China to enact first civil code as investment slows

China to enact first civil code as investment slows
Chinese commuters walk to work wearing face masks in Beijing. (AP)
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Updated 22 May 2020

China to enact first civil code as investment slows

China to enact first civil code as investment slows

BEIJING: China’s parliament is poised to put in place its first civil code, a wide-ranging legislative package that includes strengthening protection of property rights in a Communist Party-ruled country, whose embrace of private ownership has long been awkward.

The civil code, in the works since 2014, will become law at a time when China needs its often-embattled private sector to step up investment to help revive a virus-battered economy, and will be a centerpiece of the annual parliamentary session that begins on Friday after a more-than two month delay.

However, the civil code is largely an amalgamation of existing laws, meaning its impact may be limited, some analysts said. And enforcement is uncertain, as courts are not independent and ultimately answer to the party, although legal reforms in recent years have aimed to give judges more independence and rein in local officials’ influence over courts.

The civil code, which among other provisions protects personal information and makes it easier to divorce or sue for sexual harassment, is expected to spell out the clearest boundary yet between government and markets since the 1949 founding of the People’s Republic of China.

It is a cornerstone of President Xi Jinping’s push to reform the country’s legal system by 2020, even as China has tightened controls on civil society and expanded party control under his leadership.

The legislation — on paper at least — reduces the scope for bureaucratic meddling and abuse that have often bedevilled private firms and property owners in a country where business owners were not allowed to join the Communist Party until 2001 and are still treated with suspicion by some party officials.

“It gives more complete protection to the rights of the individual,” said Wang Jiangyu, a law professor at the City University of Hong Kong.

“The bigger context is, is this a country that adheres to the rule of law? Is the government really executing the law?“

Implementation of the code, which incorporates existing laws including those covering property, contracts and torts, reflects long-running concerns among business owners over protection of personal and property rights.

“All private firms have their ‘original sin,’” Xu Bin, a steel trader in Henan province, told Reuters in March, referring to the sometimes dubious actions taken by entrepreneurs in the early days of China’s reform and opening.

FASTFACT

A 2017 survey on the climate for private sector firms found companies in China rated “legal fairness” 4 out of 10.

Some worry those “sins” can still be used against them.

A 2017 survey on the climate for private sector firms by Unirule Institute of Economics, a now-defunct liberal Beijing-based think tank, found companies rated “legal fairness” 4 out of 10.

“Without legal protection, private businessmen don’t feel safe. Our survey showed that they think there is a 22.5 percent chance of danger to themselves and a 26.8 percent chance that their assets are at risk,” Sheng Hong, an independent scholar who was previously Unirule’s executive director, told Reuters.

However, the civil code will not protect entrepreneurs in criminal cases.

“Since the Civil Code only covers civil disputes, it does not help protect property rights against seizure of assets by the state, a most important concern among entrepreneurs,” said Xin Sun, a lecturer in Chinese and East Asian business at King’s College London.

Private sector investment in China has slowed sharply, to the worry of officials, from more than 20 percent growth when Xi assumed power to single digits in recent years. It fell 13 percent during the coronavirus-battered first four month of this year, compared with a 7 percent decline for state companies.

In an April meeting chaired by Xi, the Communist Party’s decision-making Politburo said the government would support the private economy and development of small and medium-sized firms, which remain excluded from several industries and have difficulties securing bank credit.

“The civil code could restore confidence of private business owners and to help prop up economic growth,” said Hu Xingdou, a retired economics professor with Beijing Institute of Technology.

Sun, of King’s College, isn’t so sure, saying the civil code brings little added protection for rights and property, and is more symbol than substance.

“China does have a comprehensive system of high-quality written laws but a lot of concerns arise from their enforcement rather than the laws themselves,” he said.


Evergrow signs $400m loan to restructure debts

Evergrow signs $400m loan to restructure debts
Updated 22 April 2021

Evergrow signs $400m loan to restructure debts

Evergrow signs $400m loan to restructure debts
  • $74 million of loan will finance construction of fertilizer plant in Sadat City
  • Mashreq Bank and National Bank of Egypt led 12-bank syndicate

RIYADH: Egyptian fertilizer company Evergrow has signed a $400 million loan agreement with a syndicate of 12 banks led by Mashreq Bank and the National Bank of Egypt (NBE), who acted as the facility arrangers, Asharq reported citing a joint statement on Wednesday.

The plan consists of $326 million that will be used to restructure previous debts Evergrow owes to the same banks, while the remaining $74 million will finance the construction of the third phase of the company’s fertilizer plant in Sadat City, slated for completion within nine months.

The financing is one of the largest dollar loans granted by banks to private sector companies in the Egyptian market in the field of potassium fertilizers during the past 10 years.

The deal is part of Evergrow’s financial reform program sponsored by the Central Bank of Egypt.

The new funds will help raise the annual production capacity of all the company’s products from 817,000 tons currently to 1.15 million tons annually, said Evergrow Chairman Mohamed El Kheshen.

Egypt’s Minister of Trade and Industry Neveen Gamea in March said that Egypt aims to increase its exports — especially to EU, African and Arab markets — to $100 billion, through the implementation of a strategic plan.


Turkish crypto founder flees with reported $2bn

Turkish crypto founder flees with reported $2bn
Updated 22 April 2021

Turkish crypto founder flees with reported $2bn

Turkish crypto founder flees with reported $2bn
  • Launched aggressive campaigns to lure investors
  • Founder reported to have flown to either Albania or Thailand
ISTANBUL: Turkish prosecutors on Thursday opened an investigation after the Istanbul-based founder of a cryptocurrency exchange shut down his site and fled the country with a reported $2 billion in investors’ assets.
The Thodex website went dark after posting a mysterious message saying it was suspending trading for five days on Wednesday because of an unspecified outside investment.
Turkish security officials then released a photo of Thodex founder Faruk Fatih Ozer going through passport control at Istanbul airport on his way to an unspecified location.
Local media reports said Ozer — reported to be either 27 or 28 years old — had flown either to Albania or Thailand.
HaberTurk and other media said Thodex shut down after running a promotional campaign that sold Dogecoins at a big rebate — but did not allow investors to sell.
Reports said the website and the entire exchange had shut down while holding at least $2 billion from 391,000 investors.
“The victims are panicked,” investors’ lawyer Oguz Evren Kilic was quoted as saying by HaberTurk.
“They are lodging complaints at prosecutors’ offices in the cities they reside.”
Prosecutors launched an investigation into the businessman on charges of “aggravated fraud and founding a criminal organization,” the private DHA news agency said.
Thodex has launched aggressive campaigns to lure investors.
It had first pledged to distribute luxury cars through a flashy advertising campaign featuring famous Turkish models.
The platform then launched its Dogecoin drive.
The cryptocurrency is getting particularly popular among Turks who are looking to preserve their saving in the middle of a sharp decline in the value of the local lira.
The Turkish crypto market remains unregulated despite growing skepticism from President Recep Tayyip Erdogan’s government about the safety and use of digital currencies.
The Turkish central bank has decided to ban the use of crypto currencies in payments for goods and services starting from April 30.
It warned that cryptos “entail significant risks” because the market is volatile and lacks oversight.
“Wallets can be stolen or used unlawfully without the authorization of their holders,” the central banks warned last week.

Riyadh property prices rise 2% in Q1 even as rents fall

Riyadh property prices rise 2% in Q1 even as rents fall
Updated 22 April 2021

Riyadh property prices rise 2% in Q1 even as rents fall

Riyadh property prices rise 2% in Q1 even as rents fall
  • Mortgages rise, underpinning demand
  • Office sector remains under pandemic pressure

RIYADH: Property prices in the Saudi capital edged higher in the first quarter even as rental rates eased, JLL said.
Riyadh’s residential sale prices registered an annual increase of 2 percent for apartments and villas. By contrast, rental rates reported yearly declines of 1 percent for apartments and villas, it said. Some 7,700 homes were handed over during the period, the broker said.
“Looking ahead, the government initiatives that are pushing Riyadh to be the business hub of the region are expected to spur local and international demand,” JLL said in the report.
It said that strong government support helped to boost demand for residential property in the first three months of the year.
New mortgage loans for individuals jumped by 33,000 contracts in January 2021, it said.
The total value of mortgages increased to SR16.4 billion, according to the Saudi Arabia Monetary Agency (SAMA).
The Riyadh office market remains under pressure with average lease rates across a basket of Grade A & B office spaces in the city falling by 2 percent over the quarter compared to a year earlier.


IATA predicts Middle East airline losses of $4.2 billion in 2021

IATA predicts Middle East airline losses of $4.2 billion in 2021
Updated 22 April 2021

IATA predicts Middle East airline losses of $4.2 billion in 2021

IATA predicts Middle East airline losses of $4.2 billion in 2021
  • Airlines will burn through $81 billion of cash this year
  • Industry crisis much longer and deeper than expected

RIYADH: Middle Eastern airlines will endure losses of $4.2 billion in 2021, down from $7.9 billion in 2020, as pandemic travel restrictions remain in place in much of the world, according to the International Air Transport Association (IATA).
Losses will be equal to 13.8 percent of revenues in 2021, an improvement from 28.9 percent in 2020, but still an historically bad number. Demand will be 67.6 percent lower than 2019 levels, while capacity will shrink 58.9 percent, IATA said.
While the region’s carriers will benefit from some of the highest vaccination rates globally, their relatively small home markets mean airlines like Emirates, Etihad and Qatar Airways will remain heavily exposed to international travel restrictions.
Globally, airline industry losses will narrow to $47.7 billion in 2021 from $126.4 billion in 2020, IATA said.
Airlines will burn through $81 billion of cash this year, following $149 billion in 2020, while the industry has taken on a further $220 billion of debt for a burden of $651 billion, IATA said.
“This crisis is longer and deeper than anyone could have expected,” said IATA Director General Willie Walsh. “Losses will be reduced from 2020, but the pain of the crisis increases. Government imposed travel restrictions continue to dampen the strong underlying demand for international travel.”


L&T Construction to build oil and gas supply base in King Salman Energy Park

L&T Construction to build oil and gas supply base in King Salman Energy Park
Updated 22 April 2021

L&T Construction to build oil and gas supply base in King Salman Energy Park

L&T Construction to build oil and gas supply base in King Salman Energy Park
  • The contract is valued at between $133m and $332m

RIYADH: Indian contractor Larsen & Toubro has been appointed by Oilfields Supply Company Saudi to design and build what it describes as one of the world’s largest oil and gas supply bases, in King Salman Energy Park in Dammam.

The project, valued at between INR1,000 crore ($133.3 million) and INR2,500 crore, involves the construction of industrial facilities, an administration building, ancillary buildings, associated infrastructure and storage yards, and is scheduled for completion in 30 months, L&T said in an emailed statement.

“This project will act as a business incubator to support the oil and gas industry in the Kingdom and help accelerate industrial growth in the energy sector,” said M. V. Satish, senior executive vice president (Buildings), L&T.