IN BRIEF

Victor Muller, chief executive officer of Spyker Cars NV and chairman of Saab Automobile AB, at the New York International Auto Show last month. China's Hawtai Motor Group will invest 150 million euros in Saab Automobile, enabling Saab to pay bills and resume production. Andrew Harrer / Bloomberg

Currency

Time not ripe to freely float yuan

Conditions are not ripe at present to freely float the yuan, economists said after US Treasury Secretary Timothy Geithner again pressed China on reform of its financial system.

"It would be inappropriate for China to let its currency float freely at present, given the ongoing second round of quantitative easing initiated by the US and the resulting excessive liquidity," said Chen Daofu, policy research chief at the Financial Research Institute of the State Council's Development Research Center.

Geithner said on May 3 that China must improve its financial system, open up its capital market and level the playing field for all players, including foreign firms, if it wants to achieve balanced growth.

Data

PMI reveals 'appropriate adjustment' growth

Chinese manufacturing growth slowed in April after a short pick-up in March as the government tightened liquidity and allowed the yuan to appreciate faster.

The official purchasing managers' index (PMI), which measures industrial activity, fell to 52.9 in April from 53.4 in March, the China Federation of Logistics and Purchasing (CFLP) said.

The data showed an "appropriate adjustment" in growth as the country restructures its economic growth pattern, the CFLP added.

The index declined for three consecutive months from a peak of 55.2 last November before increasing in March. The PMI is based on a survey of 820 companies in 28 industries.

April CPI likely to remain at high level

The nation's consumer price index (CPI) is likely to remain at a high level with April's figure rising to at least 5 percent from a year earlier, according to analysts.

Meanwhile, they warned that stubbornly high inflation may compel the government to maintain its tight monetary policy.

April CPI, a main gauge of inflation, may increase to between 5.2 percent and 5.5 percent year-on-year, Peng Wensheng, chief economist at China International Capital Corporation Limited (CICC), wrote in a report.

The National Bureau of Statistics (NBS) will release the April figure on May 11.

Banking

Stricter regulations for banks in 2012

China's banking regulator announced stricter regulation rules for commercial banks on May 3 to help improve capabilities of the country's banking and financial institutions in combating risks.

The China Banking Regulatory Commission (CBRC) said it would set the minimum capital adequacy ratio for banks of systematic significance at 11.5 percent, and 10.5 percent for banks with non-systematic significance.

The banks will have to meet the new standards by the end of 2013 and the end of 2016, respectively.

The criterion of a bank's significance will be determined within this year, CBRC said on its website.

The new regulation standards will be implemented on Jan 1, 2012.

ICBC's international settlements hit $1t

The Industrial and Commercial Bank of China (ICBC), the country's largest asset lender, said on May 3 that its international settlement volume rose 44 percent year on year to reach $1.06 trillion (714 billion euros) last year.

The company's first quarter international settlement volume for 2011 climbed almost 40 percent from last year to reach $292 billion, according to the company.

The bank attributed the rapid volume of growth to China's strong foreign trade and the company's expansion into other countries, particularly those with emerging economies.

Auto

Saab in 150m-euro deal with Hawtai Motor

Spyker Cars NV said on May 3 that China's Hawtai Motor Group would invest 150 million euros in the Dutch firm's ailing Swedish brand Saab Automobile AB in return for shares, enabling Saab to pay bills and resume production.

Saab's production has been halted for several weeks after the company ran into a cash crunch and was unable to pay its suppliers.

Spyker said Hawtai will pay 120 million euros for a 29.9 percent stake in the company, and has agreed to pay a further 30 million euros in the form of a convertible loan with a six-month maturity and a conversion price of 4.88 euros a share.

Consumer goods

Unilever hoping to clean up in China

Unilever Plc will build one of its largest production bases in Tianjin to increase its presence in China, the company announced on April 29.

The facility will be located in the Binhai New Area of Tianjin, and will have an area of 53.33 hectares and annual production capacity of 100,000 tons, the company said.

"Unilever is very committed to China and we have a very fast-growing business here," said Harish Manwani, president of the company's Asian and African divisions.

The new production base will produce items such as washing liquid and toothpaste for the Chinese market and for export to Northeast Asian countries.

Power

Vestas gets 100 mW turbines order

Danish wind turbine manufacturer Vestas has received an order from the fiercely competitive Chinese market for 50 turbines with total capacity of 100 megawatts (mW).

The Vestas V90-2.0 mW turbines for a wind power project in Shandong province are scheduled to be delivered in the second and third quarters, Vestas Wind Systems A/S said on May 3. Vestas did not disclose the value of the order or the name of the customer.

China Daily-Agencies