2019年7月25日 星期四


A week ago Yahoo Finance reported the following:

Why China Can’t Get Its Economy Moving

Bloomberg  Dinny McMahon,Bloomberg 12 hours ago
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(Bloomberg Opinion) -- China’s new GDP numbers show that the world’s second-biggest economy is growing more slowly than at any time since the early 1990s. Chinese leaders know what they need to do to arrest the slide: pump more credit into private companies, which generate the majority of jobs and growth. The fact that growth isn’t picking up regardless of their efforts would suggest banks are resisting this imperative. But, the issue isn’t whether they’re complying, it’s how they’re choosing to do so.

The government is correct that the private sector’s health is essential to the viability of the overall economy. Private firms account for 80% of jobs, 60% of economic growth and about half of all fiscal revenue in China -- and manage to do so with far lower levels of debt than state-owned companies. Since May 2018, the central bank has thus repeatedly cut banks’ reserve requirement ratios to free up liquidity, then nudged banks to direct that credit toward private firms, especially small- and medium-sized enterprises.

At the same time, authorities have demanded that banks reduce risk which, in a slowing economy, should mean more conservative and market-oriented lending practices. Chinese banks consider small, private companies as the single riskiest group of borrowers in the economy. Unlike state-owned firms, they’re not backed by the government and often don’t have a lot of assets that they can post as security.

Banks have found a way to balance these competing demands by ramping up a very specific type of lending -- discounting of bankers’ acceptances.

While bankers’ acceptances exist the world over, they play an outsized role in China’s financial system. When a company buys something from a supplier, it can pay using a bankers’ acceptance, issued by a bank on behalf of the buyer. When the acceptance matures at some pre-arranged point in the future, the supplier exchanges it for cash from the bank for the amount of the sale. The bank then seeks payment from the company on whose behalf it issued the acceptance.  

Sometimes, however, the company that’s been paid with an acceptance needs money before it’s due. It can then go to any bank and exchange the acceptance for cash, albeit at a discount to the value of the acceptance. In short, discounting is not unlike a low-interest payday loan, with the bank lending against future income. The discount rate is currently about 3.6%, which means that if a company cashes in a 100-yuan acceptance that matures in six months, it will receive a discounted 98.2 yuan from the bank.

For the past year, growth in bank lending to non-financial companies has been driven solely by bankers’ acceptance discounting. At the end of April 2019, the outstanding volume of discounted bankers’ acceptances -- what the People’s Bank of China refers to as “paper financing” -- was up 2.92 trillion yuan ($425 billion), or 76%, from a year earlier, accounting for 32% of all new credit created in that period. Meanwhile, new medium- and long-term loans declined 6% over the same period to 5.53 trillion yuan. Short-term loans (which accounted for 4% of new loans) fell 67%.

For banks, discounting seems like a handy solution to their political dilemma. Most of the companies that present acceptances for discounting are small, privately owned firms -- just the kind of companies the government is looking to support. At the same time, discounting is the safest type of corporate loan a bank can make. While the cash goes to a company, the counter party risk lies with the bank that issued the acceptance.

In effect, discounted bankers’ acceptances are inter-bank loans. Consequently, the risk-weighted capital that banks need to set aside against them is far less than that required for ordinary corporate loans. That’s particularly useful at a time when the large volume of bad-loan write-offs is making unprecedented demands on bank capital. What acceptances don’t do, unfortunately, is expand economic activity. As a rule, companies don’t like discounting their acceptances. Many Chinese firms operate on wafer-thin margins, and discounting erodes their profits. Only when they desperately need cash -- to pay wages, bonuses, taxes and social security contributions, utilities and interest on loans -- do they resort to the tactic.

While acceptances are useful as a way of getting cash to companies that are otherwise struggling to stay alive, therefore, they don’t provide either the investment capital or working capital needed to stimulate growth. For that, banks would have to extend real (and far riskier) loans to companies, which they’re still loath to do.

The central bank has supported discounting as the answer to the private sector’s problems. Other branches of the government are less convinced. At the end of June, an official from the National Audit Office said the financing environment for small firms hasn’t “fundamentally improved.” Till now, Chinese policymakers and banks have been able to convince themselves that they can make the country’s financial system safer while also stimulating growth. They may soon have to choose between the two.


 (彭博觀點)--中國新的國資料顯示, 這個世界第二大經濟體的增長速度比上世紀90年代初以來的任何時期都慢。中國領導人知道他們需要做些什麼來遏制這種下滑: 向私人公司注入更多的信貸, 從而創造了大部分就業機會和增長。事實證明, 無論它們的努力如何, 經濟增長並沒有加快, 這一事實表明, 銀行正在抵制這一迫切性。但是, 問題不在於他們是否遵守, 而是他們選擇如何去做。

政府是正確的,私營部門的健康對整體經濟的生存能力至關重要。私營企業占中國80%的就業機會、60%的經濟增長, 和大約一半的財政收入, 而且其債務水準遠低於國有企業。因此, 20185月以來, 央行多次下調銀行存款準備金率以釋放流動性, 然後推動銀行將信貸投向私營企業, 尤其是中小企業。

與此同時,當局要求銀行降低風險,在經濟放緩的情況下,這應該意味著面對向市場的群體,貸款行為需要更加保守。中資銀行認為, 小型私人公司是經濟中風險最大的借款人群體。與國有企業不同, 它們不受政府支援, 而且往往沒有很多資可以作為擔保。

銀行已經找到了一種平衡這些相互競爭需求的方法,即增加一種非常具體的貸款類型 —— 有折扣的銀行承兌

雖然銀行家承兌在世界各地都存在,但他們在中國金融體系中扮演了一個超乎尋常的角色。當公司從供應商處購買某物時,它可以使用銀行來代表買方簽發銀行承兌匯票付款。當承兌金額在將來某個預先安排的某個時間點到期時, 供應商會將其從銀行兌換成現金以換取銷售金額。銀行隨後向代其出具承兌匯票的公司尋求付款。

 然而,有時,接受承兌匯票付款的公司在未到期需要錢,它可以去任何銀行,將承兌匯票兌換成現金,儘管與承兌價有折扣。簡而言之, 貼現與低息發薪日貸款並無二, 銀行貸款用未來收入作担保。貼現率目前約為3.6%, 這意味著如果一家公司在6個月兌現100元的承兌, 在减扣貼現後將從銀行獲得98.2元。

過去一年,銀行對非金融公司的貸款增長完全是由銀行家的承兌貼現推動的。截至20194月底, 中國銀行(人民銀行稱之為"票據融資") 的貼現銀行承兌額較上年同期增加2.92萬億元(4250億美元), 或較上年增長76%, 占新增信貸總量的32%。與此同時, 同期新增中長期貸款5.53萬億元, 同比下降6%。短期貸款(占新增貸款的4%) 下降了67%

對銀行來, 貼現似乎是解決其政治困境的一個得心應手的辦法。大多數接受折扣的公司都是小型的私有公司, 而正是政府希望支援的那種公司。同時, 貼現是銀行所能發放的最安全的企業貸款類型。當現金流向公司時, 交易對手的風險在於簽發承兌匯票的銀行。

實際上, 貼現的銀行家的承兌是銀行間貸款。因此, 銀行需要預留的風險加權資本遠遠低於普通企業貸款所需。在大量不良貸款核銷對銀行資本提出前所未有的資本需求的時候, 這做法尤其有用。不幸的是, 接受承兌並沒有使經濟活動擴大。通常, 公司不喜歡接受打折承兌。許多中國公司的利潤微薄, 而貼現侵蝕了他們的利潤。只有當他們迫切需要現金 ——如支付工資、獎金、收和社會保障繳款、水電費和貸款利息——他們才會採取這種策略。

雖然接受承兌是有用的, 它是一種方式去使掙扎活著的公司獲得現金, 因此承兌銀行是沒有提供投資資本或營運資本以刺激增長。為此, 銀行應該向企業提供實際(風險大得多)的貸款, 然而他們仍不願意這樣做。

央行一直支援貼現,作為解決私營企業問題的辦法。政府的其他部門則不太信服。6月底,國家審計署的一位官員表示,小企業的融資環境沒有"根本改善"。到目前為止,中國的政策制定者和銀行已經能夠說服自己可以使中國的金融體系更安全, 同時亦能刺激增長。他們可能很快就會在兩者之間做出選擇。

              So, China should have a way to solve their economic problems soon.

2019年7月23日 星期二

US-China rivalry in high-tech field - China increased market share in 9 items

Recently the Nihon Keizai Shimbun Electronic Edition reported the following:
ハイテク分野で米中拮抗 中国、9品目でシェア拡大
2019/7/8 2:00日本経済新聞 電子版
Major product and service share survey (Source:Nikkei)











The close fighting between US and Chinese companies in the high-tech field was becoming clearer. In the 2018 “Major Product and Service Share Survey” compiled by Nikkei Inc., Chinese companies expanded their share of nine items including smartphones. The US market share increased in eight items. It confirmed a claim that there was a battle for supremacy over advanced technology. A fierce Chinese catch-up might raise the US vigilance and prolong trade friction.

Out of the 74 items surveyed, 25 were major high-tech items, the number of companies in the top 5 that made them, 33 were from China, 38 from the United States; and 1 joint venture between China and the United States. China's top five companies gained increased market share including nine items such as smartphones, mobile communication infrastructures (base stations), organic EL panels, and large and small LCD panels.

Huawei, which the US government was taking a de facto embargo on, had gained a strong presence in the market. Focusing on technological development of the next-generation communication standard "5G", the company increased its share of mobile base stations by 3 points from the previous year and maintained its top position. Zhongxing Telecommunication (ZTE) also came in fourth.

Huawei was third in the smartphone, approaching the second-place Apple. In the fourth place was Xiaomi Corporation, and in the fifth place was Guangdong OPPO Mobile Telecommunications Corp., Ltd, (OPPO), respectively the Chinese group gained market shares.

The eight items that US companies had gained in share were cloud services, virtual reality (VR) headsets, hard disk drives (HDDs), and semiconductor memory DRAMs.

Among the smart speakers that used artificial intelligence (AI), Amazon.com and Google two US companies held more than 60% of the share, but the Chinese group, including Alibaba group and Xiaomi, were quick to catch up. Alibaba had made moves to improve the accuracy of its speech recognition system and planned its installation on Honda vehicles.

On the other hand, while China had a decreased market share in two products compared to 2017 such as in security cameras while the US had eight products such as in security software. As the relative market share had fallen, the market had expanded in both surveillance cameras and security software. The Chinese and American stake in the top five companies had respectively remained dominant.

Based on the estimates of various research institutes, the world's major product and service share surveys were calculated by comparing the 2017 with 2018 shares. In terms of all 74 items surveyed, in the US was at the top rank in 25 items and China in 10 items.

Containment of Chinese high-tech companies by the US was expected to continue for the foreseeable future. It had already affected the global production of smartphones, and it was likely that some product shares would have big changes in 2019.

     It must be pointed out that some of the products mentioned about, for example smart phones, the product could consist of parts made by manufactures other than China and the US (e.g. Japan).

2019年7月19日 星期五


Recently Yahoo Finance reported the following:
Yahoo Finance
U.S. ‘Freedom Gas’ Aims to Loosen Russia's Grip on Europe’s Market

Bloomberg Christine Buurma, Bloomberg Wed, Jun 12 9:00 PM PDT
 (Bloomberg) -- More “freedom gas” from U.S. shale basins is earmarked for Europe after the company behind a Louisiana export project expanded a deal with Poland.

Venture Global LNG Inc. will send Poland’s PGNiG 2.5 million tons of liquefied natural gas from the yet-to-be-built Plaquemines terminal, up from 1 million in a previous agreement, according to a filing Wednesday. The pact boosts the odds that Venture Global will decide to move forward with the $8.5 billion project, which isn’t expected to start up until 2022.

The deal is an example of the Trump administration’s push to see more shale gas, which it has dubbed “molecules of U.S. freedom,” go to overseas buyers as a foreign policy tool. Though America’s cargoes to Europe have climbed, Russia remains the region’s biggest and lowest-cost gas supplier -- and Moscow may be testing the resilience of U.S. exporters by boosting shipments via pipeline, according to Citigroup Inc.

President Trump said on Wednesday he’s considering using U.S. sanctions to stop construction of the Nord Stream 2 gas pipeline between Russia and Germany. Europe has become a hotspot for LNG as Germany, Greece and Croatia consider building import terminals, seeking alternatives to supplies piped from Russia amid declining production from the Netherlands and the North Sea.

Today is a very very important milestone in the relationship between the United States and Poland,” Energy Secretary Rick Perry said before announcing the LNG agreement. “We are fortified by our shared commitment to energy security.”

Poland also agreed last year to buy LNG from Sempra Energy’s planned Port Arthur export terminal in Texas.

Plaquemines would be among the so-called second wave of U.S. LNG export projects. While four terminals are already sending shale gas abroad, projects that haven’t yet broken ground face an uncertain future amid tumbling global gas prices and stiff competition from Russia, Qatar and Australia. Venture Global has begun construction on another Louisiana LNG facility, the $5 billion Calcasieu Pass terminal.


(彭博社) - 在路易斯安那州出口計劃背后的公司擴大與波蘭達成協議後,更多美國頁岩盆地的 “自由氣”被指定用於歐洲。

根據周三提交的文件,Venture Global LNG Inc. 將從尚未建成的Plaquemines碼頭向波蘭PGNiG輸出250萬噸液化天然氣,高於此前協議中的100萬噸。該協議提高了Venture Global決定將推進85億美元項目的可能性,該項目預計將在2022年開始實施。

這筆交易是特朗普政府推動更多頁岩氣的一個例子,它被稱為“美國自由的分子”,向海外買家作為外交政策工具。據花旗集團(Citigroup Inc.)稱,雖然美國向歐洲出口貨物已經攀升,但俄羅斯仍然是該地區最大和成本最低的天然氣供應國 - 莫斯科可能通過增加管道出貨量來測試美國出口商的彈性。

特朗普總統週三表示,他正在考慮利用美國的製裁措施去阻礙在俄羅斯和德國之間建設Nord Stream 2天然氣管道。歐洲已經成為液化天然氣的熱點,因為德國,希臘和克羅地亞已考慮建立進口终奌,他在荷蘭和北海量下降的情況下尋求從俄羅斯輸送的替代品。

“今天是美國與波蘭關係中非常重要的里程碑,”能源部長瑞克佩里在宣布液化天然氣協議之前表示。 “我們對能源安全的共同承諾得到了。”

去年,波蘭已同意从Sempra Energy計劃出的德克薩斯州的Port Arthur出口碼頭購買液化天然氣。

Plaquemines將成為所謂的第二波美國液化天然氣出口項目之。雖然四個碼頭已經向國外輸送頁岩氣,但由於全球天然氣價格下跌以及來自俄羅斯,卡塔爾和澳大利亞的激烈競爭,尚未破土動工的項目面臨著不確定的未來。 Venture Global已經開始在另一個路易斯安那州建設液化天然氣設施 -- 一個價50億美元的Calcasieu Pass终奌


          So, LNG supply has become a political tool for both the US and Russia in their competition for influence in Europe. Currently Russia is also busy in doing business on LNG with Japan in Asia.

2019年7月18日 星期四

Russia to boost LNG production five-fold - up to 70% is for Asia

Recently the Nihon Keizai Shimbun Electronic Edition reported the following:
ロシア、LNG生産5倍に 最大7割アジア向け
環境エネ・素材 ヨーロッパ
2019/6/13 18:00日本経済新聞 電子版












 [Moscow = Ishihara Yohei] Russia's Alexander Nowak Energy Minister met with the Nihon Keizai Shimbun in Moscow and announced that it would increase the production volume of liquefied natural gas (LNG) by about 20 times by 2035. The plan was to increase the global market share to about 20% by expanding LNG production in the Arctic. It would export up to 70% of its production to the Asia-Pacific and to strengthen cooperation with Japan in the energy sector.

President Putin would attend the 20 countries and regional summit (G20 Summit) to be held in Osaka on June 28-29. At the Japan-Russia leader meeting during the summit, economic cooperation centered on the energy sector was also expected to be an issue.

Russia's LNG production capacity was approximately 28 million tons, including “Sakhalin 2”, an oil and gas development project off Sakhalin in which Mitsui & Co. together with Mitsubishi Corporation had participated, and also Yamar LNG and others in the Arctic. Nowak said, "I plan to raise it from 120 million tons to 140 million tons by 2035." Its global market share, which stood at about 6% as of 2018, would be raised to about 20%.

Qatar and Australia had over 20% market share of the LNG market in 2018. The US, which had production of shale oil increasing, was also showing a strong presence.

Russia aimed at becoming a large LNG export country like Qatar. However, Russia's large increase in production was likely to spur global LNG oversupply.

Regarding increased LNG production, Mr. Nowak pointed out, "There are 74 trillion cubic meters of natural gas in Russia's Arctic region alone, and there are also many unconfirmed reserves." With new projects in mind, such as the expansion of Arctic 2 and Sakhalin 2 planned by Russian gas giant Novatek, he showed confidence in " having all the potential needed, including the resources and competitiveness, to gain a 20% share ".

Russia's increased production of LNG also provided opportunities for Japanese companies. Relating to the LNG terminal "Arctic 2" being developed by Novatek at Yamar, Mitsui & Co. in conjunction with an independent administrative corporation together planned on representing Japan as a group to invest 10% of the total. They aimed for a final agreement in June.

"I expect an agreement with Japanese companies (such as Mitsui & Co., Ltd.)," Nowak said at an interview. In cooperation with Japan in the field of LNG, he said, "they can participate in the form of providing technology, financing, and investment etc." and stressed that "we welcome the participation of foreign partners as a government such as Japan."

Expansion was also expected at the “Sakhalin 2” LNG business off Sakhalin where Mitsui together with Mitsubishi Corporation were participating in its development. Sakhalin 2 was the closest production base to Japan, and from the perspective of stable energy supply, the merits that the Japanese could receive would be great.

Mr. Nowak pointed out that the basic consumption market would be in the Asia-Pacific region, and said that exports to Japan, China, India, Korea, and Vietnam, which are the largest importers, would increase. It was expected that 60-70% of the exports might be diverted to the Asia-Pacific region.

As for Japan-Russia cooperation other than LNG,  the energy sector that was included in the eight  “cooperation plans” presented by Prime Minister Shinzo Abe in 2016 was evaluated, it revealed a policy to strengthen efforts with Japan on the development of other fossil fuels, on the improvement of energy efficiency, and in the field of nuclear energy.

     So, Russian and Japan are in partnership in the development of energy supply.

2019年7月16日 星期二

200,000 nationwide traffic lights open to 5G base stations in 2023

Recently the Nihon Keizai Shimbun Electronic Edition reported the following:
5G基地局に信号機開放 全国20万基、23年度に
経済 政治 IoT モバイル・5G 自動運転
2019/6/3 18:00日本経済新聞 電子版














An outline of a new IT (Information Technology) strategy that the government would make a cabinet decision in mid-June was revealed. The key idea was to open up about 200,000 traffic lights installed by the local government to four domestic telecommunications companies such as NTT, DoCoMo and to use it as a base station for the next-generation telecommunications standard, the "5G". By using the existing equipment, it was possible to spread 5G which was fiercely competitive in the world at a low cost and quick speed. The local government would use it to realize automatic driving and to send information in the event of a disaster.

For the 5G to use traffic lights, experiments would be conduct in multiple cities from fiscal year 2020 and aim at a nationwide development in fiscal year 2023.

The spread of the 5G required the development of hundreds of thousands of base stations throughout the country. 5G radio wave flying distance was shorter than 4G, for example, a frequency of 28 gigahertz (giga would be 1 billion) hertz band that was assigned for 5G was said to have a radius of several hundred meters. Building a network that was easy to connect "required detailed area development," said a DoCoMo representative.

DoCoMo, KDDI, Softbank, and Rakuten Mobile were the four domestic carriers needed to have more base stations than 4G.

In urban areas where space would be limited for towers building, base stations were often placed on the roof of the building. According to a major telecommunications company, "the roof is already saturated and new establishment is difficult". Negotiations with landowners take time and effort. The Ministry of Internal Affairs and Communications announced at the end of 2018 a guideline for sharing some equipment indoors and out.

The speed of installing base stations was likely to increase dramatically if it could use the about 200,000 traffic lights throughout the country. Japan was said to have a large number of traffic lights at an area ratio compared to other countries.

Cost control could also be expected. As of the end of the 2018, DOCOMO would own 28,500 stations of 4G base stations. The total investment amount from fiscal year 2010 to 2018 was approximately 2.4 trillion yen, and the investment cost per station was approximately 10 million yen. Since 5G could cope with software updates of existing base stations, investment per station was expected to be less than 4G. There was a high possibility that investment costs could be greatly reduced by using traffic lights.

The government would now coordinate with telecommunications companies. Not only the local government but also the telecommunications companies were required to bear the expense for the use of traffic lights.

At the traffic light an IT sensor with the "IoT" function that connected everything to the Internet would be attached. The government's goal would be to build a "Trusted Mesh-net" (a reliable communication network that would not be interrupted even in the event of a disaster). The communication companies used the network to communicate with the police and the local government, yet making them mutually inaccessible.

The local government that owned and managed traffic lights would use traffic lights equipped with 5G base stations for community service.

For example, it was supposed that it would give momentum to realize automatic driving. It would be possible to automatically transmit the surrounding traffic conditions from the traffic light. It would be possible to transmit to a car on whether old people and children were walking around, and it would enable avoiding traffic congestion. In the event of a disaster, if someone hold a my-number-card over a traffic light, the local government could assume a service of confirming one’s survival and inform the family.

The government regarded 5G as a public infrastructure that would support a digital society and hurry up its spreading. The new strategy would be shown at the IT Comprehensive Strategy Headquarters (Director General -Prime Minister Shinzo Abe) on the 7th, and the Ministry of Internal Affairs and Communications, the National Police Agency, the Ministry of Land, Infrastructure, Transport and Tourism and other related ministries and local governments would start the conference starting this summer.

              I think it is an ingenious way for Japan to spread the 5G networks by making use of the existing traffic lights.