SABMiller's Chinese joint venture is to acquire brewery business of Chinese beer maker Kingway. Provided to China Daily

Investment

British beer maker to buy Kingway Brewery

Britain-based brewer SABMiller said on Feb 5 that its Chinese joint venture, China Resources Snow Breweries Ltd, had agreed to buy the brewery business of Chinese brewer Kingway for 5.38 billion yuan ($864 million; 635 million euros).

Ari Mervis, managing director of SABMiller Asia Pacific, said the purchase gives the maker of Grolsch and Miller Lite beers "greater access to high growth and attractive regional markets in China".

Finance

Foreign investors gain $1.36b quota

Eight qualified foreign institutional investors, or QFIIs, gained a $1.36 billion (1 billion euros) investment quota last month from the State Administration of Foreign Exchange. By the end of January, SAFE had approved a $39.99 billion investment quota for 177 foreign institutions, compared with a cumulative investment of $37.4 billion as of December. The total QFII quota had been raised to $80 billion last year.

The approved renminbi-QFII quota has increased to 70 billion yuan ($11.24 billion; 8.27 billion euros) and that for the qualified domestic institutional investors, the so-called QDIIs, has been raised to $85.53 billion until January.

UBS to boost wealth management in China

UBS AG, a leading Swiss Bank, will further strengthen its wealth management business in China, the bank's global chairman, Axel Weber, told China Daily. This strategy is in line with UBS' global reshuffle that cuts back its investment banking business and places more emphasis on its "core DNA" of wealth management.

The bank recently opened its locally incorporated, wholly foreign-owned bank, UBS (China) Ltd. The subsidiary bank status is a critical prerequisite to conducting the broad range of renminbi business, which is key to the success of the firm's wealth management, credit and rates businesses in China.

ICBC completes record bond sale in Australia

Industrial & Commercial Bank of China Ltd's Sydney unit has sold A$650 million ($676 million; 498 million euros) worth of three-year bonds in its biggest offering in the currency, sources have told Bloomberg. The floating-rate notes due in February 2016 were priced to yield 100 basis points more than the bank bill swap rate, the source said.

ICBC Sydney, part of the world's largest bank by market value, paid a 105 basis-point spread when it sold A$400 million of three-year bonds with its debut Australian public offering in July 2011.

Energy

Wuhan Iron and Steel to buy overseas assets

Wuhan Iron and Steel (Group) Corp, China's fourth-largest steel maker by output, is to boost investment in overseas iron ore mines and plans to achieve 100 percent iron ore self-sufficiency in three to five years.

The parent company of Shanghai-listed Wuhan Iron and Steel said it also wants to abandon its heavy reliance on imported iron ore, which is sold at high prices by the top three iron ore producers: Vale, Rio Tinto and BHP Billiton. Wisco said in a statement it will "secure part of iron ore resources in Canada and Brazil to achieve self-sufficiency".

Sinochem to take 40% stake in US oil, gas field

Sinochem Group, one of China's four state oil companies, is buying a 40 percent stake in the 837.7 square kilometers Wolfcamp oil and gas field, worth $1.7 billion (1.25 billion euros), from the Texan company Pioneer Natural Resources Co, according to a statement from the seller.

Pioneer will retain a 60 percent stake as well as operating rights for the field. The Chinese company will pay $500 million in cash for the stake, with $1.2 billion to be paid in the form of drilling equipment.

Sino-Russian refinery might resume in June

Work on a long-delayed Sino-Russian oil refinery is expected to start in June in Tianjin, according to an industry insider. Qin Yonghe, general manager of the China National Petroleum Corp Bohai Drilling Engineering Co, said government officials of Tianjin lobbied in Beijing in December for the project to be started, but he added that some issues, including pricing, remain to be settled.

The Tianjin project, with a total investment of 36.6 million yuan ($5.8 million; 4.32 million euros), was originally due for completion by 2012. CNPC is taking 51 percent of the shares, while Russia's oil producer, Rosneft, takes the remaining 49 percent.

Auto

Financing venture with Jianghuai approved

Spanish lender Banco Santander SA has received Chinese regulatory approval to form a 50-50 joint venture with China's seventh-largest automaker, Jianghuai Automobile.

Fortune Auto Finance will have registered capital of 500 million yuan ($79.50 million; 59.05 million euros), making Santander one of the first foreign banks to get a car finance license in the world's largest automobile market. The venture will provide auto financing services to cars made by JAC and other brands, the bank said.

Shaanxi Fast Auto plans overseas factories

Shaanxi Fast Auto Drive Group Co Ltd, the world's largest heavy-duty vehicle transmission manufacturer by annual output, plans to build its first overseas factories this year.

One or two factories will be built in Eastern Europe or Southeast Asia, the group's main overseas markets, said Li Dakai, its chairman.

Li said the company expects to see a 15 to 20 percent increase in sales this year as a result of international expansion and developing new products.

The group, which has more than 10 subsidiaries and joint ventures in Shaanxi province, sells its products to the United States, Australia and Eastern Europe.

Economy

China 2011 per capita GDP ranks world's 87th

China's GDP per capita reached $5,445 (4,009 euros) in 2011 and ranked 87th worldwide, allowing China to become an "upper middle income" country, a World Bank report said on Jan 31.

China's GDP in 2011 increased 9.3 percent year-on-year to reach $7.318 trillion, second only to the United States, which has a GDP of $14.99 trillion.

China's Macao Special Administrative Region ranked fifth worldwide in terms of GDP per capita and Hong Kong SAR ranked 28th, the World Bank said.

High risk of economic correction: S&P

A Standard & Poor's report has questioned whether China has invested too highly relative to its returns, and may be poised for an economic correction should the investment cycle experience a downturn.

Sampling 32 economies, including the world's 20 largest, the analysis comparing each country's investment-to-GDP ratio against real GDP growth, categorized the economies into four risk categories - high, intermediate, less and least - indicating the degree of risk it sees of an economic correction due to over-investment.

Retail

Tainted chicken scare hits Yum China sales

Yum Brands Inc, the owner of KFC and Pizza Hut restaurants, has been hit with a significant drop in fourth-quarter profits as a result of chicken safety fears in China, its largest overseas market. The company reported on Feb 5 that net profit dipped 6 percent to $337 million (248 million euros) in the three months to Dec 29.

The Louisville, Kentucky-based fast food giant said same-store sales in China declined 6 percent in the quarter, compared to a 3 percent rise in the United States, following media reports that excessive antibiotics had been used by some of KFC's former chicken suppliers in China.

China Daily-Agencies

(China Daily 02/08/2013 page19)