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China

HK’s SFC bans Merrill Lynch’s former employee for life

Hong Kong’s Securities and Futures Commission (SFC) banned a former managing director and senior trader at Merrill Lynch (Asia Pacific) Limited and Merrill Lynch Futures (Hong Kong) Limited (collectively Merrill Lynch), from re-entering the industry for life, said the regulatory authority on Thursday. The SFC said the disciplinary action follows an investigation into mis-marking activities in a trading book in exotics options ( the Book) at Merrill Lynch. The authority’s investigation foun …

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Hong Kong’s Securities and Futures Commission (SFC) banned a former managing director and senior trader at Merrill Lynch (Asia Pacific) Limited and Merrill Lynch Futures (Hong Kong) Limited (collectively Merrill Lynch), from re-entering the industry for life, said the regulatory authority on Thursday.

The SFC said the disciplinary action follows an investigation into mis-marking activities in a trading book in exotics options ( the Book) at Merrill Lynch.

The authority’s investigation found that during the period from December 2007 to December 2008, Merrill Lynch’s managing director and senior trader Jugurtha Harchaoui had mis-marked the Book by manipulating the volatility marks in the valuation model, and accessed the computer system without authority to alter pricing parameters on various occasions.

The SFC further found that Harchaoui sought to cover up his action by instructing a junior trader in his team to use a manipulated computer programme to mark the Book on a daily basis during his sick leave. If the manipulated programme had not been uncovered, the mark-up in the Book would have been linearly amortised over the duration of his two-month sick leave, said the SFC.

Harchaoui’s mis-marking activities resulted in the value of the Book being inflated by approximately 25 million U.S. dollars and caused the actual loss in the Book to be wrongly reported to Merrill Lynch.

The SFC earlier took action against Merrill Lynch in relation to regulatory issues arising out of the same incident.

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HK’s SFC bans Merrill Lynch’s former employee for life

In recent years, China has re-invigorated its support for leading state-owned enterprises in sectors it considers important to “economic security,” explicitly looking to foster globally competitive national champions.

Deterioration in the environment – notably air pollution, soil erosion, and the steady fall of the water table, especially in the north – is another long-term problem.

The government has also focused on foreign trade as a major vehicle for economic growth.

Available energy is insufficient to run at fully installed industrial capacity, and the transport system is inadequate to move sufficient quantities of such critical items as coal.

China is the world’s largest producer of rice and is among the principal sources of wheat, corn (maize), tobacco, soybeans, peanuts (groundnuts), and cotton.

A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.

The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.

The growth in both outbound investment from, and inbound investment to, China reflects the nation’s rising economic power and attractiveness as an investment destination.

“China is now the fifth largest investing nation worldwide, and the largest among the developing nations,” said Shen Danyang, vice-director of the ministry’s press department.

China is aiming to be the world’s largest new energy vehicle market by 2020 with 5 million cars.

Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.

Despite initial gains in farmers’ incomes in the early 1980s, taxes and fees have increasingly made farming an unprofitable occupation, and because the state owns all land farmers have at times been easily evicted when croplands are sought by developers.

In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.

China ranks first in world production of red meat (including beef, veal, mutton, lamb, and pork).

Offshore exploration has become important to meeting domestic needs; massive deposits off the coasts are believed to exceed all the world’s known oil reserves.

Alumina is found in many parts of the country; China is one of world’s largest producers of aluminum.

In the 1990s a program of share-holding and greater market orientation went into effect; however, state enterprises continue to dominate many key industries in China’s socialist market economy.

Coastal cities, especially in the southeast, have benefited greatly from China’s increasingly open trade policies.

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A Timeline of EU-China Relations Post-2024 European Elections

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EU-China relations are crucial in global business, with geopolitical shifts and technological competition shaping the dynamic. The recent EU Parliament elections have brought a political realignment, leading to a more assertive stance towards China. Strategic discussions and new working groups aim to navigate the evolving relationship.


EU-China relations play a crucial role in the global business landscape. The current circumstances, marked by geopolitical shifts, economic interdependence, and technological competition, contribute to the volatility and frequent adjustments in this relationship. In this timeline, we aim to capture key milestones and developments that shape EU-China ties.

The European Parliament elections, held between June 6 and June 9, 2024, have ushered in a new era for EU-China relations. The election results revealed a significant shift in the political landscape, with centrist parties losing ground to far-right groups like the Identity and Democracy (ID) and the European Conservatives and Reformists (ECR). This political realignment is poised to influence the EU’s approach to China, introducing more varied and potentially conflicting perspectives on policy.

Traditionally, the EU has maintained a cautious stance toward China, epitomized by the 2019 publication of the EU-China Strategic Outlook, which framed the relationship as one of “partnership, competition, and systemic rivalry.” This tripartite approach was later reiterated in the European Council’s Conclusion on China. However, the narrative toward China has taken a decisive turn with European Commission President Ursula von der Leyen’s speech delivered on March 30, 2023. This speech marked a shift towards a more assertive stance, further strengthened by the release of the European Economic Security Strategy in June of the same year.

In the aftermath of the 2024 elections, the increased fragmentation within the EU Parliament suggests a more complex and uncertain path to forming a cohesive strategy toward China. This uncertainty poses challenges for European companies conducting business with China, as well as Chinese and global businesses operating in Europe, who must now navigate a more unpredictable regulatory environment.

Amid these developments, the Chinese government is keenly observing the evolving dynamics within the EU. China aims to cultivate allies within the European bloc, and this intent was evident during President Xi Jinping’s recent European tour, which included official visits to France, Serbia, and Hungary. During his visit, President Xi reiterated the EU’s significance as China’s major trading partner.

As the new EU Parliament begins its work, strategic discussions have been underway to address key issues, including the EU’s technological and strategic autonomy. To manage different views and promote collaboration on shared interests with China, new cross-regional working groups have been established. These groups are focusing on sectors such as agriculture, aviation, artificial intelligence, energy, and finance, aiming to enhance resilience and foster dialogue.

In this article, we present a timeline of EU-China relations following the EU Parliament elections, reflecting the complexities and opportunities presented by this new chapter in bilateral relations.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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Economic Update: Consumption and Trade in China See Strong Recovery Despite Decrease in Industrial Output by May 2024

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Industrial output growth in China has slowed, with robust performance in some manufacturing sectors but an increase in consumption driven by services, retail sales, and imports. Despite a slowdown, equipment manufacturing has been crucial in stabilizing overall industrial growth. Certain high-tech and electronic equipment manufacturing sectors have shown strong performance, while the automobile manufacturing sector has decelerated due to falling domestic demand.


The data indicates a slowdown in industrial output growth, despite some manufacturing sectors still showing robust performance. In contrast, consumption is on the rise, driven by growth in services, retail sales, and imports. The uptick in these areas suggests a strengthening of domestic demand, spurred by a stabilizing global economic situation and the boost from the Labor Day Holiday at the beginning of May.

China’s foreign trade also continued to show marked improvement, reflecting the country’s strong export capabilities and increasing imports.

Year-on-year growth in China’s industrial sector slowed in May from the previous month but remained relatively strong. Total industrial value-added output grew by 5.6 percent year-on-year in May, a month-on-month increase of 0.3 percent but a deceleration from 6.7 percent year-on-year growth recorded in April. Value-added output of the manufacturing industry grew 6 percent year-on-year, a deceleration from the 7.5 percent year-on-year in April.

According to NBS spokesperson Liu Aihua, equipment manufacturing played a crucial role in stabilizing overall industrial growth. The sector’s added value increased by 7.5 percent from the previous year, contributing 2.6 percentage points to the growth of all industries above the designated size and accounting for 45.7 percent of the total growth. Within this sector:

Certain high-tech and electronic equipment manufacturing sectors exhibited particularly strong performance:

However, the automobile manufacturing sector decelerated significantly from a 16.3 percent year-on-year jump in April to 7.6 percent year-on-year growth in May, possibly due to falling domestic demand.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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Outlook for China’s Wine Market: Current Trends and Opportunities

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China’s wine market faces challenges like declining consumption and imports, but remains resilient. Adapting to consumer preferences, focusing on quality and sustainability, and using digital platforms for sales are key strategies. Despite setbacks, the market is promising for foreign producers.


Despite challenges such as declining consumption and import figures, China’s wine market remains resilient and promising. Strategic adaptation to evolving consumer preferences, emphasis on quality and sustainability, and leveraging digital platforms for sales are pivotal strategies for success in this dynamic and competitive landscape.

In recent years, China’s wine market has faced significant challenges marked by declines in key metrics such as consumption, imports, and domestic production. These difficulties were further compounded by the disruptions brought about by the COVID-19 pandemic. Despite these setbacks, the market retains its allure, presenting opportunities for foreign wine producers and exporters who are willing to adapt and strategically engage.

As consumer preferences evolve and government policies increasingly emphasize quality and sustainability, understanding these complexities becomes crucial for stakeholders navigating China’s evolving wine landscape. By staying attuned to shifting trends and regulatory developments, stakeholders can position themselves effectively to capitalize on the market’s enduring potential.

The wine sector in China has experienced dramatic shifts over the last two decades, initially reflecting rapid growth and then gradually declining. In the early 2000s, China emerged as a lucrative market for global wineries seeking expansion due to soaring wine imports driven by rising consumer wealth and the perception of wine as a symbol of sophistication. However, per capita consumption peaked around 2012, and imports have since plateaued, with recent years showing significant market contraction. The COVID-19 pandemic exacerbated these challenges, particularly affecting wine sales due to its association with social gatherings, which were restricted during lockdowns.

Following this trend, in 2023, China saw a significant decline in wine consumption, with a 24.7 percent decrease compared to 2022. According to the International Organization of Vine and Wine (OIV), China’s wine consumption has been falling since 2018, averaging a loss of 2 million hectoliters annually.

Nevertheless, China remains the ninth-largest wine-consuming nation worldwide.

Looking forward to 2024, China’s wine market is poised for dynamic activity, delineated primarily by consumption settings: at-home and out-of-home. According to Statista, revenue from wine sales in supermarkets and convenience stores (at-home) is forecast to reach US$9.7 billion. In contrast, revenue generated from wine consumed in restaurants and bars (out-of-home) is expected to be substantially higher, totaling US$17.2 billion. This projects the total revenue from the wine market to reach US$26.8 billion by the end of 2024.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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