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Tag >> China
Nov 24

Caterpillar issues Yuan-denominated paper

Posted by Stephen Taub in yuan-denominated bond, risk managementRisk, renminbi, Hong Kong, debtDealsChina

Stephen Taub

China is slowing making inroads into another major market--debt underwriting.

Caterpillar said its financial services subsidiary raised about $150 million in a yuan (also known as renminbi) denominated medium term note. The issuance was conducted in Hong Kong and bought by institutional investors.

Sep 21

Obama sparks RMB appreciation

Posted by nicklord in RMB, Obama, FXChinaCash


Who says politicians cannot move markets? Yesterday's town hall meeting by President Obama contained some tough language for the Chinese. The President said that the Chinese leaders were not doing enough to let their currency, the RMB, appreciate. In response the value of the RMB surged to its highest level since 1993.

The spot price of the dollar/RMB cross reached a high of 6.6987 while the price for one-year non-deliverable forwards for the RMB reached 6.5818 to the dollar. This was an increase of 50 basis points on the day and suggests that the currency will appreciate by nearly two percent over the next year.

Sep 13

China eases restrictions on foreign investment

Posted by dbedell in RiskprotectionismGEforeign investmentforeign direct investmentFDIEuropean Council on Foreign RelationsEuropean Chamber of CommerceChinaCashAmerican Chamber of Commerce


For multinationals keen to take advantage of the strong growth potential in Asia, changes to China’s foreign investment regulations might just make that a little bit easier.

According to a Reuters UK report, the country is in the process of reviewing its foreign investment catalogue—which lists those sectors and industries in which foreign companies or investors may invest.

Aug 23

McDonald’s taps China bond market

Posted by nicklord in Wal MartUFJStandard Chartered HSBCChina


Global fast food chain McDonald's is known for flipping its burgers in China, where it has 1000 restaurants. Yet last week it offered up something even juicier than a Double Cheeseburger: RMB200 million ($29 million) of three year notes. The deal was the first time a foreign company had issued renminbi-denominated bonds in Hong Kong and commentators are already heralding the move as the start of a new trend.

The so-called Panda bonds--bonds issued in renminbi in China by foreign companies--have been spoken of for while. The Chinese are keen for them to happen as they strengthen Hong Kong as the centre of this kind of issuance, while also allowing for more internationalization of the Chinese currency.

Aug 19

Companies feel the pain of emerging market wage inflation

Posted by nicklord in IndiaGenpactGECredit suisseChina


It could turn out to be the strike felt across the world. When employees at Chinese electronics manufacturer Foxconn went on strike earlier this summer, the ramifications were not immediately obvious. Their demands for better pay and conditions were met with a 30 percent hike in salaries.

This has now encouraged workers in many other Chinese companies to follow suit. The result? Western companies are being squeezed as their China costs rise, which they cannot offset with higher prices in their home markets. Some manufacturers are even relocating plants back to the US as a result.

Aug 12

China’s closures will affect growth

Posted by dbedell in growthenergy intensityenergyeconomyChinaCash


China may be talking the talk of meeting energy reduction targets, but whether they will walk the walk long term remains to be seen.

And the impact of their energy reduction plan--to shut down 2,000 high-energy-use factories in heavy industries across the country--could have a big impact on the companies being targeted. Certainly a failure to comply will have a big effect.

Jul 25

UK banks forced to lend

Posted by nicklord in Vince CableUKChina


A senior figure in the UK's coalition government yesterday announced plans to force banks to lend to small businesses. Vince Cable, Secretary of State for Business, said in an interview with The Sunday Times, that he would use a "carrot and stick" approach to make sure banks extended credit to small business. At the moment, he said, banks were "not acting in the national interest."

His proposals will be outlined later Monday in a working paper being released by the UK Treasury. Specifically he is looking to target bonuses and dividends of banks that were not deemed to be lending enough. At the moment, such a system is in place with the partially nationalized banks RBS and Lloyds. The extension of this proposal to other UK banks would be a major escalation of the policy.

Jul 20

Chinese trade concessions likely to be rejected

Posted by dbedell in WTO, trade, RiskprocurementcomplianceChinaCash


China must make much greater concessions if it hopes to join the World Trade Organisation Government Procurement Agreement (GPA) and be viewed as a fair market for foreign investment, according to global business and political leaders.

US and global members of the GPA are expected to reject the latest proposal for trade concessions by China for the would-be member to join the group. According to a report in the FT, the proposals do not provide enough support in opening to foreign companies the $500 billion public procurement market in China.

Jul 19

US export growth booming

Posted by nicklord in US ExImTaiwanSingaporeMexicoMalaysia, Korea, Japandepartment of Commerceczech republicColombiaChina


CFOs of companies around the world have always looked on exports to the US as the key to their business. The mighty US consumer had an unlimited appetite, paid in dollars and was backed by a strong and vigorous legal system (i.e. you could be sure you got paid).

Countries that have come through the recent global financial crisis better than the rest have been those with strong export machines, such as Germany and China. But it is no longer the US that they are exporting to: it is the fast growing emerging markets that are the destinations of choice.

Jul 14

GE CEO walks back his remarks about China

Posted by dbedell in RiskprotectionismJeff ImmeltGEChinaCareers/Management


To follow up on my blog from earlier this month, GE’s CEO Jeffrey Immelt is backpedalling on his comments about increasing protectionism in China. Immelt, in an interview with the FT on Wednesday, said that China is a very important market for GE, and one they plan to be in for the long term.

Apparently he decided that criticising the political administration of a key market—one where his company is very involved in public sector contracts, and one that is not known for valuing constructive criticism—in a public forum was not a good idea.

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