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UK seeks to break down digital trade barriers, says minister

Britain will look to break down digital trade barriers to help its businesses export their services, the country’s newly appointed trade minister Anne-Marie Trevelyan will say on Monday.

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Britain’s Secretary of State for International Trade Anne-Marie Trevelyan walks outside Downing Street in London, Britain, September 15, 2021. REUTERS/Hannah McKay/File Photo

LONDON, Sept 20 (Reuters) – Britain will look to break down digital trade barriers to help its businesses export their services, the country’s newly appointed trade minister Anne-Marie Trevelyan will say on Monday.

Britain’s Department for International Trade last week published a report seeking to predict trends in global trade out to 2050 which forecast that demand for digital services will double in the next decade.

“All of us depend on digital trade, yet British businesses face digital barriers in countries who take a protectionist approach,” Trevelyan will say in a virtual speech to London Tech Week, according to advanced extracts released by her office.

“I want the UK to break down these barriers and open up new, exciting opportunities for businesses and consumers so we can see improved productivity, jobs and growth.”

Trade deals typically focus on removing goods trade barriers, but since leaving the European Union, Britain has sought to include agreements on digital trade and common standards in professional services to spur service sector growth.

Trevelyan will use her first speech since taking up the role last week to set out the department’s plan to try to shape international digital policy. This will include establishing cooperation on digital trade via free trade agreements.

Enhanced consumer and intellectual property protections and promoting the development of digital trading systems such as e-contracting are also among the plans Trevelyan will set out.

The department, which said the digital sector contributed 150.6 billion pounds to the UK economy in 2019 and employed 4.6% of the national workforce, also wants to make it simpler and cheaper for businesses which use data to trade internationally by advocating free and trusted cross-border data flows.

Reporting by Kylie MacLellan; Editing by Nick Macfie

Our Standards: The Thomson Reuters Trust Principles.

“All of us depend on digital trade, yet British businesses face digital barriers in countries who take a protectionist approach,” Trevelyan will say in a virtual speech to London Tech Week, according to advanced extracts released by her office.

Source: https://www.reuters.com/world/uk/uk-seeks-break-down-digital-trade-barriers-says-minister-2021-09-19/

Reuters

Evergrande EV unit shares jump after chairman signals business shift

Shares in China Evergrande Group’s electric vehicles (EV) unit <0708.HK> rose on Monday as the embattled property developer moved to prioritise the growth of its nascent EV business over its troubled core real estate operations.

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A traffic light is seen near the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song/File Photo

HONG KONG, Oct 25 (Reuters) – Shares in China Evergrande Group’s electric vehicles (EV) unit <0708.HK> rose on Monday as the embattled property developer moved to prioritise the growth of its nascent EV business over its troubled core real estate operations.

Evergrande (3333.HK) , reeling under more than $300 billion in liabilities, averted a costly default last week with a last-minute bond coupon payment, buying it more time to head off a looming debt crunch with its next major payment deadline on Friday. read more

An announcement by its chairman, Hui Ka Yan, reported by state media on Friday, that it would make its new electric vehicle venture its primary business, instead of property, within 10 years, cheered investors on Monday.

Evergrande rose as much as 6% during the session before closing down 0.7%. China Evergrande New Energy Vehicle Group Ltd (0708.HK)rose 11.4%. The benchmark Heng Seng Index (.HSI) was flat.

Raymond Cheng, CGS-CIMB Securities’ head of China research, said the business shift makes sense given Beijing’s growing support for EVs and its increased tightening of the frothy real estate sector.

“This is the best outcome, if it just focuses on existing developments and maintains the operation,” Cheng said.

While the move would help Evergrande deleverage by gradually scaling down its massive undeveloped land holdings, Cheng said it was unclear how it would affect the company’s planned disposals including stakes in the EV unit.

Evergrande’s new vehicle business, founded in 2019, has yet to reveal a production model or sell a single vehicle. Last month, the unit warned it was still seeking new investors and asset sales, and that without either it might struggle to pay salaries and cover other expenses.

Hui expects property sales will slow to about 200 billion yuan ($31.31 billion) per year within the 10-year period, compared to more than 700 billion yuan last year, China’s Securities Times reported on Friday.

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News late last week that Evergrande had averted a default by securing $83.5 million for the last-minute payment of interest on a bond has lifted confidence the company may be able to avoid a messy collapse that would have significant ramifications for global financial markets.

On Monday, sources told Reuters some bondholders had received coupon payments they were owed last week, which suggested debt problems were being addressed.

Evergrande next needs to find $47.5 million by Friday and has nearly $338 million in other offshore coupon payments coming up in November and December.

Broader concerns about China’s real estate sector, which accounts for a quarter of gross domestic product, still loom large for investors and policymakers in the world’s second-largest economy.

Developer Modern Land (1107.HK) has a $250 million bond maturing on Monday. It said last week it ended an attempt to seek bondholder approval to extend the maturity date of the notes by three months, citing liquidity issues.

Calls to Modern Land’s investor relations office were not answered when Reuters sought comment on whether the payment has been made.

As liquidity concerns in the sector grow, property firms with large dollar-denominated debts will meet with the National Development and Reform Commission in Beijing on Tuesday to report their total issuance volume and repayment capability, a source with direct knowledge of the matter said.

Media outlet Cailianshe first reported the meeting earlier on Monday.

Separately, Evergrande said on Sunday work had resumed on more than 10 projects in six cities including Shenzhen. Many of its projects had been halted due to payments owed to suppliers and contractors. read more

Also lifting general confidence, state media outlet Xinhua in an article on Monday said the spillover effect of Chinese real estate companies’ debt default risks to the financial industry would be controllable. read more

The report follows comments from senior officials including Vice Premier Liu He and central bank governor Yi Gang last week, who also said property companies were facing debt default issues because of poor management and a failure to adjust to market changes. read more

Reporting by Clare Jim and Donny Kwok in Hong Kong, Andrew Galbraith in Shanghai, Jing Xu in Beijing; editing by Richard, Pullin, Sam Holmes and Christian Schmollinger

Our Standards: The Thomson Reuters Trust Principles.

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Source: https://www.reuters.com/business/evergrande-ev-unit-shares-set-jump-after-chairman-signals-business-shift-2021-10-25/

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China faces challenges from ‘mismanagement’ at certain firms, says PBOC head

China’s economy is “doing well”, but faces challenges such as default risks for certain firms due to “mismanagement”, the People’s Bank of China Governor Yi Gang said on Sunday.

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Governor of People’s Bank of China (PBOC) Yi Gang attends a news conference on China’s economic development ahead of the 70th anniversary of its founding, in Beijing, China September 24, 2019. REUTERS/Florence Lo/File Photo

  • China will be vigilant to avoid systematic risk – Yi Gang
  • Beijing will prioritise protection of consumers, home-buyers
  • China’s recovery trajectory remains unchanged – Yi Gang
  • PBOC will focus on retail, domestic use of digital yuan

Oct 17 (Reuters) – China’s economy is “doing well”, but faces challenges such as default risks for certain firms due to “mismanagement”, the People’s Bank of China Governor Yi Gang said on Sunday.

Concerns have grown in recent weeks over the possible collapse of property developer China Evergrande Group (3333.HK), which has more than $300 billion in liabilities and has missed three rounds of interest payments on its dollar bonds.

As the company wrestles with its debt, worries about a possible spillover of credit risk from China’s property sector into the broader economy have intensified. read more

Yi Gang said default risks for some firms and operational difficulties of small and mid-sized banks are among the challenges for China’s economy, and that authorities are keeping a close eye “so they do not become systematic risks”.

While growth has moderated due to a sporadic rise in coronavirus infections, China’s economy is expected to grow 8% this year, Yi said at an online meeting of the Group of 30 International Banking Seminar, which coincides with the annual meetings of the International Monetary Fund and World Bank.

Authorities will first try to prevent problems at Evergrande from spreading to other real estate companies to avoid a broader systematic risk, he added.

The rumbling crisis at Evergrande and other major homebuilders drove debt market risk premiums on weaker Chinese firms to a record high last week and triggered a fresh round of credit rating downgrades. read more

“The interest of creditors and shareholders will be fully respected strictly in accordance to law,” Yi said. “The law has clearly indicated the seniority of liabilities.”

Authorities will give the highest priority to the protection of consumers and home buyers, while respecting the rights of creditors and shareholders, he said.

The PBOC was taking various steps to fend off financial risks, such as replenishing capital for small and midsize banks, Yi Gang said.

The world’s second-largest economy has staged an impressive rebound from the pandemic but there are signs the recovery is losing steam.

“Economic growth has been slowed down a little bit, but the trajectory of economic recovery remains unchanged,” he said.

On the development of digital yuan, Yi Gang said the PBOC will focus on its domestic and retail use as cross-border and international usage was “a little bit complicated” due to requirements over issues such as money laundering.

“We will closely cooperate with the central bank community,” he said, adding that using digital yuan as a tool to promote China’s Belt and Road initiative was “not our priority at this point”.

Reporting by Leika Kihara in Tokyo; Editing by Jan Harvey

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/world/china/china-faces-challenges-mismanagement-certain-firms-says-pboc-head-2021-10-17/

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Lenovo stock drops 17% after withdrawing Shanghai listing application

Lenovo Group Ltd saw its stock fall more than 17% on Monday, its biggest intraday decline in over a decade, after the Chinese technology giant withdrew its application for a 10 billion yuan ($1.55 billion) share listing in Shanghai.

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An employee gestures next to a Lenovo logo at Lenovo Tech World in Beijing, China November 15, 2019. REUTERS/Jason Lee

SHANGHAI, Oct 11 (Reuters) – Lenovo Group Ltd (0992.HK) saw its stock fall more than 17% on Monday, its biggest intraday decline in over a decade, after the Chinese technology giant withdrew its application for a 10 billion yuan ($1.55 billion) share listing in Shanghai.

The world’s biggest personal computer maker on Friday said it would withdraw its application, days after it had been accepted by Shanghai’s STAR Market. read more

On Sunday, Lenovo said it had done so because of the possibility of the validity of financial information in its prospectus lapsing during the application’s vetting. It did not detail reasons why the information may no longer be valid.

It also cited “relevant capital market conditions such as the latest circumstances in connection with the listing.”

“The group’s business operations are in good condition as usual. The withdrawal of the application is not expected to give rise to any adverse impact on the financial positions of the group,” Hong Kong-listed Lenovo said in the Sunday statement.

($1 = 6.4368 Chinese yuan renminbi)

Reporting by Brenda Goh and Jason Xue; Editing by Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.

On Sunday, Lenovo said it had done so because of the possibility of the validity of financial information in its prospectus lapsing during the application’s vetting. It did not detail reasons why the information may no longer be valid.

Source: https://www.reuters.com/technology/lenovo-stock-drops-17-after-withdrawing-shanghai-listing-application-2021-10-11/

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