Features booming on shared bicycles

With competition between China’s bike-sharing companies growing even hotter, rivals are rolling out new models to tempt customers.

To do that, companies are using things like flashy paint jobs, high technology and niche features. Notable among these are three companies-Ofo Inc, Coolqi and Bluegogo International Inc-which are racing to produce more of their new models.

Ofo, founded in 2014 and now valued at $1 billion after receiving $450 million in new investments in March, unveiled the Ofo Princess bicycle for women last week. It has a rattan basket on front as well as rounded screws and a better chain guard to keep from snagging dresses. The bike-sharing giant claims to have more than 100 million registered users.

Coolqi launched its “golden bike” last week, which has an on board phone charger as well as an eye-catching color change from its traditional green cycles.

Bluegogo plans this summer to launch a bike with an internet portal that will connect to smartphones via the company’s app. It gives instant online access to features such as maps and the weather forecast.

“With the bike-sharing boom, there is a growing need for personalized user experiences,” said Dai Wei, CEO of Ofo, which is backed by ride-sharing company Didi Chuxing.

“Ofo aims to provide different user groups with a more diverse and comfortable experience,” he added.

Still, many new models are getting mixed reviews on Chinese social media.

Many commenters loved the Ofo Princess bike on Sina Weibo. “It is tailor-made for women through thoughtful design,” one netizen said. “It’s good-looking,” said another.

But some were concerned about the rattan basket on the front. Will it stand up to wear and tear?

“How can you prevent it from being damaged?” one person asked. “After all, lots of vandalism and theft happens in China.”

Coolqi’s deluxe golden edition bike also split the online community. “It can’t be any uglier,” one commenter said.

The paint job didn’t bother others so much, even though the bicycle is, by comparison, pricey. It has a 298-yuan ($44) deposit, while many other bikes have deposits of 99 to 199 yuan, and a rental price of 3 yuan per hour, while bikes can be had for 1 yuan or less per half-hour.

“Since it has a smartphone holder, I can navigate while cycling and that’s cool,” said one commenter. “Of course, I will be forever blinking at the dazzling golden color,” said the user, Sunshine Ziqing, taking a dig at the color.

There also was concern about the ability of the bike’s battery, recharged by solar power, to recharge cellphones.

“I just wonder what will happen when it rains and those batteries get wet,” said a Weibo user named Energy from Balabala.

Zhang Xu, a senior analyst at Analysys, a Beijing-based consultancy, is not convinced that extra features are going to be the key for all companies.

The Ofo Princess bike should have broad appeal, but one overlooked key is that this will help the company retain a strong position it already has obtained in the marketplace.

“Since they already have a high number of users, Ofo needs to further improve the riding experience for specific groups,” said Zhang, who said that Coolqi’s golden bike may appeal only a limited audience.

“The key to winning the battle is to attract as many consumers as possible,” Zhang said. “Companies new to the market need to do their research and cater to customer needs,” he added. “I would suggest that they should tap into small and medium-sized cities where market leader Ofo hasn’t dominated the market yet.”

Ofo says it now has more than 6 million bikes in 120 cities in five countries. Nearly half of its customers are females while around 7 million people use its cycles daily, according to app tracker Analysys Qianfan.

But not everyone agrees on strategy in this explosive new business, where companies are battling for market share on razor-thin margins.

The golden bikes company thinks it has a winner.

“Chinese consumers spend most of their leisure time on smartphones. So, recharging on a bicycle can help them always be connected to the internet,” said Gao Weiwei, founder and CEO of Coolqi, which has 1 million bikes in more than 50 Chinese cities.

Jing Shuiyu and Cheng Yu contributed to this story.




Private banking boom in China

With the rapid growth of personal wealth, China has become world’s second-largest wealth management market, which has brought opportunities and challenges for private banking business, the Investor Journal reports.

Private banking, as one of the high-end financial services, consists of banking, investment and other financial services provided by banks to high-net-worth individuals (HNWIs), with assets available for investment exceeding $1 million.

According to a report released by PY Standard, a financial planning data provider, 22 commercial banks provided private banking business in China at the end of 2016.

Of those, three banks’ assets under management exceeded 1 trillion yuan – China Merchants Bank, with total assets under management of 1.6 trillion yuan, ranked first, which was followed by Industrial and Commercial Bank of China (1.2 trillion yuan) and Bank of China (1 trillion yuan).

Last year, the number of domestic private banking clients totaled 570,000. Bank of China had the largest amount of private banking clients (95,000), and Industrial and Commercial Bank of China, followed by Agricultural Bank of China, ranked second and third respectively.

Most of the clients of the banks were aged 40 and above, private entrepreneurs and female, the newspaper said.

Banks usually offer similar products and services, such as family wealth management and global asset allocation, to private banking clients.

However, with their demand for customized products and services slated to grow, private banking has huge room for development in terms of providing comprehensive trans-sector, trans-product and trans-border financial services.




China’s May exports up 15.5%, imports up 22.1%

BEIJING – Both China’s exports and imports surged in May, beating expectations, customs data showed Thursday.

Exports in yuan-denominated terms hit 1.32 trillion yuan ($194 billion) last month, up 15.5 percent year on year, higher than market expectations and the 14.3 percent growth in April, according to the General Administration of Customs (GAC).

Imports grew 22.1 percent in May, much faster than market forecasts and the 18.6 percent growth in April.

This led to a monthly trade surplus of 281.6 billion yuan, in contrast with a 262.3 billion yuan surplus in April. However, the May surplus declined 3.4 percent year on year.

Total foreign trade volume reached 2.35 trillion yuan last month, up 18.3 percent year on year.

May’s data continued the growth in China’s foreign trade since the beginning of the year.

In the first five months combined, exports increased 14.8 percent from a year ago to 5.88 trillion yuan, and imports jumped 26.5 percent to 4.88 trillion yuan, resulting in a 21.1 percent decline in the trade surplus.

During the first five months, trade with the EU jumped 16.1 percent from the same period last year to hit 1.6 trillion yuan. The EU is China’s biggest trade partner, accounting for 14.8 percent of the country’s foreign trade.

Meanwhile, trade with the United States, ASEAN and Japan went up by 21.1 percent, 23.2 percent and 17.5 percent, respectively.

Machinery, electronics and clothing exports rose in the first five months, while labor-intensive products such as fertilizer, steel and automobiles saw shrinking orders.

A leading indicator for China’s exports increased from 40.7 to 41.1 month on month in May, signalling positive export potential.




Wealthy Chinese seek adventures on vacation

Despite a sluggish world economy, the expanding group of wealthy Chinese, especially millennials, is showing a bigger appetite for luxury travel, adding a bit to the members’ spirit of adventure.

According to The Chinese Luxury Traveler 2017 Report – jointly released on Monday by Shanghai-based Hurun Re-search Institute, which observes the rich, and International Luxury Travel Market Asia – the average upscale traveler spent 380,000 yuan ($55,855) on family travel last year, 220,000 yuan of which was devoted to shopping, up 57 percent year-on-year.

This seventh report released by the two organizations covers wealthy travelers from 12 Chinese cities. The survey polled 334 affluent Chinese with an average personal wealth of 22 million yuan.

In terms of accommodation budgets, the younger generation, who were born in the 1980s, had a budget 3,325 yuan higher than others, up 7 percent from 2015.

However, private short-stay rentals, like those provided through Airbnb, had not won equal favor among wealthy Chinese tourists. When asked if they would consider such service, 28 percent of those surveyed said no and 10 percent said it was highly unlikely.

Another 31 percent showed a neutral attitude. The lack of top-tier services at the private residences is the main reason for the luxury travelers’ indifference.

Adventure travel will be the theme in the next three years, according to the survey, with around-the-world travel, polar expeditions and outdoor adventures the most popular. The generation born in the 1980s shows greater interest in these areas. About 36 percent of these young, wealthy tourists plan to visit Africa in 2017, up from the 23 percent in 2016. Meanwhile, 32 percent of them expect to fly to polar areas this year, up from the 17 percent a year earlier.

According to HHTravel, a luxury travel brand under China’s largest online travel agency Ctrip, the number of consumers interested in polar trips with an average personal wealth of at least 10 million yuan has grown since 2014. Meanwhile, travel packages which include hunting in Africa promises room for growth among wealthy Chinese.

Andy Edwards, global director of brand and marketing communications of travel booking firm Agoda, also agreed that wealthy Chinese travelers seek adventurous, undiscovered destinations rather than going to common recreational resorts.

“As these high-end travelers become increasingly independent in terms of wealth, cost considerations weigh less heavily and they are able to travel more freely to the places they favor the most,” said Rupert Hoogewerf, chairman and chief researcher of Hurun Research Institute.

“These choices are highly significant, as they often set the trend for future waves of tourism, with these high-end pioneers setting the benchmark,” he said.




Students ready to test their mettle


Students of Maotanchang High School leave the town of Maotanchang in Anhui province on June 5 on 28 buses headed for a nearby city to take the national college entrance examination, known as gaokao, which starts on June 7. More than 10,000 parents and residents wave goodbye to the students, wishing them good luck on the all-important exams.[Photo/VCG]


Students of Maotanchang High School leave the town of Maotanchang in Anhui province on June 5 headed for a nearby city to take the national college entrance examination, known as gaokao, which starts on June 7.[Photo/VCG]







China-Brazil investment fund launched to promote productive capacity

SAO PAULO – Brazilian and Chinese officials launched a joint Brazil-China investment promotion fund on Tuesday to increase productive capacity.

The fund, now in operation, will have an initial sum of US$20 billion to finance investment projects in Brazil that are of interest to both countries.

The fund is to serve as a mechanism to promote investment by bringing the public and private sectors of the countries together to invest in projects in infrastructure, manufacturing, agribusiness and technology.

Representatives from Brazil’s Ministry of Planning and the China Latin American Industrial Cooperation Investment Fund (Claifund) made the announcement at the 2017 Brazil Investment Forum (FIB 2017) in Sao Paulo.

At the signing ceremony, Chinese Ambassador to Brazil Li Jinzhang said the China-Brazil Fund is the result of a long-running joint effort and reaffirms the countries’ strategic bilateral ties.

“With our comprehensive strategic partnership, Brazil is a priority country for China’s strategy of expanding productive capacity. The China-Brazil Fund guarantees the financial mechanism to expand cooperation,” he said.

“The fund reflects a higher level of cooperation for both countries, and will create a new model of financial cooperation,” said Li.

Brazilian Planning Minister Dyogo Oliveira said the fund is going into operation at the right moment, given that Brazil’s two-year economic recession, the longest in its history, is showing signs of coming to an end.

“This launch is marked by particular importance, as it confirms the confidence between Brazil and China,” said Oliveira. “It is taking place at a time when we and our international partners are seeking support for projects in infrastructure, energy and technology.”

The mechanism is the first of its type in Latin America, the minister noted, as Brazil becomes the region’s first country to participate in a fund that is jointly governed by China.

Projects approved by the fund’s board of directors will receive financing from Claifund, the Brazilian Development Bank (BNDES) and Caixa Economica Federal, Brazil’s federal savings bank.

Priority sectors for investment include logistics and infrastructure, energy and mineral resources, high technology, agriculture, agribusiness and agricultural warehousing, manufacturing, and digital services, among others.

According to the agreement, for every dollar put up by Brazil’s financing sources, China will put up three, with the initial US$20 billion including US$5 billion from Brazil and US$15 billion from China.

Both sides have said they are willing to provide more financing, if projects call for it.

Brazil’s Agriculture Minister Blairo Maggi hailed the creation of the China-Brazil Fund.

“China’s trust toward Brazil is ever greater. Brazil is a great supplier of raw materials, trade is always growing. The fund is very important and goes in this direction,” he said.

He also called for new Chinese investments into Brazil and reiterated that his country is a safe place to do business and that contracts would be honored, despite an ongoing political crisis.

China and Brazil established a comprehensive strategic partnership in 2012, three years after China became Brazil’s leading trade partner.




China’s growth outlook positive despite uncertainties

BEIJING – Many economists believe that despite downward pressure and uncertainties, China’s economic outlook remains bright.

To assess economic performance, growth is not the only barometer, quality, structure, momentum and room for growth should also be take into consideration, according to an article carried by the People’s Daily on Friday, under the byline of Guo Tongxin from the National Bureau of Statistics (NBS).

“A slowdown of some economic indicators such as trade growth has intensified downward pressure for China when the economy is already facing growing uncertainties due to deflation, financial supervision and real estate regulation risks,” said Jiang Chao with Haitong Securities.

A number of Chinese economists believe that the economy stabilizing is an “irreversible” trend and that the country is capable of maintaining medium-high growth for a long time to come as many economic indicators have been positive this year.

China’s gross domestic product grew 6.9 percent in the first quarter of this year, 0.2 percentage points higher than the same period last year and 0.1 percentage point higher than last quarter.

It is the seventh consecutive quarter for China to keep economic growth between 6.7 and 6.9 percent, a good example of its economic stability.

“The quality of growth was also optimized in terms of employment, consumer prices and personal income,” Guo said.

Some 4.65 million new jobs were created in China in the first four months of the year, 220,000 higher than the same period last year, according to NBS spokesperson Xing Zhihong, who described China’s employment situation as “good and stable.”

The consumer price index increased 1.4 percent in the first four months of the year, well below the government target of around 3 percent for the year.

Chinese people’s per capita real disposable income, after inflation, increased 7 percent in the first quarter, outpacing the GDP growth rate of 6.9 percent in the period.

In the first four months, supply-side structural reform was pushed forward as effort in cutting overcapacity, reducing inventory, deleveraging, lowering costs and strengthening weak links made fresh progress.

As of the end of April, 31.7 million tons of steel and iron capacity and 68.97 million tons of coal capacity had been cut, accounting for 63.4 percent and 46 percent of their annual goals separately.

In terms of floor area, property inventory fell 7.2 percent in the first four months, larger than the 6.4-percent decline in the same period last year.

The leverage ratio of large industrial companies stood at 56.2 percent by the end of March, down 0.7 percentage points year on year. Meanwhile, the average cost for those companies was 85.25 yuan ($12.4) for each 100 yuan of main business revenue, down 0.15 yuan from the same period last year.

To strengthen weak links, investment in environmental protection, public facilities and water resources management increased by 50.4 percent, 28.4 percent and 16.1 percent respectively in the first four months, all higher than the average investment growth rate.

“While China’s economic structure is improving, new momentum is also gathering,” Guo said.

As a significant growth driver, consumption contributed to 77.2 percent of GDP increase in the first quarter.

The service sector as a whole rose 7.7 percent year on year in the first quarter, faster than the 3-percent increase in agriculture and 6.4 percent in the secondary industry. It accounted for 56.5 percent of the overall economy.

Economic vitality is also being stimulated by new technology, urbanization, entrepreneurship and a burgeoning share economy, according to Guo.

China is also steadily pushing forward the Belt and Road Initiative, coordinated development of the Beijing-Tianjin-Hebei region as well as programs related to the Yangtze River economic belt and the Xiong’an New Area, which Guo believes will provide ample growth.

The latest data reinforces views that a stabilizing economy will give policymakers more scope to contain debt and financial risks.

Many economists believe that China has laid a solid foundation to realize its full-year economic target of around 6.5-percent growth.



China publishes guidelines to develop inclusive finance in banks

BEIJING – China’s banking regulator has released guidelines to prompt large and medium-sized banks to set up inclusive finance divisions, a move to increase loans for money-starved small firms, agriculture and poverty relief.

Large lenders are required to complete the establishment by the end of the year and begin operation as soon as possible, according to the website of the China Banking Regulatory Commission.

Special credit policies should be made and mechanisms should be put in place for statistical accounting and risk management.

It was the latest government effort to improve weak links in the economy. Measures have been rolled out to encourage lending to those areas, such as allowing less deposit reserves.

A State Council meeting earlier this month allowed banks to tolerate a reasonably higher non-performing loan ratio for small and micro enterprises, agriculture and poverty alleviation. Monetary and credit policy incentives will be offered to banks that increase such lending.

By March, outstanding loans to small firms stood at 27.8 trillion yuan ($4.05 trillion), up 14.4 percent from a year ago, and agriculture-related loans 29.2 trillion yuan, up 8.9 percent.




Shorter negative list for investment

WITH a shorter negative list for foreign investment, China has made a further step in opening up its vast market.

A revised guidance catalog for foreign investment in China will soon come into force, with relaxed restrictions on foreign ownership in automotive electronics, new-energy vehicle batteries, motorcycles and other industries, the Ministry of Commerce said yesterday.

The new catalog was adopted on Tuesday at the 35th meeting of the Central Leading Group for Deepening Overall Reform, which urged further opening-up in sectors as services, manufacturing and mining.

A draft of the catalog, which was published earlier to solicit public opinion, showed the number of industries restricted or off limits to foreign investment, the negative list, would be cut to 62 from 93.

The revision was viewed as another significant move by China to open up its economy for mutual benefit in a global environment of rising protectionism.

“It was a step forward for China to open up its economy on a larger scale and deeper level,” said Liu Hong with the China Association of International Trade.

China is moving fast to lower thresholds for foreign investors. More industries have been accessible to foreign investment in the country’s free trade zones, while laws were amended last year to simplify the approval procedures for foreign companies.

Today, over 95 percent of new foreign enterprises in China do not need government approval before they are set up, and the registry procedures take less than three days, compared with more than 20 days previously, said Fang Aiqing, vice minister of commerce.

Authorities have also pledged to treat foreign firms the same as domestic companies when it comes to license applications, standards-setting and government procurement.

Wang Diankai, an economist at Capital University of Economics and Business, highlighted the negative list approach, calling it a major change in China’s management of inbound investment.

“The approach sets the limits of government authority and gives foreign firms more freedom,” Wang said.

China first piloted the negative list approach for foreign investment in the Shanghai free trade zone in 2013 and expanded it to four regions in 2015.

“The overall market environment in China is increasingly regulated and fair, with improved laws, reduced red tape and better protection of intellectual property rights,” said Sara Dai, regional president for Asia-Pacific of Danish biotechnology giant Novozymes.

She also called for clearer regulations to encourage orderly competition and further expansion of market access.

Shanghai Daily

Free Trade Zone to get new coat of polish

NOW in its fourth year, the China (Shanghai) Pilot Free Trade Zone is moving from its initial experimental phase into more nitty-gritty areas of economic and financial reforms.

The State Council, China’s cabinet, last month approved a new phase of development, further relaxing regulations on commercial transactions and foreign investment.

Shanghai has listed 24 “missions” for the Free Trade Zone as part of its efforts to transform the city into an investment and financial hub for the national “Belt and Road” initiative — the 21st century version of the Old Silk Road linking East and West.

“The Shanghai zone wants to attract sovereign funds from countries along the Belt and Road route to invest in onshore yuan-denominated assets,” Li Jun, vice director of the Shanghai Financial Service Office, told a recent media briefing. “It will support the efforts of qualified foreign companies to develop and expand their businesses by making use of China’s capital market.”

A plan to create a new free trade port inside the zone has drawn widespread attention. Part of its aim is to encourage foreign investors to issue yuan-denominated financial products within the zone and serve projects related to the “Belt and Road” initiative.

Li said onshore bond insurance will be offered as a sweetener.

“The Belt and Road initiative is an important conveyor of financial reforms in the FTZ,” Li said. “It offers a possible extension of products to push forward internationalization of the yuan. This is where Shanghai’s strength lies.”

Russian aluminum giant UC Rusal last month issued 1 billion yuan (US$145.3 million) of seven-year yuan-denominated onshore bonds to fund equipment purchased in China, becoming the first foreign company set to offer so-called “panda bonds” on Shanghai’s stock exchange, Li said.

About 9 billion yuan in bonds will be issued in the future in Shanghai, he added.

In addition, Shanghai-based insurers will be encouraged to offer financial products such as construction insurance, life insurance and cargo insurance to provide risk protection services for key projects related to the “Belt and Road” program, according to Li.

Li told Shanghai Daily that the Free Trade Zone will participate in national efforts to allow easier access for foreign investors to trade onshore bonds, but no details were forthcoming.

As part of the efforts to open the Chinese debt market to foreign investors, China plans to introduce a bond-trading link between Hong Kong and mainland bourses by the year’s end, Premier Li Keqiang said at an annual media conference in March.

Shanghai Vice Mayor Zhou Bo said earlier that Shanghai will adopt the highest global standards for the city’s Free Trade Zone.

“By pushing forward reform measures on trade and investment, we want to send a clear message to the world that China is opening its market in all aspects,” Zhou said. “Institutional innovation should rely on relaxing rules, rather than making more of them.”

Shanghai FTZ was launched on September 2013. Its size has since quadrupled.

The 24 “missions” to accelerate reforms in the Free Trade Zone

1. Create consistent market access between domestic and foreign investment

2. Deepen reform of the trad­ing registration system

3. Separate business licens­ing from administrative permits

4. Establish a high standard all-in-one approval process and service mode for interna­tional trade

5. Reform and innovate comprehensive customs supervision

6. Establish a comprehen­sive evaluation mechanism for inspection and quarantine risk classification

7. Strengthen links with the city’s construction of the innovation center of science and technology

8. Optimize the talent service system

9. Establish a system of intel­lectual property protection and application

10. Map out a construction plan for the port area within the free trade zone

11. Expand efforts to open up to the outside world

12. Promote the development of cross-border services and trade

13. Improve the efficiency of customs clearance

14. Deepen links with the city’s construction of a global financial center

15. Improve the service func­tions of the free trade account

16. Strengthen financial su­pervision and coordination

17. Create an overall plan to enhance governance of the free trade zone

18. Streamline and decentral­ize administration

19. Enhance mid-event control and subsequent supervision

20. Promote comprehensive law reform

21. Accelerate service-orient­ed government

22. Create bridgehead pro­motion for “Belt and Road” initiative

23. Strengthen the exit-ser­vice system for market players

24. Promote innovation in international financial services

Shanghai Daily