Global Times - 01.08.2019

(Jacob Rumans) #1

B2 Thursday August 1, 2019


BIZUPDATE


u Favorable policies support expansion of bilateral business relationship


Nation’s trade, investment with ASEAN booms


By Yang Kunyi


The Association of Southeast Asian Na-
tions (ASEAN) has replaced the US to be
the second-biggest trade partner of Chi-
na in the fi rst half of 2019, while China
remained the biggest trade partner of
the bloc for the 10th consecutive year,
customs data showed.
The fi gures highlighted closer region-
al cooperation in a time of rising global
protectionism and unilateralism.
Bilateral trade between China and
ASEAN member countries increased
4.2 percent to reach $291.9 billion in the
fi rst six months of this year, Li Cheng-
gang, an offi cial of China’s Ministry of
Commerce, told a press briefi ng of the
State Council on Wednesday.


In 2018, the total cumulative invest-
ment between China and ASEAN stood
at $205.71 billion, growing 22 times over
the previous 15 years.
Li also noted that the 27th round of
the Regional Comprehensive Economic
Partnership negotiations has been held
in Zhengzhou, capital of Central China’s
Henan Province from July 22 to July 31.
It is expected that the negotiations on
the regional treaty could be completed
within this year.
In 2018, China and ASEAN upgrad-
ed their free trade agreement, aiming to
build the largest free trade zone among
developing countries. Now, more than
90 percent of the products traded be-
tween China and ASEAN members are
duty-free.
Steadily increasing China-ASEAN

relations are supported by favorable
policies and geographical proximity. In
recent years, trade in fruit has been a
highlight of bilateral relations, bringing
benefi ts to both, industry insiders said.
For example, 1.34 million tons of fruit
were exported to China from Vietnam
in 2018, increasing 15.5 percent from
the previous year, according to statistics
from China Customs.
The growing trade, especially in ag-
ricultural products, shows an open atti-
tude of China and ASEAN in terms of
international business collaboration, Xu
Liping, director of the Center for South-
east Asian Studies of the Chinese Acad-
emy of Social Sciences, told the Global
Times on Wednesday.
This openness is in contrast to US
protectionism and unilateralism in

terms of foreign policy.
“Governments tend to be more cau-
tious over trade in agricultural products
because they are concerned over compe-
tition with domestic farmers,” Xu said.
“But the growing trade in fruit between
ASEAN and China shows a win-win
situation where Chinese consumers will
have more quality options in tropical
fruit and farmers in ASEAN countries,
where agricultural populations are huge,
get more job opportunities.”
Ding Yi, a representative of Shanghai
Qingyuan Economic & Trading Co, told
the Global Times that his company was
one of the fi rst to import Malaysian du-
rians to China.
In recent years, the company’s sales
have been climbing, with total sales
reaching 1,000 tons annually.

Rising defaults in bond market normal and controllable: experts


By Zhang Hongpei

Rising bond defaults in China
are part of a normal process
that helps the nation’s debt sec-
tor become more market-driv-
en by abandoning the practice
of guaranteed payments, indus-
try analysts said.
As of Tuesday, 47 Chinese
companies defaulted on 54.89
billion yuan ($7.97 billion) in-
volving 98 domestic bonds in
2019, fi gures from fi nancial
data provider Tonghuashun
showed.
The real estate sector had
the highest number of bond
defaults.
The 16 HNA 02 bond, is-
sued by domestic conglomer-
ate HNA Group, defaulted on
about 1.6 billion yuan on Mon-
day, according to media reports

from Tonghuashun.
There are concerns in the
market about whether this
year’s bond defaults would
break the record set in 2018,
bringing more challenges to
regulators and investors.
The record wave of corpo-
rate bond defaults last year hit
115.45 billion yuan involving
118 cases, while in 2017, the
value was 33.75 billion yuan,
according to another fi nancial
data provider Wind.
“It is hard to predict if the
number of defaults will ex-
ceed that of 2018,” said Dong
Dengxin, director of the Finan-
cial Securities Institute at the
Wuhan University of Science
and Technology.
“As long as the defaults
don’t involve fraud or illegal
economic behavior, but arise
from problems with business-

es’ operations, they are a nor-
mal part of the capital market,”
Dong told the Global Times on
Wednesday.
Domestic economic down-
ward pressure and the uncer-
tainties caused by the complex
external environment have
posed challenges to domestic
companies, as shown in the
bond market, experts said.
“But it is also a proper adjust-
ment process when the nation’s
bond sector becomes more
market-driven and guaranteed
payments are abandoned,” Liu
Xuezhi, a senior economist at
Bank of Communications, told
the Global Times on Wednes-
day.
“Potential risks brought by
the defaults are controllable if
they do not expand to the point
where they trigger systemic
risks,” Liu noted.

Pan Gongsheng, a deputy
governor of the People’s Bank
of China (PBC), the country’s
central bank, said during the
two sessions in March that de-
faults are normal. Defaults help
break the system of guaranteed
payments and correct faults in
the market.
“They are benefi cial for a
normal investment culture, a
normal price and resources al-
location in the bond market,”
said Pan.
The offi cial noted that China
will control the amount of bond
defaults in 2019, using both le-
gal and market means.
Bond defaults increased last
year, but were not excessively
high, he said.

Credit list


regulations


defi ne evidence


The Ministry of Commerce
(MOFCOM) released on
Wednesday a notice on the
management of lists of persons
or entities receiving penalties
due to losing credit, with the
aim of strengthening credit
regulation in the business
world and accelerate the pace of
credit-based mechanisms.
According to the notice post-
ed on the ministry’s website,
evidence that can be invoked
when defi ning the list includes
administrative penalties or in-
spections of business opera-
tions, judicial decisions, and
laws and rules.
The list is divided into two
categories – those who are to re-
ceive joint penalties and those
who will be given special atten-
tion. The fi rst group will stay on
the list for no more than three
years; in the case of the latter,
for no more than two years.
Entities on the penalty list
that actively correct their bad
behavior and erase their bad
infl uence can apply for credit
recovery, said MOFCOM.
The regulation takes eff ect
on Wednesday.
“It is a trend that joint ef-
forts by diff erent departments
are contributing to a compre-
hensive social credit system in
China,” said Zhu Wei, a pro-
fessor at the China University
of Political Science and Law in
Beijing. China has sought to
build a credit-based framework
by applying the inter-agency
approach in penalizing people
that acted in bad faith.


Global Times


uECONOMY


uPOLICY


uFINANCE

Page Editor:
lixuanmin@
globaltimes.com.cn

uDrink up!


A view of the
ongoing 29th
Qingdao
Beer Festival
in Qingdao,
East China’s
Shandong
Province on
Tuesday.
The festival
kicked off on
Friday and
will last until
August 18.
The event
has driven
up the sales
of local
beer, with
67 tons sold
on Saturday
alone. Photo:
VCG
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