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Minsheng to buy up to 20% of US bank

October 9, 2008 - by Rena

China Minsheng Banking Corp, the country's 7th-largest bank by market value, will buy up to 20 percent of UCBH Holdings Inc - the biggest bank serving the Chinese community in the United States, the Chinese lender said Monday.

The deal would be the first strategic investment in a US bank by a Chinese mainland financial institution and give UCBH a stronger exposure to the mainland market.

"The stake purchase will serve as Minsheng's platform to explore the overseas market," said Gu Junlei, a banking analyst with Orient Securities.

According to a Minsheng statement, the stake purchase will be divided into three phases: Minsheng will initially buy 5.4 million shares for $96 million, representing a 4.9 percent stake. Before March 31, 2008, the bank will increase its ownership to 9.9 percent. And by June 2009, it may increase its holding to 20 percent, becoming the largest single shareholder in UCBH.

"The acquisition will have limited impact on Minsheng's financial status, given the portfolio in the bank's total assets," Gu explained.

However, as 77.16 percent of UCBH's loans are related to the real estate business, the bank's returns largely depend on the US property market, Gu added.

UCBH, the holding company of United Commercial Bank, has $10.7 billion in assets and 70 branches in the US and one in Hong Kong, with quite a number of its clients foreign citizens of Chinese origin.

It plans to use the proceeds from the initial sale for a pending acquisition in China which will be closed in the fourth quarter, a UCBH statement said.

In March, UCBH said it would buy China's Business Development Bank Ltd for $205 million to gain a foothold in the world's fastest-growing major economy.

Minsheng's deal follows China Development Bank (CDB) taking 5 percent in Britain's third largest lender Barclays in July.

"More and more Chinese banks will take stakes overseas as they expand overseas business," Wu Yonggang, an analyst with Guotai & Junan Securities, told China Daily.

"And it is also an effective way to deal with the appreciation of the renminbi," Wu added.

Minsheng shares closed at 16.3 yuan ($2.17) Monday, up 3.1 percent from the previous trading day.

(from:China Daily)
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China Business 0 Comment October 9, 2007, 11:38 am

More Shenzhen Housing Regulations

September 14, 2007 ¨C Ryan Beers

Front page of the Shenzhen Daily today states:

¡°EXPATRIATE families in Shenzhen are allowed to buy more than one home in the city, but individual family members are restricted to just one each, a spokesman for the municipal housing and land resources bureau said yesterday.¡±


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"If both the expat wife and husband have been working in the city for over one year, each of them can buy a home," said the spokesman, adding that residents of Hong Kong, Macao, Taiwan and other overseas Chinese can each buy a home here too.

The city's housing has been such a hot speculative market in the last year or so that the local bureaus have been trying to cool it down. However, last month sales of second hand apartments slumped dramatically, so much so that Shenzhen property agents were selling more apartments in the Hong Kong New Territories than in Shenzhen! It has been quoted that the introduction of new sales contracts, restrictions on obtaining mortgages, and incoming tax measures, was the catalyst for this slump.

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The Shenzhen office of Lehman, Lee & Xu has experienced that no particular regulation has, in itself, scared away would-be purchasers, but the regularity with which new regulations are implemented are what are causing unease.
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China Business 0 Comment September 14, 2007, 11:37 am

Chemical manufacturing in Guangdong

September 4, 2007 ¨C by Ryan Beers

Companies seeking to produce products involving heavy chemicals or polluting processes in Guangdong need to carefully consider where to locate their operations. The traditional manufacturing centers are being cleaned up, and many manufacturing companies are moving further ¡°out of town¡± to in order to guarantee long term production.

Operators in Shenzhen, Dongguan, Zhongshan, and Guangzhou are increasingly experiencing difficulty in obtaining production licences and various approvals.

The upside is that cheaper land is up for grabs in these newer areas, local Government¡¯s are encouraging the investment, and companies have the safe knowledge that these areas will too soon enjoy infrastructure previously enjoyed only by the famous districts aforementioned.

For the residents particularly of Shenzhen and Hong Kong, these moves to re-locate polluting industry has seen more clear skies in the urban areas. I have seen only one really polluted day in Shenzhen this whole Summer.


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China Business 2 Comment September 4, 2007, 5:40 pm

Macau Happenings

August 29, 2007 ¨C Ryan Beers



Macau is heating up. I have been hearing stories for a few years now about how it has changed, and although I live about an hour away by ferry, I have yet to visit this new Disneyland for grown-ups.

The latest casino to open, the Venetian Macau, is now the biggest on the globe.

Macau¡¯s recent revolution has really come on the back of China¡¯s recent and massive economic development, as well as the removal of monopoly powers from Stanley Ho.


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Things are not all going well in Macau however. High rollers club, Tryst, closed down its doors within a few months of its grand opening, because. I think that their target audience did not really align with those appearing in the picture below, demonstrating that ¡°Chinese gamblers eschew nightclubbing in favor of the casino's baccarat tables¡±. Also, those in the area who want to be ¡°cool¡± can simply spend their money and party in nearby Hong Kong.

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China Business 5 Comment August 29, 2007, 2:12 pm

Will foreign investment in China¡¯s real estate market be cooled down?

August 10, 2007 - by Sandy Lin
In recent years, with China¡¯s economy booming, many foreign investors have seen good investment opportunities in China¡¯s real estate market, and made considerable investments, mainly by acquiring assets or equity interest of Chinese real estate developers. China¡¯s central government, concerned about the economy¡¯s overheating, and the probable negative impacts of foreign hot money on the economy, has take measures, including issuing new laws and regulations, to cool down the foreign investment in China¡¯s property market.
Here comes another regulation restricting foreign investment in China¡¯s real estate sector. On July 10, 2007, the State Administration of Foreign Exchange ("SAFE" ) of China issued a document entitled the Circular of the General Affairs Department of SAFE on the Distribution of the List of the First Group of Foreign Invested Real Estate Projects which has Filed with the Ministry of Commerce, which is also known as the Circular 130. Though technically not a regulation, it will have the same impact on a market participant as any regulation in practice.
The main purpose of Circular 130 is to disallow any foreign investor of a foreign-invested real estate enterprise ("FIRE" ) to register foreign debt of the FIRE, which means that any foreign investor of a FIRE can only make equity investment, and an important channel for foreign hot money to enter China (i.e., by registering foreign debt) is cut.
According to Circular 130, SAFE will not register any foreign debt of a FIRE if the FIRE obtained approval from the local Bureau of Commerce ("COFCOM" ) and filed with the Ministry of Commerce ("MOFCOM" ) after June 1, 2007. This also applies to FIREs that are established and approved before June 1, 2007, where such FIREs wish to increase their registered capital after June 1, 2007.
This is the 4th time since July 2006 that China has promulgated policies specifically targeted at foreign investment in China¡¯s real estate market. On July 11, 2006, several government departments of China jointly issued the Market Access and Administration of Foreign Investment in Chinese Real Estate Market ("Circular 171" ). According to Circular 171, although FIREs will not be restricted from financing from onshore sources, those FIREs with total investment amounts equal to or more than US$10 million will still be restricted from borrowing more than 50 percent of its total investment amount.
Obviously, Circular 130 is another restrictive measure of the Chinese government to cool down foreign investment in its real estate market. However, it seems still too early to conclude if Circular 130 would work effectively.


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China Business 0 Comment August 10, 2007, 1:45 pm

Smart Shenzhen

August 7, 2007 ¨C by Ryan Beers

Today it was reported that Shenzhen is planning to develop its own ¡°silicon valley¡± in the spirit of those in LA and Zhongguancun in Beijing. It will be located the Nanshan area, which is Shenzhen¡¯s version of Haidian in that it is the district within which many education institutes are situated.

I see this as a further step in this city to progress its previous capabilities as a mass manufacturing center, into a high tech city, and is a key indication of the city¡¯s aspirations for the future.

There are already famous high-tech industrial parks in Shenzhen, offering lower tax rates for companies operating within those areas as well as support services, and this new silicon valley will help attract those talented individuals who will be able to bring the front end intellectual property closer to the manufacturing source. I guess the idea is to get the brains in Shenzhen, then manufacture the products in Shenzhen, then simply ship the products straight out of the Shenzhen ports.

It seems like an ambitious and positive plan for the future of the city.
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China Business 2 Comment August 8, 2007, 9:17 am

Insight, Challenges and Opportunities

November 9, 2006 - by Will

The Global Advertising Lawyers Alliance, or known as GALA, is having a regional conference today at the China World Hotel, Beijing, organised jointly by Lehman, Lee & Xu and GALA International.

The theme for the seminar: "Global Perspective on China Advertising Industry: Insight, Challenges and Opportunities" had attracted more than 100 international major merketing and advertising players' participation in the half-dayseminar.

Distinguished speakers from all over the world, amongst others, Li Fang Wu, the Assistant General Secretary of the China Advertising Association will be giving the audience an overview of China's Advertising Administration System.

Richard Wageman, one of the most prominent advertising legal practitioners in China, who is currently based in Beijing, also acting as Chairman of the Organizing Committee of this event, will moderate one of the GALA panel discussions on various advertising issues in China.

"We wish to take this opportunity to extend his gratitude and appreciation to our distinguished speakers and panelists, namely Erich Bachman (New Zealand) - GALA Regional President; Al Moffatt, CEO of Worldwide Partners and its partner in China, Viveca Chan; Mr. Li Fangwu of the China Advertising Association; Akihiko Hara (Japan); Peter Le Guay (Australia); Sharad Vadehra (India); Jay Young - June Yang (Korea); Patrick Mirandah (Malaysia); Marc Lim (Singapore) and all the respected guests for taking time off their busy schedule to meet in Beijing and participating in the conferene", said Richard when interviewed.

The seminar will also include panel discussions such as "Agency Perspective on China and the World", "Advertising Standards - decency and cultural sensitivity" and "Comparative Advertising". It is hoped that upon the conclusion of this seminar, the participants would be kept abreast of the latest developments and changes in the advertising industry in China and to foster closer working relationships and cooperations between Chinese and foreign agencies.
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China Business 1 Comment November 17, 2006, 7:54 pm

Free trade talks with EU & China, says South Korea

November 3, 2006 - by Will

At a meeting with foreign businessmen at the Korea Trade Investment Promotion Agency (KOTRA), the South Korean President Roh Moo-Hyun said his country is determined to push for a number of free trade agreements (FTA) with the European Union and China simultaneously starting next year.

President Roh emphasized: "We aim to open FTA negotiations with the EU next year ... We'll also make all the preparations so that we may start FTA talks with China next year or later,".

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State-run KOTRA has said a FTA with the European Union would bring Seoul greater benefits than a similar trade pact with the United States now being negotiated.

Korea, has since 2004 joined the trillion dollar club of world economies, especially in the past few years with its consistent incredible records of growth and the nation¡¯s successful integration into the high-tech modern world economy.

According to the statistics from the Central Intelligence Agency, in the 1960s¡¯, the nation¡¯s GDP per capita was comparable with levels in the poorer countries of Africa and Asia. Today its GDP per capita stands approximately at USD$23k, equal to the lesser economies of the EU.

The Seoul based government promoted the import of raw materials and technology at the expense of consumer goods and encouraged savings and investment over consumption. Between 2003 and 2005, growth moderated to about 4%. A downturn in consumer spending was offset by rapid export growth. Moderate inflation, low unemployment, an export surplus, and fairly equal distribution of income had contributed to the characterization of the nation¡¯s solid economy.

The main reasons behind the proposed talks and further FTAs with the EU and China would boost South Korea's gross domestic product by 2 to 3%. Accordingly, if implemented smoothly, it would further increase South Korea's exports to the EU by US$11 billion and imports from there by US$8 billion.

A source from the Singaporean run MediaCorp Press reported that, South Korea has completed FTAs with Chile and Singapore, and has been in tough talks with the United States on a deal which would be the largest for the US since the North American Free Trade Agreement.

The two sides took a "big step forward" in talks that ended in the southern island of Jeju last month but lengthy negotiations will still continue into next year, a top US official said.

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China Business 0 Comment November 6, 2006, 11:20 am

Malaysia to Supply LNG to China worth US$25bil

October 30, 2006 - by Will

Petronas of Malaysia and China National Offshore Oil Corporation has sealed a deal today to supply up to 3.03 million metric tonnes of liquefied natural gas (LNG) annually for 25 years worth US$25 billion.

According to an official statement issued by Petronas on October 30, 2006. the deal was jointly announced by Prime Minister Datuk Seri Abdullah Ahmad Badawi and the Premier of China, His Excellency Wen Jiabao in Nanning, China during the bilateral meeting on October 30.

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With the sigining of the deal, it marked a significant breakthrough for Petronas into China's energy sector

The LNG will be supplied from Petronas' LNG Complex based in Bintulu, Sarawak, and will be channelled to Shanghai LNG's Receiving Terminal at Zhong Ximentang Island, Shengsi, Zhejiang Province, which is currently under development and targeted for completion by mid 2009.

The mentioned Bintulu Complex is reputed to be the world's largest integrated LNG facility at a single location with a combined production capacity of approximately 23 million tonnes per year (MTPA). - News Straits Times.

In another report by the Star, China's International Energy Agency had earlier stated it wanted to increase the country's demand for natural gas to 8% of its total energy consumption by 2010 from about 3% currently so as to reduce the use of coal and the resultant pollution.

The deal will definitely boost and further enhance the economic ties between Malaysia and China.
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China Business 0 Comment October 31, 2006, 7:01 pm

Wal-Mart's US$1 Billion deal in China?

October 24, 2006 - by Will

According to reliable sources and quoting Wall Street Journal report, rumour had it that Wal-Mart Stores Inc. is ready to splash US$1 billion to acquire China Retailer - "Hao You Duo" - Trust-Mart hypermarket chain.

Just about 2 months ago, Wal-Mart had taken a move to withdraw and exit from the German & South Korean market with its 85 existing retail stores and now, using the exact US$1 billion obtained from the said sales price and preparing its further expansion plan in China has no doubt created a lot of speculations of coincidence.

This transactions, although yet to obtain confirmation from either party, if successful, this could give the world's largest retailer the biggest food and department store network in China.

The deal for the Chinese hypermarkets of Trust-Mart, a closely held Taiwanese company, comes as foreign retailers look to tap China's fast-growing economy, large population and expanding middle class.

It was reported that Wal-Mart has defeated its arch rival, the French's Carrefour in their bid to acquire Trust-Mart, and if approved by the regulators, the transaction would vault Wal-Mart as the BOSS, in terms of number of hypermarkets in China.

Wal-Mart's acquisition of Trust-Mart, which rumour had it that the deal was concluded more than a month ago, requires regulatory approval from China's Ministry of Commerce.

The process to gain approval by the Chinese government authority for foreign companies can be complex and time consuming.

Some brief facts about Trust-Mart

Established since 1997, having approximately 100+ chain stores, total labor force of close to 30,000. At present, Trust-Mart has the most outlets / retails stores within the inner mainland. ...

China Business 0 Comment October 25, 2006, 3:01 pm

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