Chinese foreign exchange reserves on the rise
The People’s Bank of China released data on Thursday showing that Chinese foreign exchange reserves have increased in March, unexpectedly ending a declining streak lasting since November. With a top of $3.21 trillion in March, foreign exchange reserves rose by $10.28 billion from the previous month according to data from China’s central bank. This data has eased widespread fears of Yuan weakness and a downward spiral of capital outflows. The People’s Bank of China also stated that for the first time they would release foreign exchange reserves denominated in Special Drawing Rights (SDR). Click here for the full article.
JD Finance investing in Beijing auto credit company
Meili Finance, a Beijing auto credit company, has received an undisclosed amount of funding from the Chinese online giant JD on Wednesday. This start-up investment facilitates JD Finance in extending its consumer credit business into auto finance, a task which usually requires a license from a banking regulator. Meili offers loans exclusively within the second-hand car sale market in Beijing, reportedly the largest in China, delivering a total of 250 million Yuan in credit to over 30,000 auto buyers. Currently, Chinese automobile ownership in China has hit 172 million units, with second-hand auto sales expected to overtake new car sales in the near future and hold an estimated transaction volume of 2 trillion Yuan. Click here for the full article.
Small cities fuel China consumption
E-commerce is increasingly being seen as the key to integrating nearly two-thirds of Chinese consumers living in Tier 4 cities. The 800 million Chinese living in Tier 4 cities largely remain an untapped resource, with misconceptions of smaller cities being less likely to generate revenue. The smaller cities are also perceived to have limited shopping needs, low brand awareness and comparatively less desire to spend. However, studies conducted by UBS Evidence Lab demonstrates that lower tier cities actually exhibit “thriving” consumption and high brand awareness. Unfortunately, this desire for consumption within smaller cities is hindered by the low number of physical retail stores and limited products. This is where E-Commerce could be key. Click here for the full article.
German companies see opportunities in China’s transformation: industry expert.
German companies have expressed great interest in China’s structural transformation, regarding it as having great business potential. The Chinese economy is currently growing at a comparatively slower rate than previous years because of the “transformation process of the country”. In conjunction with the “supply-side” reform launched last year, China is aspiring to transform from a low-end non-effective supplier to improving products and service quality, whilst also enhancing productivity and innovation. German Companies will be able to capitalise upon the further market liberation as addressed in the reforms, and in return will be able to provide their own experiences and capabilities. Click here for the full article.