China business news digest

Your daily digest of the biggest business news in China, translated and summarized every day.

China's budget deficit tipped to increase in 2015

China's party and government leaders are set to decide on key economic targets for next year at the upcoming Central Economic Work Conference in Beijing.

In order to maintain economic growth rates in 2015, many analysts expect the government to lift fiscal outlays.

One of the key features of China's new budget law, which is set to come into effect on January 1, 2015, will be to limit the amount of funds that local governments can raise from financing platforms, making them more reliant on provincial bond sales. 

This new reliance on provincial bonds will likely lead to an increase in the nominal size of China's overall budget deficit but also in terms of a ratio of GDP.

In March 2014, China announced that it was planning for a budget deficit of 1.35 trillion yuan this year, equivalent to 2.1 per cent of GDP.

The chief economist with Haitong Securities told the 21st Century Business Herald

that the need to provide supportive fiscal policy and the phasing out of local financing platforms means that the deficit to GDP ratio would likely increase to 2.5 per cent, which equates to a deficit of about 1.7 trillion yuan.

Everbright Securities' chief economist told the financial paper that the deficit would blow out to at least 2 trillion yuan in 2015.

(21st Century Business Herald)

China Telecom to launch mobile service in Australia

China Telecom is set to announce the launch of a mobile phone service in Australia this month reports the Beijing Morning Post. 

The service, called CTExcelbiz is a new mobile virtual network operator (MVNO) that will target Australia's Chinese population.

According to the report, the company provided 4G mobile service for the visiting Chinese government delegation during the recent G20 summit in Brisbane — the first time 4G has been provided by a Chinese telco outside of the country.

China Telecom has offered its CTExcelbiz service in the UK and France since 2012.

(Beijing Morning Post)

ICBC London branch officially opens for business

Industrial and Commercial bank of China (ICBC), the world's biggest bank, has opened a London branch becoming the first Chinese bank to be approved in Britain, reports Xinhua.

ICBC already has operations in the city run through a subsidiary. Both entities will engage in traditional commercial banking with the new London Branch focussing on large wholesale business and the subsidiary on retail and SME business.

According to the report, ICBC has over 330 overseas institutions in 41 countries and regions worldwide.

(Xinhua)

China to encourage foreign firms to establish for-profit aged care facilities

Foreign investors are being encouraged to either work with local Chinese partners or to set up independent firms engaged in operating for-profit aged care facilities in China, according to a joint announcement made by the Ministry of Commerce and the Ministry of Civil Affairs on Tuesday.

The announcement outlined some of the procedures that foreign investors need to go through in order to establish operations in China.

Companies intending to enter the market should approach the provincial-level commercial bureau in the region in which they wish to operate.

Foreign investors will be encouraged to expand the scale of their aged-care facilities, establish quality brands and seek to link operations in larger chains.

(Xinhua)