Hi everyone. I’m Stephanie LI.
Coming up on today’s program.
China launches a series of promotion events themed “Invest in China” in a strong move to attract investment;
Alibaba splits into six and plans new IPOs in a historic overhaul.
Here’s what you need to know about China in the past 24 hours
China kicked off a yearlong campaign on Tuesday, themed "Invest in China," to attract foreign investment and help foreign companies better understand China's opportunities.
The event, initiated and organized by the Ministry of Commerce, was officially launched in Guangzhou, South China's Guangdong Province, the nation's export hub, and it will last throughout the year. Special promotional events will also go overseas to Saudi Arabia, Japan and South Korea, as well as to Germany and other European countries.
For the rest of the year, over 20 activities will be held across the nation and abroad, to "help foreign investors understand China's investment environment more comprehensively, develop businesses, listen to their appeals, respond to their concerns, better serve everyone, and thus encourage them to invest in China," Vice Minister of Commerce Wang Shouwen, who is China International Trade Representative, said on Tuesday.
"China's policy of utilizing foreign investment will not change, and it will make greater efforts to attract and utilize foreign investment," Vice Premier He Lifeng said at the inauguration event on Tuesday evening. “It is the right time for foreign enterprises to expand their investment in China,” he added.
China will accelerate its opening-up in fields such as regulations and management standards in line with the highest international standards, He said, pledging to issue more policies to facilitate trade and investment, and build a market-oriented, rules-based and international business environment in a sustained manner.
The strong effort to attract foreign investment comes at the conclusion of the three-day China Development Forum 2023 held in Beijing, during which top officials reassured participants - mostly multinational CEOs and representatives of global organizations - about China's further opening-up commitment and policy orientation this year and beyond.
More than 100 multinational executives and representatives from foreign chambers of commerce and associations attended Tuesday’s ceremony, expressing their confidence in the Chinese market and willingness to continue to invest in China.
This event demonstrates the high priority that China places on opening up to foreign investments, and "we appreciate that very much," Markus Kamieth, a board member of BASF SE, said.
On Wednesday, the first promotion event was held in Guangzhou, with executives of the world's top 500 multinationals in the attendance, which yielded fruitful results with deals that totaled 90.5 billion yuan signed.
Chinese commerce minister Wang Wentao on Tuesday told Dutch chip-making equipment maker ASML's CEO Peter Wennink that China will unswervingly promote high-level opening-up and is willing to create a good business environment and provide efficient services for multinational companies, which includes ASML, to develop in the country. The minister also hoped that ASML will strengthen its confidence in trade and investment cooperation with China, make contributions to China-Netherlands economic and trade cooperation, and jointly safeguard the stability of the global industrial and supply chains in the semiconductor sector.
Moving on to regional highlights
Amazon Global Selling on Tuesday announced the launch of its Asia-Pacific seller training center in Hangzhou, Zhejiang Province. It is Amazon Global Selling's first comprehensive seller training center in the world. The center in China will become an important base for the cultivation of professional, international and comprehensive cross-border e-commerce talent, Amazon Global Selling said. It will upgrade the company's existing seller training system and mechanism in four parts: training programs, course content, talent community and innovation incubation.
Greater Bay Area, Greater future
The World Bank issued $350 million in insurance-linked securities (ILS) in the form of Chile Catastrophe Bond in Hong Kong on Tuesday, marking the inaugural listing of ILS in Hong Kong and its fourth ILS issuance overall. The Chile Catastrophe Bond, which is also the largest of its kind for a single country led by the World Bank, offers protection against losses related to earthquake risks in Chile over the next three years.
British banking giant Standard Chartered's private equity company on the Chinese mainland has received permission to start operating, and is licensed to manage up to 500 million yuan in assets. SC Ventures Investment Management (Shenzhen), which is owned by Standard Chartered’s Hong Kong branch, has been registered at the Asset Management Association of China, according to the association's website. The fund was set up in July last year with registered capital of USD2 million, the second foreign-backed private equity company to be registered at the association this year.
Next on industry and company news
Shares in Chinese photovoltaic firms rose today after new standards for the solar industry released yesterday saying that China is encouraging large PV power installations to be located in desert and barren regions, such as the Gobi desert. Deserts, barren land, unused land, land reserved for construction, oilfields, gas fields and coal mining areas, which can't be restored, can be used by the PV sector, according to a notice issued by three authorities including the Ministry of Natural Resources.
China aims to formulate more than 30 key automotive chip standards by 2025 in its latest push to accelerate the development of its homegrown semiconductor industry, according to a draft released by the Ministry of Industry and Information Technology on Tuesday. The standards will cover general requirements such as environment and reliability, electromagnetic compatibility, functional safety, and information security, as well as key product and application technical requirements such as control chips, computing chips, memory chips, power chips and communication chips.
Hong Kong shares of Alibaba Group soared as much as 16 percent on Wednesday, marking a vote of confidence from investors after the company announced a major restructuring plan. The tech heavyweight announced late Tuesday it will split its business into six main units, the biggest restructuring in the company's 24 year history. Each of the units will be managed by its own chief executive and board of directors and have the flexibility to raise outside capital and seek its own initial public offering, said Daniel Zhang, chairman and CEO of Alibaba Group, in an internal letter to employees. The six units include Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group, and Digital Media and Entertainment Group.
China National Offshore Oil Corporation and France’s TotalEnergies completed China’s first purchase of imported liquefied natural gas to be settled in Chinese yuan through the Shanghai Petroleum and Natural Gas Exchange(SHPGX), media reported on Tuesday. The deal is reported to have an energy content of 3.2 billion to 3.4 billion British thermal units, and the LNG comes from the United Arab Emirates.
Junshi Biosciences has joined hands with Singapore’s Rxilient Biotech to promote and commercialize the Chinese biopharmaceutical company’s cancer drug in Southeast Asia. Junshi Bio will buy a 40 percent stake in Rxilient’s unit Excellmab, which will be granted the exclusive license and other related rights to develop and commercialize intravenous cancer drug Toripalimab in nine Southeast Asian countries, it announced late yesterday.
Earnings reports express
China's leading new energy vehicle manufacturer BYD Company Limited on Tuesday reported surges in both revenue and net profits in 2022. Its net profits stood at 16.62 billion yuan, up 445.86 percent year-on-year, according to the company's annual report. Revenue soared 96.2 percent to roughly 424 billion yuan last year. Sales of automobiles and auto products saw strong year-on-year growth in 2022, driving a significant improvement in earnings, according to the company. BYD ranked first in global NEV sales in 2022. The company had a domestic NEV market share of 27 percent last year, up nearly 10 percentage points from 2021. In 2023, BYD aims to become the biggest carmaker in China by year-end, chairman Wang Chuanfu said today.
Semiconductor Manufacturing International, the world's fifth-largest maker of integrated circuits, slowed profit growth in 2022 despite increasing sales amid sluggish growth in the global integrated circuit industry. SMIC's annual revenue rose 39 percent to 49.5 billion yuan from a year ago, the company said in its earnings report yesterday. Net profit climbed 13 percent to 12.1 billion yuan, after more than doubling in 2021. SMIC increased its gross profit margin by 9 percentage points to 38.3 percent but its net profit margin dropped by 1.8 points to 29.6 percent in 2022, partly due to rising expenditures on opening new factories. Looking ahead, SMIC expects revenue for the first quarter to drop between 10 percent and 12 percent from the previous quarter and the gross margin will come in at between 19 percent and 21 percent.
Shares of SF Holding rose after the Chinese express delivery giant reported a 45 percent leap in net profit and a new annual revenue record last year. Net profit was 6.2 billion yuan in the year, while revenue soared 29 percent to a record high of 267.5 billion yuan, according to the firm yesterday. Revenue from the supply chain and international businesses jumped 124 percent to 87.9 billion yuan last year, raising its proportion to the total revenue to nearly 33 percent from 19 percent, mainly because of the consolidation of the acquisition of Kerry Logistics Network, SF said. Revenue from the express delivery business, which accounts for nearly 40 percent of SF’s total, rose 6.8 percent to 105.7 billion yuan.
The People's Insurance Company Group of China (PICC), China's leading insurer, registered an increase in revenue and net profit in 2022. The business revenue of the insurer was 625.8 billion yuan last year, up 6.9 percent year-on-year, data from the company showed. Net profit expanded 12.2 percent from a year ago to about 24.4 billion yuan in 2022 with that from property insurance increased 17.5 percent to 26.5 billion yuan, with the total assets reaching 1.51 trillion yuan.
Wrapping up with a quick look at the stock market
Chinese stocks ended mixed on Wednesday with the benchmark Shanghai Composite down 0.2 percent, while the Shenzhen Component and its tech-heavy ChiNext Index both gained 0.1 percent as major Chinese tech firms rallied, led by Alibaba. Hong Kong’s Hang Seng index closed 2 percent higher, and the TECH index jumped 2.5 percent.
Biz Word of the Day
Catastrophe bonds (also known as cat bonds) are risk-linked securities that transfer a specified set of risks from a sponsor to investors. Catastrophe bonds emerged from a need by insurance companies to alleviate some of the risks they would face if a major catastrophe occurred. An insurance company issues bonds through an investment bank, which are then sold to investors.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI
Sound Editor: Stephanie LI
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
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