Your daily digest of the biggest business news in China, translated and summarized every day.
China’s outsourcing industry reaches US$100bn
Chinese companies earned $US107bn from outsourcing contracts, up 12.2 per cent from 2013, according to data from the Ministry of Commerce.
The Ministry estimates the outsourcing industry created 4 million new jobs for university graduates. One third of outsourcing contracts involved high end research and development works.
‘Red princeling’ in charge of Anbang Insurance
Liberal newspaper The Southern Weekend, has published an explosive story revealing that one China’s most prominent princelings, Chen Xiaolu, is the de facto owner of Anbang, one of the largest financial conglomerates in the country with one trillion yuan in assets.
Chen Xiaolu is the son of Marshal Chen Yi, one of the ten founding marshals of the People’s Republic.
Chinese railway freight volume declines 3.9 per cent
Chinese railway freight volume, one of the most important economic indicators for the country, declined 3.9 per cent in 2014. Freight volume dropped 7.8 per cent during the final quarter of 2014 as a result of a slowing economy.
Railway freight is one of three components that make up the so-called ‘Li Keqiang Index’, named after the Chinese premier who is reportedly distrustful of the official GDP figure.
Chinese demand for oil set to moderate
Petro China, one of the country’s three major oil companies, estimates that demand for oil will moderate to 2 to 3 per cent for 2015. China’s dependence on foreign oil will exceed 60 per cent of its total consumption this year.
The company estimates the demand for foreign natural gas will increase 10.2 per cent in 2015, slower than the growth rate in 2014.
BOC Hong Kong considering sale of $6 billion bank unit
Lender BOC Hong Kong Holdings is weighing up a sale of subsidiary Nanyang Commercial Bank (NCB) for approximately US$6bn, reports Reuters citing sources familiar with the matter.
According to Reuters, one potential buyer interested in NCB is China Cinda Asset Management, China’s second bad debt manager that listed in Hong Kong in December 2013.
The sources told Reuters that purchasing a bank will help China Cinda access cheap sources of funds to buy bad loans -- an ability rivals like Huarong Asset Management already have.
BOC Hong Kong issued a statement to the Hong Kong stock exchange on Thursday saying it was conducting a feasibility study to review its group's business and assets portfolio.
China expected to set 2015 growth target at 'around 7 percent'
China plans to cut its growth target to around 7 per cent reports Reuters citing sources with knowledge of a recent high-level economic meeting in Beijing.
According to the report, the new growth target, the lowest in 11 years, was endorsed by top party leaders and policymakers at a closed-door Central Economic Conference in December.
"This year's economic growth target will be around 7 per cent, but the 7 per cent should be the bottom line,” said one of the sources, an ‘influential economist’ according to Reuters.
China's economy expanded 7.4 per cent in 2014, its weakest pace in 24 years, and authorities are emphasising a "new normal" as they retool the country's growth model to one they hope will be more sustainable.
China's reliance on iron ore imports rose to 78.5% in 2014
China now relies on imports to supply 78.5 per cent of its iron ore demand, according to figures released by the China Iron and Steel Association (CISA) on Thursday and reported on by China National Radio.
The industry body, which represents the largest players in China's steel industry, said that the decline in import prices last year represents a serious threat to the survival of domestic iron ore producers.
China imported 933 million tonnes of iron ore in 2014, a 13.8 per cent increase on the previous year.
In 2013, China sourced 68.2 per cent of its iron ore from abroad.
Iron ore decline lifts profits at Chinese steel firms
The slump in iron ore prices has helped China's largest steel firms post their best annual profits in almost three years.
Medium and large sized steel mills achieved a combined profit of 30.4 billion yuan last year, according to figures released by the China Iron and Steel Association (CISA) yesterday.
This was an 8.75 billion yuan increase on the profits posted in 2013, a more than 40 per cent improvement year on year.
Ministry of Commerce: Currently no sign of large scale exodus of foreign firms from China
At a press conference held by the Ministry of Commerce yesterday, ministry spokesperson Shen Danyang said that according to the overall data, there has been no widespread removal of capital by foreign-invested companies.
The response followed reports that Microsoft plans to gradually close down two Nokia factories in China. Japan's Panasonic is also said to be planning on closing colour television production lines in China.
Government revenue expands at slowest pace in 23 years
The pace at which overall government revenue expanded in 2014 was the slowest since 1991.
In 2014, China's central and local government collected a total of 14.04 trillion yuan, an increase of 8.6 per cent on the previous year. The central government collected 6.45 trillion yuan in revenue over the year, a 7.1 per cent increase over 2013.
Local governments raked in 7.59 trillion yuan, up 9.9 per cent on the previous year. Tax revenue accounted for 11.92 trillion yuan of receipts, a 7.8 per cent increase on last year's tax take.
China's bull market lifted revenue from stamp duty on stock trades by 42 per cent in 2014, with most of the lift in revenue coming in the final two months of the year.
Aside from tax revenue, profits from various government funds, state-owned enterprises and land sales are also included when calculating total government revenue.