China Economy - News & Updates

[Myth_buster_1]

BEIJING, July 13 (Xinhua) -- China's venture capital market was brisk in the second quarter of this year, with 159 enterprises obtaining such investment.

According to a recent forum on venture capital and private equity investment in China, among the 159 enterprises, 143 have revealed the investment they required, involving 1.2 billion U.S. dollars in combined venture capital, up 31.4 percent and 73.5 percent respectively.

Of the total, expanding enterprises made up for 85 in number, or 53.5 percent. They involved 682 million U.S. dollars in venture capital, or 56.6 percent of the total. Another 26 were matured enterprises, with 373 million U.S. dollars in venture capital, accounting for 16.4 percent and 31.0 percent, respectively, of the total.

The IT sector accounted for 42.1 percent of the total enterprises that acquired venture capital, or 45.9 percent of the total investment, while traditional sectors made up 22.0 percent and 19.9 percent, respectively, of the total.

 

[Neo]

Threads merged!

 

[Neo]

Chinese economy slows but still expands at double-digit pace​

BEIJING: China’s economic juggernaut slowed but still maintained double-digit growth in the first half of the year as it battled inflation and absorbed global setbacks, official data showed Thursday.

The world’s fourth biggest economy expanded by 10.4% in the first half and 10.1% in the second quarter, the National Bureau of Statistics said, down from the sizzling pace of 11.9% recorded for all of 2007. Bureau spokesman Li Xiaochao said domestic inflation, problems with food supplies and global economic woes were among the chief concerns for China.

“Pressure for rapid price increases remains high, there are factors constraining steady agricultural production,” Li said.

“The international financial situation is severe and there are uncertainties in world economic development.” Nevertheless, he said China’s economy remained strong and that the slowdown was under control.

“The national economy maintains the momentum of steady and fast growth,” he said. “This slowdown is in line with our expectations.” NBS chief economist Yao Jingyuan said the economy would likely grow at 10% for the full year, although this was still above the target set by Premier Wen Jiabao of 8%.

China had already released data last week showing the nation’s trade surplus had fallen nearly 12% in the first half, as exporters struggled with the global economic slowdown, particularly problems in the United States. The appreciation of the yuan against the dollar, as well as curbs such as tariffs on exports imposed by the government to rein in the surplus, also contributed to the decline.

Jing Ulrich, chairman of China Equities for JPMorgan Securities, said that although the economy was slowing down and exporters were feeling the heat, the government had the tools to maintain control. “Despite the multiple challenges of a global slowdown, high inflation and natural disasters, the Chinese authorities have a range of options for addressing the key domestic policy challenges,” Ulrich said.

Economists said the earthquake that devastated large areas of southwest China in May, leaving 88,000 people dead or missing, did not have a big impact on the economic growth numbers in the second quarter. However, a huge post-quake reconstruction effort could lift the growth numbers in the short term, according to Moody’s Economy.com expert Sherman Chan. “Rapid and large-scale reconstruction works in the next couple of years will provide a boost to economic activity,” he said. Industrial output, a key measure of activities in the nation’s factories, expanded by 16.3% in the first half and 16% for June alone, according to the bureau.

China’s fixed asset investments rose 26.3% in the first half of 2008 from a year earlier, the bureau said.

China’s retail sales up 21.4% in first half: China’s retail sales rose 21.4% in the first half of 2008 from a year earlier, the National Bureau of Statistics said Thursday.

Retail sales of consumer goods reached $748 billion in the first six months of the year, the bureau said in a statement.

The growth was 6 percentage points higher than in the same period last year, according to the bureau.

The rise coincided with a 7.9% increase in inflation during the first half of 2008. Retail sales for June alone were up 23%, according to the bureau.

Retail sales are the main gauge for consumer spending in the world’s fourth-largest economy. afp

Daily Times - Leading News Resource of Pakistan

 

[Neo]

China June inflation falls to 7.1 percent​

BEIJING: China’s inflation rate fell to 7.1% in June but is still “fairly high” and the country faces pressure for more price rises due to high costs for energy, grain and industrial materials, the government said Thursday.

“We are still facing pressure” for more price rises, a spokesman for the National Statistics Bureau, Li Xiaochao, said at a news conference. He gave no indication that Beijing considered the problem under control or whether it might impose drastic measures.

The June rise in consumer prices over the same period of 2007 was down sharply from May’s 7.7% rate and April’s 8.5% rise. It came after months of government efforts to cool inflation by paying subsidies to increase food supplies and imposing price controls on food, fuel and other basic goods.

The communist government worries about the impact of fast-rising prices on China’s poor majority, who spend up to half their incomes on food. Bouts of high inflation in the 1980s and ‘90s sparked protests, a scenario the government is anxious to avoid ahead of the Beijing Olympics in August, which it hopes will showcase China as stable and prosperous. The government gave no June figure for food prices, but said they rose 20.4% in the first half over the year-earlier period. JPMorgan estimated June’s food price rise at 17.5%, compared with 19.9% in May.

China’s main planning agency, the National Development and Reform Council, said inflation in housing prices, another key government concern, slowed slightly in June but that costs in 70 major cities still were up 8.2 over the year-earlier period. Chinese leaders want to maintain high growth to reduce poverty but are trying to squelch a boom in bank lending and construction. They worry that runaway investment could ignite a debt crisis or fuel pressure for higher inflation. ap

Daily Times - Leading News Resource of Pakistan

 

[Neo]

China shifting focus from inflation to growth: analysts​

BEIJING: Recent statements from Chinese President Hu Jintao and other senior leaders suggest a subtle shift in policy focus away from inflation control and towards growth creation, analysts said Monday.

The new thinking at the elite decision-making levels in Beijing comes amid an expanding body of evidence that growth in the world’s fourth-largest economy is still hot, but not too hot.

“China has basically reached its earlier target of preventing overheating,” said Li Huiyong, a Shanghai-based economist with Shenyin Wanguo Securities.

“So the policies that were designed previously will be shifted towards stabilising the economy and ensuring faster growth,” he said.

The Communist Party’s politburo, the two- people who finally make most policy decisions in China, met last week for a gathering chaired by Hu and then issued a statement spelling out their new concerns.

“Challenges and difficulties are growing for maintaining fast and stable economic growth, due to rising international uncertainties and problems in the domestic economy,” Xinhua news agency said, paraphrasing participants.

In separate gatherings with provincial leaders and economists, Premier Wen Jiabao also called for an emphasis on long-term growth. “The country should make efforts to secure steady and comparatively fast economic growth,” Wen was quoted as saying on the Chinese government’s website.

He said this was a task “not only for this year but also for the next few years.” The stuttering US economy was a main factor behind a 12% drop in China’s trade surplus in the first half of the year.

This in turn contributed to a slowdown in economic growth in China to 10.4% in the first half of 2008 from 11.9% for all of 2007.

At the same time, inflation now seems a less urgent priority than just a few months back.

Growth in the consumer price index peaked at 8.7% in February, nearly a 12-year high, but softened to a more manageable 7.1% in June. “While the government still puts combating inflation at a significant place of its policy agenda, the task is no longer at the top place,” said Sun Mingchun, a Hong Kong-based analyst with Lehman Brothers.

“This change clearly reflects a shift of policy bias from inflation to growth, although the balance seems only slightly more weighted toward growth at the time being,” he said in a research note. While China’s leaders have identified new policy priorities, they may find it harder to design concrete measures to reach their objectives, economists said. afp

Daily Times - Leading News Resource of Pakistan

 

[Neo]

China industrial output growth eases​

BEIJING: Growth in China’s industrial output eased to 14.7 percent in July from a year earlier, taking a hit from weakening exports, the National Bureau of Statistics said on Thursday.

The figure marked a slowdown from 16 percent growth in June and 18 percent in July of last year, according to previously published data.

“The deceleration in export growth was the main reason for the slowdown in industrial output,” the bureau said.

It said export growth in July was 26.9 percent, compared with a more robust 34.2 percent in July of last year.

A reduction in external demand brought about by the slowdown in the global economy and the strengthening of the Chinese currency were among key factors in causing export growth to weaken, it said.

“A rise in enterprise production costs have also impacted industrial output.”

In particular, it said, the prices of crude oil and iron ore had spilled over into higher costs for local companies.

In the first seven months of the year, industrial output expanded 16.1 percent from the same period in 2007. afp

 

[Neo]

'China's inflation to continue to ease'​

SHANGHAI: China's consumer inflation is expected to continue to slow in the rest of this year and in 2009 as global commodity prices ease, Chinese state media reported Thursday. The growth in the consumer price index (CPI) -- the main gauge of inflation -- is expected to be below six percent in 2009, the 21st Century Business Herald reported, citing He Keng, an official with China's parliament. He, vice director of the financial committee of the National People's Congress, told the newspaper in an interview an economic slowdown, rather than inflation, should now be a bigger concern for Beijing. "Crude oil prices are falling and I believe iron ore prices will also decline in the near future... CPI growth is likely to continue to decelerate," he said. "The risk of further economic slowdown, rather than increase of prices, deserves more attention," he said. China's economy has slowed, growing 10.4 percent in the first half of the year compared with the 11.9 percent recorded for all of 2007. afp

 

[Neo]

China lays path to power in Central Asia ​

Sunday, August 31, 2008

MAIKHURA, Tajikistan: In this dusty village surrounded by craggy mountains, Chinese builders are hard at work on a new road, one of many projects paving the way to China’s growing influence in Central Asia.

Dressed in blue overalls and orange helmets, the scores of laborers load sacks of cement on excavators, ferry rocks down steep mountain slopes with cables and put finishing touches to a reinforced concrete tunnel.

“I’m pleased China is doing this project,” said Zhang, as Chinese vans streamed past on the new road, carrying elderly Tajik men in Muslim skullcaps and women in bright veils through the arid mountain terrain. The road through Tajikistan is part of a growing catalogue of Chinese investment projects in Central Asia that are changing the geopolitical face of this strategic, resource-rich region, once dominated by Moscow.

Road building in Tajikistan “is part of China’s plan to open up markets in Central Asia and get access to hydrocarbons. That’s China’s main interest,” said Saimuddin Dustov, an independent Tajik political analyst.

“China has major influence over the politics and economics of these countries but it doesn’t advertise it, unlike the others. It’s a quiet policy of working against US and Russian interests,” Dustov said.

The planned 354-kilometre (220-mile) road will link the Tajik capital of Dushanbe with the town of Chanak on the Tajik-Uzbek border, a vital route for trade in the impoverished region. An AFP reporter visited the construction site at Maikhura, some 60 kilometres (37 miles) north of Dushanbe, the same week that Chinese President Hu Jintao arrived on an official visit to cement Sino-Tajik economic plans.

“We are developing projects in electricity and roads. In the future, we want to invest in agriculture, light industry, telecoms, mining and infrastructure,” Hu said after meeting Tajik President Emomali Rakhmon on Wednesday. The Tajik leader referred to China as a “a big friend” for his country.

Construction of the new road is being financed with $296 million of credit from China. China is also building power lines in Tajikistan and the country has already become a significant importer of a range of Chinese goods, from cosmetics to cars.

“We import everything from China,” said an official from Tajikistan’s economic ministry. Trade turnover with China in the first six months of 2008 was 164 million dollars 160 per cent more than for the same period last year.

Large billboards erected for Hu’s visit around Dushanbe read: “Welcome to Tajikistan, Dear Chinese Friends!” and “The People’s Republic of China is Our Close Friend, Our Dear Neighbour and Our Reliable Partner!”

No such signs could be seen for Russian President Dmitry Medvedev, who was also in the city for a summit meeting of the Shanghai Cooperation Organisation, a regional security grouping of China, Russia and four Central Asian countries.

“Russia has no clear policy on Central Asia and that opens the way for China,” said Dustov, adding that China had invested one billion dollars in Tajikistan since the early 1990s far more than any other country. Reflecting the struggle for influence in Central Asia, road infrastructure in Tajikistan is also being built up by Iran and the United States, which financed a new bridge on the country’s southern border with Afghanistan.

Russia, which has had troops based in Tajikistan since Soviet times, is also trying to regain some of its economic influence. Russian companies are bidding for projects in Tajikistan’s hydroelectric power and aluminium industries. China’s growing dominance in the region does not make conditions any easier for Shi Weili, 25, a Chinese-Tajik interpreter who has lived in Maikhura for the past two years translating between local inhabitants and Chinese workers.

 

[sunny_aus]

China to build world's fastest rail link


BEIJING: China plans to build the world's fastest rail line linking its capital Beijing with financial capital Shanghai, which will cut the journey time to four hours as compared to current 10-12 hours.

New technology will enable trains to travel at 380 km an hour to cover 1,318-km stretch between the two important cities, 30 km per hour more than the current generation of bullet trains. Previously these trains had been planned to run at 350 kilometres an hour, a state media reported today.

"The quickest trains can currently travel between Beijing and Shanghai is 10 hours. It is possible that we can start to manufacture 380 km/h trains in two years' time and put them into service on the Beijing-Shanghai high speed railway," China Daily newspaper reported today quoting Zhang Shuguang, the Ministry of Railways' deputy chief engineer, as saying.

Construction has begun on the new rail line in April and is expected to become operational by 2012. The line is part of China's ambitious plans to build more than 12,000 km of high speed railway to connect its major urban centers.

The new line will be the longest high-speed railway to be built in one go in the world, the report said.

Last month China opened a high speed line linking Beijing and the eastern port city of Tianjin, which has reduced the journey time between the two places to just half an hour.


China to build world's fastest rail link- International Business-News-The Economic Times

 

[sunny_aus]

China to launch third manned space flight in September


HONG KONG: China has brought forward the launch date of its third manned space flight to late September, a report said on Tuesday.

The launch of Shenzhou VII is now expected to take place between September 17 -- the end of the Beijing Paralympics and China's National Day on October 1, Hong Kong newspaper Wen Wei Po said, citing unnamed sources.

The period offered the best launch window for Shenzhou VII, the source told the Chinese-language newspaper, without giving any more details.

The mission will blast off from China's Jiuquan launch centre in northwest Gansu province and land in northern Inner Mongolia province, Wen Wei Po said.

The launch schedule has been changed several times, with previous Chinese state media reports suggesting October or November launch.

Three "taikonauts" or astronauts will be on board the flight, with one of them conducting China's first space walk, China's official Xinhua news agency said in an earlier report, quoting a spokesman for the mission.

China successfully launched its first man, Yang Liwei, into orbit in 2003, making it the third country after the former Soviet Union and the United States to put a man in space.

It sent two more astronauts into orbit in 2005 on a five-day mission.


China to launch third manned space flight in September-China-World-The Times of India

 

[gpit]

News confirmed by CCTV. It will be launched between 9/25 - 9/30.

 

[Marshal]

China's trade surplus falls 6.2 pct in Jan-August: Xinhua

10 Sep, 2008, 0835 hrs IST, AGENCIES

BEIJING: China's trade surplus fell 6.2 percent in the first eight months of 2008 compared with a year ago to 152.0 billion dollars, the official Xinhua news agency said Wednesday, citing the customs bureau.

China's trade surplus falls 6.2 pct in Jan-August: Xinhua- International Business-News-The Economic Times

 

[Neo]

China August trade surplus at record $28.7 billion high​

BEIJING: China said Wednesday its trade surplus hit a monthly all-time high of 28.7 billion dollars in August, but economists doubted this would push Beijing to allow any major rise in its currency.

The August surplus, beating a previous record of $27.1 billion in October last year, was caused by an abrupt slowdown in imports rather than any particular pickup in exports, they argued.

"Import growth declined rather steeply while exports posted just normal growth," said Feng Yuming, a Shanghai-based economist with Oriental Securities.

China's exports last month increased 21.1 percent from a year earlier to $134.9 billion, according to customs data. In July, exports had increased 26.9 percent.

Meanwhile, August imports were up 23.1 percent to 106.2 billion dollars, customs said, marking a steep decline from 33.7 percent growth the month before.

"Soft imports growth and the reacceleration and pickup in trade surplus growth in August could be an indication of weakening domestic demand, induced by the credit tightening which began nearly a year ago," Goldman Sachs said in a research note.

Signals of a domestic slowdown, among these a drop in inflation to 4.9 percent in August, coincide with a renewed emphasis among policy-makers on the need to create more economic growth.

Among factors behind the slowing imports, economists pointed out that falling international prices of raw materials also helped push down the price importers have to pay.

Even so, headline figures suggesting a ballooning Chinese trade surplus could reignite the debate over whether China is keeping its currency, the yuan, artificially low to give its exporters an unfair advantage.

While the yuan has risen sharply against the euro since early August, it has hardly moved against the US dollar in recent months.

However local economists said there was not much of a case for a drastic readjustment of the yuan's value.

"Exports are not particularly strong, and the yuan will not come under big appreciation pressure simply because of the August trade figures," said Xing Ziqiang, a Beijing-based economist at China International Capital Corporation.

"Actually, as export growth slows down further, the room for appreciation will shrink," he said, adding the yuan would probably rise by another one percent against the dollar for the rest of the year.

Other economists predicted the yuan might not move at all against the American currency for the remainder of the year.

"The dollar is getting stronger, and one monthly figure cannot have a major impact on the currency rate, especially since export growth is likely to go down further," said Feng of Oriental Securities.

Stephen Green, a Shanghai-based economist with Standard Chartered, also argued that brisk export growth was unlikely to last.

"The golden times are certainly over, and many firms are suffering, but from a macro-perspective it is still remarkable that real export growth has stabilised over the summer," he said.

Adjusting for inflation and exchange rate movements, China's exporters still produced 10 percent more during the summer months than a year earlier, he said.

"As Europe now slows, though, the biggest destination for exports, this will change in the last few months of the year. This may well be the lull before the storm."

In the first eight months of the year, China's trade surplus was $152 billion, down 6.2 percent from the same period of 2007. afp

 

[Neo]

China industry output slows sharply​

BEIJING: China's industrial output growth slowed to a six-year low of less than 13 percent in the year to August from July's reading of 14.7 percent, HSBC and a government researcher said on Wednesday. The figures are due for release on Friday. Economists polled by Reuters had expected growth of 14.5 percent. Temporary factory closures to help improve Beijing's air quality during the Olympics were partly responsible for reducing output growth to below 13 percent, HSBC economist Qu Hongbin said in a note to clients. The report did not say where the information came from.

A government researcher, who declined to be identified, put the figure at 12.8 percent. That would be the slowest growth rate since Aug. 2002, excluding the months of January and February, when factory closures for the Lunar New Year make output statistics volatile. Two other sources at banks in China said the growth rate was around 13 percent. Retail sales figures for August will also be released on Friday. The government researcher said they were likely to show growth of 23.2 percent in the year to August, down from July's reading of 23.3 percent but beating forecasts of 23 percent. One of the bank sources also said the increase would exceed 23 percent, while Qu at HSBC said retail sales in real terms, deflated by the retail price index, were still strong and growing at a pace of more than 15 percent.

Qu said the risk of a sharp economic slowdown in China was still limited. "Growth is indeed slowing, but only gradually," he wrote. GDP was still likely to expand at a 9.5 percent rate in the second half of the year. "As a result, we believe that there is no real need for Beijing to ease the policy tightening to support growth, at least in the near term," Qu said.

 

[gpit]

Coca Cola in China antitrust case

China's competition watchdog says it will enforce anti-monopoly rules in reviewing Coca Cola's bid to buy Chinese juice company Huiyan.

US drinks giant Coca Cola is attempting to swallow the Chinese firm in a $2.5bn (£1.4bn) bid.

The move will be closely watched as it is the first such case filed under the country's new antitrust laws.

Last week's bid sparked anger in China over the possible sale of a national champion to an overseas firm.

Drinks giant Coca Cola is keen to increase its presence in the country's fast growing drinks market.

For this reason, it agreed to pay 12.20 Hong Kong dollars per share - about three times the firm's closing price last Friday - for the firm.

Huiyan had a 44% market share by sales value in China's pure juice sector and 42% of the nectar sector in the first half of 2008, according to data from research firm AC Nielsen.

Huiyan said that Coca Cola was in the process of preparing the documents to send to Beijing competition authorities.

"We are prepared to accept the decision of the Ministry of Commerce one way or the other," said Matthew Mouw, Huiyan's vice president for strategic development.



BBC NEWS | Business | Coca Cola in China antitrust case