A total of 21 foreign companies and one local’s have signed contracts with Myanmar to develop the country’s first biggest Thilawa Special Economic Zone (SEZ) project being implemented on the outskirts of Yangon by a Myanmar- Japan joint venture, sources with the SEZ administration said Wednesday.
The 21 foreign companies include nine from Japan, four from China’s Taiwan, three from Thailand and one each from Chinese mainland, China’s Hong Kong, Sweden, the United States and Australia as well as one from Myanmar.
Under contracts with the Myanmar-Japan Thilawa Development ( MJTD) Co Ltd, these foreign companies will respectively undertake works related to steel pipe, construction, aluminium, finished wood product, textile, beverage can manufacturing and plastic at the 400-hectare Class A Area of Thilawa SEZ in Thanlyin, 20 kilometers southeast of Yangon.
The 21 foreign companies were shortlisted from 51 which submitted intention of interest in the investment project.
MJTD was formed by two Myanmar companies and two Japanese companies sharing under an ownership ratio of 51 to 49.
The two Myanmar companies comprise the government’s Thilawa SEZ Management Committee and the Myanmar Thilawa SEZ Holdings Public Co Ltd (MTSH), while the two Japanese companies involve MMS Thilawa Development Co Ltd and Japan International Cooperation Agency (JICA).
MMS Thilawa is a consortium group of Mitsubishi, Marubeni and Sumitomo Corporations.
Myanmar has started the land lease procedure for Phase 1 of the Thilawa SEZ project Class A Area which has about 400 hectares divided into two phases out of nearly 2,400 hectares in total.
The project began implementation in November 2013 and the commercial run of the Thilawa SEZ is expected to start in mid-2015.
Source : China Daily | October 2, 2014
China on Monday (Sep 29) hailed the first anniversary of its first free-trade zone (FTZ), but foreign companies expressed disappointment over the pace of pledged reforms as they await real business opportunities.
The FTZ was set up in China’s commercial hub Shanghai with the promise of a range of financial reforms, including full convertibility of the yuan currency and freer interest rates – both of which remain unfulfilled. But just two weeks ago authorities shook up the zone’s management, removing Communist Party chief and executive deputy director Dai Haibo without giving a reason, after media reports he was facing allegations of corruption.
In recent days, a flurry of activity has surrounded the zone. Earlier in September, China launched a gold market in the FTZ and Premier Li Keqiang gave his stamp of approval during a visit. And on Monday Microsoft launched its Xbox One in China – made possible by a new policy for the FTZ.
“The results of the reforms in the pilot FTZ in the first year are better than expected,” Shanghai’s Communist Party chief Han Zheng told state media in a lengthy interview carried by major newspapers Monday. “It’s a major step to further promote reform and opening-up under the new scenario.”
On Sunday, China’s cabinet approved further opening to 27 sectors, plans for which had been announced by Shanghai in July. The policies include allowing foreign investors to set up wholly owned companies to design yachts and manufacture aviation engine components. They would also be allowed to process green tea through joint ventures with Chinese partners.
FOREIGN FIRMS ‘STILL WATCHING’
Foreign company executives say privately they are disappointed, while publicly many say they are still waiting to see what opportunities might arise. “It’s (the FTZ) part of the ecosystem to encourage new things, out-of-box thinking, which nowhere else has. So we’re still watching,” said Frank Jiang, head of R&D in Asia-Pacific for French pharmaceutical giant Sanofi.
About 12,266 companies had registered in the zone by mid-September but only 13.7 per cent, or 1,677, were overseas firms, according to official figures.
Chinese investors still cheered the one-year anniversary on Monday, chasing stocks of companies related to the zone. Shanghai Waigaoqiao Free Trade Zone Development rose 1.39 per cent while import and export firm Shanghai Material Trading gained 3.14 per cent.
The launch of an international board for gold trading was the first major reform aimed at establishing more open financial markets in the FTZ by allowing more foreign investors. “The establishment of the international board is creating an offshore market in China with which they can pilot a lot of measures to internationalise the financial markets,” said Albert Cheng, Far East managing director for industry group the World Gold Council.
Chinese officials have made clear that eagerly anticipated financial reforms will be incremental while risk management remains a priority. “The opening of the capital markets and renminbi (yuan) ‘going out’ will depend on the completion of the supervision system and strengthening risk prevention measures,” said Zheng Yang, head of Shanghai’s financial services office.
The government keeps a tight grip on the yuan, also known as the renminbi, fearing unpredictable inflows or outflows of funds could harm the economy and reduce its control over it. “We will continuously move forward with renminbi internationalisation, interest rate liberalisation, financial market opening and capital account convertibility,” Zheng said.
Source : Channel News Asia | September 29, 2014
China’s manufacturing sector saw a surprise pick-up in September, a closely watched survey showed Tuesday (September 23), providing some respite after a string of weak data pointing to a slowdown in world’s second-latest economy.
China’s manufacturing sector saw a surprise pick-up in September, a closely watched survey showed Tuesday (Sep 23), but economists warned a slowdown in the key property sector was an ongoing risk to growth.
HSBC’s preliminary purchasing managers index (PMI) hit a two-month high of 50.5, better than a final reading of 50.2 in August and providing some respite as indicators point to a slowdown in world’s second-largest economy. A reading above 50 indicates expansion.
Concerns over China’s economy – a key driver of global growth – have intensified following a string of lacklustre recent data, with economists calling for authorities to take further action to kickstart growth.
Qu Hongbin, HSBC’s chief economist for China, said that while the result indicated manufacturing sector activity was stabilising this month, expansion was still modest. “The property downturn remains the biggest downside risk to growth,” he said in the statement. “We continue to expect more monetary easing from the PBoC (People’s Bank of China) in order to steady the recovery,” he added.
Since April, Chinese authorities have introduced various stimulus measures, including small business tax breaks, targeted infrastructure spending and incentives to spur lending in rural areas and to small companies.
And last week reports said the PBoC would pump $81 billion into the country’s top five banks to spur lending.
FEARS OVER PROPERTY SLOWDOWN
Economists, however, have warned that the effect of stimulus measures introduced since April is waning and worry that a slowdown in the crucial property sector, where new home prices have fallen for four straight months, could derail any rebound.
On Tuesday, the Shanghai Securities News reported that China’s big four lenders will relax mortgage loan requirements, citing one of the banks. It added that people who had paid off previous mortgage loans would be treated as first-time buyers and enjoy preferential policies.
“If this is true, it constitutes a clear credit easing measure for the property sector,” economist Hua Changchun and colleagues at Nomura wrote in a reaction to the news report.
Earlier this month, the government said industrial production growth slowed sharply in August to its lowest level for more than five years, while expansion in retail sales and fixed asset investment also weakened.
Julian Evans-Pritchard, China economist at Capital Economics, said that while the PMI result indicated manufacturing had been boosted by demand for exports, the economy still had hurdles to surmount, property in particular. “Policymakers have remained relatively calm in the face of this quarter’s slowdown,” he wrote in a comment on the PMI. “Despite all the fuss over the recent liquidity injections by the People’s Bank, there has been no significant monetary easing.”
Finance Minister Lou Jiwei said at a weekend meeting that authorities would not make any significant policy adjustments even though downward pressure on economic growth remains, according to a government statement.
Earlier this month Premier Li Keqiang, at a World Economic Forum meeting in China, called for taking a long-term and comprehensive approach to managing the economy, suggesting the government was not overly concerned.
China’s economy grew a higher-than-expected 7.5 per cent in the second quarter, up from 7.4 per cent in the previous three months, which was the worst since a similar 7.4 per cent expansion in July-September 2012. Beijing is targeting expansion of about 7.5 per cent this year, the same as last year’s objective, as it tries to pull off a delicate transformation of the country’s growth model whereby consumer spending becomes the main driver rather than investment.
“We expect policymakers to stick with their current approach of using targeted support measures to prevent too rapid a deceleration in growth while at the same time avoiding the type of broader stimulus that could aggravate credit risks,” Evans-Pritchard wrote.
The PMI index is compiled by information services provider Markit and released by HSBC, which said the final result for September would be announced next Tuesday.
China releases its own official PMI at the beginning of each month. That indicator came in at 51.1 in August, down from 51.7 in July.
Sourcing : Channel News Asia | September 23, 2014
Foreign Direct Investment (FDI) in Thailand showed a 20.9-per-cent increase to US$13 billion (Bt419 billion) last year, though an uncertain political outlook poses a challenge, said a report by Escap.
According to the “Asia-Pacific Trade and Investment Report 2014″ published by the United Nations Economic and Social Commission for Asia and the Pacific, the surge in FDI was driven mainly by a rise in mergers and acquisitions. In the year, Thailand was the second-largest target of M&A purchases in Southeast Asia, behind Singapore, with concluded sales worth $6 billion.
A major deal was the acquisition of Bank of Ayudhya by Bank of Tokyo for $5.3 billion.
Escap noted that future FDI trends of Thailand remained somewhat uncertain after months of political turmoil came to an end with a military coup in May.
“Foreign investors could begin to find neighbouring countries more attractive if the long-term political outlook remains uncertain. However, the situation is beginning to look more settled,” it said.
Thailand and China stood out among Asia-Pacific countries in terms of increases in FDI through M&As. While the entire region registered a slight decline of 3.6 per cent, the two countries attracted record values in deals in 2013, with China reaching a total of $25 billion and slightly more than $6 billion for Thailand.
In the same year, Myanmar recorded its three first M&A deals ever.
Between 2011 and 2013, Asean attracted $22.5 billion of FDI in the form of M&As from Asian countries outside the bloc, representing close to one-third of all FDI inflows through M&As to Asean. Japanese companies were involved in 51.6 per cent of intra-regional M&A-related FDI inflows, while enterprises from China including Hong Kong accounted for 21.6 per cent. The most attractive economies in this regard were Singapore and Thailand, both of which attracted $6.7 billion from Asia-Pacific firms outside Asean.
Low-income economies also took part in the intra-regional dynamic, with all M&As in Cambodia, Laos and Myanmar involving companies from the Asia-Pacific region. The financial, materials, energy and power industries were the most popular among investors in Asean, while the telecommunications sector attracted the most investments in low-income economies.
For higher-income economies, the financial sector was the main driver for intra-regional flows.
Between 2011 and 2013, Asean countries took an increasing part in M&A activities in the region.
Source : The Nation | September 25, 2014
Young, rich and hungry for speed: a new generation of Chinese drivers is reshaping the global market with their taste for powerful cars, according to a study released on Wednesday (Sep 25).
Asia and particularly China, the world’s second-largest economy, have long been a key market for global automobile manufacturers as they seek to make up for weak demand in the US and Europe.
But a study of 14 countries by French think-tank Cetelem found that Chinese consumers were also set apart by their attitudes to cars, which wealthy young buyers see as an important status symbol. “Ninety-four per cent of Chinese told us that a car is a sign of modernity,” Cetelem head Flavien Neuvy told AFP a week ahead of a major industry conference in Paris.
Chinese buyers see power and safety as the most important factors for choosing a vehicle, he said. In contrast, in 12 of the 13 other countries surveyed buyers looked first at the price of a car and then its fuel consumption.
Already the world’s largest car market, China has become a key focus for major brands such as US giant General Motors and Germany’s Volkswagen, which dominate the market through local partnerships.
Low ownership rates of around 69 cars per 1,000 people, compared to 770 per 1,000 in the United States, the world’s number-two market, also mean it is set to be a key driver for growth in the coming decade.
“In 2005, they were 17 per 1000 and by 2020, they will be 184. In 15 years, they have multiplied the pool per capita by 10,” said Neuvy. “The potential is considerable for all emerging markets, which is good news for all manufacturers.”
China’s car buyers are also much younger than in other countries – on average 35, compared to 52 in the US and 54 in France – and much less likely to be “patriotic” in their tastes. Whereas more than half of drivers in auto manufacturing hubs such as France and Germany prefer national brands, rising to 94 per cent in Japan, in China only around a quarter of buyers shop at home.
Chinese also spend more of their budget on buying and operating their car: 19 per cent of consumer spending is devoted to vehicles, compared to around 11 per cent in France and Germany and 16 per cent in the US.
Cars also cost more compared to salaries in other major markets. Buying a new Volkswagen Golf in China is equal to five years of wages, 13 times as much as in the US. “Americans spend a lot, including operating costs. Fuel prices are lower, but they have bigger cars that cost more in maintenance and they drive a lot,” said Neuvy.
Source : Channel News Asia | September 25, 2014
Vietnam’s short-term outlook took a positive turn after the Trade Confidence Index rose to 120 in the first half of this year, its highest in three-and-a-half years, in HSBC’s release of its latest trade survey on Wednesday.
Almost half of the survey respondents said they expect trade flows to increase over the next six months; a third cited higher demand from key markets as the main reason.
HSBC estimated that textiles and garments will continue to dominate Vietnam’s exports, although shipments of information communication technology (ICT) products will also grow strongly.
Vietnam’s advanced technological infrastructure has helped the garment sector advance into higher value clothing lines, the bank noted.
“Led by these two industries we expect exports to grow by more than 11 percent per year between 2014 and 2020,” according to the report.
More than 50 percent of survey respondents cited the costs of essential services such as shipping, logistics and storage as a barrier to expanding trade and almost a third cited rising interest rates.
Less than a quarter, however, complained of a lack of demand.
Six months ago, half the respondents complained of sagging demand.
“Vietnam has made good progress in improving its business environment over the last decade but it is crucial that these efforts continue,” the HSBC report said.
Vietnam reaped export revenues of $97 billion between January and August — up 14.1 percent over the same period last year, according to the General Statistics Office.
Source : Thanh Nien News | September 18, 2014