Your daily digest of the biggest business news in China, translated and summarized every day.
Taobao hits back at fake goods claim
E-commerce giant Alibaba’s flagship online platform has hit back at the State Administration of Industry and Commerce over its allegation that only 37.25 per cent of goods sold on Taobao are genuine.
The Chinese regulator has been fighting a public battle with the Chinese e-commerce giant for the last few days over the fake goods claim. Taobao has challenged SAIC’s sampling methodology as well as the official in charge of the on-line commerce quality department.
Taobao says SAIC’s high-handed and old-fashioned tactics risk stifling innovation and has lodged an official complaint against the official who is responsible for the report.
(Caijing)
Beijing set to unleash 10.5 trillion yuan of credit
China International Capital Corp, one of the country’s leading investment banks, predicts the central bank will increase total credit creation from between 5 and 10 per cent, making 10.5 trillion yuan worth of credit available to the market this year.
CICC estimates the big four commercial banks are likely to be responsible for 30 to 40 per cent of new loans in 2015 and small and medium sized banks will be reponsible for another 20 per cent. Analysts believe the central bank is adopting a more loose monetary policy.
Chinese beer industry hit by anti-corruption campaign
Chinese beer production has declined for the first time in the last decade as a result of bad weather, weak consumer demand and the country’s anti-corruption campaign.
Beer production dropped 0.98 per cent in 2014 compared to the year before. Production growth reached its peak in 2006 when it increased 14.79 per cent. A beverage analyst says consumption at entertainment venues and restaurants decreased last year.
Chinese per capita consumption of beer is 34.2 litres per year, slightly above the world average. The industry is highly concentrated with the top five producers accounting for 80 per cent of market share.
(Caijing)
Shaanxi set to levy 6 per cent tax on coal
Shaanxi province is set to levy a 6 per cent resource tax on its coal industry following examples of other major coal producing provinces such as Shanxi (6 per cent), Inner Mongolia (9 per cent) and Ningxia (6.5 per cent).
The China State Administration of Tax announced at the beginning of December last year that it wanted to replace the myriad of fees and levies on the coal industry with a new resource tax from between 2 and 10 per cent. Each province is allowed to set its own tax rate.
The Shaanxi Coal Association says the new resource tax is likely to increase the burden on the industry which is already struggling as a result of low prices. The association estimates 50 to 60 per cent of coal producers are losing money.
China’s Coal Industry Association estimates the total tax burden for the industry is 35.04 per cent of total revenue, which includes 21.03 per cent of fees and levies and 14.01 per cent of administrative charges.
(Caijing)
Shanghai's first private bank receives approval to start operating
Following the launch of WeBank, China's 'first private bank', earlier this month, Shanghai authorities yesterday gave another private financial institution, the Shanghai Huarui Bank, the green light to begin operations.
The bank, which has registered capital of 3 billion yuan, will focus on providing trade financing to small- and medium-sized companies operating within the Shanghai Free-Trade Zone.
The executive director of the bank will be the former deputy governor of the Shanghai branch of the PBoC and the new bank's head will be the former head of the Suzhou branch of the Bank of China.
The bank still needs to obtain various other regulatory approvals before it can open for business.
Employees gain greater access to compulsory housing funds
Chinese employees will have easier access to their housing funds and will be able to able to use this money to contribute to their rent, according to a joint announcement from the Ministry of Housing and Urban-Rural Development, the Ministry of Finance and the Central Bank yesterday.
Most Chinese employees are required to contribute to a housing fund, which, like superannuation in Australia, is matched by an employer contribution and is not taxed.
The rules to date have meant that they can only access these funds in order to purchase a house.
The new rules allow, under certain conditions, employees to access their funds in order to pay their rent.
Tax reform reduced tax burden on firms by almost 200 billion yuan in 2014
China is in the process of reforming how it taxes firms operating in some service industries, shifting from the levying of a 'business tax' to a value-added tax.
The pilot reforms have already resulted in reducing the tax burden of firms by 192 billion yuan last year, according to data released by the country's State Administation of Taxation yesterday.
The report in to the progress of the tax reform says that 4.1 million firms were involved in the trial and that 95 per cent of the companies involved in the piloting of the tax reform experienced a decline in their tax burden.
The scope of the value-added tax reforms are expected to expand into other service industries such as construction and finance this year.
The tax bureau also noted that in 2014 it collected a net total of 10.38 trillion yuan in revenue, an 8.8 per cent increase on the previous year.
Two-thirds of provinces say they missed GDP growth targets in 2014
At least two-thirds of China’s provinces, regions and municipalities failed to meet GDP targets last year reports Caixin.
According to the magazine, out of the 22 provinces and regions that have released statistics, only Tibet met its target of 11 per cent.
Shanghai has become the first major city to abandon its GDP growth target.
China’s growth numbers for 2014 showed the economy expanding at its slowest pace in 24 years.
(Caixin)
Alibaba's finance arm launches credit scoring service
Alibaba Group’s finance arm has launched a credit rating system that will draw upon the e-commerce giant’s vast data trove in the company’s latest push into consumer finance.
The credit-scoring system, Sesame Credit, will look use online data including from social networks to determine the credit worthiness of consumers, said Ant Financial Services Group in a statement.
Alibaba has been moving further into financial services of late including through a money market for consumers, micro-loans, and a new private bank.
Consumer credit remains a relatively underdeveloped sector in China where state-owned banks have long dominated. Companies such as Alibaba and Tencent hope to leverage their massive data banks to make inroads into the sector.
Alibaba founder Jack Ma has made building a culture of credit in China a stated ambition of his company.