Highlights from the EO print edition, No. 590, Oct 15, 2012

China's Banks Lose Taste for Personal Housing Loans
News, cover
~ Personal housing loans have traditionally made up the bulk of the lending that China's banking industry makes to individuals, but the profits that banks are making off these mortgages are starting to account for a smaller proportion of their overall revenue.
~ Some banks are no longer treating the mortgage market as a key area of competition, focusing their efforts instead on making short-term loans to small enterprises.
~ Many banks had already started to look at ways of diversifying their books as the gradual introduction of policies aimed at letting the market set interest rates began to take effect. But it was the cooling of the domestic housing market that really marked the turning point for banks, with mortgages starting to decline as a proportion of total loans being issued.
~ Minsheng Bank began to pull back from personal home loans in 2009 and currently, not only have mortgages as a proportion of their total outstanding loans dropped from a peak of 16.1 percent in 2007 to 5.9 percent at the end of June this year, but the absolute amount of personal housing loans that they have outstanding has also fallen.
~ An employee of Minsheng Bank explained that the small profit margins combined with policy tightening in relation to the housing market had encouraged them the switch their lending strategy.
Original article: [Chinese]

Beijing's Taxi Shake Down
News, page 2
~ The huge sprawling capital of China is home to more than 20 million people and aspires to be a great international metropolis, but it's currently only served by 66,000 taxis - the same number that operated on the streets 10 years ago. According to a recent policy document released by the city's transportation commission, the number of taxis is going to stay at this level for years to come.
~ The limited supply of taxis is being maintained at the current level, despite many media reports related to the difficulty that many residents of Beijing have finding taxis. The fact that approximately 100,000 "black cabs" (illegal taxis) operate in the city is a sign that the current taxi fleet is not enough to meet the demand for transportation services.
~ ‌Now rental companies and start-ups utilizing the latest telecommunications technology are looking to make some money out of this pent up demand.
~ From the start of this year, more and more people in the capital have been shaking their smart phones rather than hailing from the curb in order to get a ride. A new service called "Yaoyao Zhao Che" (摇摇招车), which roughly translates as "Shake Shake Find Car" allows customers who have downloaded an application to their mobile phone to locate cars willing to take them to their destination. Users first shake their phone and then they'll be given the license plate and name of the driver that will soon arrive to ferry them to their destination.
~ Last month the company that runs YYZC sent out an SMS to the more than 10,000 members who use the service telling them not to be alarmed if next time the car that comes to meet them is a regular taxi.
~ Wang Weijian (王炜建), the founder of Juhe Zhongxin (聚核众信) - the company that developed the application, explained to the EO how in March they hired 20 cars from a car rental firm in order to test the software. Of the 20 cars, three were picked up by Beijing authorities for operating as illegal taxis.
~ The company has since stopped this trial, explaining that initially many taxi drivers didn't understand the concept and had been unwilling to work with them. But after testing the system, Wang says the company can now better present the "mature" technology to taxi drivers.
~ Over 1,000 taxi drivers have already begun to work with ZZYC, despite the fact that they receive no immediate benefit. The company takes a small fee from members each time they order a cab through the service but passengers only pay the driver what is on the meter.
~ Wang Wei aims to sign up at least 10,000 drivers by the start of 2013, he argues that over the long term drivers can profit from taking part as they are likely to increase the number of trips they run each day.
~ Wang's is not the only company to attempt to take advantage of what appears to be an obvious business opportunity, plent of car rental companies are also operating in a legal gray area that sees them offer car hire services with a driver for short trips to customers.
Original article: [Chinese]

Sinopec to Construct Overseas Oil Storage Base in Indonesia
Corporation, page 25
~ China Petrochemical Corp. or Sinopec Group will soon start construction on a long-planned oil storage facility on the island of Batam, an Indonesian free trade zone that is close to Singapore. This will be the first self-constructed overseas oil storage facility for the company.
~ Sinopec Kantons Holdings, a subsidiary of Sinopec, will hold a 95 percent stake in the project, which will include a 2.6 million cubic meter oil storage facility capable of storing up to 16 million barrels of crude and refined fuels.
~ According to reports, the project will also later include a refinery and petrochemical plant.
~ According to Professor Lin Boqiang (林伯强), an expert at a resources research center at Xiamen Univesity, although this might well become the first overseas storage facility that Sinopec will build, it isn't the only overseas storage facility that they have, as most overseas refineries also have storage tanks. Professor Lin also says that the decision to build the storage facility is a normal commercial operation that will assist with the companies trading practices.
~ Sinopec is currently working with a Saudi Arabian company on constucting a new 400,000 barrel per day (bpd) day refinery at Yanbu in Saudi Arabia which is expected to be operational by late 2014.
Original article: [Chinese]