China to lighten the tax burden on individuals and businesses

China has vowed to cut the value-added tax rate on various sectors as of May 2018. The sectors affected include manufacturing, transportation, construction, telecommunication and agricultural sectors.

The motivation behind this decision is to lighten the tax burden on individuals and businesses. The government is also looking to boost domestic demand in a year of economic growth that slowed down in 2017.

According to Reuters, China’s State Council said VAT cutd are expected to save 240 billion yuan ($38 billion) in taxes this year.

Earlier this month, Premier Li Keqiang highlighted the tax cuts for the manufacturing and transportation. The tax rate cut for the manufacturing sector will lower to 16% from 17%, while the rate for other industries will be cut to 10% from 11%.

The findings from Goldman Sachs research indicated that the tax cut is a positive move. “However, the magnitude of the cut is relatively small and is already factored into the official fiscal budget.”

The research also stated that the coming weeks will reveal details of other tax cut measures.

Source: Reuters

Brazil hosts the 8th World Water Forum

The 8th World Water Forum got underway on Monday with Brazil President Michel Temer and other heads of state.

They all gathered in the country’s capital, Brasilia to discuss the sustainable use of water resources around the world.

The forum invited experts in water and sanitation to facilitate the efficient conversation, development, planning and use of water in all its dimensions.

During the opening ceremony, the Honorary President of the World Water Council, Loïc Fauchon, highlighted the need to protect water resources.

Said Fauchon: “Our responsibility is to ensure the availability of water everywhere.”

He added that the forum has become an indispensable medium for the international community to discuss the sustainability of water resources.

Basic sanitation is among other several factors concerning water.

The minister of the Secretariat for Human Rights of Brazil, Gustavo do Vale Roche spoke about the improvement of basic sanitation.

“Politicians should help to ratify the idea to improve basic sanitation. Is a fundamental right that should not be taken lightly while other rights are demanded. I hope that the next World Forum, we have evolved concerning those issues.”

According to Eric Tardieu, director-general of the International Office of Water, 2.1 billion people in the world do not have access to clean water, which corresponds to 30% of the world’s population. And 4.5 billion people have no basic sanitation, 60% of the population. One of the main factors that define these numbers is the low investment in infrastructure in the water sector.

 

source : www.worldwaterforum8.org 

SA ready to chair the BRICS Business Council after signing Kigali Declaration

The growing motion on the African Continental Free Trade Area saw about 44 countries sign the AfCFTA deal this week in Kigali, Rwanda.

Several other countries, including South Africa, signed the Kigali Declaration which is devoted to the establishment of the African economic community, that seeks free movement of persons and goods to facilitate trade.
Chairman of the SA chapter of the BRICS Business Council, Dr Iqbal Survé said this is the best thing to happen to Africa in a very long time.

The AfCFTA agreement is figured to have the potential to bring together 1.2 billion people with a combined GDP of over US$2.5 trillion if successfully implemented.

Survé said the AfCFTA would allow the BRICS grouping to attract further investment into Africa to create skilled jobs.

“The global norm for intra trade is 30 percent but Africa has not been trading with itself. But Africa is now set for a decade of unbelievable growth and prosperity.” Survé said.

The BRICS nations make up more than 40 percent of the global population and according to Survé the formation of BRICS has proven to be hugely beneficial to Africa as a whole.

“BRICS countries are now Africa’s biggest trade partners.”
Survé also pointed to the deepening of inter-BRICS relations in areas such as financial services, skills development, manufacturing, and the easing of travel restrictions.

“For Africa, of course, it is important that there is continued infrastructure investment and deepening investment,” added Survé.

Survé will be leading around 50 senior business executives from various sectors to the mid-term meeting that would take place next week in Shanghai, China.

Source: African News Agency/ANA

China Names Yi Gang as Its First New Central Bank Chief in 15 Years

China has appointed Yi Gang as the new head of People’s Bank of China.

The position was run by Zhou Xiaochuan for more than a decade, who is now set to retire at the age of 70.

He steered the institution through global financial crisis during his 15-year term.

The new leadership is said to come at a time of heightened awareness of the risks facing the economy, from a broader trade-war with the U.S. to a long-feared financial blow-up.

The appointment of Gang falls part of the country’s new economic team as President Xi Jinping kicks off his second term.

Sources : www.cnbs.com

Lavrov: BRICS New Development Bank to prioritise Africa

Russian Foreign Minister Sergey Lavrov confirmed on Thursday that Africa is a top priority on the (NDB) BRICS New Development Bank’s agenda for 2018.

He said: “The New Development Bank is just starting its operation but it will soon work in full swing. Projects discussed at the initial stage pertain only to the territory of five BRICS countries. Potential projects outside BRICS is the next stage. However, special attention will be clearly paid to the African continent because an office of the BRICS New Development Bank is situated in South Africa,” he said.

Talks on establishing the bank were discussed came in Fortaleza, Brazil on 15 July 2014. According to Tass.com, the NDB’s starting capital was set at $100 bln. With its headquarters in Shanghai, China, the bank was brought about as a means to finance BRICS and emerging market infrastructure projects and projects for sustainable development.

Source: Tass.com
Image: Sputniknews.com

Cause of Listeria outbreak identified

By Ntsiki Ntsibande

South Africa’s Listeria outbreak is believed to be the largest-ever outbreak of the bacterial disease listeriosis, claiming 180 lives to date.

Minister of Health Aaron Motsoaledi announced on Sunday that the outbreak was traced to Enterprise’s Polokwane facility and Rainbow chicken facility in the Free State.

He also stated that further tests were needed as the sequence type was not yet known.
Motsoaledi had also confirmed that polony was a definite carrier of the disease, warning that products like Viennas, Russians, Frankfurters, other sausages and cold meats could also be affected due to the risk of cross contamination.
The disease was traced after several children presented with gastroenteritis in Soweto earlier in the week. It was found through test that they had listeriosis.

Latest stats from the National Institute of Communicable Diseases (NICD) show that 948 cases detected and 180 deaths have been reported.

Listeriosis caused by the bacterium, Listeria monocytogenes can contaminate animal products and fresh produce such as fruits and vegetables. Pregnant women, neonates, elderly people and anyone with weakened systems are at risk.

Members of the public have been advised to get rid of any Enterprise ready-to-eat products. Shoprite and Pick ‘n Pay indicated they are withdrawing all products linked to the source of the disease.

Tiger Brands confirmed that all Enterprise products, as identified, will be recalled.

“We are working very closely with the officials at present to conduct the process and will provide updates to the public on this matter,” said spokesperson Nevashnee Naicker in a statement.

Motsoaledi includes that the Enterprise facility in Germiston on the East Rand, and Rainbow chicken facility in the Free State has been singled out pending for more tests to determine the sequence type.

Additional reporting: News24

Ministry drafts policies to promote self-driving vehicles

22 January 2018
Li Fusheng
Displayed with permission from China Daily

China’s Ministry of Industry and Information Technology is working on a draft document on autonomous driving, which is part of China’s efforts to promote the cutting-edge technology, according to a source close to the matter.

“The central government is eager to do it,” Wu Zhixin, vice-president of the China Automotive Technology & Research Center, told China Daily in an interview last week.

“The Beijing city government has released one and the central government will promulgate that before any local government will follow Beijing’s example.”

China expects smart cars with partial or fully autonomous functions to account for 50% of new vehicles sold in the country by 2020, according to the National Development and Reform Commission.

The Beijing guideline on autonomous driving, which was released in late December, is the first document of its kind in the country.

It applies to independent entities registered in China, allowing them to test at most five vehicles at a time, but before conducting road tests they must first complete tests in designated closed zones, according to the guideline.

Wu said specific requirements about tests in closed zones have not been finished and his centre will organise experts in the field to conduct a comprehensive study soon.

“It is like we obtain our driving licenses. We must pass tests in closed zones before we are allowed to hit the road,” he said.

For the technology’s development, he suggested that a large scale of lower-level functions, or advanced driving assist systems, should be promoted first.

“We should start from the basics, like autonomous parking, which is easy to realise in simple scenarios like parking lots,” said Wu.

RELATED LINKS: VW will launch electric car in China soon

“We promote them, and then more people will use them. When more people use them, carmakers will have returns on investments so they will have the money to invest further.”

A lot of carmakers and tech companies have been pushing forward autonomous driving.

Baidu Inc has been moving ahead with the research and development of autonomous driving technology. In April 2017, it launched Apollo, an open platform on which its technologies can be shared with developers and automakers.

It also announced plans to unveil Level 3, or eye-of functions, in mass-produced cars by 2019 in cooperation with Chinese carmakers including JAC Motors and BAIC Motor.

China’s SAIC Motor is teaming up with Intel to develop autonomous cars based on its Mobileye technology.

Zhu Jun, general manager of Shanghai E-propulsion Auto Technology Co, a SAIC subsidiary that that develops electric and hybrid propulsion technologies, is cautious. He does not expect affordable cars with real autonomy, which means at Level 4 or above, to drive into daily life within 10 years because of technological issues and costs.

A Level 4 vehicle can drive itself almost exclusively without any human interaction, and a Level 5 vehicle can drive itself without human interaction on any road.

Zhu’s estimate is in line with the view of PwC consultancy subsidiary Strategy&, which predicts that from around 2027 highly or fully autonomous cars will become a reality in daily lives.

Source: Repubhub (China Daily 01/22/2018 page18)
[Photo provided to China Daily]

Promoting Services Trade

By Zhou Xiaoyan

A services trade cooperation roadmap was adopted at the trade ministers’ meeting to boost economic complementarities and diversification. With the trade in services becoming a new driver for global economic and trade growth, the ministers decided to intensify cooperation on information exchange, capacity building and coordination within BRICS to make services trade a new highlight of BRICS trade growth.

Although the group’s combined GDP accounts for nearly one fourth of the global total, its export of services accounted for only 11.3 percent of the world total in 2015, according to data from the World Trade OrganiSation.

“Services trade is not only a strong driving force of global economic and trade cooperation, but also a precious opportunity for countries to balance their trade structure. It will also push forward the development of China’s services industry and supply-side structural reform,” Xu Hongcai, Deputy Chief Economist with China Center for International Economic Exchanges, told Beijing Review.

Zhang Shaogang, Director General of the Department of International Trade and Economic Affairs at China’s Ministry of Commerce, said services trade covers a wide range of sectors and BRICS countries have demand for cooperation in every one of those sectors.

“As the first step in implementing the roadmap, we will carry out cooperation in the prioritized areas,” Zhang said at the press conference on August 1. “The first prioritized area would be tourism, with Russia being a hotspot travel destination for Chinese, and tourist visits to India, South Africa and Brazil gaining more popularity.”

An Yongming, a retiree living in Haikou, capital of south China’s Hainan Province, recently had an eight-day trip to Moscow and Saint Petersburg, which cost him a little more than 10,000 yuan ($1,500).

“People of my generation have a very deep fascination with Russia and deep memories of the former Soviet Union. We grew up listening to stories about the Soviet Union and reading Russian novels. Russian, instead of English, was the foreign language some of the people of my generation acquired,” An told Beijing Review. “Our minds are full of Russian names and places. I’d always wanted to visit the country.”

However, An thinks the local government has much to do to improve the tourist experience in Russia.

“Most Russians don’t serve their customers. Drivers don’t help passengers carry their luggage. There’s no Chinese language service on the flight, although the plane is full of Chinese. There are no Chinese signs or even English signs in most tourist spots,” An said. While he would still recommend people of his age to visit Russia, he thinks younger generations should visit countries with better tourist services.

In addition to the tourism industry, Zhang said other prioritized areas include healthcare, computer and related services, research and development, business services, construction services, distribution and education.

As the first achievement of the trade ministers’ meeting, China and Brazil signed a two-year action plan on August 1, pledging to bolster collaboration in services trade. It would include project consultation, project construction, information technology, automation of banking services, travel, culture and traditional Chinese medicine.

Read more about strengthening e-commerce cooperation within BRICS here.

This article was originally posted on Beijing Review.

BRICS Gets More Byte

By Zhou Xiaoyan

Wang Kexiang, a 65-year-old retiree living in Beijing, is addicted to nuts. Since he has a heart problem and the doctor has told him eating nuts is good for his heart, he eats them every day. What’s more, he has also persuaded his entire family to join him in his munching habit. Now the household spends almost 500 yuan ($75) a month on nuts, around one sixth of his monthly pension.

Among the various kinds of nuts available, Wang loves pine nuts imported from Brazil the most, saying they are bigger and better-tasting than domestic ones. That’s why Wang was excited when he heard the news that there would be closer e-commerce cooperation among BRICS countries – Brazil, Russia, India, China and South Africa.

“Currently, Brazilian pine nuts are sold here at a very high price. A very small bag could easily cost up to 50 yuan ($7.5). I am hoping I can buy more cheaper types in the future,” Wang told Beijing Review. “That would be one of the concrete benefits for us ordinary people from closer ties among BRICS nations.”

Strengthening e-commerce cooperation was one of the eight major consensuses reached at the Seventh Meeting of the BRICS Trade Ministers in Shanghai on 1-2August. Others included more cooperation on digital networks at ports, services trade, intellectual property rights, investment facilitation and opposing protectionism.

The consensuses cover every aspect of BRICS economic and trade ties, said Bai Ming, Deputy Director of the International Market Research Institute of the Chinese Academy of International Trade and Economic Cooperation. “They are interconnected and support each other, opening the next decade of BRICS cooperation,” Bai told Beijing Review.

A virtual feast

As more and more consumers choose to make purchases online, e-commerce is enjoying mushrooming growth around the world.

In China, cross-border e-commerce imports reached 1.2 trillion yuan ($179.3 billion) in 2016, up 33.3 percent from 2015, and the figure is expected to reach 1.85 trillion yuan ($276.4 billion) this year. The number of cross-border online shoppers surged 82.6 percent to 42 million in 2016, and is anticipated to hit 59 million this year, according to data from 100EC.cn, an e-commerce research institute.

“E-commerce offers small and medium-sized enterprises an opportunity to directly participate in global trade with more diverse customers and tailored products,” Bai said.

“Presently, China’s cross-border e-commerce platforms are growing by building warehouses as well as collection and distribution centers in foreign countries. But that’s far from enough in terms of BRICS e-commerce cooperation,” Bai said. “The domestic cross-border e-commerce network should be linked with the networks of other BRICS nations to create a larger cross-border network. China could use its experience to help them build their own cross-border e-commerce networks and then realise network linkage.”

Zhong Shan, China’s Minister of Commerce, said Chinese people will soon see more food on their dining tables from Brazil, Russia, India and South Africa, following the e-commerce cooperation initiative adopted at the Seventh Meeting of the BRICS Trade Ministers.

“BRICS ministers all think strengthening cooperation on e-commerce will boost trade, promote industrial upgrading, create jobs and help developing countries as well as small and medium-sized companies integrate into the global value chain,” Zhong said at a press conference following the meeting. “Therefore, we decided to establish the BRICS e-commerce work group to start comprehensive cooperation and strengthen pragmatic cooperation in policy sharing and capacity building. It’s expected that e-commerce will become the new momentum for BRICS trade and economic cooperation.”

This article was originally posted on Beijing Review.

 

Investors think holistically when searching for great companies

Jonathan Ratner
Displayed with permission from Financial Post

Buy & Sell: As financial analysis becomes more industrialised, time has been freed up for investors to focus more on non-financial factors…

For a long time, most investors assumed everything they needed to know about a company was in the numbers. They’d comb through the past five years of annual reports to determine whether or not it was a great business.

But the reality today is much different, as financial analysis becomes more industrialised through computers, common reporting and accounting standards, and automation. That has freed up time for investors to focus more on non-financial factors like human and social capital – the way businesses discharge their environmental, social and civic obligations.

“Those sorts of things define whether a business is great or not,” said Habib Subjally, head of global equities for RBC Global Asset Management (U.K.), during a recent visit to Toronto.

The portfolio manager of the $2.3 billion RBC Global Equity Focus Fund never had to audit customer satisfaction or employee engagement in during his previous career as a chartered accountant. But when he talks to successful entrepreneurs and asks what makes their businesses valuable, nobody mentions factories, buildings, working capital or inventory. Instead, they typically single out customer loyalty, brand value, people and know-how in developing new products.

“Those are not typically found in annual reports,” Subjally said. “Investors need to spend much more time looking at those types of things.”

Investing in great businesses at expensive valuations is an “elegant way to lose money,” so Subjally and his team of 11 experts take a much more forward-looking approach to find value. They try to understand what businesses and management teams are doing, and project where they will be in five, 10 and 15 years. These includes tracking competitive dynamics and sustainable business models, execution and market share, and management’s attention to environmental, social and governance issues.

“If management is not focused on the long term, it often ends up being a poor investment,” Subjally said, noting that executives are frequently evaluated on very short time periods.

A chief executive could cut training and development budgets – savings that would translate directly to a stronger bottom line, but employees may be unhappy. Similarly, they can borrow from clients by cutting customer service staff, but there won’t be anyone to answer the phones.

“This sort of borrowing creates contingent liabilities that sooner or later become financial liabilities,” Subjally said.

That’s why he considers it important to find management teams that have an ownership mindset, and are prepared to invest in people, customers, suppliers, communities and the environment.

“This costs money, and does lead to lower profits in the short term, but it does lead to better long-term value creation,” he said.

One of the fund’s largest holdings, Fortive Corp. (FTV/NYSE), fits these requirements. The diversified industrial firm that was spun out from Danaher Corp. roughly a year ago, acquires businesses and implements a methodology for making them more efficient.

“They want to use less space, fewer resources, make businesses faster and better, and the process goes all the way up and down the organisation,” Subjally said. “They measure everything, and it’s all about selling more, so there is both a growth element and a people element.”

“They are very good at buying businesses and improving them dramatically,” he added. “They are taking market share, the end markets are growing, and management is able to execute.”

Another top holding, HDFC Bank Ltd. (India), has a technology-focused business model that Subjally believes makes it one of the best-managed banks in the world. He highlighted the country’s largest private-sector bank’s ability to use branches – sometimes with just one employee – to service small villages.

“In a country like India, where the economy and financial services are still growing, they are able to move fast and deal with the huge volumes,” Subjally said.

He highlighted HDFC’s roughly US$1 billion in micro finance: family-based loans that are primarily for women, as well as the bank’s market share gains in areas like credit and debit cards.

“We really like the management team,” Subjally said. “They have not only run the business very well with great transparency, but they also develop their people.”

Estée Lauder Cos. Inc. (EL/NYSE) is an example of a portfolio holding that has professionalised its management team in recent years. The skin care and beauty giant still has William Lauder as chairman, and continues to have a long-term focus, but by purchasing small brands, investing in them, and taking them around the world, that’s allowed the company to grow successfully.

Subjally pointed to Estée Lauder’s very rapid growth in China, India, the Middle East and Latin America, along with the addition of new brands such as Glamglow, Tom Ford and Joe Malone.

“There is much more coming,” he said. “So we can see that it is a great business, and why it is going to be much more valuable in 10 years.”

-Repubhub/Financial Post