China Direct

UK FDI Flows 2019-20 - A DIT Summary

The UK's Department for International Trade has just published its latest FDI figures to the UK.

• The UK attracted 1,852 new inward investment projects in the 2019/20 financial year; a 4% increase on the previous year.
• Investment from #AsiaPacific was responsible for 190 of those projects, with #Australia and #NewZealand accounting for 72 projects, and #Japan 65 projects.
• Please download the PDF below to find out how your sector has performed:
• Download Department_for_International_Trade_inward_investment_results_2019_to_2020

CHINA DIRECT would like to thank UK Gov in APAC for kindly sharing this information.

ASEAN Business Webinar - Opportunities in Malaysia with EY & MIDA

Dear CBI Members & Partners,

We are delighted to invite you to join an exclusive webinar this Thursday 16th July from 1300-1400 (UK) 2000-2100 (MY) in association with CBI member EY and the Malaysian Investment Development Authority (MIDA).

Registration and joining instructions can be found in the attached below.

Download EY Asean Tax webcast - Global investment strategy on relocation and expansion exploring the Asean business landscape with a special focus on Malaysia

Background:

With every crisis lies new opportunities. Join us at our webcast on Thursday, 16 July 2020, as we discuss the current business landscape in ASEAN, with a special focus on Malaysia and her recently unveiled Short-term Economic Recovery Plan (“Plan”). Key amongst the proposals announced under this Plan are a number of generous incentive packages aimed at encouraging foreign manufacturing companies to relocate their overseas facilities to Malaysia.

We are honoured to have Dato' Azman Mahmud, Chief Executive Officer of the Malaysian Investment Development Authority (“MIDA”) join us in this session. Dato' Azman has extensive experience in promotion strategy for the manufacturing and services sectors and has played a significant role in attracting investments into Malaysia during his 30 years of service with MIDA. He will be able to provide practical and valuable insights from the perspective of an investment authority.

Don’t miss this 60-minute session that aims to provide you with insights and practical action steps to help you navigate these unprecedented times, and thrive beyond.

British Business optimistic about 2020 China market opportunities

Dear CBI Members and Partners,

The British Chamber in China recently published its 2020 British Business Sentiment Survey in Beijing.

The Survey revealed that:

• More than 50% of respondents were optimistic about the China market and intended to continue to invest

However:

1. More UK businesses report that it is harder to do business in China
2. More than 30% feel that they are not treated fairly compared to domestic firms

According to the Survey the top three regulatory issues are:

1.     Cybersecurity & IT restrictions
2.     Accessing and moving company finances
3.     Competition with SOE (State Owned Enterprises) or state-sponsored companies  

For a detailed overview of the Business Sentiment Survey (English & Chinese versions) please access and download the survey here.

Our thanks to partner The British Chamber in China for sharing these insights.

Ocado partners with Japan’s biggest supermarket operator

CBI member, Ocado has announced that it has gone into business with Japan’s biggest supermarket operator, Aeon in a bid to launch and popularise online grocery shopping in the market.

Online grocery shopping has yet to take off in Japan, where consumers are accustomed to shopping daily for fresh ingredients. However, competition to be the first to harness the technology and logistics of online shopping is emerging between Japan’s two largest grocery stores: Aeon and Seiyu.

Aeon, which operates more than 21,000 stores in Japan, said that it would use Ocado’s software and expertise to build a new online business with a national network capable of handling $5.5 billion in sales by 2030, and just over $10 billion by 2035.

The deal between Ocado and Aeon will be the group’s first in Asia.

Aeon will use Ocado’s product picking software within parts of its existing store network, and offer click-and-collect services from selected sites. Aeon will also integrate Ocado’s robotic warehouses model into its own distribution network, adopting Ocado’s renowned customer fulfilment centres system.

Initially, Ocado-managed customer fulfilment centres will serve Japan’s Kanto region, with the first planned to go live in 2023, followed by other regions over the next two years.

Ocado shares leapt by as much as 15% in early Friday trading last week, as investors welcomed the partnership, whose technology deals have become more important that its original business of selling food online.

Despite only holding a 1.4% share of Britain’s grocery market, Ocado’s technology has powered the group to a £8.1 billion stock market valuation and partnerships with leading supermarket groups, including Kroger in the United States and Casino in France.

Nike keeps up the pace with its China e-commerce business

 

CBI member, Nike has announced plans to expand its digital presence in China and to take further advantage of the market’s burgeoning e-commerce infrastructure. The US-based sportswear manufacturer plans to introduce more apps and related technologies into China that will allow customers to incorporate a greater number of Nike health incentivising programmes into their lives.

Michael Martin, vice-president of Nike China and general manager of Nike Direct China said, “China’s fast growing 5G technology infrastructure, artificial intelligence, machine learning and digital related-business environment, as well as people’s willingness to connect with various products via digital applications, are creating many opportunities [for Nike in China].”

Nike currently operates a TMall and WeChat mini programme to sell its products and services into the market. These programmes will be accompanied by ‘Nike App China’, which will offer customers exclusive content including coaching tips, and personalised experiences for the brand’s Chinese clients. According to Martin, the Nike China App will function as a member network, “Encouraging every athlete in China to make sport a daily habit, through opening up the world of sport through personal and immersive experiences.”

Iris Yen, vice-president of Nike Direct China and general manager of Nike Direct Digital Commerce China said, “The digital economy will bring huge market opportunities for China and the other parts of the world, as technology has profoundly affected consumer behaviour and raised the expectations of potential customers.”

 

AstraZeneca launches $1 billion China healthcare investment fund

 

CBI member, AstraZeneca has announced that it is launching a new fund with China International Capital Corporation to invest $1 billion in China’s healthcare sector, predominantly to fund research and development.

According to AstraZeneca CEO, Pascal Soriot, the fund will look to invest in Chinese firms, with companies involved in a life-sciences park AstraZeneca helped to open in the city of Wuxi last year, to be among the first to be brought into partnership. AstraZeneca will be a minority partner in the fund, and will mainly play an advisory role in selecting investments and supporting firms.

Mr. Soriot said: “[AstraZeneca] can help by choosing some of those investments [and] we can also help along the way with start-up companies, developing products and helping them find their way around the world. […] it is a substantial investment on our side, but also for our financial partners.”

The company reportedly also plans to expand an existing research and development centre in Shanghai from 450 employees to 1,000 and to establish a new artificial intelligence innovation centre in the city.

AstraZeneca is performing particularly well in China, where sales have doubled since 2012 and foreign drugs manufacturers have witnessed a softening regulatory environment for pharmaceutical firms.

Mr. Soriot said that AstraZeneca wanted to start making drugs it could export globally from China, with areas of opportunity having been identified in oncology and respiratory diseases. “Historically, until today, [AstraZeneca’s] Chinese team has been developing global products for the Chinese market. We now want the Chinese team to take the global leadership on some projects,” he said.

Mitsubishi Corporation secures $7 billion SinoSteel deal

 

 

CBI member, Mitsubishi Corporation has announced that it has entered into an agreement with China’s state-owned, SinoSteel to divest its interests in an iron ore mine and rail and port infrastructure project in Western Australia, in a deal reportedly valued at $7 billion dollars.

Mitsubishi acquired an original 50% stake in the project in 2007 for $100 million, and bought the project outright in 2012 for an additional $225 million. The project revolved around the refurbishment of the Jack Hills iron ore mine, as well as a proposed rail and port facility for the export of iron ore. Before acquiring the site, SinoSteel had been set to be a major customer of the port and rail facility for the export of iron ore to China.

Mitsubishi said in a statement that the Japanese group agreed to exit the project considering its own divestment strategy, which sees the company transition to place a higher emphasis on ‘green investments.’

Shares were reportedly transferred between Mitsubishi Corporation and SinoSteel on Friday. At that time, the Jack Hills iron ore mine project, named Crossland Resources, had capital of $375 million. Mitsubishi revealed that development had been expensive while withholding the sum, but disclosed that it was satisfied with the agreement it had drawn up with its Chinese partner. 

ExxonMobil puts foot on gas with Zhejiang Energy LNG Deal

CBI member, Exxon Mobil has announced that it has signed a sales and purchase agreement with Zhejiang Provincial Energy Group for liquefied natural gas supply. The deal, which was signed on Monday, will see Exxon Mobil supply Zhejiang Energy with 1 million metric tonnes of LNG annually over 20 years.

Peter Clarke, senior vice-president of LNG at Exxon Mobil said, “This sales and purchase agreement represents an important milestone and provides a solid foundation for our strategic partnership with Zhejiang Provincial Energy Group [and…] developing a major LNG gateway in the Ningbo-Zhoushan region. [ExxonMobil] looks forward to continuing our support for Zhejiang Energy during the construction, commissioning and operation of its [new] Wenzhou LNG receiving terminal.”

Zhejiang Energy is building a $1.3 billion receiving terminal for the fuel in Wenzhou, with an annual handling capacity of 3 million tonnes. Zhejiang Energy will partner with Chinese state oil and gas major, Sinopec for the development of the terminal. ExxonMobil already has another separate long-term supply agreement with Sinopec in China, extending the two companies’ collaboration in the market.

China has been ramping up its efforts to import LNG over the past few years. The country imported more than 53 million tonnes of LNG last year, which accounts for 60% of total natural gas imports. Consequently, the Chinese government has sought foreign investment in the country’s LNG infrastructure to help boost China’s capacity to handle greater LNG flows.

Regular readers of China Direct may remember that back in the September of last year, Exxon Mobil announced that it had agreed with Chinese officials to invest $10 billion in an LNG terminal and petrochemicals plant in Guangdong province.

This is part of the company’s efforts to diversify their global portfolio, and includes diversifying further into the LNG supply chain and better catering to the needs of the China and Asian energy markets.

City of London report cements position as global RMB hub

 

CBI member, the City of London Corporation has published a report accounting for the UK’s position as the world’s leading centre for offshore Chinese Renminbi payments. According to the City of London, the UK accounted for 37% of RMB foreign exchange transactions outside of China in January 2019.

In the final quarter of 2018, average daily trading volumes of Chinese RMB in London reached £76.6 billion, up nearly 50% on the same period of 2017. Cross-border transactions between the two countries also grew, by near 110% in 2018, compared to previous years.

Catherine McGuinness, City of London Corporation policy chair said, “This report, which comes amid unprecedented uncertainty in the UK economy, shows that the fundamentals of London remain strong, particularly in terms of foreign exchange.”

https://www.cityoflondon.gov.uk/business/asia-programme/greater-china/Documents/london-rmb-business-quarterly-issue-3-2019.PDF

Jaguar Land Rover roars and wins Chinese copycat legal battle

CBI member, Jaguar Land Rover has won a legal case to prevent Chinese car manufacturer, JiangLing Motor Corporation from selling a copycat vehicle, ending a three-year court battle.

On Friday, the Beijing Chaoyang District Court ruled that five major features of JiangLing Motor’s Land Wind X7 sport utility vehicle had been copied from Jaguar Land Rover’s Range Rover Evoque model. JiangLing motors was ordered to cease production, sales and marketing of the vehicle.

Jaguar Land Rover is also seeking RMB 1.5 million (£170,000) in costs and lost business, a sum which may rise in the future.

Keith Benjamin, Jaguar Land Rover global head of legal said: “This ruling is a clear sign of the law being implemented appropriately to protect consumers and uphold their rights so that they are not confused or misled, whilst protecting business investment in design and innovation. [Jaguar Land Rover] welcomes this decision of the Beijing court, which further strengthens our confidence in investing in China and in the fairness of intellectual property adjudication in the Chinese courts.”

The new Range Rover Evoque will be launched in China next month.

To find out more, please follow the link.