The Industrial and Commercial Bank of China (ICBC), China National Cereals, Oil & Foodstuffs Corp and Zhonghai Trust Co Ltd. Have launched China’s first wine trust project hoping to be fruitful in the tough global capital market. Different from other wealth management products, the unit of the wine trust is measured by the “barrel”, which contains 300 bottles of wine, with each investor limited to buy no more than two barrels. It is said by now the project has been more than double oversubscribed, facing only ICBC’s private banking customers and enterprise customers.
Facing the tough global capital market, banks are searching for investment alternatives. Wines are always with high investment values and could provide a more steady income it fits the quality of an investment alternative. To profit more and more banks are paying attention to the investment alternatives in the tough circumstance. China Minsheng Banking Corp, for instance, has launched a fund investing in fine arts. Industry statistics show that in the last 20 years, long-term invested well chosen wine portfolio could bring an annual return of 10 to 12 percent. And it is less volatile than stocks and shares, and not closely related with the stock market, no wonder it is more attractive to investors looking to diversify a portfolio.
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China Finance and Banking
ICBC, Investment alternatives, tough capital market, wine trust
Facing the export surplus shrink, which is evident from the first-half Customs data, Chinese government may adjust the export policies to support the export business. It is believed that a proposal thrown by China National Textile & Apparel Council had been handed to the State Council, which suggested the tax rebate for textile materials will increase from 11 to 13 percent, and that of the garment sector will raise to 15 from the current 11 percent.
In June alone trade surplus shrank more than 20.6 percent, making it $5.5 billion less than the previous month. The total trade surplus in the first six months this year declined by 11.8 percent to $99 billion. Textile and garment export, the most seriously influenced sectors, declined by 4.2 percent year-on year to the slowest increase in five years. While for a long time the high trade surplus has been the top concern for economic policy. Exports contribute a large part to the overall economic growth. Influenced by the export slowdown, the total economic growth down to 10.6 percent, which is 1.3 percent below that of last year.
The tough situation draws attention from both the companies and policymakers alike. Recently Premier Wen Jiabao Vice-Premier Li Keqiang and Commerce Minister Chen Deming visited export-oriented provinces and visited enterprises, many of which were in the textile sector. These visits were seen as a sign for policy changes.
Last year, when the high trade surplus was the major concern, export tax rebate of many textile materials and garments were removed or cut down. Many favorable policies for them are also removed, because most textile manufacturing enterprises are energy consuming and may lead to environment pollution. Several months after the policy was put into effect, China’s textile companies are challenged by many other unexpected situations, including rising raw material prices, labor cost, the appreciation of the yuan and the slowdown of US economy. These make the industry association of urge for a policy change ever since April.
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China Trade Import Export
export policy change, textile and garment export, trade surplus shrink, unexpected challenges