Business briefs

Data

Non-manufacturing sector growth slows

China's non-manufacturing sector posted slower growth in May, with a drop of the Purchasing Managers Index (PMI) for the sector, the China Federation of Logistics and Purchasing said.

As a key economic indicator, the PMI of non-manufacturing sector weakened to 61.9 percent in May, down 0.6 percentage points from April. The PMI for non-manufacturing sector was 62.5 percent in April, 60.2 percent in March, 44.1 percent in February and 56.4 percent in January.

A reading above 50 percent indicates expansion while below 50 percent indicates contraction.

Finance

Policies aim to aid small businesses

The China Banking Regulatory Commission on June 7 announced a series of favorable policies for lenders to offer more loans to small-scale enterprises.

The move is designed to alleviate the financial pressure on smaller businesses against the background of the nation's monetary-tightening policies.

According to the new regulations, a lower risk weighting (25 percentage points less) will be applied when calculating the capital adequacy ratio for loans of less than 5 million yuan (527,778 euros) to each individual small enterprise.

The move came after the country became caught between sliding industrial output and rising inflation. Analysts have said that small businesses in some coastal areas are currently in a worse situation than during the global financial crisis of 2008.

Technology

Huawei tops list of technology companies

The Ministry of Industry and Information Technology recently issued a top 100 list of Chinese electronics and information technology companies, with Huawei, a telecom solutions provider, continuing to stay in first place.

Legend Holding Ltd, whose subsidiaries include Lenovo and Digital China, and the Hai'er Group are the second and third companies in the ranking.

The list showed the combined main business revenues of the 100 companies totaled 1.54 trillion yuan (162 billion euros) in 2010, up more than 20 percent from the previous year. Their revenues accounted for 24 percent of the total in the sector.

Energy

Solar power gets more government support

The government will issue a five-year proposal to guide the country's renewable energy development, in which the goal for installed generating capacity of photovoltaic (PV) power is set at 10 gigawatts (gW).

The draft for the 12th Five-Year Plan (2011-2015) has been submitted to the State Council for approval. The goal for solar power capacity generation is double that submitted in an earlier version.

Industry insiders said the plan also promotes related industries such as polycrystalline silicon and PV component sectors.

Auto

Fiat has plans to make gearboxes in China

Fiat SpA, Europe's sixth-largest automaker by market share, will locally produce its gearboxes in China as part of its plan to gain a foothold in the world's biggest automobile market.

The gearboxes will be produced in partnership with the Italian carmaker's Chinese partners - Guangzhou Automobile Group Co Ltd and Hangzhou Advance Gearbox Group Co Ltd.

The production of the gearboxes is expected to start in 2013 and is expected to eventually achieve an annual capacity of 500,000 units.

Cosmetics

Jahwa rejects LVMH acquisition report

Shanghai Jahwa United Co Ltd on June 8 rebuffed media reports that it could be acquired by the French luxury brand LVMH Group, reiterating the line that the State-owned cosmetics manufacturers will keep its domestic tag in its planned share sale.

Ge Wenyao, Jahwa's chairman, said that while there is likely to be cooperation between the two sides, including the possibility of a share transfer, Jahwa will "never" be controlled by a foreign company.

Jahwa, whose revenue jumped 26.3 percent to 843 million yuan (89 million euros) in the first quarter, is currently undergoing restructuring to transform from a State-owned to a public company.

Pharmaceuticals

Drug market poised for explosive growth

China's drug market is primed for "explosive growth," making companies there attractive targets for drugmakers that will soon lose patents on their most popular treatments, according to a recent KPMG report.

Products worth more than $30 billion (20.52 billion euros) will lose patent cover this year, leading more drugmakers to look into buying or joining with companies in China, the world's third-biggest drug market, the report said.

Large pharmaceutical companies are turning away from traditional mergers that boost margins and reduce costs, and are looking for unconventional acquisitions such as firms that have unique uses for drugs, the report said.

Novo Nordisk boosts China investment

Novo Nordisk A/S will boost investment in China to preserve its dominance in the world's largest market after rival Sanofi SA made a new foray amid an effort by the government to improve health services.

"We don't fear any competition," said Kaare Schultz, chief operating officer of Bagsvaerd, Denmark-based Novo, the world's biggest maker of insulin.

Novo produces two-thirds of the insulin used in China. Sanofi said last month that it will train 10,500 doctors and experts in diabetes care as part of a program led by the Ministry of Health to curtail the spread of the disease.

Novo will respond by boosting its presence as needed across all aspects of the market, from sales to production to patient care.

China Daily-Agencies