China Business News

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RMB cross-border circulation to accelerate

The People’s Bank of China has announced an increase in cross-border circulation channels for the RMB, extending the use of the local currency to settle cross-border trade with the entire country. Previously, only 20 provincial regions in China could conduct such settlements. China will also allowed foreign investors to make direct investments with RMB legally obtained overseas.

In addition, the PBOC has signed currency-swap agreements with 14 governments worth RMB 1.3 trillion yuan, including South Korea, Malaysia, Hong Kong SAR, Belarus and Argentina. 

China's GDP growth to slow to 8.3% in 2012

China’s economic growth is expected to slow to 8.3% in 2012, according to a report by Deutsche bank. The economy will continue to decelerate in the first quarter of 2012 mainly due to property investment slowdown and slowdown in export due to weak demand from Europe, with year-on-year GDP growth dropping to somewhere between 6 and 7%, said Ma Jun, an economist with the bank.

However, improvement in Eurozone economies, loosening domestic monetary policies and fiscal measurements could result in GDP growth rate surging in the second quarter and third quarter, Ma said.

Mergers and Acquisitions rising in China

Amid a global economic downturn, cross-border mergers and acquisitions in the Chinese market soared by almost 100 percent yoy in 2011 in terms of the disclosed value, according to a report released by Zero2IPO Research Center.

China weighing benefits of Carbon Taxation

China is considering tightening its tax regulations on polluting industries by levying a carbon tax on China’s biggest energy consumers before the end of the current Five-Year Plan (2011-2015), according to the China Daily.

November FDI in China drops 9.76%

--Annual growth still positive--

Foreign direct investment  in China in the month of November was down almost ten percent (9.76%) when compared with November of last year, the Ministry of Commerce (MOC) reported last Thursday. The establishment of foreign companies was also down 12.9% in November when compared with last year.

China to raise fines to combat software piracy

--New fines to move from fixed to flexible--

China, which by some estimates is the world’s second largest market for pirated software, has decided to increase both fines and punishments for those caught counterfeiting software in order to cut down on the prevalence of pirated software in the Chinese marketplace. Whereas in the past China often imposed fixed fines for counterfeiters, the government has said it will move towards using more flexible fines that will represent a multiple of the value of infringed goods.

Controls on Foreign Investment Tightened

--New measures aimed at controlling hot money flows--

The State Administration of Foreign Exchange (SAFE) and the Ministry of Commerce (MOFCOM) have issued a new regulation governing the supervision of foreign investment companies in China, according to an announcement on the MOFCOM website this Monday.

China M&A: Sinopec and ENN Energy bid on gas distributor

--Potential buyers hope to capitalize on undervalued stock--

China Petroleum & Chemical Corporation (Sinopec), together with ENN Energy Holdings Ltd. has put in an offer of over HKD 15 billion (USD 2 billion) in cash for China Gas Holdings Ltd., potentially allowing the companies to gain control of the company’s fuel distribution network that covers 20 different provinces in mainland China, Bloomberg reports.

China Unicom and China Telecom call for regulators to end probe

--Telecom giants pledge to reform practices--

Two of China’s most prominent telecommunication companies, China Unicom [Hong Kong] Ltd. And China Telecom Corp. have each asked that Chinese regulators halt an investigation into their pricing practices and have vowed to deal with issues discovered during internal evaluations, according to the Wall Street Journal.

U.S. to investiage China solar dispute

--Federal panel proceeds with inquiry--

In the latest move in the ongoing dispute around fair competition in the renewables sector, the U.S. International Trade Commission (ITC) has made a preliminary ruling that determined Chinese imports of solar panels are harming the domestic U.S. solar industry.

China cuts bank reserve requirements

--First cut in nearly three years signals desire for growth trumps inflation concerns--

SMEs face difficult business conditions in China

--Regional report says conditions currently worse than during 2008 crisis--

Small and medium size enterprises (SMEs) are facing a tougher business environment recently in China, according to a regional survey of more than 4,000 companies, over 90% of which were SMEs, the China Daily reports.

China telecom giants under investigation

--May be punished for violations of China's Anti-Monopoly Law--

State-owned telecommunication companies China Telecom and China Unicom are under investigation from China’s National Development and Reform Commission (NDRC). This is the first time since the law was implemented in 2008 that a state owned enterprise (SOE) has being regulated under China’s Anti-Monopoly Law.

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