TODAY'S BRIEFS Daily News Update - 20 October, 2008
20 October 2008
TODAY'S BRIEFS
GDP growth slows to 9% in 3Q
China's economy grew 9% in the third quarter, the slowest rate in the last five years, Bloomberg reported, citing official statistics released today. The news underlined concerns that the global financial crisis would affect growth on the mainland. China's economy expanded by 12% in 2007 and 10.1% in the second quarter of this year. The State Council said after a meeting chaired by Premier Wen Jiabao that global financial troubles and economic instability will have a "gradual" effect on China, and that growth, corporate profits and public revenues would slow. Many analysts expect that the government will move to stimulate the economy in response to the slowdown with increased easing of monetary policy controls.
CCB profit growth slows in 3Q
China Construction Bank (CCB), the country's largest mortgage lender, recorded 13% profit growth in the third quarter, down from the 71% growth posted in the first half of the year, the South China Morning Post reported. CCB's profits in the first nine months of 2008 were up 48.07% from the same period in 2007. The bank put its growth down to "continued positive development of various businesses" and a lower corporate income tax rate. CCB said in August that it would likely not be able to sustain the high level of growth seen in the first half of the year due to "increasing economic uncertainty." Chinese lenders' profit growth peaked in the first half of the year, analysts said. Fourteen listed banks reported an average of 67% net profit growth in the period.
Chinalco seeks frozen Lehman assets
Aluminum Corp of China (Chinalco) is among the clients of Lehman Brothers' European unit that are seeking to regain assets frozen when the firm collapsed in September, the Wall Street Journal reported. The state-owned aluminum firm said it was in talks to free its 9% stake in mining firm Rio Tinto from Lehman. Chinalco has delayed a US$1.17 billion bond sale until the matter is resolved. Chinalco must wait until Lehman's insolvency administrator, PricewaterhouseCoopers, has determined that its stake can be returned to it, based on the type of account it has filed. Chinalco said it expects to recoup the stake without a loss.
Union to push harder for migrants, foreign firm workers
The All-China Federation of Trade Unions (ACFTU), China's only legal workers' union, pledged at its 15th national meeting to push for increased protection of labor rights, the South China Morning Post reported. Delegates at the meeting, who for the first time included migrant workers, urged amending the organization's charter to address the rights of China's tens of millions of migrant laborers as well as employees of foreign firms. No details of the amendment have been released, but a delegate told the newspaper that a consensus had been reached that the ACFTU should do more to address the two issues. Foreign enterprises have been facing an increased likelihood of unionization among their Chinese employees since the promulgation of the new Labor Contract Law at the beginning of this year.
Fonterra may sell off Sanlu stake
New Zealand-based Fonterra Cooperative Group is considering selling its 43% stake in Sanlu Group - the Hebei-based dairy firm at the center of an industry-wide product safety scandal, Bloomberg reported. Fonterra CEO Andrew Ferrier said in a statement that a number of options were available for Sanlu's future, including an acquisition of the stake by a third party. In September, Fonterra wrote down the value of its stake by 69% to US$85 million due to the scandal's effect on Sanlu's brand. Last week, Wahaha, China's largest beverage producer, said it may be interested in buying out Sanlu. Selling off the stake would free up Fonterra to make other investments in China's dairy sector.
CDB may increase share in Anglo American
China Development Bank (CDB), the mainland's largest policy lender, could raise its stake in mining firm Anglo American as the company's share price falls, the South China Morning Post reported. CDB currently holds a small stake of less than 3%, though the exact amount is not known. London-traded shares of Anglo American, the world's fourth-largest miner, have fallen 64.84% to £12.95 (US$22.44) from a 52-week high of £36.83 (US$63.81) in May. Global commodities prices have dropped on negative sentiment about the world economy. CDB has held a stake in Anglo American since 2006. Anglo American did not comment on whether CDB would increase its investment.
Former Beijing vice mayor given death sentence
Ex-vice mayor of Beijing Liu Zhihua has been convicted of corruption for taking US$1 million in bribes, and sentenced to death, state media reported. Liu had been in charge of the body that oversaw construction projects for the city's massive buildup in advance of the Olympics. He was stripped of his title in 2006. Liu's sentence has been suspended for two years, meaning that it could be commuted to life imprisonment on good behavior. The bribery scandal was an embarrassment for the Chinese Communist Party, which had promised that the preparations for the games would be the "cleanest in history."
Foreign media rights extended after Olympics
China extended freedoms for foreign media initially granted for the duration of the Olympics, Reuters reported. The new rules, released minutes before the temporary rules were set to expire, allow foreign journalists to travel freely across most of the country for reporting, though Tibet remains a restricted area and other areas may be made off-limits after disasters, said Foreign Ministry spokesman Liu Jianchao. Chinese citizens are also forbidden to work as full correspondents for foreign media and can only serve as assistants. The extension was welcomed by the Foreign Correspondents' Club of China, though it urged the government to properly enforce the new rules. Other groups, including Human Rights in China and PEN, said the new rules were encouraging, but that freedoms granted foreign reporters should be extended to domestic media.
TODAY'S BRIEFS
GDP growth slows to 9% in 3Q
China's economy grew 9% in the third quarter, the slowest rate in the last five years, Bloomberg reported, citing official statistics released today. The news underlined concerns that the global financial crisis would affect growth on the mainland. China's economy expanded by 12% in 2007 and 10.1% in the second quarter of this year. The State Council said after a meeting chaired by Premier Wen Jiabao that global financial troubles and economic instability will have a "gradual" effect on China, and that growth, corporate profits and public revenues would slow. Many analysts expect that the government will move to stimulate the economy in response to the slowdown with increased easing of monetary policy controls.
CCB profit growth slows in 3Q
China Construction Bank (CCB), the country's largest mortgage lender, recorded 13% profit growth in the third quarter, down from the 71% growth posted in the first half of the year, the South China Morning Post reported. CCB's profits in the first nine months of 2008 were up 48.07% from the same period in 2007. The bank put its growth down to "continued positive development of various businesses" and a lower corporate income tax rate. CCB said in August that it would likely not be able to sustain the high level of growth seen in the first half of the year due to "increasing economic uncertainty." Chinese lenders' profit growth peaked in the first half of the year, analysts said. Fourteen listed banks reported an average of 67% net profit growth in the period.
Chinalco seeks frozen Lehman assets
Aluminum Corp of China (Chinalco) is among the clients of Lehman Brothers' European unit that are seeking to regain assets frozen when the firm collapsed in September, the Wall Street Journal reported. The state-owned aluminum firm said it was in talks to free its 9% stake in mining firm Rio Tinto from Lehman. Chinalco has delayed a US$1.17 billion bond sale until the matter is resolved. Chinalco must wait until Lehman's insolvency administrator, PricewaterhouseCoopers, has determined that its stake can be returned to it, based on the type of account it has filed. Chinalco said it expects to recoup the stake without a loss.
Union to push harder for migrants, foreign firm workers
The All-China Federation of Trade Unions (ACFTU), China's only legal workers' union, pledged at its 15th national meeting to push for increased protection of labor rights, the South China Morning Post reported. Delegates at the meeting, who for the first time included migrant workers, urged amending the organization's charter to address the rights of China's tens of millions of migrant laborers as well as employees of foreign firms. No details of the amendment have been released, but a delegate told the newspaper that a consensus had been reached that the ACFTU should do more to address the two issues. Foreign enterprises have been facing an increased likelihood of unionization among their Chinese employees since the promulgation of the new Labor Contract Law at the beginning of this year.
Fonterra may sell off Sanlu stake
New Zealand-based Fonterra Cooperative Group is considering selling its 43% stake in Sanlu Group - the Hebei-based dairy firm at the center of an industry-wide product safety scandal, Bloomberg reported. Fonterra CEO Andrew Ferrier said in a statement that a number of options were available for Sanlu's future, including an acquisition of the stake by a third party. In September, Fonterra wrote down the value of its stake by 69% to US$85 million due to the scandal's effect on Sanlu's brand. Last week, Wahaha, China's largest beverage producer, said it may be interested in buying out Sanlu. Selling off the stake would free up Fonterra to make other investments in China's dairy sector.
CDB may increase share in Anglo American
China Development Bank (CDB), the mainland's largest policy lender, could raise its stake in mining firm Anglo American as the company's share price falls, the South China Morning Post reported. CDB currently holds a small stake of less than 3%, though the exact amount is not known. London-traded shares of Anglo American, the world's fourth-largest miner, have fallen 64.84% to £12.95 (US$22.44) from a 52-week high of £36.83 (US$63.81) in May. Global commodities prices have dropped on negative sentiment about the world economy. CDB has held a stake in Anglo American since 2006. Anglo American did not comment on whether CDB would increase its investment.
Former Beijing vice mayor given death sentence
Ex-vice mayor of Beijing Liu Zhihua has been convicted of corruption for taking US$1 million in bribes, and sentenced to death, state media reported. Liu had been in charge of the body that oversaw construction projects for the city's massive buildup in advance of the Olympics. He was stripped of his title in 2006. Liu's sentence has been suspended for two years, meaning that it could be commuted to life imprisonment on good behavior. The bribery scandal was an embarrassment for the Chinese Communist Party, which had promised that the preparations for the games would be the "cleanest in history."
Foreign media rights extended after Olympics
China extended freedoms for foreign media initially granted for the duration of the Olympics, Reuters reported. The new rules, released minutes before the temporary rules were set to expire, allow foreign journalists to travel freely across most of the country for reporting, though Tibet remains a restricted area and other areas may be made off-limits after disasters, said Foreign Ministry spokesman Liu Jianchao. Chinese citizens are also forbidden to work as full correspondents for foreign media and can only serve as assistants. The extension was welcomed by the Foreign Correspondents' Club of China, though it urged the government to properly enforce the new rules. Other groups, including Human Rights in China and PEN, said the new rules were encouraging, but that freedoms granted foreign reporters should be extended to domestic media.
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