China Economy - News & Updates

[Janbaz]

China tries to reduce trade surplus, cautions against quick results

BEIJING: China is taking active measures to reduce its ballooning trade surplus, but its trade minister cautioned on Monday that the increasingly politicised problem will not be resolved quickly.

“It is true that our trade surplus last year reached a historic high,” Bo Xilai told journalists. “In the past few years we have taken a series of trade measures that are aimed at boosting imports and slowing the growth in exports.”

Shortly after Bo spoke, the customs authorities published trade figures showing a near-record 23.8-billion-dollar trade surplus in February. China’s trade surplus last year soared 74 per cent to hit a record $177.5 billion, according to previously published government data. Bo maintained the Chinese government was not seeking a large trade surplus and was actually hoping for a balance in its international payments.

“The surplus was not formed only because of trade issues, it has developed due to the industrial structure and the overall situation with the global economy,” he said. “So we should not expect to see the resolution of the trade surplus problem in the short term, or only because of some trade measures.”

He further said China’s booming export-driven economy was fueled by foreign-invested companies and the processing trade, where overseas companies were reaping the profits. “China has a big trade surplus, but the profits are being made by (these) companies,” he said.

Bo also voiced opposition to proposed legislation in the United States that would impose 27.5 per cent tariffs on Chinese imports if Beijing did not take greater measures to free up the exchange rate of its currency.

“If this proposal moves forward, it would destroy the currently healthy development of Sino-US trade,” Bo said. “China is firmly opposed to this, we believe that this does not conform with WTO rules and if it is implemented would not only be trade protectionism but trade hegemony.” US lawmakers have accused China of maintaining the yuan at artificially low levels in an effort to boost exports.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=46595

 

[Neo]

March 14, 2007
China’s FDI jumps 13pc

BEIJING, March 13: Foreign direct investment into China in the first two months of the year totalled $9.7 billion, a rise of 13 per cent from the same period a year earlier, the government said on Tuesday. Hong Kong, the British Virgin Islands — where many Chinese companies register for tax purposes — and Japan were the top three sources of foreign direct investment, the commerce ministry said. Last year actual foreign investment in China was $69.5 billion, down 4.1 per cent from 2005.

However, if the financial sector were to be excluded, the figure totalled $63 billion, a rise of 4.5 per cent.

http://www.dawn.com/2007/03/14/ebr13.htm

 

[Janbaz]

China's Hangxiao Steel wins $4.4bn contract

BEIJING: China’s Hangxiao Steel Structure said on Tuesday it had won a 4.4-billion-dollar contract to sell construction products and services for public housing projects in Angola.

The contract was signed with China International Fund Ltd, a Hong Kong-based company with a vast array of construction activities in Africa, according to a statement from Shanghai-listed Hangxiao Steel Structure.

The sale of construction products is worth 24.8 billion yuan ($3.2 billion) and the company will be paid another 9.6 billion yuan for its construction services in 12 cities in the African country, the statement said.

Construction work on each site should be completed by Hangxiao Steel Structure, which is based in the eastern province of Zhejiang, within two years after construction facilities and conditions on the site become available.

The statement deemed unstable social and political conditions in Angola, the “relatively backward” local transportation system, difficulties in water and electricity supply on the construction sites as major risks for the deal.

China International Fund signed an Equipment, Procurement and Construction construction with the Angola government to build a series of public housing projects within five years.

China’s growing engagement in Africa is raising eyebrows in other parts of the world, especially Europe and North America.

Sino-African trade reached $55.5 billion last year, according to official Chinese figures.

At a historic summit in November last year that brought leaders from 48 African nations to Beijing, China pledged to double its aid to the continent and to offer five billion dollars in loans and credits by 2009.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=46709

 

[Janbaz]

UAE-China trade soars to $14.2 billion

DUBAI: Two-way trade between the UAE and China surged 31.5 percent to $14.2 billion in 2006 to position the Emirates as the largest trading partner of China in the GCC, according to Zhuang Ruijin, Economic & Commercial Counsellor of Chinese Embassy in UAE.

Quoting statistics released by the General Administration of Customs of China, Zhuang said bilateral trade between the two countries was poised to grow steadily over the years.

“In line with the vision of His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, Sino-UAE trade is targeted to reach $100 billion by 2015,” he said at a recent seminar to facilitate UAE SME entrepreneurs’ participation at the 101st China Import & Export Fair in Canton.

“This goal is very tough, while I believe that by 2015, each entrepreneurs present today will play a key role in achieving this strategic plan.

It will be realised through our joint efforts. The prospect is bright and we must take the opportunities.”

Trade relations between China and the GCC have also gathered pace over the past few years with total ono-oil trade value rising to $32 billion.

He said China’s economy has been on a fast growth track. In 2006, China’s GDP got to $ 2.7 trillion, up 10.7 per cent over 2005; the total volume of export and import amounted to $1.76 trillion, an increase of 23.8 per cent over 2005, of which the exports stood at $969 billion and imports $791.1 billion.

Ren Xiangdong, who was heading a delegation from China Foreign Trade Centre, said Canton Fair has been playing a key role in spurring the growth of Sino-UAE trade.

In 2006, Canton fair attracted more than 5500 businessmen from the Emirates and the business conducted by the UAE side was valued at $1.16 billion, contributing more than eight per cent of total Sino-UAE trade.

He said the fair would attract more than 200,000 visitors in April; 150,000 different goods and services will be displayed by 14,000 Chinese companies and manufactures.

Renee Wang, general manager of Dragon Century Tourism, believes that the Canton Fair is the most significant platform for regional business people to meet and engage with Chinese business interests.

“With the growing significance of trade with China over the past few years, we have seen an impressive upturn in the number of regional business people, especially from the UAE, visiting the Canton Fair. Dragon Century Tourism has set up its services to target such business travellers providing them with all the services they require to make their trip more effective.” courtesy khaleej times

Daily Times.
http://www.dailytimes.com.pk/default.asp?page=2007\03\16\story_16-3-2007_pg5_28

 

[Neo]

Saturday, March 17, 2007

‘China to encourage overseas investments’

BEIJING: China will take further steps this year to encourage domestic firms and residents to invest overseas, a senior foreign exchange official said on Friday.

Li Dongrong, a deputy director with the State Administration of Foreign Exchange (SAFE), did not provide details on what the policies would be, but he said they would be part of a range of efforts to balance the country’s international payments.

“We will continue to support qualified firms to go abroad to expand their overseas investment channels,” Li was quoted as saying in a statement on the regulator’s Web site (www.safe.gov.cn).

The foreign exchange regulator has said recently that one of its main tasks for 2007 is to encourage more capital outflows so as to offset the upward pressure on the yuan generated by the country’s large trade surplus and inflows of investment. Li said the agency would also step up its supervision over short-term foreign debt to curb speculative capital inflows.

He added that two parallel schemes for allowing foreign institutional investors to invest in China and domestic institutions to invest in capital markets overseas would both be improved this year. That echoed a report by the central bank issued on Friday that said China would encourage greater two-way capital flows.

http://www.dailytimes.com.pk/default.asp?page=2007\03\17\story_17-3-2007_pg5_24

 

[Janbaz]

China raises interest rates to trim credit growth

BEIJING: China’s central bank said on Saturday that it was raising interest rates for the third time in less than a year to put a lid on credit and investment and keep the world’s fourth-largest economy on an even keel.

The People’s Bank of China said that, effective Sunday, its benchmark one-year yuan lending and deposit rates would rise by 0.27 percentage point each. That brings the one-year deposit rate to 2.79 per cent and the lending rate to 6.39 per cent. “The rate increase is conducive to the reasonable growth of credit and investment, to stabilising prices, to the stable operation of the financial system, to balancing growth and improving the structure of the economy, and to promoting the healthy but rapid development of the economy,” the central bank said in a statement on its Web site (www.pbc.gov.cn).

The move follows an increase of lending rates alone on April 27 of last year and a rise in both rates last Aug 18. The central bank has also raised banks’ required reserves five times since last June, to help soak up liquidity generated by the country’s large balance-of-payments surplus.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=47285

 

[Janbaz]

Mozambique, China in talks on hydro-power project

MAPUTO: Mozambique is close to a deal with China that would pave the way for a $300 million hydro-electric dam in Maputo, Public Works and Housing Minister Felicio Zacarias said on Monday.

China’s Export-Import Bank (Eximbank) already has agreed to finance studies for the Moamba Major project, which would expand the supply of electricity as well as drinking water in the Mozambiquan capital, Zararias said.

The talks could see the Chinese taking a much larger stake in the project, according to Zacarias, who did not provide further details. “We are about to close the discussions and hope China will fund and construct the dam,” Zacarias told Reuters in an interview. He added that the project could help control flooding and droughts in the impoverished southern African nation.

Dozens of people were killed and some 170,000 forced to flee their homes in central Mozambique in February when heavy rains triggered flash flooding along the Zambezi river and its tributaries.

Mozambique officials said last year that Eximbank planned to invest some $2.3 billion in the construction of the new Mepanda Nkua dam and 1,300 Megawatt hydro-electric plant on the Zambezi River, south of the giant Cahora Bassa power development.

At the time officials said discussions were also under way with China on the Moamba Major project. Although Mozambique has large supplies of fresh water, much of the infrastructure required to transport it to Maputo and other cities was destroyed or allowed to fall into disrepair during a two-decade civil war that ended in the early 1990s.

Zacarias said the government planned to expand the number of medium-sized and large dams in the country there are currently 12 in order to meet its goal of extending clean drinking water to 60 per cent of the population by 2015.

Only about 40 per cent of Mozambiquans have access to clean water. The Moamba Major project would also allow Mozambique, which currently relies on Cahora Bassa in northern Tete province, to meet growing domestic and regional power demands.

Cahora Bassa generates some 2,075 megawatts of power, providing Mozambique with $100 million in annual electricity exports. There are plans to expand the site to add a further 850 megawatts of capacity.

South Africa, the economic powerhouse in the region as well as the African continent, is expected to absorb the bulk of the additional electricity produced in neighbouring Mozambique.

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=47546

 

[Owais]

China to set up a company to build large aircraft
BEIJING: China announced it had approved a plan to build large passenger aircraft which analysts said could take on Boeing and Airbus, not just at home but eventually on the world market.

The State Council, or Cabinet, made the decision at a meeting presided over by Premier Wen Jiabao after listening to details of a feasibility study on the project, the government said in a statement posted on its website.

The plan is to "design and build airplanes that can carry more than 150 passengers and compete with Airbus and Boeing."

Initial estimates showed research and development would cost between 50 and 60 billion yuan (6.5 billion and 7.7 billion dollars), the report said.

The media characterised the move into big-ticket airplane manufacturing as "a major strategic decision" and said the project would begin "as soon as possible."

In the statement, the Cabinet also said it had approved a plan to set up a company to make large aircraft.

The statement reinforced China's role as a possible entrant into what is effectively a global duopoly shared by US-based Boeing and Airbus of Europe.

Even if challenging the two western behemoths -- something Russia is reportedly also trying to do -- might seem over-ambitious, local experts said China could pull it off.

Given enough resources and a healthy dose of official commitment, China could probably produce a large plane, not just for the domestic market but for exports as well, they argued.
However experts said it would be a long journey before large Chinese passenger jets took to the skies and China must be prepared to import key parts from abroad.
http://geo.tv/geonews/details.asp?id=3645&param=3

 

[Neo]

China copper imports hit highest level in two years

BEIJING/HONG KONG: Chinese refined copper imports hit their highest level in two years in February, causing warehouse stocks to pile up and spot copper values to plunge, but traders do not expect the trend to continue into the next quarter.

China’s refined copper imports soared 177.9 per cent compared with a year earlier to 148,679 tonnes in February, customs data showed on Thursday. Imports rose by 12.8 per cent from January. But the surplus of refined copper could cause imports to slip in March, and fall off sharply into the second quarter.

“After the Chinese New Year, premiums have come down very quickly, and so have imports,” said a senior trader at a Chinese company based in Beijing. The abundant supplies caused spot copper in eastern China to fall to a discount to Shanghai futures prices this week. On Thursday, spot copper traded at a discount of 300 yuan to 500 yuan ($38.80-$64.70) below the April futures contract.

“At the moment, the market is not so good for cathodes. The LME copper prices have come up too quickly. You’d make a small loss for imports today,” the trader said.Strong imports during the first two months of this year reflected a retreat in London Metals Exchange copper futures at the start of the year, combined with a tight spot market in China.

The government also tightened scrap imports in the south, which also pushed up demand for copper cathodes in the first two months. The control has normalised since. LME copper futures for delivery in three months have bounced back to about $6,770 a tonne, a level not seen since mid-December, from the 2007 low of $5,260 hit early in February.

“Rising stockpiles in the Shanghai Futures Exchange indicate the country’s consumption is lower than what people had earlier expected,” said analyst Yang Jun at China Futures.China’s apparent consumption of aluminium soared in the first two months of this year, as strong demand from fabricators spurred smelters to restart idled capacity.

Although China had tried to crack down on the energy intensive industry over the last two years by removing tax incentives for primary aluminium exporters, exporters of aluminium products can still enjoy a rebate of about half the 17 per cent value added tax.

The surge in primary aluminium production has depressed domestic prices and lifted stockpiles. Lower domestic prices have discouraged imports, which have fallen by 64 per cent in the first two months of this year compared with the year before.

Aluminium products exports doubled in the first two months of this year, to 255,811 tonnes. Some traders expect Beijing to reduce or remove the VAT rebate on aluminium products exports in order to prevent a further ramping up of smelting capacity.

http://www.thenews.com.pk/daily_detail.asp?id=47951

 

[Neo]

China to be world’s second biggest consumer by 2015: report
(AFP)

24 March 2007

SHANGHAI - A booming economy will lift China tosecond place behind the United States as the world’s biggest consumer market by 2015, a research report said on Saturday.


Consumption in the Asian giant is expected to make up 14.1 percent of the total among major world economies in 2015, surpassing that of Japan and Germany, Britain and Italy, according to a report by the Credit Suisse bank.

The United States, which last year accounted for 42 percent of global consumption, will account for 37.7 percent by then, the report said.

China’s consumption last year made up 5.4 percent of the global total, putting it on par with Italy, but behind Japan at 11.1 percent, Germany at 7.3 percent, and Britain at 6.6 percent, the report said.

Credit Suisse forecast China’s consumption to move in behind the United States and Japan by 2010.

However, the survey also revealed that despite economic growth of 10.7 percent last year, budgeted and actual spending on many consumer items declined in 2006 compared with the previous year.

It also said personal income grew at a slower pace when compared with China’s rapid economic expansion, profit growth of the nation’s enterprises and government tax revenue growth.

China’s regulators are eager for the nation’s 1.3 billion people to consume more in an economy that still relies heavily on investment and exports for growth.

Chinese retail sales rose 14.7 percent in the first two months of 2007 compared with a year earlier, a level of growth regarded as relatively strong, but one that regulators would like to see higher.

Consumers in China are often reluctant to spend freely because of the crumbling welfare state that forces many people to save any extra money for basics such as education and health care.

http://www.khaleejtimes.com/Display...h/business_March661.xml&section=business&col=

 

[Neo]

March 25, 2007
Venezuela in oil export deals with China

CARACAS, March 24: Venezuela said on Saturday it was working on a raft of oil deals with China, giving impetus to President Hugo Chavez’s attempts to break his country’s dependence on oil exports to the United States.

The China National Petroleum Corp. will look to develop heavy crude oil production in the Orinoco Belt and cooperate with Venezuela in building three refineries in China and a “super-fleet” of crude tankers, the Information Ministry said.

“The United States as a power is on the way down, China is on the way up. China is the market of the future,” Chavez was quoted as saying by an Information Ministry statement after meeting CNPC President Jiang Jiemin in Caracas.

China's economic expansion has turned it into the world’s second-biggest oil consumer. Opec member Venezuela was the fifth-biggest oil exporter to the United States in January.

Analysts reckon it pumps about 2.7 million barrels per day.

Chavez has ambitious plans to lift oil exports to China to lessen its dependence on its arch-foe the United States, saying it hopes to send one million barrels per day to China by 2012.

This optimistic target follows an earlier goal of more than tripling oil exports to China of 160,000 bpd by 2009.

The Information Ministry said CNPC would in the coming days sign a preliminary deal to take a 40 per cent stake in a Venezuelan heavy crude project.

Chavez is pushing ahead with a nationalisation of Venezuela’s oil industry, stripping major US companies such as Exxon Mobil Corp., ConocoPhillips and Chevron Corp. of their majority stakes in heavy crude projects.

While sidelining such majors, Chavez is seeking to do more business with China, Russia and Iran, part of forming what he describes as a multipolar alliance against the United States.

http://www.dawn.com/2007/03/25/ebr17.htm

 

[PakSniper]

Intel's $2.5bn China chip plant

Intel logo and computer user in China, Intel says China is its fastest-growing major market, Intel is to build a $2.5bn (£1.3bn) computer chip plant in China, boosting the country's high-tech industry.

It will be Intel's first integrated wafer plant in Asia, serving the US firm's "fastest-growing" market.

"This project confirms... the strategic importance of China in our global strategy and the IT industry around the world," said Intel boss Paul Otellini.

However, the technology used in the plant is at least a generation behind Intel's most advanced computer chips.

Intel already employs more than 6,000 people in China, making memory chips at factories in Shanghai and Chengdu.

China innovation

The new factory, where production is scheduled to begin in 2010, will use 90-nanometre technology.

It will be based in the port city of Dalian, in the north-east of China.

"China is our fastest growing major market, and we believe it is critical that we invest in markets that will provide for future growth to better serve our customers," said Mr Otellini.

Intel wanted to "support a transition from 'manufactured in China to 'innovated in China'," he said.

Zhan Xiaoqiang, vice chairman of China's National Development and Reform Commission, said he hoped the new factory would "bring more value-added research projects" to the region.

The new factory will take Intel's total investment in China to $4bn.

http://news.bbc.co.uk/2/hi/business/6494401.stm

----

China's future is set it's going to go high-tech soon.

 

[Janbaz]

Hu eyes energy imports on Russia visit

MOSCOW: Chinese President Hu Jintao holds crucial talks with Russian counterpart Vladimir Putin in the Kremlin on Monday as part of a worldwide drive to secure new energy sources for China.

Officials from the two countries were expected to seal trade deals worth up to four billion dollars during Hu’s three-day visit to Russia, as well as discuss the nuclear programmes of Iran and North Korea.

But the key to the visit is energy-hungry China’s bid to obtain guarantees of increased oil and gas deliveries from Russia, the biggest energy producer in the world, analysts said. Last month, Hu went on a 12-day tour to eight African nations that was aimed largely at boosting Chinese investment in natural resources in the continent and securing oil imports from war-torn Sudan.

“Energy is one of the most significant and promising areas of co-operation with China. It is based on large projects of a long-term and mutually beneficial character,” a Kremlin official said ahead of the talks. The Kommersant daily said that the main agreement to be finalised during Hu’s visit was a deal between the Russian and Chinese railway companies that would increase crude oil exports to China.

Russia exported 15 million tonnes of oil to China in 2006, 11 million tonnes of it by rail, officials said. Plans to boost shipments have sparked concern that supplies to the West might suffer.

The visit is also expected to touch on Chinese worries about delays in the construction of a planned oil pipeline from the fields of Siberia to the Chinese oil hub of Daqing, Kommersant reported.

The two leaders are set to meet in Moscow on Monday and sign a joint declaration on Russian-Chinese partnership. They will meet again on Tuesday to inaugurate a major exhibition of Chinese artefacts inside the Kremlin.

Hu will then travel to Tatarstan, a mainly Muslim province in central Russia that has extensive oil reserves and has attracted high levels of foreign investment. Hu said ahead of the trip, his third to Russia since becoming president, that the visit would further cement economic and diplomatic relations that have grown significantly since the collapse of the Soviet Union in 1991.

But Russian newspapers said that behind the high-flown rhetoric, Hu’s trip would be about hard-nosed business bargaining. “Behind the ceremonial facade, the Chinese president is in for some tense negotiations,” Kommersant said. The Nezavisimaya Gazeta ran a headline reading: “Difficult Neighbour: The imbalance between Russia and China is growing.”

The News.
http://thenews.jang.com.pk/daily_detail.asp?id=48519

 

[Contrarian]

Intel's $2.5bn China chip plant

Intel logo and computer user in China, Intel says China is its fastest-growing major market, Intel is to build a $2.5bn (£1.3bn) computer chip plant in China, boosting the country's high-tech industry.

It will be Intel's first integrated wafer plant in Asia, serving the US firm's "fastest-growing" market.

"This project confirms... the strategic importance of China in our global strategy and the IT industry around the world," said Intel boss Paul Otellini.

However, the technology used in the plant is at least a generation behind Intel's most advanced computer chips.

Intel already employs more than 6,000 people in China, making memory chips at factories in Shanghai and Chengdu.

China innovation

The new factory, where production is scheduled to begin in 2010, will use 90-nanometre technology.

It will be based in the port city of Dalian, in the north-east of China.

"China is our fastest growing major market, and we believe it is critical that we invest in markets that will provide for future growth to better serve our customers," said Mr Otellini.

Intel wanted to "support a transition from 'manufactured in China to 'innovated in China'," he said.

Zhan Xiaoqiang, vice chairman of China's National Development and Reform Commission, said he hoped the new factory would "bring more value-added research projects" to the region.

The new factory will take Intel's total investment in China to $4bn.

http://news.bbc.co.uk/2/hi/business/6494401.stm

----

China's future is set it's going to go high-tech soon.

Grrr...Its THIS very market that we want to steal from China.

 

[Neo]

Tuesday, March 27, 2007

Deutsche Bank to strengthen presence in China

FRANKFURT: Deutsche Bank, the biggest bank in Germany, said on Monday it planned to reinforce retail banking interests in China by applying to incorporate its activities there under Chinese law.

Deutsche Bank said in a statement that it had “formally advised the China Banking Regulatory Commission (CBRC) of its decision to apply for local incorporation in China.”

In addition, Deutsche Bank said it would set up its Chinese headquarters in Beijing, while keeping a foreign currency-booking branch in Shanghai.

“Local incorporation expresses not only our commitment to China but also our desire to participate directly in the development of the local financial services market there,” said the head of Deutsche Bank’s Asia Pacific division, Colin Grassie. The head of Deutsche Bank China, Lee Zhang, said: “Local incorporation is an important step in the implementation of our China strategy. We are already well-positioned for expansion and local incorporation will allow us to accelerate our growth plans across all product lines.”

Other big international banks have already applied for local incorporation under a new law passed by Beijing last year. Deutsche Bank is already present in China via a 19-percent stake in Harvest Asset Managment, the country’s biggest independent asset managment company, and via a 9.9-percent stake in Hua Xia Bank.

http://www.dailytimes.com.pk/default.asp?page=2007\03\27\story_27-3-2007_pg5_16