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Jack Ma to step down as Alibaba chairman in 2019

 

The founder and Chairman, Jack Ma, of the Chinese biggest e-commerce company Alibaba has announced that in September 2019 we will step down as the chairperson of the company, allowing the current CEO Daniel Zhang to step in as the Chairperson.

Daniel Zhang has been with the company for 11 years and became the CEO in 2013 when Jack Ma handed over the CEO post to him. Alibaba was founded in 1999 by Jack Ma to connect Chinese exporters with foreign retailers. The company expended into consumer retailing, currently operating in 200 countries making it the biggest e-commerce company and biggest Chinese company to date.

Alibaba has confirmed that Jack Ma will stay in the Alibaba Partnership which consist of a group of 36 people who has the right to nominate most of its board of directors. Jack Ma in a letter to Alibaba customers explained his decision by stating: “This transition demonstrates that Alibaba has stepped up to the next level of corporate governance from a company that relies on individuals, to one built on systems of organisational excellence and a culture of talent development,”

Jack Ma is China’s third richest man, with a net worth of $36.6bn, according to Forbes 2017 list. The former English teachers has dedicated his life to philanthropy through the Jack Ma Foundation. On the letter Jack Ma emphasised his love for education through the Jack Ma Foundation and highlighting his journey going forward: “As for myself, I still have lots of dreams to pursue. Those who know me know that I do not like to sit idle … I also want to return to education, which excites me with so much blessing because this is what I love to do. The world is big, and I am still young, so I want to try new things – because what if new dreams can be realized?!”

 (By Ntsikelelo Kuse)

Beijing will offer $60 billion in financing to Africa-centric projects over the next three years

Chinese President Xi Jinping addressed African leaders attending the FOCAC summit in Beijing and laid out plans for investment in Africa. The Chinese President pledged that  his country will put $60 billion in financing projects in Africa.The $60 billon will be in a form of grants, interest-free loans and concessional loans, credit lines, development financing and imports from Africa.      

China aims to build ties with African countries that will mutually benefit them in trade, investment and politics. This has encouraged the China-Africa outreach, in 2015 the China President promised African countries the $60 Billion funding, and the promise was delivered this week.

The specifics of the project that will be funded has not been made clear yet however the aim has always been to assist in food aid, providing scholarships, vocational training and trade opportunities to African countries.

The China President emphasized that China will not get involved with the political affairs of the African countries they invest in. President Xi said: “China does not interfere in Africa’s internal affairs and does not impose its own will on Africa.”

Related Story: FOCAC Summit to further strengthen China-Africa ties

(Source: KRMG)

China-Africa cooperation across all areas

Rwandan Ambassador to China, Charles Kayonga has stated that Africa and China are enjoying cooperation “across all areas”, and that the mutual work should continue.

Kayonga said in addition to political exchanges that China-Africa cooperation is also vigorous in fields including infrastructure, industry and agriculture.

There are successful projects carried out under the Forum on China-Africa Cooperation.

He cited two Chinese-built railways, including one linking Djibouti and Addis Ababa, Ethiopia, as well as “hundreds of Special Economic Zones across the continent, that bring many benefits to both sides”.

The ambassador told China Dailythat “we have had financing for a number of roads, and we have seen direct investment by Chinese companies in a number of businesses rise.”

Kayonga added that Africa is in need of infrastructure, among other things, to achieve sustainable economic transformation.

According to Kayango, the cooperation with China will help finance the infrastructure projects to spur the continent’s industrial development, which will in turn favour China in its vision of going global.

He has confirmed that Rwandan President Paul Kagame, also chairman of the African Union, will attend the 2018 Beijing Summit of the Forum on China-Africa Cooperation taking place in October.

The Summit is expected to better align the Belt and Road Initiative with development strategies of African countries.

The Belt and Road Initiative, along with its related infrastructure projects on the continent, “will bring Rwanda and other landlocked countries in Africa out of isolation while facilitating integration of the continental economy into the global economy”, Kayonga said.

For Kayonga, by building such a community, China and Africa will be able to better complement each other.

“The concept of a shared future for China and Africa refers to strategies by both sides to ensure that they apply their respective advantages and opportunities for mutually beneficial ends,” he said.

 

Source: China Daily

 

Coca-Cola embarks on ‘healthy’ growth route

The world’s largest beverage maker, The Coca-Cola Co. is currently diversifying its product range in China by introducing healthier and more functional products to cater to the changing consumer preferences in the country.

The President of Coca-Cola Greater China, Curt Ferguson said this move, considered the “next big thing” in the Chinese beverage market,contains products with more functional benefits, especially those that focus on health and wellness.

He mentioned that the US beverage maker will also consider launching products based on traditional Chinese medicine.

Ferguson said that Coca-Cola, which is already the top juice provider in China,will expand its range of juice products with an added focus on premium brands.

The President added that the focus on functional beverages and premium products has been necessitated due to the rapid growth of the middle-income group in China and shifting tastes across various age categories.

According to Ferguson, Coca-Cola has introduced more than 60 products under 20 brands in China.

The double-digit growth of the company in the country during the second quarter of this year has to some extent proven the popularity of the newly released products.

He included that Coca-Cola’s growth momentum in China can be attributed to the general escalation of the consumer goods sector from last year on the back of government policies to boost consumption and further opening-up, consumer centric approach in the market and people’s increased disposable income.

Source: China Daily

China faces increased economic risks in second half of 2018

China’s economy is currently facing increasing risks in the second half of the year and policymakers need to step up efforts to hit key development goals as U.S. trade tensions intensify.

The Chairman of the National Development and Reform Commission, He Lifeng told the standing committee of the National People’s Congressthat:“targets in economic growth, employment, inflation and exports and imports can be achieved through effort. But to achieve growth goals in consumption, outstanding total social financing and urban disposable income will require bigger effort.”

Reuters informed that China’s economy is already starting to cool even before the trade fallout bites, with investment growth at a record low and consumers becoming more cautious about spending.

Lifeng included that China will continue its multi-year campaign to reduce financial risks and curb debt, but will control the pace and intensity of such efforts, echoing a central bank pledge that the country won’t resort to strong stimulus this time to prop up growth.

Source: Reuters

 

China cabinet announces plan to restrict risks in online finance

The Chinese State Council has confirmed that the country will continue to resolve financial risks in online lending and the use of shares as collateral for financing activities to protect market stability.

China’s cabinet stated that the government will speed up the development of a long-term regulatory mechanism for internet finance.

The cabinet spoke in a meeting of the state cabinet’s Financial Stability and Development Commission (FSDC) chaired by vice Premier Liu He.

The meeting comes a few days after a central government work group tasked with cracking down on online finance risks and proposed 10 new measures to curb risks caused by the troubled peer-to-peer (P2P) lending sector, to protect social and financial stability.

The state council committee also said in a statement that China will further deepen reforms of its capital markets to better serve the real economy. This includes taking the necessary measures to improve the quality of listed companies, reform stock issuance system, and broadening the long-term and stable funding sources for the country’s capital markets.

Source: Reuters

Shell to expand nationwide gas station network

Global energy giant Royal Dutch Shell Plc has announced plans to triple the number of gas stations it has in China to 3,500 by 2025. This comes after the recent lifting of restrictions on foreign investment in the sector.

Downstream director of Royal Dutch Shell, John Abbott said; “Shell is already the leading international oil retailer in China, running 1,300 sites via strategic joint ventures and two wholly owned companies, and we aspire to triple the size of our network by 2025.”

Abbott included that non-fuel retailing is an area that Shell is developing in a big way and we are piloting high-quality convenience stores in our retail stations in China too.

He stated that China is one of the company’s key markets in terms of downstream sector growth, which includes providing fuels, lubricants and petrochemicals.

According to Abbot, Shell will continue to employ the joint venture, wholly foreign-owned enterprise or dealership models, whichever is most competitive and best serves its customers.

This year, Shell opened its first liquefied natural gas refilling station in Xianyang, Shaanxi province, and is looking to pilot electric vehicle charging in China.

China Daily informed stated that many international oil giants have expressed willingness to continue investing in China.

British oil and gas multinational BP also said that it plans to more than double its gas station network in China by adding 1,000 more outlets in the  next five years, in response to the lifting of foreign ownership limits.

Source: China Daily

Online education gaining momentum in China

A recent report from UBS Securities stated that online education is gaining traction in China, with the market scale expected to exceed 714 billion yuan ($104 billion) by 2025.

According to the report, the Chinese online education market will grow markedly from the 29 billion yuan reported last year.

An analyst at iiMedia, Liu Jiehao said government support, technological progress, and an cultural emphasis on education have all contributed to a burgeoning online education market in China.

Most Chinese parents expect their kids to continue learning after the end of the school day.

The UBS report pointed out that about 37% of Chinese parents paid for tuition compared to 70% in places such as Japan and South Korea.

A Chinese online education company, called VIPKid recently raised $500 million in its latest round of financing – the world’s largest fundraising in the online education sector.

The company’s latest data showed it has enrolled more than 60,000 foreign teachers in its network, enabling it to work with 500,000 paid users.

Founder and chief researcher at Learneasy Times Online Education Research Institute,LyuSenlin said; “The financing accelerated the accumulative effect of the country’s online education segment.”

China Daily informed that, in recent years, TAL Education Group and New Oriental Education & Technology Grouphas been China’s top two education players.

The companies are transforming from offline to online and putting great emphasis on online education.

Source: China Daily

Chinese local governments urged to speed up bond issuance for infrastructure projects

Chinese local governments will join commercial banks to accelerate fund injection into infrastructure projects, as a way for the country’s policymakers to step up the fight against economic downside risks in the second half of this year.

The Ministry of Finance has required provincial-level and authorised municipal governments to finish no less than 80% of the 1.35 trillion yuan ($196.2 billion) special bond quota by the end of September.

The ministry said the funds raised from special bonds should be used effectively and should be injected into targeted projects as soon as possible.

According to the National Bureau of Statistics, the guideline came after the country reported a record-low fixed asset investment growth figure in the first seven months, which retreated to 5.5% from 6% for the first six months.

According to China Daily, the weaker-than-expected investment has increased market concerns on economic slowdown pressure, although the country’s monetary authority has already pushed commercial banks to increase lending since the second half.

The central bank recently released data showing that in July, the new yuan loans rose to 1.45 trillion yuan, which was higher than the market’s expectation of around 1.2 trillion yuan, and also increased by 623.7 billion yuan from a year earlier.

Chief economist of Chinese property developer Evergrande, Ren Zeping said: “It indicated that commercial banks have not yet increased long-term lending to non-financial enterprises and only boosted short-term interbank lending, as the banks lack incentives to lend out amid weakening economic outlook.”

Experts indicated that issuance of local government special bonds, which will raise money mainly for the construction of railways and expressways, will be another way to encourage banks’ fund injections, as they are the major holders of the bonds.

 

Source: China Daily 

 

Twenty years of strategic partnership between South Africa and China

This year marks the 20th anniversary of diplomatic ties between China and South Africa. According to Chinese President Xi Jinping, “this relationship has made big strides and demonstrated a strong growth momentum in political trust, economic and trade co-operation, people-to-people exchanges and strategic co-ordination”.

The partnership between the two countries has over the years been strengthened through bilateral mechanisms, FOCAC, the Belt and Road Initiative, BRICS co-operation, and other platforms that deepen co-operation in key areas such as industries, production capacity, resources and energy, infrastructure, finance, tourism, and digital economy and deliver more benefits to the people.

China has been a major investment partner to South Africa, making South Africa the top destination of Chinese investment in Africa. For the past nine years, China has been South Africa’s largest trading partner – at the end of 2017, bilateral trade between the two countries grew by 11.7%. In September 2017, South Africa became the first African country to export beef to China. In the tourism industry too, South Africa has hosted the largest number of Chinese tourists in Africa, which includes students, as well as the Confucius Institutes and Classrooms.

The Chinese government has assured South Africa that they will continue making great efforts to support and assist South Africa in their development strategies that will ensure fast economic development that will allow South Africa to continue to play a leading role in African affairs. This year South African President, Cyril Ramaphosa has stated that China President has committed to investing $14.7 billion into South Africa. More agreements and memorandums of understanding were signed this year by the two countries, these agreements are intended to further deepen relations. Some of the agreements are between big businesses, state-owned entities and even visa regimes.

Related Story: [OPINION]: China’s building BRICS in South Africa

The China/South Africa partnership goes beyond economics and politics as over the years there has been several student exchange programs between the two countries. For the past several years the Free State government has sponsored students to go study in China for their undergraduate qualifications, this has not been happening in Free State only, last month eight South African students from False Bay TVET College have left on a year-long internship to China.

Both the President of South Africa and Xi Jinping, President of China have assured each other that the partnership and cooperation between the two countries will continue. President Ramaphosa said reporting back to Parliament after the third bilateral meeting between the two head of state: “We have a strategic relationship with China and we intend to exploit it to good effect because they have offered to assist us and they have not offered to dominate us and that to us is an important part”.

By Ntsikelelo Kuse