Standard Chartered Bank has opened five new outlets in China’s mainland in one month. The five sub-branches are in Chengdu, Nanjing, Beijing, Tianjin and Shenzhen.

All sub-branches are capable of providing full foreign currency business and partial yuan services. The outlets expansion boosted the bank’s network in the mainland to 29, with 12 branches, 14 sub-branches and 3 representative offices in 15 cities.

The Standard Chartered Group was formed in 1969 through a merger of two banks: The Standard Bank of South Africa founded in 1863, and the Chartered Bank of India, Australia and China which was founded in 1853.

It sold off its stake in the Standard Bank of South Africa in 1987 in response to anti-apartheid pressure.

Standard Chartered Bank is one of the three banks issuing banknotes for Hong Kong, the other two being the Bank of China (Hong Kong) and The Hongkong and Shanghai Banking Corporation.

The bank is also known for supporting marathons around the world. There is no connection between this and the slang phrase ‘doing a runner’. None whatsoever.
Source: Shanghai Daily

Ernst & Young said in an industry report that more will activity is coming from listed Chinese banks as the lenders seek expansion. Big state-owned lenders, like the Industrial and Commercial Bank of China, will seek opportunities to set up overseas branches and merge or acquire overseas lenders in coming years.

Some big lenders have already taken this path. China Construction Bank bought Bank of America (Asia) Ltd for $1.27 billion as the biggest overseas acquisition inked by Chinese banks. The Beijing-based group got 17 outlets in Hong Kong and Macau through the purchase.

Terence Lau, an Ernst & Young partner based in Shanghai said that smaller city commercial banks are in a trend to merge in pursuit of growth.

He said, ‘The priority for the country’s 110-plus city commercial banks now goes to seeking strategic partners, listing and stepping out of their headquarter cities. Once they finish the moves, M&A activities will be more active.’ For those of us who forget these things M&A stands for mergers and acquisitions.

Bank of Nanjing and Bank of Ningbo are now awaiting regulatory approvals to become listed in mainland stock markets.

So why the daft and seemingly unconnected illustration. It is there because the report comes from Ernst and Young which is, as auditing companies go, quite liberated.

Ernst & Young has run a very successful campaign to show that it is a non-sexist, equal opportunity employer. It has been highlighting one employee’s promotion after taking paternity leave.

After creating a nine-foot poster that was visible in New York’s Times Square, the company scaled down the poster and sent a mini-version to every office in the U.S. Ernst & Young also created four videos — two starring men — that pointed out why employee needs matter. When a major Chinese company does this it will be a time to celebrate a sort of coming of age.
Source: Shanghai Daily

A symposium in Tokyo, organized by Keizai Koho Center under the theme Perspectives on management in a global context, had a row of professors from American universities, specifically schools of business, discussing techniques for complying with internal control rules which have happened partly because of the Enron and WorldCom scandals.

J-SOX, the Japanese version of the U.S. Sarbanes-Oxley Act of 2002, is scheduled to take effect in April 2008, because Japan itself has had a series of high-profile accounting frauds in recent years, including those at Seibu Railway, Kanebo and Livedoor.

There are massive problems in both the United States and Japan — mainly a shortage of trained accounting staff — to deal with this problem and the symposium focused on this. Japan has only 17,000 certified public accountants and even in the U.S., which has 330,000 CPAs, auditing firms are complaining that they don’t have enough staff to do proper jobs

Frederick Choi, a professor of accounting and international business at New York University’s Stern School of Business noted that it is a huge burden on non-U.S. companies thinking of entry into the U.S. capital market to raise funds. He said the biggest potential benefit will be achieved only if companies approach the new rules in a positive light — to use SOX implementation ‘as an opportunity to review all of their operating and reporting procedures,’ and enhance their return on investments. He said, ‘One way to reap returns from these controls is to set a proper tone at the top by having the very top management signal that accurate and transparent financial reporting is valued. This in turn will lead to a better investor rating of the company, which could reduce its cost of capital.’

Roberto Rigobon, an associate professor of international economics at the Massachusetts Institute of Technology’s Sloan School of Management, that some adjustments would result in a massive reduction in American consumer demand, and that no economy in the world will be safe from its impact.

Asian economies will not be free from the impact of a bust in U.S. growth, Rigobon said. He added it will be ‘wishful thinking’ to hope that China will be growing at 10% to 12% a year in the face of a U.S. recession.

Source: Japan Times

Shanghai Automotive has agreed to pay RMB1.48 billion ($192.2 million) to buy out Shanghai Wanzhong Car Components and Shanghai Huizhong Automotive Manufacturing. Before this deal both ventures were equally-owned by Shanghai Auto and Shanghai Industrial Holdings.

The company said in a statement: ‘The purchase will power our integration in commercial vehicles and enhance the development of core car components. We aim to lift our competitiveness in both areas.’

Commercial vehicles such as trucks and mini vans are the priority for SAIC during its 11th Five-year plan that ends in 2010. It plans to significantly expand production and sales to match with its leading position in passenger cars.

SAIC’s Huizhong now produces nearly 6,000 trucks and 10,000 minivans every year.

Sales of heavy duty trucks in China surged 31% to 307,296 units as part of the China’s logistics boom.

China Business Post reported that Shanghai Auto is also expected to invest RMB210 million to set up a technical center for commercial vehicles.

The Independent newspaper in the UK suggested that the following British car brands will soon follow MG to China: Daimler, Jaguar, LandRover. If this is so it will make a serious dent in British car manufacturing and bring China’s automobile makers much-needed and instant brand identification.
Source: China Car Times

China’s trade surplus soared 73% in May from a year earlier to $22.45 billion. That’s more than the $19.5 billion median estimate of 18 economists surveyed by Bloomberg News. The surplus brings the gap for the first five months to $85.76 billion, an 84% increase on a year earlier.

The Chinese government last month said it will boost imports to narrow a trade surplus with the United States that last year reached $232.5 billion. It will take some big time boosting to get over that. The Ministry of Finance raised export taxes on 142 products and cut tariffs on 209 types of imports from June 1.

The World Bank last month raised its estimate for China’s growth this year to 10.4% from 9.6% because of improved prospects for exports to Europe and developing countries.

China’s economy, the world’s fourth largest, expanded 11.1% in the first quarter.

According to a forecast by the National Development and Reform Commission, the country’s top economic planner, the trade surplus may swell to $250 billion-$300 billion in 2007 from a record $177.5 billion last year.

While on the one hand this is plainly a good thing for China it does create havoc with other economies, specifically the United States where there is definitely an anti-China movement growing over this surplus.

Anent which an odd story.

Containers go from China to Britain on a daily basis. There is not much Britain is selling China and so often the containers are coming back empty. Relatives of the writer are buying these containers once they have made one trip from China to Britain. Then the containers are painted on the outside and sprayed with foam on the inside. The total cost per container is about $2,000. The containers are then assembled on sites on the edges of town and rented out as the ultimately secure storage container at a very reasonable price.

This has now built into a sizable business with seven major depots currently running and another three starting this year. The writer has just spent two days driving around these repurposed containers and is impressed and dizzy. So for at least one business in Europe, the trade surplus has turned out to be a major benefit.
Source: China Daily Online

The Organization for Economic Cooperation and Development (OECD) said the Chinese economy is expected to grow at rates above 10% over the next two years.

The Paris-based group, in its annual global survey, said China’s Gross Domestic product (GDP) would increase by 10.4% in 2007 and 2008, with domestic demand set to keep expanding.

The 30-nation group forecast in its Economic Outlook that the inflation rate will drop to 2.5%, down 0.3 percentage points from last year

The current account surplus, which is the broadest measure of trade, should rise to $314.6 billion this year and to $368 billion in 2008. It added that the growth rate of China’s exports may decrease due to slower world demand and a somewhat stronger Chinese currency, the RMB, over the next two years.

However, an increasing consumption capacity in China’s rural areas and the revitalized real estate sector would rapidly expand the domestic demand.

The Chinese economy grew 10.7% in 2006, the fourth consecutive year of double-digit growth.

In March, Chinese Premier Wen Jiabao said in a government work report that China plans to gear this down to 8% this year. That is the intent. The actuality may be very different.
Source: People’s Daily Online

According to a report released by the Ministry of Commerce, China’s estimated imports and exports of goods will amount to $2.1 trillion for the whole year, a growth of 20% over the previous year, In 2006, China’s foreign trade stood at $1.76 trillion, up 23.6% year-on-year, ranking third in the world.

According to the report external trade has continued to grow rapidly since the beginning of the year. Foreign sales of machinery, electronics, textiles and clothing and footwear posted sustained growth. Trade with major partners, including the European Union, the United States and Japan, has increased continuously.

The report believes the overall environment is still favorable for China’s foreign trade.
Source: China News