Gold bourse plans silver benchmark

Date Nov 30 2018 09:37:32 Source:China Daily

SGE to launch quotations for palladium and platinum in Shanghai soon 

Two years since the Shanghai Gold Exchange launched the Shanghai Gold Benchmark Price, it now plans to introduce a benchmark price for silver, its latest step in product innovation.

The exchange said that it would also launch quotations and trading for palladium and platinum at the beginning of next year at the earliest. It has also planned that price-asking products with performance guarantees will be launched at the beginning of 2020.

Jiang Qijia, senior analyst of the research department at financial services provider Noah Holdings Ltd, said that silver has a similar function as gold in terms of hedging risks. At the same time, it can be widely applied in industrial production, which is the same as aluminum and copper. Its strategic importance is only next to gold with regard to its trading volume in the physical and futures market.

Jiang pointed out that the launch of a benchmark price for silver in Shanghai will help China come up with a pricing mechanism, making the country less reliant on the prices set by the CME Group in the United States and the London Metal Exchange.

"Combined with products for palladium and platinum, this will help China complete its all-category pricing for metals," he said.

"Like the London Interbank Offered Rate, which is of crucial importance to derivatives, benchmark prices for metals will help to lay the groundwork for derivatives in Shanghai," he added.

Jiang also stressed that the trading of such metals in Shanghai is settled in yuan, which will help with the internationalization of the renminbi.

The Shanghai Gold Exchange launched price asking services for silver on Jan 2. On the first trading day, the total trading volume reached 196.8 metric tons, valued at around 7.4 million yuan ($1.1 million). At present, the term rights for silver are mainly held by HSBC, UBS and JPMorgan.

Founded in 2002, the exchange launched the world's first yuan-denominated gold benchmark price in 2016. It has reported the world's largest on-exchange trading for gold for 11 consecutive years. Its on-exchange trading volume for silver was the world's third-largest last year.

According to a survey released by the global body the Silver Institute, China is by far the largest consumer of silver in the world, accounting for 18 percent of global fabrication demand in recent years. China is also the third-largest silver producing country worldwide, said the institute.

The nation will continue to be a major driver in the global silver market for years to come, fueled by continued industrial demand, the institute predicted. 

Economic recovery building up in northeastern provinces

Date Nov 29 2018 15:34:57 Source:China Daily

Economic growth has improved in China's northeastern provinces during the past few months and helped dispel doubts about their outlook for the future.

According to government data, GDP in Liaoning, Jilin and Heilongjiang provinces rose 5.4 percent, 4 percent and 5.1 percent year-on-year, respectively, in the first three quarters, with Liaoning notching up positive growth for seven consecutive quarters and Jilin ending its six-month slowdown with robust growth in the third quarter of this year.

With economic growth accelerating, the provinces have "bottomed out" and entered a new phase of "restorative growth", said Li Kai, deputy director of the Northeast Revitalization Research Institute under Northeastern University.

The three provinces were once the most important heavy industry bases in China.

However, they have been struggling for growth since 2014 following the decline of their traditional heavy industries such as coal, steel, petrochemicals and machinery.

Falling investment has intensified along with population loss, which made it more difficult for local governments to rejuvenate the economy. Reform was imminent.

Li is a long-standing observer of the economic scene in the region. He said local companies have vigorously promoted supply-side structural reform to adapt to the market, and governments have prioritized the work of improving the business environment.

A campaign was launched across the region to delegate responsibilities, improve regulation and optimize services, with hundreds of guidelines issued to transform government functions.

In Heilongjiang, about 73 percent of the review and approval items at the provincial level have been canceled. In Jilin, a total of 1,263 provincial review and approval items can be done with just one visit to the office.

As a result, private investment rose 8.8 percent, 11.5 percent and 1.1 percent, respectively in Liaoning, Heilongjiang and Jilin from January to September, including a major 3-billion-euro ($3.4 billion) investment by German automaker BMW.

Johann Wieland, president and CEO of BMW Brilliance Automotive Ltd, said the investment will help improve the business environment in Shenyang, the capital of Liaoning province.

At the same time, Jilin and Liaoning have introduced favorable policies to attract talent to settle and thrive in their cities, including high relocation allowances, relaxed payment restrictions and entrepreneurship support.

In Liaoning alone, the province recruited 150 percent more high-level innovative young talents in the first seven months of 2018 than a year ago.

However, compared with other regions, especially coastal provinces in southeastern China, the northeastern provinces still lag behind in terms of economic development.

Li said the northeastern provinces can serve as a window on the Chinese economy. The changes in recent years have once again proved that only reform and opening-up can push the economy forward.

China's logistics sector reports steady growth, improved operating efficiency

Date Nov 29 2018 15:32:05 Source:China Daily

The total value of goods carried by the logistics sector surged to 231.5 trillion yuan ($33.3 trillion) in the first 10 months, the China Federation of Logistics and Purchasing said in a statement Wednesday.

The total amount was up 6.6 percent year-on-year. The growth rate, however, edged down 0.1 percentage points when compared with that for the first three quarters of the year.

Logistics expenditure was 10.7 trillion yuan in the first 10 months, up 8.6 percent, which was 1.8 percentage points lower than a year earlier.

The Logistics Performance Index (LPI) stood at 54.5 percent in October, up 1.4 percentage points from September, the federation said. A reading above 50 percent indicates expansion from the previous month, while a reading below indicates contraction.

The sector's stable performance came amid steady growth of China's economy, which expanded 6.7 percent in the first three quarters of the year, above the government's annual growth target of around 6.5 percent.

China's machinery giant eyes world's top three position by 2025

Date Nov 29 2018 15:25:07 Source:Xinhua

Xuzhou Construction Machinery Group (XCMG), China's largest construction machinery manufacturer, aims to become one of the world's top three makers in sales by 2025, the China Daily reported Thursday.

The company aims to raise its global ranking in the sector from the current sixth to fifth by 2020, and is confident to meet its goal of higher global ranking, said Wang Min, chairman of the group.

The top three makers in 2018 are Caterpillar, Komatsu and Hitachi Construction Machinery, according to industry information provider KHL.

During the four-day Bauma China International Trade Fair, which is being held in Shanghai until Friday, XCMG is presenting world leading machines including the world's biggest rotary drilling rig and the world's largest all-terrain crane.

Wang said the group has been allocating about 5 percent of its sales revenue to research and development for many years, and it has more than 6,000 R&D staff.

Consistent reform and innovation have made XCMG grow from a company with an annual revenue of around 300 million yuan (43.2 million U.S. dollars) into the nation's leading machinery giant earning 100 billion yuan a year, Wang said.

In the first 10 months of the year, XCMG posted 91.9 billion yuan in sales revenue, and its profit surged 76.2 percent year on year.

Wider market access primary task, Li says

Date Nov 29 2018 10:55:11 Source:China Daily

China will carry out an evaluation of its business climate by measuring it against international standards, according to a statement issued after the State Council's executive meeting, chaired by Premier Li Keqiang, in Beijing on Wednesday.

The evaluation will be aligned with World Bank standards and reflect Chinese features, the statement said.

"With continued reform of government functions, our business environment has visibly improved in recent years, and its global ranking has continuously moved up," Li said at the meeting. "As many as 18,000 new market entities are now registered on an average day, up from several thousand a few years back. This would not be possible without an enabling businesses climate."

Criteria for the new assessment will cover areas of immediate concern to market entities, such as the ease of opening a business, construction licensing, access to electricity and credit, paying taxes, filing for bankruptcy and protecting intellectual property rights.

"To foster a more enabling business environment, the primary task is to widen market access, and the second to properly exercise supervision and oversight," Li said.

"Based on the concerns expressed by market entities, we should apply international standards in the context of China's marketplace to truly reflect the actual conditions on the ground," Li said.

"The government should leave no regulatory gaps and should conduct evenhanded oversight, abolish any arbitrary practices in fee collection or inspection, avoid unwarranted interference in business operations and continuously narrow the gap with world-class business environments," the premier added.

The evaluation will be carried out across the country in due course. Local authorities and departments will be encouraged to come up with more solid measures for bettering the business climate.

The aim is to deliver tangible benefits to enterprises and maintain China's status as a popular destination for investment from home and abroad, the statement said.

"Countries around the world are working to upgrade their business environment, as this is crucial for attracting investment, boosting market vitality and stimulating public creativity," Li said.

"Our efforts so far still fall short in some respects. We must make sustained efforts to enhance our business climate as an important means for managing the complex environment and promoting high-quality development," the premier added.

More rapid extension nationwide of practices proven to be effective at local levels is needed to facilitate business operations, the summary said.

In particular, efforts to cut review requirements, simplify permitting procedures and reduce costs must be intensified. Enterprises will be supported as they participate in the policymaking process related to the business environment, and channels of communication between business and government will be smoothed to foster an environment that is market-driven, law-based and up to international standards.

"Improving the business environment is a comprehensive endeavor with great significance," Li said.

"Our successful practices so far, especially in the free trade zones, must be fully drawn upon to help us develop a full-fledged and sound evaluation system. A more enabling business climate will generate sustained impetus for the development of market entities," he added.