggling financial companies.
In recent months there has been an increase in offers bite-sized, especially in the smaller European markets as Chinese companies on tiptoe on the continent, which seeks to diversify and take advantage of cheap prices.
More deals may be in the way, bankers and lawyers say. Chinese conglomerate Fosun International Ltd. has expressed interest in the Portuguese Novo Banco, carved out of the collapsed Banco Espirito Santo SA, while Chinese insurers have wondered about the Italian up for sale Banca Monte dei Paschi di Siena SpA, people familiar with offers. Both offers could have multimillion dollar transactions.
"Chinese financial institutions are carefully evaluating their opportunities in Europe," said Jim O'Neil, head of the Bank of global financial institutions group of America Merrill Lynch, noting that insurers have been particularly active. "They have been consciously walking in the market before they take on the opportunities and run bigger."
Last year, total investment by Chinese companies in the European financial groups soared to $ 3.96 billion from $ 304 million in 2013, according to data provider Dealogic. Most of these agreements, including acquisitions and buyouts, were valued at less than $ 1 billion. Some of deals last year are still awaiting regulatory approval.
On Monday a unit of Anbang Insurance Group Co. agreed to buy and recapitalize Vivat, the insurance arm of SNS Reaal a Dutch government-owned financial group. Anbang pay the government € 150 million ($ 170.9 million) and agreed to inject up to € 1 billion to increase the capital base of Vivat and take charge of € 552 million of outstanding debt of the group, according to the Ministry of Finance Netherlands. A spokesman declined to comment on Anbang recapitalization plans. The deal still has to obtain regulatory approval.
In December, Anbang appeared as buyer of last minute for a small Belgian bank held by the Dutch insurance company Delta Lloyd NV. Anbang also aims to complete the acquisition of Belgian Fidea insurance company in the coming months.
Industrial & Commercial Bank of China Ltd. recently bought a majority stake in the business global markets London-based Standard Bank Group Ltd. 's agreement on a reduced price. And in March, Fosun paid € 98.5 million to become the second largest shareholder of German lender BHF-Bank. Fosun said the deal would give access to the financial centers of London and Frankfurt, as well as "billionaires and family businesses."
The recent spate of deals has raised hopes among bank regulators and investors awaited an influx of Chinese investment in the battered financial sector in Europe is about to begin. This year, bankers and analysts expect China's interest in deals that stretches from Portugal to Italy and the UK as financial mainland enterprises looking to shed another's business and strengthen their balance sheets, while Chinese groups ras cash put their capital to work.
James Tye, a partner in the team of financial service transactions at PricewaterhouseCoopers LLP, said he expects this year to see an increase in Chinese purchases. Chinese buyers "have their kids on the floor, your trusted advisors in place and ready to run fast."
Some bankers warn that Chinese buyers are still suffering from losses incurred bets on Europe's banks in recent years.
In 2007, China Development Bank bought a 3.1% stake in Barclays PLC, only to see the value of the shares wither. Ping An Insurance (Group) Co. of China Ltd., the second largest life insurance company in China, pumped € 2 billion in the group of Belgian-Dutch financial services Fortis NV, which ended up being nationalized in 2008. Ping An, who wrote most of their investment Fortis, later scrapped plans to buy half the asset management unit of Fortis.
Some bankers and lawyers warn that Chinese companies remain wary of deals that could attract political scrutiny. Hence his desire to start small: There is less chance of a backlash by Chinese investors or regulators if the investment turns out to be a fiasco. The process also allows Chinese buyers to gradually build their credentials with regulators and politicians on the continent, before moving to larger prey.
The interest arises when European governments continue to attract Chinese investment in activities ranging from real estate to British entertainment company Club Med French. European financial centers, meanwhile, are competing to become centers of trade in the Chinese yuan. And European regulators are anxious to any investor who can help plug holes in the balance sheets of lenders.
There are plenty of potential targets, analysts say. Banks in southern Europe, in particular, are on the hunt for new capital or looking to get rid of lines of business.
At the same time, "the Chinese government has been encouraging Chinese companies to go abroad" to diversify, Jian Fang said a Shanghai-based partner with the law firm Linklaters. He said it is a change from the previous concerns of the Chinese government about their companies investing in European banks and other financial institutions.
The justification of Chinese deals has changed.
Anbang, who has been on a shopping spree in recent months after the Chinese government relaxed restrictions on investments in insurance companies, has said he sees Belgium, in the heart of the policy of the European Union, as a springboard to the mainland. He was also attracted by the possibility of acquiring a local banking license, according to a person familiar with the deal. ICBC's investment in global business markets Standard Bank was driven in part by the growing number of Chinese companies involved in the trade of commodities, according to a statement from the bank.
Chinese buyers have eyed Portuguese offers partly as a gateway to its former colonies in Africa.
Fosun has recently completed the first Chinese acquisition of a foreign insurance, buying a majority stake in the Portuguese insurance group Fidelity-Companhia de Seguros SA, and Haitong Securities Co. in December agreed to buy the investment banking arm of Espirito saint of € 379 million.
New Chinese government fund for venture capital has real potential to significantly promote China's domestic entrepreneurship and innovation. But if access to new funding is too easy, the main objective of the project is jeopardized.
On January 14, 2015, the State Council - The head of China's policy body - announced that it will allocate 40 billion yuan (US $ 6.5 million) to a new venture capital fund to support new startups and promote emerging industries. The notice read that the fund "comes at the right time", but "still monitoring efforts are required to ensure the fund works'. The government said the fund will come from existing government budget designated for the expansion of emerging industries . the details on how it will be managed yet to be announced. the government has referred to the possibility of including "social capital" and invite tenders from fund managers.
The aim is to promote innovation. But the success of the fund not only depend on the extent to new financing extends. Instead, it depends on the ability to pick winners among fledgling startups China, promote profitable business and profitability secure market for investors.
China's economic strategy has recently faced challenges. Abundant labor in rural interior of China has decreased, which entitles workers to demand better wages and conditions. The global financial crisis has shown that export demand for labor in China can not rely indefinitely. China is working hard for a "soft landing" from his slowing growth by improving its economic structure. The fund startup venture is the latest concrete step towards the escalation of the value chain. The desire to breed and foster sunrise industries for the future and help promote economy [China] to move towards the middle and high end 'the new background. Recent success stories like Alibaba Group, Huawei and Lenovo bright point to the ability of Chinese industry world-class innovation in global competitive markets possibilities.
China private small and medium enterprises (SMEs) are driving economic growth, but still struggle to access finance and investment. Yiping Huang wrote that the capital market in China is distorted against SMEs due to the asymmetric liberalization of factor markets in China. Product markets have been fully liberalized, but the state deflated prices of factors of production such as capital, labor and land. State banks lend at rates below market; as a result, does not lend enough to meet demand. Loans in place to rich SOEs is prioritized in assets.
The government statement said that SMEs - especially startups - have few or no assets to be mortgaged by banks, and must rely on other financial organizations, especially venture capital funds.
Venture capital market in China is small and has been limited by a number of restrictions in the past. According to research by consultancy Z-Ben capital, China has around 3,100 hedge funds with RMB388 billion (US $ 62 billion) under management, and another 2,500 private equity managers who oversee RMB1.2 billion (US $ 192 million).
Government restrictions on venture capital market are loosening. In late 2014, regulators allowed insurance companies to invest their huge pools of raw venture capital. Caixin reported recently that Anbang, a relatively small Chinese insurer, is making big inroads into private equity, raising questions about whether regulators are keeping up. 'Princes' China are flocking reportedly in the nascent venture capital industry.
The danger is that such a significant increase in the supply of venture capital 'water' for performance expectations receptor investment. Benefiting companies can develop the same disease than their larger cousins state: the inefficiency caused by easy access to government capital.
The solution to this risk is "mixed capital". The government has recognized this, and refers to the possibility of increasing the "social capital" (or actually the private capital) for the background. 'Mixed economy' has already been discussed in connection with the improved performance of SOEs. Zhao Changwen the Development Research Center of the State Council wrote that the "mixed ownership" can increase the performance of public capital. The idea is that the public capital invested in conjunction with the capital and private investors have a say in the management of assets. He Fan CASS economist said that if private investors are skeptical about whether they have management control of investment in joint venture assets, it is unlikely to invest in these companies.
The same applies to venture capital. If the State is to have any hope of achieving a successful fund "joint venture" with rates of return to attract private investors, investors need assurance that they will say in investment decisions. Investors will want to fund managers who can create winning formulas to pick-ups and innovative SMEs. They will be supported to become profitable businesses in order to make a return on your investment.
If the government can not attract "social capital", the fund can not very well become another subsidy program inefficient government, instead of an investor of goods in the future of innovation in Chinese industry.
Thailand is willing to be a strategic investment destination for Chinese enterprises, not only to take advantage of a huge domestic market, but also with the Kingdom as a springboard for export to the ASEAN and other markets worldwide.
However, Thailand has to improve the efficiency of public services in the processing of work permits and visas for foreign companies looking to set up operations here, as well as help them reduce their production costs, a Chinese investor says.
Gen Xu Luo, president of Thailand and China Rayong Industrial Realty Development Co., said that with the rapid development of China's economy, the companies had been increasingly integrated with the global economy.
Despite their higher production costs compared to China, Thailand has other strengths make it an attractive country for investment.
The main factor is the desire to enrich their products Chinese manufacturers diversity of origin. They also want to expand their business in the Thai market and use this country as a springboard for export to global markets. Moreover, Chinese companies want to leverage the resources of the kingdom as rubber.
The Chinese government has encouraged companies to invest abroad, granting low-interest loans and tax incentives and direct support of capital.
"China is a young country whose modernization and progress of industrialization has taken place in just 30 years. It takes time for Chinese companies to improve and strengthen themselves first before expanding their business in global markets," said Xu . Thailand is located in the center of ASEAN and has a great atmosphere for investment and harmonious cultural environment. Security of investment in Thailand is quite secure. That's why more and more Chinese investors have come to Thailand, said.
He said more than 1,000 Chinese companies are operating here, including commercial and industrial companies.
Thailand and China Rayong Industrial Realty Development was established in 2005 as a joint venture between Holley Group of China and Thailand Industrial-estate developer Amata Corporation.
Its core businesses are an investment advisory service and rental and sale of land and factories. Its purpose is to build a platform for Chinese investors to develop and expand its business in Thailand.
Xu said the group decided to form a partnership with Amata for three reasons. First, Vikrom Kromadit, director and chief executive officer of Amata Corp, is a man-mind strategic business enjoys a high reputation in Thailand. Second, Amata Industrial-estate is a well developed and successful company with years of experience. Third, Amata City is in Rayong, enjoying the Board of Investment Zone 3 investment privileges.
"Factories in our industrial area have invested US $ 1.2 million so far in the first and second phases," he said.
"Currently, there are over 60 manufacturers in the industrial park, which covers the total area of 2,000 rai. Most of them are in industries such as electronics, motorcycles, vehicle parts, and renewable energy industries, as solar panels. Han Chinese employed about 1,000 workers and 10,000 Thai workers. "
Xu added that about 60 percent of farm products were exported to many markets around the world, particularly the US and Europe.
"We plan to add another 1,000 rai initially in our Phase 3, which starts this year and will add another 200 factories in our industrial park".
Specializing in energy and high technology industries renewable products will be new approaches, he said, noting that with its relatively high production costs, Thailand needed to focus on high value-added industries. He said this year marks the 40th anniversary of establishment of diplomatic relations between China and Thailand is commemorated. It is clear that cooperation between the two countries, such as economics, politics, culture and communications, has entered a new stage.
China is now the No 1 trade partner of Thailand and importer of its products. Chinese investment in Thailand last year totaled BT38 million. Xu said the government needed to improve the efficiency of your visa and work permit processing to attract more foreign investors.
Moreover, as the ASEAN Economic Community becomes fully effective this year, affecting the movement of the regional labor market, Thailand should be doing something to reduce their production costs.
"We are looking forward to the ACS," he said, adding that ASEAN could become a complementary and mutually beneficial ecosystem in terms of resources, capital, trade and labor.
He said government railway project would be mutually beneficial to China and Thailand. Its importance is not only economic but also in politics and culture.
One of the largest investment funds China has taken over the £ 1bn Chinese project to develop Royal Albert Docks of London in a 21st century "Puerto Asian business."
The project, initially approved by Advanced Business Park, a Chinese developer and project partner UK Stanhope, aims to make the springs in an office style of Canary Wharf and the shopping complex and is dear to the heart of Boris Johnson, Mayor London.
China Minsheng Investment, a fund created last year by the former head of Minsheng Bank, Dong Wenbiao said this weekend to become the majority of investors in the project.
Minsheng is the largest bank in the country with the "hybrid property" or substantial participation by private companies, although the fund says it is independent of the bank.
A spokesman for the fund said the original developer, Advanced Business Park businessman Xu Weiping property or ABP, still owns a stake, but declined to quantify. He also refused to say whether the expected cost of the project was agreed in May 2013, had increased.
Foreign investment in China, especially in real estate, has accelerated as the domestic real estate market cools and the economy slows.
The output inversion soon overtake inward investment, in a reversal of three decades of capital inflows that turned the nation into the world's factory and propelled the economy the size of Spain or Canada in 1980 for most the world by purchasing power in 2014. outward investment rose 14 percent to $ 103bn last year.
Much of this has been put into bricks and mortar. Ping An Insurance in January paid a £ 327m recorded in the Tower Place office building in London, following the purchase of EUR 260 million Construction of Lloyd in July 2013.
His rival China Life Insurance paid £ 795m in June for a building near Canary Wharf, while Taikang Life Insurance has agreed to buy Milton Gate 198m pounds.
In New York, Anbang insurance is paying $ 1.95bn for the historic Waldorf Astoria hotel, while Zhang Xin, co-founder of real estate developer based in Beijing Soho in 2013 led a group of investors to take a 40 per percent share of the overall engine building at the southeast corner of Central Park.
The Royal Albert Docks project was led by the founder of ABP Mr. Xu, marking its first foray outside of China. Mr. Xu said in the past that he planned to seize Chinese banks for two thirds of the £ 1bn investment and finance the rest of pocket.
The project has attracted considerable skepticism from property developers rivals London observe high rents necessary to justify the investment. Mr. Xu has said it plans to sell long-term leases at half the units to Chinese investors, most of which have not yet been identified.
A Chinese real estate company called China's Capital Investment Group recently bought Queensland Daydream Island Resort for the bargain price of just over $ 30 million.
The purchase can only be described as a bargain compared to its original price $ 65 million.
Last October Agent CBRE Hotels' Wayne Bunz said he expects the sale to go to an investor in Asia after the market specifically targeted video ads recorded in Mandarin.
"The Chinese are absolutely in love with the Great Barrier Reef, so we're hopeful we'll get some renewed interest," said Bunz News Limited.
"The key is for the Chinese, that if you look around in any major economy, Australia is seen as a fairly safe haven for investment.
"It also helps that the lower and the dollar tourism is on the rebound with strong growth in the Chinese market input."
The Island resort is the latest in a series of sales in the Whitsundays, following the sale of Lindeman Island to Chinese group, Whitehorse in 2012, and Orpheus Island by $ 6,250,000, Bedarra Island for less than $ 5 million and Dunk Island $ 7.5 million, all in 2011.
The one kilometer long island is home to a complex of 296 rooms 4.5 stars built by the founder of Nature Vaughan Bullivant, who paid $ 25 million for Daydream in 2000.
After an extended period in the market, the selling price was fair islands fall before Christmas.
The annual turnover of the town is estimated at $ 27 million.
Prime Minister Manasseh Sogavare on Wednesday met with the CEO of a Chinese company based in Papua New Guinea interested in investing in the Solomon Islands.
Mr. Ma Jianhua, General Manager of China Habour Company (PNG) Limited, lit the Prime Minister about his company, he said, is a state-owned enterprise specializing in the survey and design, marine engineering and road construction , bridges and docks.
Mr. Jianhua told the prime minister that his company also provides support to its customers for financial solutions for their needs infrastructure development.
"I first visited the Solomon Islands two years knew that the country has a good market investment for my company.
"We are committed to providing quality service and the best value for our customers," he added.
The Prime Minister acknowledged the interest of China, Habour Engineering Company.
"We are open to any genuine investor who wants to help boost our private sector and I am pleased that your company is a reputable company to do business in 80 countries including Papua New Guinea," Sogavare said.
He said, "Solomon Islands is in dire need to leave where we are now in terms of development and we have ourselves to blame for other potential investors stick".
The prime minister said there is potential for investment in the Solomon Islands for the company and he is encouraged to hear that the company can also help clients access financial solutions for their needs infrastructure development.
"My challenge now is to ensure the development of Malaita Province, but I hear people saying that investors are afraid to go to Malaita."
A Chinese company has had a run of bad luck in Kyrgyzstan is not getting much support from government investment hunger or country of Russia.
China controlled by China Junda State Oil Company runs an oil refinery in trouble but potentially strategic in northern Kyrgyzstan. The problem now is that Junda does not have enough oil to fuel its plant for $ 430 million. And oil producers in the region, Kazakhstan and Russia are not willing to help.
Last week, Deputy Prime Minister of Kyrgyzstan Valery Dil Junda called the decision to build a refinery without planning crude supplies "ridiculous" in quotes collected by 24.kg.
"To build a large refinery and not knowing where to get the oil, that's ridiculous," said Dil.
Those who are not exactly welcoming words of a great foreign benefactor who are already struggling to find reasons to continue investing in perennially troubled Kyrgyzstan. In its short history, has faced Junda own environmental protests and labor disputes, asserting a legislator are backed by opposition politicians bent on using the facility as a weapon in a political confrontation with the government.
Dil also confirmed that Russia and Kazakhstan have refused to provide tax-free oil, although his colleague, Economy Minister Temir Sariev, had recently been the hope that the accession of Kyrgyzstan in the Eurasian Economic Union led by Russia would help resolve this problem.
Currently the refinery in Kara-Balta is serving only a fraction of its 850,000 tonnes annual capacity. Medetbek Kerimkulov, President of the Association of Kyrgyz oil traders, an industry lobby said recently that Kazakh companies had supplied 100,000 tons of crude to the refinery in 2014. But that translates into approximately 50,000 tons of products refined petroleum (gasoline) ie just one drop to the annual consumption of Kyrgyzstan, says the Association is around 1 million tonnes.
Moscow is probably reluctant to become a supplier of raw materials for Chinese upstarts in their own backyard. Since Soviet times Central Asia has always been a captive market for finished products Moscow and the fuel, such as migrant workers, is an easy source of influence on Bishkek.
Shanghai-HK connection opens up possibilities for companies looking to tap demand for Chinese investors
November 17, 2014, marked the first day of trading under the Shanghai-Hong Kong Stock Connect, a platform for mutual market access which effectively opens the market for Hong Kong investors in mainland China. The Shanghai-HK Connect allows Chinese mainland investors to trade in securities listed on Hong Kong Stock Exchange (HKEx) in renminbi (RMB) through brokers members of the Shanghai Stock Exchange (SSE) and Hong Kong investors to trade in securities listed on the SSE through their brokers HKEx. Although in its infancy, the Shanghai-HK Connect is an important step in the liberalization of capital markets in China and adds to the attractiveness of Hong Kong as a place from the list of companies looking to tap demand Chinese investors.
A modest increase in trading volumes on the Stock Exchange of Hong Kong from the lows of mid-2014 was widely attributed to the imminent start of the platform, with the valuations of listed companies in Shanghai generally much higher than those of the Hong Kong listed companies and platform potentially leading to a narrowing of the gap. Even more pronounced is the increase in the average daily volume in DFS, from a minimum of US $ 9.7 billion in May 2014 and $ 40 million in November 2014.
At least initially, the scope of the Connect Shanghai-HK has limitations. China mainland, or "south", investors are only able to invest in constituent stocks of the Hang Seng Index Composite LargeCap, the Composite Index MidCap Hang Seng, and H shares of any company incorporated in the People's Republic China have shown corresponding class of shares in Shanghai - a grand total of about 270 companies that together account for about 82 percent of the total market capitalization of the HKEx and 78 percent of the average daily volume. Companies that only have a secondary listing on the HKEx, ie companies with a primary listing on a market outside China and Hong Kong, are a remarkable group excluded from the platform. Hong Kong, or "north", investors can trade in shares listed 568-SSE companies, representing approximately 90 percent of the total market capitalization of SSE and 80 percent of the average daily volume.
The platform does not extend to the subscription of shares in initial public offerings, which are often perceived as riskier, which listed on the HKEx companies will have to wait until they qualify for one of the Hang Seng index applicable to benefit platform. Chinese investors are also unable to short sell or participate in financing margin or stock borrowing or lending. In line with narrow China's foreign exchange controls, there is an initial limit of RMB250 million in the net amount of the securities listed on HKEx that can be purchased under the program by investors from mainland China values (with a cap daily net purchase of RMB10.5 million), and the corresponding aggregate quota RMB300 million in the purchase of securities listed in Shanghai by investors from Hong Kong titles. The cover aggregate RMB250 million, just over US $ 40 billion, equivalent to about turnover in the HKEx week - although sales are offset against purchases off the lid is not necessarily indicative of the overall level of turnover generated by the platform.
In addition, both northbound and southbound investors need to comply with laws governing securities markets in which they conduct business, including the requirements of applicable information in these markets. The Commission of Hong Kong and China Securities Regulatory Commission Securities and Futures have signed a memorandum of understanding to strengthen cooperation in implementation that provides, inter alia, for the exchange of information and data on potential or suspected irregularities. Non-listed Chinese SSE investors seeking to use the program to trade in securities should, therefore, ensure they are familiar with the applicable requirements.
In early 2015, shares of 268 companies listed on HKEx had been negotiated by investors to the south, with most traded stocks a mixture of major constituent stocks of HKEx and SOEs with H shares trading at significant discounts to its SSE- listed A shares. Contrary to the expectations of many who anticipate the lowest rating of the HKEx be the main appeal, northbound net purchases of listed-SSE shares for investors in Hong Kong have significantly exceeded net purchases south. As of December 26, 2014, had been used about a quarter of the share RMB300 billion net purchase of operations north, compared to only RMB10.5 million share of net purchase of operations to the south.
If the Connect Shanghai-HK is successful in its initial pilot phase, both parties have publicly stated that the platform can be expanded in terms of fees, and the securities markets. However, no timetable has not yet been set for an expansion of the platform.
Investor Tong Jinquan China has boosted its stake in offshore drilling contractor Seadrill Ltd. (SDRL), involving raised catapulting it beneficial owner of about 5.2 percent of the company.
Seadrill is majority owned by Norwegian oil tycoon John Fredriksen, which had increased its stake in the company to 23.9 percent in early December. In addition, another 23.9 percent of the total outstanding share is held by Hemen Holdings Ltd., an investment holding company based in Cyprus founded by Fredriksen.
Oil services stocks have been affected negatively by falling oil prices, which has resulted in suspensions and dividend cuts, impairment charges, and consolidation through mergers and acquisitions. Oil prices have stabilized near $ 53 after collapsing six years minimum of about $ 44 in January.
Seadrill shares also lost more than 40 percent of its value since late November, when the company completed its dividend to improve its balance sheet. The stock has fallen 70 percent since June 2014, when oil prices had peaked.
In a communication to the Oslo Stock Exchange, Seadrill Tong revealed that increased its stake in the company through the purchase of shares by the rich Source Holdings, Inc., Horizon Horizon Consortium Ltd. and starray Global Ltd., which are the 100 percent owned by Shanghai Summit Pte. Ltd., which is 100 percent owned by Tong.
Bermuda-based Seadrill Hamilton said Tong currently holds an aggregate of 25,620,000 shares as beneficial owner, being 5.20 percent of the issued share capital of the company.
On the NYSE, SEADRILL closed Monday's trading at $ 14.34, up 1.08 or 8.14% on a volume of 22.23 million shares. Stocks also closed in Oslo 100 NOK to SEK 4.70 or 4.93% on a volume of 3.77 million shares.
The president of Infront Italy Marco Bogarelli spoke about the possible entry of a Chinese investor to help new stadium project of AC Milan.
AC Milan has recently launched its new plans for a new stadium-of-the-art status, project drawings having been completed.
Bogarelli mentioned the Wanda Group, since the investor in question, who might be willing to help finance the project Rossoneri.
"The Chinese group Wanda is a market leading company," he told Radio 24 Bogarelli.
"In terms of [Wanda] becoming a part of the stadium project, the skills are there, the means to invest are there too and the time is right.
"About AC Milan [in the new potential investor Wanda] That's another story and not for me to say, I have not talked to anyone Silvio Berlusconi Barbara yet."
Economists already know that large numbers cease to be useful when they become targets. This law now applies to technology companies in China. Rival groups like Alibaba and JD.com bandy about statistics as "gross merchandise volume" which are highly subjective. As the Internet matures, numbers like these will confuse irrelevant China.
For groups ecommerce China, GMV is the data point to flaunt. Alibaba handled transactions worth 2.3 trillion yuan ($ 364 billion) last year - an impressive 81 percent of total online shopping market in the country. That put 240 billion yuan JD.com rival, according to iResearch, in the shade. However mammoth Alibaba GMV includes all confirmed less than 100,000 yuan, regardless of whether or not the transaction is complete orders. Excludes incomplete transactions JD.com more than 2,000 yuan. If a customer orders a 5,000 yuan iPhone 6 and then canceled, Alibaba will in its GMV while JD no.
The possibility of rotation. Alibaba proudly displays sales figures in real time on a giant screen during his 24 hours "Day" Singles "online shopping festival. At midnight, the company reported 57.1 billion yuan in transactions. However, this number was driven by an initiative of pre-sales, where customers could make a deposit nearly a month before, just to pay the full amount on the day of 'Singles.
The main reason investors pay attention to these numbers is that it makes it easier to compare different business models. Market main eBay-like Alibaba, Taobao - where consumers sell each other - is very different from Amazon-like JD.com business to consumer sites. JD.com also clings to products in their own warehouses and trucks, while Alibaba does not.
Ideally, investors stick to the fundamentals of the old school, like operating profit. After all, that's what actually went to investors after stripping equity and debt in the different business models. Technology companies themselves are unwilling to highlight those figures though. Alibaba GMV grew 49 percent in the last quarter, while operating profit grew only 6 percent year on year. And JD.com remains negative. That makes the numbers as GMV best of a bad bunch - but investors should be wary of being too credulous of what is basically a new way of being cheated.
China is complicated and raises many questions for investors. On the one hand, China's economy is growing more slowly at 7.4% last year, compared with 7.7% in the previous two years. Furthermore, because the base was much higher last year, the gradual increase in the size of the economy was 100% greater than the increase from a decade ago, when GDP rose by 10%. Therefore, the International Monetary Fund estimates that China accounted for almost a third of global growth last year. With income adjusted for inflation to about 7% in China, compared to 2% in the US, consumer spending is booming, up 11% versus 2% here. Headlines, however, are telling us that China's economy is doomed.
This is the first in a series of three parts Sinology designed to answer some of the most important questions about China's economy. We address the impact of falling oil prices and risks for deflation. We also consider the prospects of certain moves cuts policy interest rates and banks required reserves ratios have led to a Chinese domestic stock market booming, and the conclusion that those investors are likely to be disappointed.
The second part of this series will explore the reasons why the Communist Party is comfortable with slower growth, and how slow pace might be tolerable. This segment also answer questions about the health of what has been the best story of world consumption, and the prospects of new economic reforms.
The latest installment will answer the question, China's property market is heading for a crash? He will discuss what we think are the biggest risks of long-term growth and stability: the absence of the rule of law and institutions of trust.
Q: Are Falling oil prices have an impact on China?
No, because coal is still king in China, representing two-thirds of the country's energy. In fact, although China is the largest net importer of oil in the world, net oil imports amount to less than 3% of GDP in China.
Oil accounts for only 18% of primary energy consumption in the country, compared with 44% in Japan, 40% for Korea and 37% in oil prices lower United States has helped to reduce prices fuels, delivering a modest contribution to retail price index (CPI), but low food prices (due to unusually mild weather and unusually low levels of swine disease) have had a much bigger impact. Moreover, households represent a relatively small part of total oil consumption in China.
China, undoubtedly contributed to weakening global demand for oil last year, with oil consumption rising by about 1.4% year-on-year (yoy), compared with growth of 3.2% in 2013. However , most analysts agree that a large increase in the supply of oil was the main factor behind the lower prices.
Q: Do you need China to worry about deflation?
No, we do not believe. So do not jump on the bandwagon of deflation, and do not expect much easier monetary policy.
IPC is low in China, but not unusually low, and this is clearly not due to a fall in aggregate demand.
IPC Media Holder for the fourth quarter of last year was 1.5%, down significantly from an average of 2.9% for that time in 2013, but closer to the average of 2.1% in 2012 (when the nominal GDP growth for that year was 9.8%).
During 4Q14, core CPI (ex-food and energy) with an average of 1.3% compared to 1.8% during that period in 2013 and 1.5% for that time in 2012.
As always, food prices are great swing factors. For example, the price of pork, the main protein of China, fell by 3.9% yoy in 4Q14, while a year ago it was 3.9%. CPI / food averaged 2.6% during the last three months of 2014, compared to 5.5% during that period in 2013. But it was at a similar rate in 2012 (3%). And you may recall that food inflation soared to 11.8% in 2011, leading many to argue that inflation was out of control in China a few years ago.
Some suggest that the sharp declines in the producer price index of China (PPI) mean that China has a problem of deflation. But in my opinion, this is inaccurate, because it is clear that trends in PPI China are closely related to world prices of raw materials. In other words, the decline reflects lower energy PPI China and world prices of raw materials instead of deflation in China. I think many Chinese companies will benefit from lower prices of inputs.
Q: Will China cut interest rates?
China is likely to reduce interest rates, but this fails would signal a shift towards a dramatic easing of monetary policy. China's central bank understands that changes in food prices are the result of supply issues (recently, a low incidence of swine disease and moderate climate), no significant changes in demand, so the central bank (People's Bank of China, or central bank) has tried not to use monetary policy to intervene when food prices send CPI up or down. The People's Bank of China, however, usually adjust interest rates to keep pace with the CPI.
As a result, we might see one or two cuts of 25 basis points (0.25%) each, active and passive benchmark rates over the next couple of quarters.
In my opinion, it is important to understand the motivation of the Communist Party by these cuts: first, to keep in line with inflation rates, and secondly, to take advantage of lower CPI to reduce borrowing costs for businesses (including privately owned companies) and consumers.
It is likely, however, that the Party postponed a rate cut by the concern that this step would be misinterpreted by investors, adding fuel to the already dramatic rise in the domestic stock market. And the People's Bank of China has adopted new tools for managing liquidity and reduced funding costs, as the promised additional loans (PSL), the operations of short-term liquidity (SLO) standing credit line (SLF), and a medium-term loans (FML). Chances are that the central bank will use these tools as they have the advantage of attracting much less attention from the media and investors that changes in interest rates.
Q: Why China reduced the required reserve ratio (RRR)?
China recently reduced the RRR, but not to boost bank lending. Cut the RRR will have little practical impact and not alone for more loans. Changes in the RRR are linked primarily to changes in foreign exchange reserves, sterilization purposes.
Fake RRR a banking system
In a real banking system, regulators use the RRR to manage growth in lending and money supply. Banks only influence the money supply in an economy where pay and a lower RRR raises the share of deposits that can be provided.
However, China has no real banking system. All Chinese banks are controlled through the personnel system (even to the branch level) by the Communist Party. This allows the party to establish quotas for each bank loans, which regulates the level of loans above and beyond the RRR limitations. The system works as any banker who ignored his share soon be unemployed.
RRR cuts last, on their own, did not result in a material credit and liquidity loans that change is controlled by the quota. I have seen no sign that the party plans to raise the share of this year and credit growth continues to slow as planned. Since the party seems comfortable with the fact that GDP growth is likely to continue its gradual slowdown this year, there is no reason to expect the party to re-accelerate credit growth in 2015.
Already in 2012, when the central bank governor, Zhou Xiaochuan, was asked at a press conference if the latest RRR cut should be construed as government support to equity markets and property, said no. Zhou also said the RRR is primarily a tool sterilization currency "and in most cases, the RRR adjustments do not indicate the monetary policy is tighter or looser."
This is consistent with comments from the deputy governor Hu Xiaolian in 2011: "It should be noted that the increase in the RRR is mainly to offset the further increase in the liquidity of foreign exchange inflows, and does not have a great impact on the normal availability of money to financial institutions. The overall effect is neutral ".
Investors rush booming healthcare business in China, helping M & A deal values exceed the hot Internet sector, as the country prepares to serve hundreds of millions of elderly.
Encouraged by a relaxation of foreign ownership rules last year, and a rapidly aging population, the private equity firms TPG Capital and as industry players including IHH Health Malaysia are investing in Chinese hospitals, pharmaceutical companies and device manufacturers.
The prospect of 223 million people aged 65 or older predicted to live in China in 2030 is too tempting for these companies, despite the significant risks, as weak hospital infrastructure, increased valuations and the shortage of doctors .
Companies have begun to harness connections local partners to recruit physicians, and to help streamline local licenses and permits to begin work on planned projects.
China has the health care provided by the private sector, businesses and consumers state-owned to triple to 8 trillion yuan ($ 1.3 billion) over the next five years as it tries to cope with the boom aging of its population, the result of decades of the country's one-child policy and low current fertility rate.
"I spend 70 percent of my time looking for deals healthcare in China," said Steve Wang, co-founder of private equity firm based in Hong Kong Pino Golf Capital. "It's a very hot sector in China, as hot as mobile Internet."
After years of steady growth, mergers and acquisitions China's health more than doubled to a record $ 18.5 billion in 2014, showed data from Thomson Reuters. This January, deals totaled $ 6.9 billion, an acceleration in activity that points to another blockbuster year.
Deals involving e-commerce in China, Internet software, services and infrastructure also reached a record in 2014, but with a $ 17.9 billion were lost health.
China began liberalizing its health sector in 2009, but it was not until 2014 that allowed full foreign ownership of hospitals, the prices of medicines deregulated and implemented rules to expedite approval of medical devices.
That optimism has pushed valuations for some firms consistently above. Phoenix Healthcare Group, No.1 private hospital group in China, listed in Hong Kong in December 2013 to 25.1 times its expected earnings. It now trades around 35 times.
Other risks for potential investors in China, where government policies are often unpredictable, are lack of doctors and the long approval process licenses hospital.
The country had 14.6 physicians per 10,000 population in 2012 compared to 38.5 in Australia, 24.2 in the United States and 17.6 in Brazil, according to the World Health Organization.
"When you look in the hospital sector and supply, in particular the medical point about availability is very important," said Vikram Kapur, partner at consulting firm Bain & Co. "So the risk to be managed is for sure you can attract enough doctors to private institutions. "
TPG, Blackstone Group and Shanghai Fosun Pharmaceutical China Pharmaceutical Group are among the investors who have already bought in hospitals, medical device manufacturers and service providers in China.
"We are very positive on the New China, especially the health sector," said Kinger Lau, chief strategist at Goldman Sachs China. "The concept of reform in the health sector is very attractive from the point of view of investment as living standards improve and the population ages."
IHH Health, the largest hospital operator in Asia, already has a hospital in Shanghai and smaller clinics in the country and is in talks to further expand in China, President Suleiman Abu Bakar told Reuters.
"China is big, so it's not only going to Beijing and Shanghai," Suleiman said. "For the private sector, these are very early days. We think it's a good thing for us to come now."
Foreign direct Chinese investment in Europe seems to be becoming an accessory after hitting a record $ 18 billion (RM64.3 billion) last year, with food and agriculture the star, said a report.
Highlights of an upcoming report by the law firm Baker & McKenzie showed that foreign direct investment in China (FDI) in Europe doubled last year, prompting the continent one of the leading global FDI destinations Giant Asia.
Chinese FDI in Europe hardly existed before 2004, and did not really take off until 2009.
New dominated sectors such as food and agriculture in the first place at US $ 4.1 billion and real estate in third place with US $ 3.0 billion. Energy investments, which dominated for several years, were in second place at $ 3.7 billion.
"While opportunities of crisis and low valuations still play a role, consistently high levels of investment in a growing number of sectors and countries in the assets that are no longer cheap suggests that Chinese FDI in Europe is a structural trend, just a cyclical phenomenon, "said baker & McKenzie.
While acquisitions continue to represent the majority of investment, the report found that Chinese companies are increasingly investing in new projects such as research and development, food processing facilities, production of machinery and real estate.
He noted that a larger number of smaller deals as shown in the structural nature of Chinese investment in Europe.
Britain was the top European destination for FDI in China last year at US $ 5.1 billion, followed by Italy at US $ 3.5 billion.
During the last decade, more than two thirds of Chinese FDI has gone to countries that have emerged relatively unscathed from the debt crisis in the eurozone, although there has been great interest in privatization opportunities in Portugal, Italy and Spain.
"Chinese investors are clearly taking the opportunities that might arise in markets go through difficult times, but also see great benefit in investing in the most stable countries, where there are strong economic ties with China through trade and existing tourism "said Zhang Danian, the chief representative of the Shanghai office of Baker & McKenzie.
"They are making a long-term bet on the European economy."
The report said the new reforms to the Chinese economy could stimulate more outbound investment.
He noted that the investment trend has continued in early 2015 with the acquisition of Club Med leisure brands for $ 4.3 billion and Louvre Hotels Group for $ 1.5 billion.
Wanda Group of China announced yesterday that it has agreed to buy Infront-the Swiss sports marketing group headed by the nephew of FIFA president Sepp Blatter and having some broadcasting rights for the World Cup € 1.05 billion (RM4. $ 2 million).
Chinese investment in Europe is at record levels and 50% higher than the US level. With 153 different investments worth $ 18 billion last year, Europe has become one of the main destinations for foreign investment from China to worldwide. The UK is the main destination and $ 55 billion has been invested in Europe in five years, but IDA Ireland, the inward investment agency of Ireland, has not yet had an impact.
Baker & McKenzie, the global law firm, says that the use of a single database of acquisitions and investments in new facilities provided by research firm Rhodium Group, the new report, Reaching New Heights, paints the clearest picture so far of Chinese investment in Europe. The full report will be released in March with Chinese investment bank CICC.
Rhodium Group United States said last month that Chinese investment in the US Over the past 12 months was $ 12 billion, surpassing the mark of the $ 10 billion for the second consecutive year. The number of M & A transactions reached a new record high in 2014 as smaller deals and financial interests are becoming an important driver of investment activity.
Meanwhile, The Wall Street Journal reported today that US companies in China have expressed growing concern over what they see as a growing anti-foreigner sentiment and operating conditions increasingly difficult as the growth of jobs in the economy slower.
An annual survey released on Wednesday, about 500 members of the American Chamber of Commerce in China found that most companies believe that foreign companies have been the target of investigations of widely publicized government for a range of anti-competitive practices.
Many of those companies that see themselves as objective that it had reduced its interest in making new investments in China.
"The Chinese investment in Europe has become more diverse in recent years and now extends throughout Europe," said Thomas Gilles, president of the China Group EMEA and Baker & McKenzie. "What we're seeing is the maturation and standardization of processes of Chinese investment in line with the international economy."
In 2013 investment levels fell as energy supplies and materials were reduced. However, investment rebounded to record levels in 2014. While opportunities of crisis and low valuations still play a role, consistently high levels of investment in a growing number of sectors and countries in which the assets no longer look cheap suggests that Chinese FDI in Europe is a structural trend, not just a cyclical phenomenon.
Chinese FDI in Europe barely existed until 2004 and then an average of less than $ 1bn a year. Then in 2009, investment flows tripled to nearly $ 3 billion, three times before again in 2010 to over $ 10 billion. $ 55 billion has been invested since 2009.
How the Chinese are investing in the EU
The Baker & McKenzie report says that over the past decade, most Chinese enterprises have increased their presence in the EU market through greenfield projects and expansions (69% of all jobs). However, most investment value is attributable to acquisitions (86% of total value), as these transactions are greenfield projects and expansions generally more capital intensive.
In the last three years the average value of greenfield projects has grown. Previously mostly smaller administrative offices and operations, Chinese companies have begun to invest in new projects with large capital investments, including Scandinavia D research and development, food processing facilities in France, real estate developments in Britain, and machinery production in Germany. Companies have also increased spending on the expansion of existing facilities in Europe, including chemical plants, warehouses and other transport infrastructure.
The composition of mergers and acquisitions has also changed substantially since 2011. An important trend is the growing importance of small and medium mergers and acquisitions, often by financial investors. While mega deals over $ 1bn continue to dominate total investment of Chinese input, small deals (below $ 100 million) and transactions midmarket (between $ 100 and $ 1bn) grew particularly strong since 2011 . More importantly, they are less prone to annual fluctuations that large-scale transactions and provide further confirmation of the structural expansion of the private sector in China in Europe.
Gilles Thomas said: "The increase in venture capital funds and other financial investors in the Chinese space investments abroad is driving a change in investment strategy completely to hand the property as well as the finding that minority interests often can help preserve and create value for less experienced Chinese investors. "
Countries of choice: invest for the long term
Since the turn of the century, the four countries that have attracted more Chinese investment are the United Kingdom ($ 16 billion), Germany ($ 8.4bn), France ($ 8 billion) and Portugal ($ 6.7bn), followed Italy ($ 5.6 billion), the Netherlands ($ 4 billion), Hungary ($ 2.6 billion), Sweden ($ 2 billion), Spain ($ 1.5bn) and Belgium ($ 1.2 MIL).
While 70% of the investment in the last decade has been to economies that emerged relatively unscathed from the crisis, the last three years have seen a significant Chinese interest in the privatization of state-related industries, such as public services and logistics in countries like Portugal, Italy and Spain.
"Chinese investors are clearly taking the opportunities that might arise in markets go through difficult times, but also see great benefit in investing in the most stable countries, where there are strong economic ties with China through trade and existing tourism "said Zhang Danian, chief representative of the Shanghai office of Baker & McKenzie. "They are making a long-term bet on the European economy."
Ireland is not among the top 67 destinations of Chinese FDI issuer in 2014
Sector evolving and maturing
Chinese investment in the EU are spread across a range of sectors. Throughout the period 2000-2014, the main recipients of Chinese capital were energy ($ 17 billion), automotive ($ 7.7bn), agriculture ($ 6.9bn), real estate ($ 6.4bn), equipment ($ 5.3bn), and information and communications technology (3.5 million).
Toby Clark, director of Investment Banking CICC Europe, explains: "The mix of Chinese investors industries are interested in has changed rapidly, reflecting the changing position of Chinese enterprises in global value chains and the evolution of policy framework for China's outward FDI. "
Before 2011, the entrance to the EU market was motivated mainly by considerations of trade facilitation and the desire to access technology in sectors such as automotive and industrial equipment. In 2011-2012, the promotion of technology and other assets that foster competitiveness increased, but the energy and materials became the main drivers of investment activity since SOEs have seized opportunities to buy companies European mining, energy assets and utilities. In 2011 and 2012, Chinese companies spent a total of $ 11 billion on fossil fuels, renewable energy and utility assets in Europe.
We report says this changed dramatically in 2013 and 2014 as Chinese investment in energy assets collapsed to $ 5 billion for the two years combined as the appetite of SOEs on foreign energy assets decreased and radical changes in the intensive growth model of resources and renewable energy projects became less attractive due to cuts in feed-in tariffs in many European economies.
On the positive side, the commercial real estate has offset part of the investment of energy in decline. From virtually zero before 2013, Chinese investment in European commercial real estate rose to $ 2.8 billion in 2013 and US $ 3 billion in 2014, excluding future development costs. A drop in the Chinese domestic market in 2013 and 2014, and the rise of the Chinese population abroad during the same period - tourists, students and immigrants - were the main drivers of real estate outward FDI. The liberalization of policies for investments abroad by institutional investors such as sovereign wealth funds and insurance companies also contributed to increased investment in real estate.
Other industries that have shown above trend in 2014 compared to previous years are financial and business growth, agriculture and food, and transportation and infrastructure. Financial and business services in the EU received more than $ 2 billion investment, especially in the last two years, driven by financial liberalization in China and new business opportunities related to the internationalization of the Chinese currency, the renminbi (RMB).
"Although from a small number of basis, investments in the food more than quintupled in the past three years, with several large motivated by the desire to acquire know-how, technology and brands to feed the fast food market acquisitions growth in China. investment in transport infrastructure and also reached over $ 2.4 billion through the end of 2014. the increase in investments in air and port services business lines was driven by the increase in tourism, trade and Chinese business activities in Europe "
TheChinaInvestors is the world's #1 funding and investments network for Chinese Investors and Global Investees.