China Direct

JP Morgan receives Chinese brokerage venture approval

 

CBI member, J.P. Morgan has received approval from the China’s securities regulator to set up a majority-owned brokerage joint venture.

J.P. Morgan will take a 51% controlling stake in a joint venture with Shanghai Waigaoqiao Free Trade Zone Group and four other smaller investment firms. China’s securities regulator announced last year that foreign financial services institutions would be able to take a 51% controlling share in response to a pledge by China’s government that the nation’s domestic securities market would undergo further opening to foreign competition. That said, the granting of J.P. Morgan’s license is the first since December.

After the investment cap to allow foreign brokerages majority control of their mainland joint ventures was lifted last April, only 10 foreign-invested joint ventures in the securities sector have managed to expand their presence in the market. Moreover, these companies account for only a small fraction of the mainland brokerage business – once again highlighting a common criticism of China’s commitment to opening up, that the regulators only step in to support foreign market entrants once China’s domestic service providers have such a strong foothold that the international banks are forced to play catch-up.

Irrespective of the size of opportunity within the China market in isolation however, expanding the presence of financial services companies in China is seen as a crucial part of wider Asia-Pacific expansion. Nicolas Aguzin, chairman and CEO of J.P. Morgan Asia-Pacific said: “[the granting of the license] is a critical component of [J.P. Morgan’s] growth plans globally as well as in Asia-Pacific and the progress and investments we continue to make reflect our long-term commitment to bringing the full force of our firm to the country.”

Further steps remain in J.P. Morgan’s path, however. Despite having received approval from China’s securities regulator the bank still needs to obtain various other approval certificates and business licenses from different government regulators before they can officially operate in China.

 

CBI Member BT secures IP VIPN License for Shanghai

CBI member BT Wins Shanghai IP-VPN Licence

BT is the first global foreign telco to be awarded an IP VPN licence through the Shanghai Free Trade Zone by the Chinese Ministry of Industry and Information Technology (MIIT).

This allows BT to provide IP VPN services to customers within the Shanghai municipality.

This is part of BT's long term strategy to continue to expand its presence in China and it will continue to work with the Chinese authorities to this end.

CBI Member Thomas Cook opens China Business in Shanghai

CBI Member Thomas Cook, one of the world’s leading holiday companies, and Fosun, the leading Chinese investment conglomerate, officially launched Thomas Cook China in Shanghai in September.

Thomas Cook China is a joint venture between Thomas Cook and Fosun. It opened its offices in Shanghai in October 2015 and aims to be a full service travel company, offering inbound travel to and within China, as well as holidays and tours for Chinese customers looking to travel to destinations around the world.

For more information please read here.

 

A busy week for UK-China Relations - business deals and highlights Sept 2015

 

Dear CBI members and partners,

China Direct has summarized below the key UK-China announcements made during a busy and productive week for UK-Sino relations.

Chinese Ambassador to U.K. speaks at reception in honour of KPMG Chairman

Chinese Ambassador to the U.K. Liu Xiaoming spoke at a reception held in honour of KPMG Chairman Richard Reid. The Ambassador highlighted some of Mr. Reid’s impressive contributions to strengthening relations between China and the U.K., including:

• Mr.Reid established KPMG’s U.K.-China Business to work with Chinese groups as they expand overseas. KPMG has played an important role in facilitating investments between China and the U.K.
• In 2012, KPMG was involved in seven out of the eight major Chinese investments in the U.K., including CIC’s investment in Thames Water and Heathrow Airport.
• KPMG has been a leading advisor for China’s potential investment in the U.K.’s nuclear power generating market.
• KPMG assisted Jaguar Land Rover to enter the Chinese market and form a joint venture with Chery Auto.

 Please read the full transcript of the Ambassador’s speech here.

U.K. Chancellor announces £3 million funding for grassroots football programme

U.K. Chancellor George Osborne announced a £3 million funding boost for a revolutionary grassroots football programme in China, supporting thousands of young people.

Speaking during a visit to the Soong Ching Ling Football School in Urumqi, the Chancellor announced new funding to provide training for over 5,000 new football coaches, significantly increasing Chinese awareness of the thriving football sector in the U.K.

The extension of the highly successful Premier Skills football coaching programme, run by the British Council and the Premier League, will also see it reach Xinjiang for the very first time. The initiative, which started in 2008, focuses on creating new coaches and referees across the world and inspiring young people to get involved in football.

So far the programme has trained 1,100 coaches and reached nearly 500,000 young people in China. The announcement follows a new agreement between the British and Chinese governments to work together in developing sports education, including new collaborations on sports policy, the training of coaches and referees, and a new joint accreditation in football coaches for PE teachers.

The Chancellor said, “Grassroots football plays an instrumental role in U.K. life, and it is brilliant to be able to spread that to China. This fantastic scheme which will bring new opportunities to young people across China will also help bring increased awareness and investment into the U.K. football sector.” Please read more here.

U.K. Chancellor announces support measures to showcase British culture

U.K. Chancellor announced a raft of support measures to open up some of the country’s best arts and culture to Chinese audiences. Examples include: 

• British Library to display some of its most iconic literary treasures in China for first time ever: Ten handwritten manuscripts and early editions by some of the best-known British authors of all time, from William Shakespeare to the Sherlock Holmes creator Sir Arthur Conan Doyle, will star in pop-up exhibitions across China between 2016 and 2019. The British Library will also begin creating related online resources in Mandarin. This follows the opening of a new display at the British Library in London showcasing 3,000 years of Chinese writing, from ancient engraved animal bones to a vast 15^th century encyclopaedia.

 

• Shakespeare’s Globe to tour China with revival of The Merchant of Venice: To commemorate the 400th anniversary of Shakespeare’s death next year, Shakespeare’s Globe will tour China with a revival of The Merchant of Venice, which premiered at the Globe in April this year to full houses for over 6 weeks. £500,000 of government funding will also develop a training programme for Chinese arts organisations to develop their learning and community projects. This complements the £1.5 million investment announced at the 2014 UK-China Economic Financial Dialogue in support of the Royal Shakespeare Company for the translation of Shakespeare into Mandarin and the translation of seminal Chinese plays into English.

 

• £500,000 to support Royal Opera House training programme for Chinese students: The Royal Opera House currently provides training to Chinese delegations on an ad hoc basis, so this Sino-U.K. funding will offer Chinese students the opportunity to travel to London for intensive training courses with world-leading arts institutions.

 

• New Love China Festival at Southbank Centre: This will celebrate the U.K.’s cultural links with China through workshops, exhibitions and performances showcasing the best of music, theatre, fashion, design, dance, comedy, and literature from the U.K. and China. It builds on the success of the Southbank Centre’s annual Alchemy Festival celebrating the U.K.’s links with the Indian subcontinent.

 

• £250,000 for National Theatre of Great Britain, working in collaboration with National Theatre of China to develop tour of War Horse across China: The tour will follow its recent performances in Beijing and Shanghai. The show will be produced, operated, and performed by 90 Chinese artists and technicians who have been trained as part of the strategic skills exchange between the two national theatres.

 

• £1.3 million to support presentation in China of Tate’s exhibition of British art, Landscapes of the Mind: British Landscape Painting (1700 – 2007): The exhibition comprises over one hundred celebrated works drawn from Tate’s unrivalled collection of British art, including David Hockney’s ‘Bigger Trees near Water’. Most of these will be presented in China for the first time. This exhibition, which has travelled to Mexico City and São Paulo, will forge a new museum partnership for Tate in China and follows the successful presentation of a landmark Turner exhibition at the National Art Museum of China, in Beijing in 2009.

 

• Victoria & Albert Museum to create new system for interpreting Chinese images: £300,000 of funding will support the initial stages of creating a bilingual English-Mandarin database of pre-1900 Chinese cultural and literary sources.

 

• £700,000 to showcase tourism in North of England as part of Northern Powerhouse: The Chancellor’s visit to China was a key opportunity to highlight the economic and cultural impetus of the U.K.’s Northern Powerhouse, and the campaign will encourage Chinese visitors to explore the Yorkshire moors, Beatrix Potter, and Wordsworth countryside in the Lake District, and historical sites such as Hadrian’s Wall.

• £1.3 million for VisitBritain ‘culture is GREAT’ campaign in China: This will highlight Britain’s cultural capital. Sally Balcombe, VisitBritain’s CEO, also joined the Chancellor during his tour of China.

 

• New Eden Project in Qingdao: The Eden Project has signed a deal, worth up to £5 million, for a new Eden Project in Qingdao—the company’s first development outside of the U.K.

Please read more here.

U.K. Chancellor opens £11.8 billion HS2 bidding process

U.K. Chancellor George Osborne announced a major new milestone for the government’s High Speed 2 rail project (HS2), kick-starting the bidding process for phase one of the mega construction project.

At least seven new contracts will be opened up to companies, with a total combined value of £11.8 billion. The Chancellor made the announcement at an event in Chengdu, aimed at wooing some of China’s biggest investors to be part of the project as well as a raft of other major U.K. infrastructure projects.

Mr. Osborne also announced a new ‘HS2 partnering day’ between British and Chinese firms to explore joining up on bids for contracts, as well as launching the Northern Powerhouse pitchbook. HS2 forms a major part of the government’s plan to rebalance the U.K. economy and build a Northern Powerhouse by providing high speed rail services from London to the Midlands and the North.

Construction of phase 1 is due to start in 2017 and, when opened, will slash the travel time between London and Birmingham from one hour and 21 minutes to 49 minutes. The government is organising an ‘HS2 partnering day’ to give Chinese companies an opportunity to meet U.K. firms and establish potential partnerships to join up on bids.

The Chancellor is also inviting Chinese participation in the HS2 skills college, which is due to open in 2017. A skills-swap programme would allow the U.K. to benefit from China’s expertise as a world leader on High Speed Rail and help Chinese investors better understand the U.K. market. The Chancellor is also encouraging Chinese companies to take part in an HS2 ‘regeneration tour’, which would involve visiting areas of huge commercial opportunity in London, the Midlands, and the North. Investors would have the chance to meet with relevant local authorities and visit station sites. Please read more here.

U.K. Chancellor showcases Northern Powerhouse investment opportunities

U.K. Chancellor George Osborne showcased a selection of £24 billion worth of investment opportunities in the North of England at an event in Chengdu with senior Chinese investors.

The Chancellor said there are unprecedented opportunities for Chinese investment into the Northern Powerhouse as the U.K. and China enter a golden era of economic cooperation.

Infrastructure and regeneration investment projects such as the Atlantic Gateway, a series of projects connecting the Port of Liverpool to the City of Manchester, and Science Central, a cutting-edge development in the heart of Newcastle, are set out in a new Northern Pitchbook that was presented in Chengdu.

At the same time, Britain’s Northern leaders said a new wave of transformational Chinese investment can revolutionise Northern infrastructure. Key projects for which investment is sought include:

• Manchester Place—an opportunity to deliver three new zones of more than 10,000 homes with a combined value of over £3 billion
• Sheffield Retail Quarter—working with Sheffield City Council to create new city centre homes and centrally located offices
• South Bank, Leeds—a new regeneration scheme covering more than 130 hectares in the city centre

 Alongside the Pitchbook, the Chancellor also announced:

• potentially doubling Enterprise Zones across the North
• commissioning a new government report looking at existing links between U.K. and Chinese cities to help the U.K. better understand how it can attract more trade with China
• a commitment to reinvigorate partnerships between Northern and Chinese cities, including Sheffield’s Sister City agreement with Chengdu, which has fostered significant business, civic, and cultural links since 2010
• the secondment of staff from the China Rail Construction Corporation, the world’s largest railway company, to Mott MacDonald, the U.K.-based management, engineering, and development consultancy, in Manchester
• the findings of a city-clusters research project based on the Chongqing-Chengdu cluster and the Northern Powerhouse
• a new service, established by Lancaster University, to bring together U.K. and Chinese universities, researchers and businesses to take research to commercialisation
• a new joint PhD programme to teach the next generation of Chinese Radio Astronomers at the Square Kilometre Array headquarters at Jodrell Bank
• a new offer on the Chevening Scholarship Programme to those in the Northern Powerhouse who wish to strengthen ties with Chinese students. Durham, Lancaster, Leeds, Liverpool, Manchester, Newcastle, Sheffield, and York universities (the ‘N8’) have all expressed an interest so far

Please read more here.

UKTI and Shanghai FTZ partner to help U.K. companies with e-commerce sales 

U.K. Business Secretary Sajid Javid signed a partnership agreement on behalf of U.K. Trade and Investment (UKTI) with the Shanghai Cross-Border e-Commerce Public Platform.

The signing took place at the first ever China-U.K. Cross-Border e-Commerce Cooperation Roundtable organised by the Bank of China in Shanghai. The partnership was organised as part of UKTI’s e-Exporting Programme.

The agreement will support U.K. exporters and help promote their online sales in China by helping them to find new customers, build brand awareness, and analyse Chinese consumer requirements. The Shanghai Cross-border e-commerce Public Platform will work with UKTI to:

• provide help to U.K. companies wishing to sign up to e-commerce platforms registered in the Shanghai Free Trade Zone (FTZ)
• encourage e-commerce platforms registered in the Shanghai FTZ to run a marketing campaign promoting U.K. brands on their platforms
• share information to help U.K. companies understand the opportunities in China and how they can be optimised through e-channels in the Shanghai FTZ

UKTI will work to grow the volume of U.K. online exports to China through the Shanghai FTZ e-marketplace by:

• delivering a programme with U.K. partners to increase the number of companies seeking to export through global e-marketplaces
• promoting opportunities for U.K. companies to grow their business in China through e-marketplaces
• working with partners and private sector experts to provide peer-to-peer mentoring for U.K. companies seeking to export through e-channels
• delivering a retail and brands campaign across relevant e-commerce platforms in the Shanghai FTZ

Please read more here.

Standard Chartered announces China Free Trade Zone (FTZ) initiatives

CBI member Standard Chartered announced a series of initiatives for the construction and development of free trade zones (FTZs), immediately following the launch of three new FTZs in Guangdong, Fujian, and Tianjin.

In Fujian’s FTZ, Standard Chartered successfully completed a cross-border RMB payment for Youda Trade (Fuzhou) Co. Ltd. with its parent company Grobest in Taiwan. This is the Bank’s first cross-border RMB payment for a Taiwanese enterprise in Fujian’s FTZ. Meanwhile, the Bank received two more cross-border RMB sweeping business mandates from Youda and Xiamen Zhongjiu Trading Co., the sub-company of Likeit International. Once the relevant rules are announced, the Bank will provide cross-border RMB two-way sweeping services to the two companies, which will also mark the first transactions for cross-border RMB two-way sweeping by a foreign bank in Fuzhou and Xiamen.

In Guangdong, as one of the first batch of banks to launch cross-border RMB loans in Qianhai, Standard Chartered completed a series of milestone deals in the zone. In September 2013, Standard Chartered Shenzhen Qianhai Sub-branch commenced operation, bringing a range of comprehensive and quality banking services, including foreign exchange and RMB-related services, to customers in and around the Qianhai zone.

In Nansha FTZ, Standard Chartered provides services including trade finance, cash management, financial markets, and unsecured business installment loans to clients including multinational companies, local corporates, and small- and medium-sized enterprises. Under the future management and service framework of the FTZ, Standard Chartered will target more clients in the zone and launch new services, including but not limited to warehousing logistics, financial leasing, and shipping finance. In addition, the Bank has followed the construction of Hengqin’s FTZ closely and continuously provides advice on financial innovations in the zone. Standard Chartered will maintain its support of enterprises in the zone and provide first-class financial solutions for their cross-border transactions.

In Tianjin, the Bank actively participated in the construction and development of the FTZ from the start. By working closely with the FTZ management committee, Standard Chartered provides financial solutions to enterprises to help them reduce costs and improve cash management efficiency. In the future, Standard Chartered will take advantage of its network and product innovation to carry out integrated financial services, as well as contribute to the construction of the “One Belt One Road” plan and the synergic development of the Beijing-Tianjin-Hebei Region.

In April, the plan to further deepen the reform and opening-up in the China (Shanghai) Pilot Free Trade Zone (PFTZ) was officially announced, that Shanghai PFTZ, which covers 28.78 square kilometres, will add 91.94 square kilometres to encompass a total area of 120.72 square kilometres, including the Lujiazui, Zhangjiang, and Jinqiao districts. Following the expansion, Standard Chartered’s China head office, Shanghai branch, as well as the sub-branches in the PFTZ and Shanghai Urban Construction International Center, will all be located in the zone to further promote financial reform and product innovation, as well as strengthen business marketing and organizational building, demonstrating the Bank’s determination to support the construction of Shanghai as an international financial centre.

Jerry Zhang, CEO and Executive Vice Chairman of Standard Chartered China, commented, “The launch of the three new FTZs is a significant step towards China’s further economic reform and opening-up, when the country will play a more important role in the increasingly integrated global economy and promote the mutual development of other regions and markets. Standard Chartered is delighted to announce a series of transactions and services, immediately following the launch of the three new FTZs. By leveraging our strong network and financial innovation capabilities, we are leading the way in cross-border RMB business, supported by our proven experience in operating in the Shanghai PFTZ, which we aim to replicate in the new FTZs. Capitalizing on our own unique expertise and capturing the opportunities brought about by the financial innovation in the FTZs, Standard Chartered Bank China is well positioned to provide value-added services to our clients as they venture abroad and contribute to China’s ‘One Belt and One Road’ initiative.”

Besides business expansion, Standard Chartered has been offering guidance on the construction and development of the FTZs. The Bank shares its expertise on cross-border RMB business and the Shanghai FTZ with regulators and local companies and also advises on the formulation of policies in the FTZs.

Standard Chartered Bank plays an active role in the development of the Shanghai PFTZ. Currently, the Bank has a sub-branch in the zone, providing cross-border RMB sweeping services, cross-border RMB loans, central collection services, and support for clients who are setting up new financial leasing companies in the zone. In February 2014, Standard Chartered approved the first cross-border RMB two-way sweeping transaction for Baoxin Group, which helped the Bank receive an award for the Model Business in Innovation from the Shanghai PFTZ Administration. In addition, this transaction also ranked among the highly commended list in Best Cash Management at the Taozhu Gong Awards by Euro Finance.

CBI Member Successes in China - Snapshot of Year of the The Horse

 

Dear CBI members and strategic partners,

China Direct would like to share with you a snapshot of CBI members' successes in China through 2014. We hope that you found our new format easy to use, visual and informative and wish you all every success for the forthcoming year of the sheep.

Please do keep sending us your updates and press releases so that your business can also be highlighted in 2015.

Thank you.

Download CBI Beijing, Member Milestones in China, 2014

HSBC opens Shanghai Pilot Free Trade Zone Sub-branch

 

CBI member HSBC recently opened its Shanghai Pilot Free Trade Zone Sub-branch, focusing initially on servicing corporate customers with cross-border financial needs in the pilot zone.

Under the current regulatory framework of the China (Shanghai) Pilot Free Trade Zone, the new outlet offers a range of banking services, such as account opening, cross-border payment, and settlement in multiple currencies. Its service scope and business scale are set to expand further as policies governing the zone evolve.

Helen Wong, Deputy Chairman, President and Chief Executive Officer of HSBC China, said, "The launch of our new outlet in the Shanghai FTZ signals another concrete step that HSBC is taking to participate actively in supporting China's financial reforms. We will leverage this platform as we continue our efforts in advancing product and service innovations. As a leading international bank, HSBC is ideally positioned to deliver our cross-border expertise into the zone to meet our customers' financial needs for trade and investment and to support the development of China's real economy."

Please click here to read the full press release by HSBC.