How Terrible China Detains Five Over Tiananmen Crash!

Tiananmen Square as smoke rises into the air. (Getty Images)

According to The Wall Street Journal, Chinese police said that terrorists were behind Monday’s deadly car crash in Tiananmen Square and that they had detained five suspects, as more details emerged to suggest the rare violent attack in China’s capital was rooted in ethnic grievances.

Authorities on Wednesday didn’t place blame on any group, but released information suggesting the attack was carried out by people from the western region of Xinjiang, which has seen protests against Chinese rule by some members of its mostly Muslim Uighur minority.

Authorities detained the suspects about 10 hours after Monday’s crash, the official Xinhua news agency said on Wednesday. It didn’t say where the suspects, two of whom are women, were detained. The occupants of the car were a man, his wife and his mother, who died after they ignited gasoline in the vehicle, according to the Xinhua report, which cited a spokesman with the Beijing Municipal Public Security Bureau.

The crash—which occurred in front of the Forbidden City in Beijing’s Tiananmen Square, just below the famous portrait of Mao Zedong —also killed two tourists and injured 40 others, according to authorities.

Police described the attack as “carefully planned, organized and premeditated,” Xinhua said. They recovered gasoline canisters, iron rods, two machetes and banners with “religious extremist” slogans from the vehicle used in the attack, Xinhua said. Police identified the vehicle used in the attack as a Jeep with a license plate from Xinjiang, Xinhua said.

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What’s the Entry Ticket to Chinese Market?

Fast-fashion Brand ZARA in China (Bloomberg)

According to The Wall Street Journal, a growing number of Western brands in China are creating online stores to reach more consumers, adopting a formula that Chinese e-commerce company Alibaba Group Holding Ltd. has exploited with much success.

The promise of e-commerce in China has attracted foreign companies for years. Yet Western companies, such as eBay Inc., EBAY +0.22% Google Inc. GOOG +0.20% andGroupon Inc., GRPN -4.49% have struggled in China, partly because of competition from domestic giants. Western retailers also have had concerns about the difficulties of distribution in the country and its Web shoppers’ insistence on low prices.

But China’s e-commerce—which, by some measures, overtook the U.S. this year as the world’s largest online retail marketplace—has become too big to ignore. Online retail sales in China are expected to reach about $540 billion by 2015, compared with roughly $345 billion in the U.S., according to consulting firm Bain & Co. China’s online retail sales have increased more than 70% annually since 2009, compared with 13% in the U.S.

“If you’re going to be in China, e-commerce is going to be the first thing you consider, and if you’re already there, you’re scrambling to adapt,” says Duncan Clark, chairman of BDA China, an investment advisory firm in Beijing.

Inditex SA ITX.MC +0.51% ‘s Zara fast-fashion brand, high-end handbag makerCoach Inc. COH -0.27% and luxury-department-store chain Neiman Marcus Group Inc. began selling online in China late last year.

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How Asian Markets Down on Earnings?

Asian Stock Market (Asian News)

According to The Wall Street Journal, Asian stocks moved lower Friday, though Australia managed to rise, in a session heavy in corporate earnings.

South Korea’s Kospi slid 1.1%, with the index’s largest single constituent, Samsung Electronics 005930.SE 0.00% down 1% after it reported third-quarter net profit had risen 25.6% to another record. Before the results, the stock enjoyed a strong run-up, and remains 5% higher so far in October.

Also in Seoul, LG Electronics 066570.SE -3.42% dropped 3.7% after it reported a 34% decline in net profit over the same period.

In Hong Kong, shares of Chinese auto maker Great Wall Motor GWLLY -4.22% shed 5.8% after reporting weaker profit margins in the third quarter.

In Japan, Canon 7751.TO -1.60% fell 1.1% after it lowered its full-year net profit forecast to ¥240 billion ($2.46 billion) from a previous estimate of ¥260 billion set in July. Mitsubishi Motors 7211.TO +1.17% Corporation added 1.8% after the car company increased its profit outlook.

More broadly, the absence of fresh catalysts left regional markets to drift lower.

In Japan, the Nikkei remained under pressure from a yen that has firmed up in recent sessions. The Japanese currency maintained its strength, last at ¥97.21 to the dollar, helping to pull the Nikkei down 1.7%.

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Why China PBOC Unveils Prime Interest Rate for Commercial Bank Loans?

China PBOC (China Image)

China PBOC (China Image)

According to The Wall Street Journal, BEIJING–China’s central bank Friday said it has introduced a new prime lending rate, which it said would help push forward interest rate liberalization.

The new bank lending rate, officially known as the “loan prime rate,” would be the rate on loans extended to the best customers of Chinese commercial banks.

The rate is based on a weighted average of lending rates from nine commercial banks, the People’s Bank of China said in a statement on its website.

It said the rate would be calculated each working day and would be announced on the website of the key barometer of interbank lending, the Shanghai Interbank Offered Rate, or Shibor.

The central bank said that initially, it would calculate only a one-year rate. It gave Friday’s level as 5.71%.

In the past, the central bank has set guidelines for domestic interest rates, but it has been trying to give a greater role to the market. The PBOC’s existing benchmark interest rate for one-year loans is 6%.

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WTO rules against China in US chicken dispute

WTO rules against China in US chicken dispute

China breached the rules of global commerce by imposing duties on imports of US chicken, the World Trade Organization ruled Friday, saying Beijing must fall into line.

A WTO disputes settlement panel said that China’s actions had been inconsistent with rules that allow countries to impose duties when their trade partners dump goods on their markets.

Dumping is the practice of selling goods at cut-price in order to increase market share, which can harm domestic producers.

The WTO panel said that China’s chicken duties were found to have “nullified or impaired benefits accruing to the United States” under international trade accords.

The issue has been a major bone of contention in the often tense trade relations between the world’s two largest economies.

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GLOBAL MARKETS-Dollar steady before Fed, China shares gain on growth pledge

GLOBAL MARKETS-Dollar steady before Fed, China shares gain on growth pledge

TOKYO, July 31 (Reuters) – Chinese shares rose after Beijing pledged to keep economic growth stable in the second half of the year, while the dollar held onto slight gains as market momentum stalled ahead of the outcome of the U.S. Federal Reserve policy meeting on Wednesday.

European shares were expected to open steady, with London’s FTSE 100 seen up as much as 0.1 percent and Frankfurt’s DAX indicated flat, while U.S. S&P 500 index futures edged up 0.1 percent.

The dollar was steady against a basket of major currencies after a 0.2 percent rise on Tuesday. The dollar index is down 1.5 percent in July and set to post a second straight monthly loss for the first time since the turn of the year.

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Asia Stocks Down on China’s Resistance to Inject Money in Markets

Asia Stocks Down on China’s Resistance to Inject Money in Markets

MANILA, Philippines— Asian stock markets floundered Friday as China pressed ahead with industrial restructuring that is partly to blame for slowing growth in the world’s No. 2 economy.

Beijing ordered companies to close factories in 19 industries where overproduction has led to price-cutting wars, affirming its determination to push ahead with a painful makeover of the economy. That move followed weak manufacturing data on Wednesday.

Communist leaders are trying to reduce reliance on investment and trade. But a slowdown that pushed China’s economic growth to a two-decade low of 7.5 percent last quarter had earlier prompted suggestions they might have to reverse course and stimulate the economy with more investment to reduce the threat of job losses and unrest.

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China and US see progress on investment treaty

China and US see progress on investment treaty

The US and China have agreed to restart stalled negotiations on an investment treaty, with Beijing dropping efforts to protect some economic sectors. But talks struck a sour note over China’s handling of Edward Snowden.

For a while it seemed that the project was doomed, but it was revived during this year’s two-day Strategic and Economic Dialogue talks in Washington. The meeting has “paved the way for substantial negotiations” on a bilateral investment treaty, Chinese Commerce Minister Gao Hucheng told reporters.

The move was praised by both nations as a breakthrough. According to US Treasury Secretary Jack Lew, Beijing agreed for the first time to put all areas on the table on a treaty to govern investments. He said the step would “level the playing field” for US businesses seeking to enter the billion-plus market.

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Boyu Capital Avoids China’s ‘Princeling’ Curse

Boyu Capital Avoids China’s ‘Princeling’ Curse

More often than not, private equity funds set up by the sons and daughters of top Chinese government officials, also known as “princelings,” have been met with a barrage of criticism for being unprofessional and investing money willy-nilly into deals.

But Boyu Capital, which counts among its partners Alvin Jiang, the grandson of elder political statesman Jiang Zemin, has won praise from investors and is expected to quickly attract capital for its second fund, which it plans to launch later this year with a $1.5 billion target. One Beijing-based limited partner also pointed to the pedigrees of the firm’s four other partners as a testament to the firm’s professionalism.

Boyu’s co-founders include Mary Ma, who previously worked as a managing director of TPG Capital’s Asian arm, former Ping An Insurance 601318.SH -1.19% (Group) Co. president Louis Cheung and Sean Tong, a former managing director at Providence Equity Partners.

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Asian factory blues deepen in June, exports drop

Asian factory blues deepen in June, exports drop

BEIJING: Asian factories were buffeted by stronger growth headwinds in June, as crumbling foreign and domestic demand knocked activity in China to multi-month lows and shrank orders for Indian producers for the first time in more than four years.

China’s official purchasing managers’ index (PMI) showed factory growth stalling last month, while a similar private survey offered a bleaker picture and showed manufacturing activity tumbling to a nine-month low.

The cheerless outlook for the world’s factory floor was repeated across Asia as manufacturers, facing belt-tightening by consumers in Europe, the United States and at home, struggled to increase sales.

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