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US business-equipment orders tame amid investment downshift –



Orders for U.S. capital equipment barely increased in November, consistent with a downshift in corporate investment throughout the year that’s weighed on economic growth.

Bookings for non-military capital goods excluding aircraft — a proxy for business investment — rose 0.1 per cent, matching projections, after a 1.1 per cent jump in October that followed consecutive monthly declines, according to Commerce Department figures issued Monday.

Orders for all durable goods, or items meant to last at least three years, unexpectedly dropped two per cent, reflecting a slump in military aircraft and a drop in civilian planes.

Key Insights

• Combined with a decrease in core shipments, the figures highlight a lack of appetite for capital expenditures, with profit growth cooling and business sentiment still subdued amid global demand concerns. Despite a thawing in the U.S.-China trade war after this month’s phase-one agreement, a more sweeping deal that could spark greater investment and re- charge world growth prospects is a bigger challenge.

• Other recent reports have showed manufacturing, while no longer suffering larger setbacks, remains weak. The Federal Reserve Bank of Philadelphia’s factory index dropped in December to a six-month low, while the New York Fed’s manufacturing gauge barely expanded.

• The headline durable-goods figure was pressured by a decline in orders of commercial aircraft despite Boeing Co. reporting earlier this month that it received 63 orders in November compared with just 10 in October. Orders for motor vehicles and parts rebounded, likely reflecting the effects of the end of the auto workers’ strike at General Motors Co.

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• Shipments of non-defence capital goods excluding aircraft — a measure used in gross domestic product calculations — fell 0.3 per cent after a 0.7 per cent increase. The report showed core business- equipment shipments fell 2.9 per cent on a three-month annualized basis through November.

• Excluding transportation equipment, which tends to be volatile, durable-goods orders were little changed after a 0.3 per cent gain. Bookings for military hardware plunged 35.6 per cent, the most since February 2017, while defence aircraft orders slid 72.7 per cent.

• Durable goods inventories expanded 0.4 per cent for a second month.

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Grey County innovation hub receives $800K federal investment –



Entrepreneurs in Grey County will soon have a new place to prototype their products and experiment with leading-edge technology.  

Today, FedDev Ontario announced that it will be investing $845,000 to enhance service offering and business programming at the Sydenham Campus Regional Skills Training, Trades and Innovation Centre in Owen Sound.

“By collaborating with Grey County and its partners, we are supporting important parts of our region’s economy to stay strong, while bringing new innovators into the market and helping them commercialize their ideas,” said Marie-France Lalonde, parliamentary secretary to the Minister of Economic Development and Official Languages.

Lalonde made the announcement Monday morning via Zoom webinar on behalf of Minister Mélanie Joly, Minister of Economic Development and Official Languages.

The funds will be used to support the creation of a maker space and device lab that will include 3D printers and prototyping equipment to support small businesses to develop STEM skills, integrate new technologies, and commercialize products.

The investment will also support two new programming streams: acceleration programming for established companies; and incubation programming for newer businesses, benefiting from access to the maker space.

FedDev’s contribution of $845,000 is part of the overall project cost of $2,664,695 with contributions coming from the private sector and Grey County. 

According to Lalonde, the investment will support 75 businesses, produce 10 new products and services, create 50 new jobs and will leverage an additional $1.8 million in private investment for the region.

“Creating fabrication and maker space labs allows the Sydenham campus to offer entrepreneurs a place to prototype and experiment, as well as offer training on leading-edge technology. FedDev Ontario funding is outstanding news and we are delighted the federal government recognizes the importance of rural entrepreneurs in the region,” said Selwyn Hicks, warden of Grey County.

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Q2 2021 Chinese Inbound Investment: M&A and Equity Investments – China Briefing



The period April-June 2021 saw an impressive array of investments into China, in a variety of different sectors. Despite political differences, the United States led the way closely followed by Asia and then Europe.

Q2 aggregate amounts were led by real estate, and logistics acquisitions and investments, suggesting that corporate MNC’s are buying into China’s Belt and Road Initiative projects while politicians continue to discredit it. Joint ventures (JV) and minority investments took place in multiple sectors from several Asian countries.

JVs/minority inbound investments were made from several European countries led by German and Scandinavian businesses. The UK saw a handful of small investments/JVs as well as one major exit. A notable next generation investment was made by Germany’s Volocopter, looking to bring flying taxis to China.

The second quarter of 2021 saw China inbound investments/pledges reach US$13.9 billion, down 2.1 percent from US$14.2 billion in Q1 2021, but still well above both Q3 and Q4 2020 levels. These investments were a mixture of controlling inbound acquisitions, minority stakes, JVs, and new plants/operations.

This quarter was led by acquisitions of controlling stakes across financial services, banks, investment banks, securities firms, asset and wealth managers, insurers, real estate, and logistics. We set out this activity by region below.

North America led with US$6.8 billion. Two large acquisitions by Blackstone, one of a Beijing-based commercial developer and one of a leading Chinese data management group, accounted for US$4.3 billion. Canadian-based Brookfield acquired a set of five mainland shopping malls for US$1.4 billion. There was a furry of investments/announcements by leading US financial services groups including JP Morgan – seeking to acquire the remaining 29 percent of its securities joint venture (estimate of US$40-50 million). This follows JPM’s Q1 acquisition of a 10 percent stake in China Merchants Bank, a leader in Chinese wealth management for US$410 million.

Morgan Stanley is interested in acquiring stakes in their Chinese securities and mutual funds JVs (approx. US$150 million)

Goldman Sachs launched its Chinese wealth management JV with ICBC wealth management. Goldman will control 51 percent.

Blackrock announced that it had received its license for a majority owned (50.1 ercent) wealth management JV with CCB and Temasek (Singapore). Blackrock also became the first global asset manager to start a wholly owned onshore mutual funds business.

There were also industrial JVs in lithium batteries, chemicals and gasification, venture capital (VC) and/or private equity (PE) investments into Chinese healthcare, with a focus on biopharma and biotech, into diary and into a newly launched industrial/PE fund for the Chinese beauty market. There were also a few smaller RE acquisitions as well. The quarter ended with Warburg Pincus announcing a JV with China’s Golden Union Group, to acquire under-utilized properties in Shanghai and Beijing and convert them into use, including serviced apartments, creative offices, or mixed-use commercial projects.

Asia Q2 announced deals with disclosed values totaling US$6.1 billion.

Not surprisingly, Hong Kong and Singapore ranked #1 and #2, respectively, by country.

The largest Asian inbound investment was AIA’s acquisition of a 24.99 percent equity stake in China Post Life for US$1.8 billion. Hong Kong also saw a US$500+ million acquisition of a Chinese shopping mall by a REIT and an inbound mainland Chinese hospital acquisition. Singapore saw three real estate/REIT transactions, one of which represented the successful IPO of GLP’s logistics REIT (a landmark China REIT transaction), the launch of DBS’ majority-controlled mainland securities JV, and a private placement by GIC into a leading tech platform.

This quarter also saw inbound JVs/partnerships involving many other Asian countries; Japan (Daiwa securities JV and an EV batteries JV), Korea (biopharma VC investment led by Mirae and a JV in lithium-ion battery recycling), Mongolia (metallurgical coal JV), Thailand (hospitality/hotels entry), and Australia, a US$1.4 billion lithium strategic partnership.

MENA China (Guangzhou) and Israel launched a second Sino-Israel biotech Fund, managed by prominent Israeli professionals, and is to be focused on Israeli and EU biotech companies in phase II/III clinical trials.

Europe (excluding the UK) saw numerous JVs/investments into China, however, very few of these disclosed any value. The aggregate disclosed values for FDI into China amounted to US$750 million.

Germany invested in two China JVs, focused on electric batteries as well as one on fuel cells – all involving leading brands from both countries. There was a JV launched to focus on monorail components, another to bring German flying taxis (Volocopter) into China and one to fund a Series C of a Chinese drone maker. Perhaps the most pressing Q2 German/China JV was the one between Fosun Pharma and BioNTech, which is designed to produce up to 1 billion of additional vaccine doses per year to mainland China, which needs this additional domestic vaccine capacity. (BioNTech also announced that it would be launching new regional vaccine production facility in Singapore).

BASF’s new engineering plastics compounding plant at the BASF Zhanjiang Verbund site (US$10 billion) is also on track with the first production plant to come commence operations at the site in 2022. German inbound VC investment volume was much lower in Q2 versus Q1 as Bertelsmann (BAI) – which made 5 VC investments in Q1, made none in Q2.

BASF and Bosch VC funds saw much lower VC investment activity in Q2.

France saw Sanofi launch a new global research institute in China (its fourth such global institute), Air France/KLM acquired an additional US$200 million to increase its stake in China Eastern (still below 10 percent) and TOTAL released updated data on its solar panel JV (TEESS) with Envision, which appears to be making strides into the Chinese commercial and industrial user segment.

Other European countries

Norway saw two JVs, one to develop offshore wind in the Yellow Sea and one with UAC, a supplier of fiberglass pressure vessels, to build a large-scale production facility in China.

Finland – Finnair announced a new JV with Shanghai’s Juneyao Air to expand air services between Finland and China.

Switzerland – Clariant opened its new production facility for light stabilizers.

Italy – Daerg Chimica, a specialist in car washing business operating in 45 countries, announced the launch of its Chinese business.

Netherlands – LyondellBasell announced that Jiangsu Fenghai will use its Spheripol 400 kilotons per annum (KTA) and Hostalen ACP300 KTA Hostalen technology for its new facility to be built in Lianyungang.

UK – (amounts with disclosed values of estimated US$250 million)  – saw the acquisition of a majority (73 percent) stake in a small Chinese industrial company, acquisition of a 10 percent stake in a regional Chinese freight organization, a JV involving China Everbright Fund providing growth capital for IP Group’s China based portfolio companies, a chemical manufacturing JV, a JV in life sciences/AI, a small petrochemicals JV (via Shell), and a data focused JV involving Unilever, Alibaba’s Brand DataBank, and Fudan University.

A sizeable infant formula business exit was made by Reckitt Benckiser, a leading UK consumer health group.

Included in this analysis are transactions and/or investments which have both been signed and announced. Omitted from this analysis are transactions involving publicly traded debt or equities.

We are grateful to Henry Tillman of China Investment Research for the use of the data in this article. Contact: or visit:

About Us

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so 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

Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.

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Smaller groups feel the pinch as investment research costs slide – Financial Times



The price of corporate research published by independent providers dropped 8 per cent last year as cut-throat competition from large investment banks continued to squeeze revenues for smaller analytics companies.

Independent research providers have complained to regulators in the UK and Europe that their businesses are being hurt by what they say is unfair competition after large banks slashed the cost of research services in recent years.

“Unfair, anti-competitive pricing by investment banks remains the single most fundamental problem for independent research providers. Seventy-eight per cent of independent research providers believe that urgent regulatory action is needed to address predatory pricing by investment banks,” said Steve Kelly, special adviser at Euro IRP, the trade body which represents 70 independent research providers.

Euro IRP estimates that research pricing by independent providers has on average declined by about 40 per cent since the introduction of the sweeping package of European market rules, known as Mifid II, in 2018.

Under Mifid, asset managers must split the cost of buying research from any trading costs incurred for buying and selling securities, an arrangement known as “unbundling”. This was designed to prevent investment banks and brokers from offering research to portfolio managers as an inducement to direct trading orders to them.

Investment banks responded by slashing the price of their research. JPMorgan, for example, now offers asset managers access to all of its written research output for an annual fee of $10,000, with face-to-face meetings with analysts costing more.

Large banks which primarily earn revenues elsewhere can absorb this drop but smaller, research-focused companies have been left exposed. Some independent providers also believe that investment banks are using research as a loss leader, funding this activity from other parts of their business in order to facilitate the selling of other more lucrative services to clients.

“Research for investment banks is a route to clients to whom many other, much more profitable services can be sold,” said Kelly.

JPMorgan declined to comment.

In April, the Financial Conduct Authority proposed that research produced by independent providers should be exempted from the Mifid rules covering inducements that apply to investment banks.

Prices charged per research assignment vary enormously but Kelly said “declines and ongoing pressure” were widely reported by Euro IRP members, particularly smaller providers.

Richard Kramer, founder and chief executive of Arete Research, an independent provider, said he believed that many investment banks were pricing research services below cost.

“Almost all of the investment banks are cross-subsidising the cost of their research services from other activities,” said Kramer. He also questioned the value of some research. “How are investors well served when 80 per cent of the recommendations by bank analysts are ‘buys’? The research produced by the sycophants and stenographers at investment banks is part of a promotion machine, advertising other banking services,” he said.

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