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Sony officials will reject proposal to spin off its entertainment arm

In May, the US asset management company Third Point proposed that Sony should spin off its entertainment arm and sell 15 to 20 percent of its shares on a US stock market. The US hedge fund is a major Sony shareholder.

Third Point thinks the money could be better spent rebuilding the company's electronics division.

Sony officials say they will reject the proposal at a board meeting as early as next week. They believe the entertainment arm can contribute to the company's future growth if it's run in combination with its electronics business that includes TV and video games.

Source: NewsonJapan

China: the risk of local goverment funding is well under control

The risk element of local government funding vehicles is well under control, said Shang Fulin, head of the China Banking Regulatory Commission in an interview with CCTV on Friday.

Shang said in general the risk exposure of lending to local governments is small because most of the loans are long-term and contained by effective regulations and controls.

By the end of June, outstanding loans via local government funding vehicles stood at 9.7 trillion yuan ($1.57 trillion), up 6.2 percent year-on-year.

"Most of the new lending to local government funding vehicles in 2013 went to projects that are in their final phase. As the total amount of lending increases, low efficiency of the use of funds and a lack of solvency may be observed," a note from the commission released on Friday said.

In response to mounting concerns over trusts and wealth management products - which are considered to be "shadow banking" by many people - Shang said the risk element in these products is controllable.

"Growth rates of such products are not significant. The balances of these products are basically the same as that of last year," said Shang.

The balance of wealth management products was 9.08 trillion yuan by the end of June, with non-standard credit assets totaling 2.78 billion yuan, 7 percent short of the level recorded in late March, when the commission released a notice on regulating the wealth management product business of the country's commercial banks.

Lenders need to keep a close eye on their liquidity management, said Shang.

"The liquidity crunch in June was a lesson to lenders that at all times the management of lenders must follow the principle of prudence. Safety and liquidity are always vital in the banking sector and financial system," said a CBRC note on Friday.

Source: Xinhua

China's surge in material consumption has created intense pressure on environment

China has surged ahead of the rest of the world in material consumption, which has created intense pressure on the country's environment, according to a report released by the United Nations Environment Programme (UNEP) on Friday.
According to the report, China has become the world's largest consumer of primary materials, including minerals, metal ore, fossil fuels and biomass, with domestic material consumption levels four times that of the United States.

The report said massive investment in urban infrastructure and manufacturing have caused the domestic per capita consumption of natural resources to increase at almost twice the rate of the rest of the Asia-Pacific region.

Urbanization and infrastructure have driven the consumption of minerals for use in construction and metal ore, while increased fossil fuel consumption has contributed to China's rising carbon dioxide emissions, the report said.

China's emissions of greenhouse gases per unit of economic output are four times the global average and twice that of the rest of the Asia-Pacific region, the report said.

Although the country is facing serious challenges, it also remains among the most successful in the world in improving resource efficiency, the report noted.

 In 2009, the circular economy promotion law was promulgated and put into force in order to improve resource efficiency, protect the environment and achieve sustainable development.

According to another UNEP-backed study released earlier this year, China invested 67 billion U.S. dollars in the renewable energy market in 2012, up 22 percent from last year, which consolidated its position as the world's dominant renewable energy market player.

Source: Xinhua

China's non-manufacturing sector rebounded in July

The purchasing managers index for China’s non-manufacturing sector rebounded after falling for three consecutive months, according to official data released yesterday.

The non-manufacturing PMI was 54.1 percent in July, up from 53.9 percent for June, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

A PMI reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

The CFLP said China’s service sector is becoming increasingly active — boosting the economy.

In the service sector, the sub-indices for business activity and new orders both rose for two consecutive months, up to 53 percent and 50 percent, respectively.

Information-related consumption increased rapidly during the period, the CFLP said. New types of businesses appearing in the service sector will push growth in the second half, it said.

Construction activity also remained at a high level in July, according to the CFLP, with the sub-index for business activity staying above 58 percent.

China’s non-manufacturing PMI is based on a survey of some 1,200 companies in 27 sectors.

Source: Xinhua

China's July HSBC services PMI holds steady at 51.3

Activity in China's services sector expanded modestly in July, a private survey showed, as new business orders recovered from a multi-year low in a rare sign of resilience.
The HSBC/Markit Purchasing Managers' Index (PMI) for the services industry stood at 51.3 in July, unchanged from June and just a whisker above a 20-month low of 51.1 struck in April. 
But the show of strength was tempered by a fall in prices charged by companies, suggesting demand was still too weak for firms to raise prices, which hit a nine-month low in July.

China's economy is at risk of posting its weakest annual growth in over two decades this year as flagging foreign and domestic demand weigh on exports and factory production. A slowdown in investment has further dragged on growth.

"China's service sector has stabilized at a relatively low level of growth," said Qu Hongbin, an economist at HSBC.

"But profit margins continue to be squeezed. Without a sustained improvement in demand, services growth is likely to remain lackluster, putting downside pressures to employment growth."

China's economy is at risk of posting its weakest annual growth in over two decades this year as flagging foreign and domestic demand weigh on exports and factory production. A slowdown in investment has further dragged on growth.

Source: Reuters