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Australia rebuffs China over Silk Road

Li Keqiang and Turnbull Australia 230317China is expected to suffer a rare setback in its drive to develop its $4trn One Belt One Road global trading, transport and logistics network this week during Premier Li Keqian’s visit to Canberra, with an unnamed Australian officials predicting that Australia will rejected Beijing’s request for its $3.8bn Northern Australia Infrastructure Facility infrastructure fund to be formally aligned with the New Silk Road strategy . The rebuff comes amid concerns that such a move could damage relations with the US at a time when Australia is pressing Washington to bolster its presence in the region and taking a tougher line on inward investment from China.
S Kidman & Co cattle farmLast year, the Canberra government blocked two potential Chinese acquisitions – bids in excess of $7.6bn for the Ausgrid electricity company due to be submitted by the State Grid Corporation and the Hong-Kong-based Cheung Kong Infrastructure company; and attempts by a Chinese consortium to purchase the S Kidman & Co cattle farm that stretches across more than 1% of Australia’s land mass.
The debate over whether Australia should align its state infrastructure fund with One Belt One Road follows on from Canberra’s hesitation over joining the Asian Infrastructure Investment Bank (AIIB). In 2014, Australia initially decided not to join following lobbying by the US and Japan, but eventually relented after the UK and several other western nations broke ranks and signed up.

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Alibaba to open ‘e-hub’ in Malaysia

China’s e-commerce giant Alibaba Group CEO is on track to open an ‘e-hub’ close to Kuala Lumpur International Airport as part of the company’s plan to establish an electronic world trade platform, its CEO Daniel Zhang said today. The facility in the KLIA Aeropolis zone would (more…)

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BJP looks to trigger FDI surge into retail sector after election victory

Modi wins Uttar Pradesh March 2017Indian retail: BJP’s resounding victory in this month’s Uttar Pradesh assembly elections is expected to trigger a speedy relaxation in the rules governing inward investment into India’s fiercely protected multi-brand retail sector, the Times of India reported on Monday.
According to its sources, (more…)

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GCC investors buy stake in Russian Helicopters

Russian HelicoptersA consortium set up between the Russian Direct Investment Fund (RDIF) and a group of GCC investors has bought a 12% stake in Russian Helicopters, it announced yesterday. The deal entails an up-front investment of $300m with a further $600m to follow at a later date.
The cash injection (more…)

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China puts faith in development zones to attract investors

Tianjin Economic-Technological Development Area (TEDA)China is to carry on promoting its development zones as a means of attracting foreign investment and promoting international cooperation, the State Council announced yesterday, as it seeks to counter the effects of President Donald Trump’s attempts to boost domestic production and employment by discouraging US companies from locating their plants and factories abroad.
International companies running their operations within the zones will be allowed (more…)

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Chinese real estate investment hits record high – with more to come

Strategic Hotels ChicagoChinese investment in overseas commercial and residential property investment hit a record high of US $33bn in 2016, a year-on-year increase of nearly 53% percent year-on-year, according to the latest data compiled by Jones Lang LaSalle (JLL), with the highlights of last year’s activity being (more…)

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China corners fintech investment as Beijing ups funding towards $200bn

Eric Jing CEO Ant Financial Services Group (Alibaba)Fintech investment: As much as half of all today’s investment in financial technology ends up in China, a senior Alibaba executive told delegates at the World Economic Forum in Davos last week, days before the Chinese government announced that it was to pump a further $14.6bn into an investment fund designed to provide financial assistance to technology companies as it seeks to create a digital economy. This latest intervention (more…)

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India looks for $13bn to fund Sagar Mala port upgrade programme

Vibrant GujaratHaving committed itself to spending $180bn to modernise the country’s ports and surrounding infrastructure by way of its Sagar Mala port expansion initiative, the Indian authorities have been wooing visitors at this week’s biennial three-day Vibrant Gujarat investment summit with a series of presentations aimed at raising $13bn to fund (more…)

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Beijing looks to stem Chinese capital flight and encourage FDI

Chinese Commerce Minister Gao HuchengChinese capital flight: The Chinese government is getting ready to curb its private sector’s appetite for overseas mergers and acquisitions and to encourage inward investment by sharply reducing restrictions on foreign investment access in 2017 to make it easier for overseas firms to spend their cash in the People’s Republic, according to a blog posted on the Ministry of Commerce’s website earlier this month. The government would “promote the healthy and orderly development of outbound investment and cooperation in 2017, ” Commerce Minister Gao Hucheng is quoted as saying. (more…)

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Italian regulators probe finances behind Glencore-Rosneft deal

Intesa SanpaoloFinancial regulators in Rome are examining whether Intesa Sanpaolo’s financing of Glencore‘s recent investment in Russian oil group Rosneft complies with sanctions imposed on Western companies conducting business with Russian concerns after the annexation of Crimea in 2014, it emerged yesterday.
Two weeks ago, (more…)

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Putin celebrates as Qatar wealth fund and Glencore buy $11bn Rosneft stake

PutinRussian President Vladimir Putin took to the TV airways yesterday to celebrate the news that the commodity trader Glencore and Qatar’s QIA sovereign wealth fund – Glencore’s largest shareholders – had agreed to buy Moscow’s 19.5% stake in the state-run Rosneft oil giant for a figure Putin put at $11bn, boosted by what he described as “the rising trend in oil prices.”
The transaction was so big that Putin specifically asked Sechin to work with the Finance Ministry and central bank to ensure that it did not destabilize the currency market when the proceeds were converted into roubles. The rouble gained against the dollar in late trading after the deal was announced. and shares in Rosneft jumped by 6.4% on the news.
Glencore Chief Executive Officer Ivan GlasenbergPutin haled the surprise deal as the “largest acquisitions in the oil and gas sector in the world in 2016.” It is certainly the biggest foreign investment in Russia since the crisis in Ukraine and comes little more than a year after Glencore Chief Executive Officer Ivan Glasenberg had to go cap in hand to his shareholders for a cash injection. Qatar’s involvement also marks a rare venture of an OPEC member into the Russian energy sector.
Putin was joined on air by his long-term ally and Rosneft CEO Igor Sechin who thanked the President for his part in brokering the deal which, he said, only “became possible thanks to your personal contribution,…..the negotiated price is in our view the maximum possible with the minimum discount of 5% to market prices.” Financing will be provided by “one of the largest European banks,” he added, without specifying which one.
Putin and UlyukaevThe deal comes at the end of an eventful few weeks for Russia’s privatisation programme which has seen Economy Minister Alexey Ulyukaev dismissed and put under house arrest, accused of taking a bribe to end his objections to Rosneft taking part in the privatisation of Bashneft; and Deputy Finance Minister Alexei Moiseev announcing that hundreds of SMEs were likely to put up for sale next year as Moscow scrambles to raise cash to fill its $21bn budget deficit.
The new deal will go a long way to reducing that debt, but with Rosneft and Sechin himself subject to the sanctions imposed by the West after the annexation of Ukraine, Glencore announced that it would be “fully ring-fenced” from exposure to the Russian state company, apart from a 0.54% “indirect equity interest.”
Russia will retain a controlling stake in Rosneft after the deal, while BP owns a further 19.75% stake in the company.

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Investment rolls back in as retailers bank on Russian economic recovery

FDI RussiaRussian economic recovery: Foreign direct investment into Russia reached $8.3bn in the first nine months of this year, according to data from the Central Bank of Russia (CBR), easily outstripping the $5.9bn reported for the whole of 2015, as foreign retailers began betting that the country’s two-year long recession is coming to an end.
Even before (more…)

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First convoy arrives in Gwadar down China-Pakistan Economic Corridor

Pakistan PM Nawaz Sharif and Army Chief General Raheel Sharif at CPEC inauguration Gwadar 13-11-16China-Pakistan Economic Corridor: Pakistani’s Prime Minister Nawaz Sharif and China’s Ambassador to Pakistan Sun Weeding joined other senior officials from both countries this week at the Arabian Sea port of Gwadar to watch as the first containers full of Chinese goods arrived for loading onto two ships – also Chinese – for export by way of the nascent China-Pakistan Economic Corridor (CPEC). The trade convoy (more…)

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Chinese set to pump $11bn into new Lake Baikal tourist complex

Lake BaikalLake Baikal tourist complex: A group of Chinese investors have clubbed together and commissioned a study into the commercial and technical feasibility of creating an $11bn leisure and tourist complex on the shores of Lake Baikal (more…)

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German Minister blocks Aixtron takeover and looks to curb Chinese spending spree

german-economy-minister-sigmar-gabrielAixtron: With China’s appetite for buying up European companies showing no sign of abating and its year-on-year investment in Europe jumping by 62% to a record €20bn last year, the German Economy Minister Sigmar Gabriel this week ramped up pressure (more…)

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South Korea agrees to build $350m terminal for Tashkent airport

Tashkent airport: The South Korean government yesterday agreed to invest $250m in the construction of a new terminal (more…)

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CITIC gets ready to pump $10bn into Iranian mining sector

Iranian MinersIranian mining sector: China’s CITIC Group Corporation is getting ready to invest $10bn in Iran’s mining and minerals sectors through the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO), it emerged this week, with the Chinese investment company (more…)

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Chinese investors lead surge as Kazakh FDI on course to hit $10bn for 2016

Chinese pm and Kazakh presidentKazakh FDI: With some $24bn of Chinese project investment in the pipeline over the coming years. the Astana is expecting FDI into Kazakhstan to hit $10bn this year, according to Kaznex Invest Chairman Borisbiy Zhangurazov, almost (more…)

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Alrosa launches Eurasian Diamond Centre in Vladivostok as Eastern Economic Forum gets under way

Eastern Economic Forum VladivostokAlrosa, Russia’s largest diamond mining operation, launched the Eurasian Diamond Centre in Vladivostok yesterday to coincide with the opening of the second Eastern Economic Forum tomorrow, when representatives from more than 200 (more…)

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China threatens to withdraw £100bn UK FDI over Hinkley Point delay

UK PM Theresa MayHinkley Point delay: The authorities in Beijing have used a strongly-worded article in the state-run Xinhua news agency to indicate that it might pull as much as £100bn worth of investment out of the UK if Prime Minister Theresa May decides to cancel the Hinkley Point nuclear project.
The British Government was (more…)

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