http://mynews.mychinab2b.com Your Source for Latest B2B iNews Thu, 03 May 2012 11:51:13 MDT en http://mynews.mychinab2b.com/Finance/china-denies-yuan-is-undervalued-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/
US Treasury Secretary Timothy Geithner urged China to let the currency strengthen and open its markets wider.

However, Trade Minister Chen Deming denied the yuan was undervalued and pointed to China's shrinking global trade surplus. China reported a US$5.3 billion surplus in March, down from a monthly level of at least US$15 billion for most of 2011.

"Given that China's global trade is basically balanced while running a surplus with the US shows that the exchange rate plays a minimal role in trade," Chen told reporters.

Geithner urged further appreciation of the yuan while acknowledging China's plan to overhaul its financial system to increase support for private enterprise and reduce special treatment for state-owned companies.

"The United States has a strong interest in the success of these reforms," he said.

"A stronger, more market-determined currency would reinforce China's reform objectives of moving to higher value-added production, reforming the financial system and encouraging domestic demand," he said.

The yuan has gained more than 13 percent over the past two years since China announced an acceleration of exchange rate reform. With the yuan standing at around 6.3 against the dollar, Chinese authorities said earlier that the yuan had approached a relatively fair value.

Chen renewed demands for Washington to ease export controls on more than 2,400 high-tech products. The US restricts sales of such "dual-use" goods with possible military applications.

He said the current trade imbalance between the two countries had mainly been caused by US restrictions on these products being exported to China.

He said it would be difficult for the two countries to achieve balanced trade if the US continued to maintain control over such a large variety of exported goods.

Chen urged the US to stick to its pledges and take timely action in relaxing its export controls.

"Currently, the fact is that the US has not only failed to relax export restrictions, but has instead tightened them in some areas," Chen said. "For instance, the US is now mulling loosening controls on exports of commercial satellites, but it has also stressed that the controls will not be eased for China."

He added that a failure to remove export controls for China would be harmful to US companies and employment, as well as the US plan to speed up exports.

"I hope I will have enough patience and that this day of easing export controls will not be far off," Chen said.

Chen also attributed US business fears of a hard landing in China to "politicians and media hype" while urging the US not to erect barriers to Chinese investment on the grounds of safety.

Chen told a news conference he had noticed that some US businesspeople still had concerns about investing in China.

"On one hand, they worry about a possible economic hard landing in China. On the other hand, their fears are also a result of politicians and media hype," Chen said, pledging to continue to improve the country's investment environment.

The minister said some US companies had misunderstandings about China's investment climate. "China has promised not to use technology transfers as a requirement when approving foreign investment.

"We hope US companies will not view technology transfer demands during business negotiations as forced transfers required by the government," Chen said.

"The two countries do have a considerable diversity of opinions on some issues," said Shen Dingli, director of the Center for American Studies at Fudan University.

"That is why such dialogues are necessary to strengthen trust and dismiss doubts. ]]> Thu, 03 May 2012 11:51:13 MDT admin Finance 2 http://mynews.mychinab2b.com/Finance/china-denies-yuan-is-undervalued-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/ http://mynews.mychinab2b.com/Economy/trade-china-to-encourage-import-rise-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-/
In a clear signal to encourage imports, the State Council, China's Cabinet, said in a guideline posted on its website yesterday that China will stabilize its imports of commodities and actively increase the imports of advanced technology and equipment, key components and parts, as well as resources and raw materials.

Imports of consumer goods will also be increased "appropriately," according to the 18-clause guideline.

Increased imports and the balanced development of foreign trade will ease domestic pressures for the resources and environmental sectors, accelerate scientific and technological innovation, improve people's consumption and reduce trade frictions, said the guideline.

Currently, China is the world's second-largest importer, and it has been the world's largest exporter since 2009 when it overtook Germany.

China targets 10 percent annual growth in its foreign trade this year to further improve its international balance of payments, sharply down from 22.5 percent last year when China's imports and exports hit US$3.64 trillion.

China saw a US$670 million trade surplus in the first quarter, with imports reaching US$160.31 billion, according to customs data.

In the first quarter, China's imports and exports expanded 7.3 percent from a year ago to reach US$859.37 billion, marking the slowest pace since the fourth quarter of 2009 and showing a growth rate that was 22.3 percentage points lower than that in 2011.

According to the guideline, China will encourage imports from the least-developed countries within multi-lateral trade rules with faster tariff cuts, and it will expand imports from developing countries.

China will lower import tariffs for some resources and raw materials with provisional tax rates and "appropriately" bring down import tariffs for some goods that are closely linked with people's daily life, the guideline said, without giving further details. ]]> Mon, 30 Apr 2012 13:13:30 MDT admin Economy 2 http://mynews.mychinab2b.com/Economy/trade-china-to-encourage-import-rise-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-/ http://mynews.mychinab2b.com/Finance/rules-to-ease-delisting-of-stocks-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-/
The Shanghai Stock Exchange and Shenzhen Stock Exchange both posted planned rules on their websites yesterday, including more delisting triggers for the main board in Shanghai and the main board and SME board in Shenzhen.

The triggers include negative net assets, revenue of less than 10 million yuan (US$1.6 million), no-approval or no-comment from accounting firms, inactive trading or poorly performing prices, or the inability to post an annual report after the suspension of listing.

For instance, companies listed in Shanghai that report two straight years of negative net assets will delist. Or companies reporting four years of annual revenue of less than 10 million yuan will delist in Shanghai.

"Improving the delisting rules will allow capital markets to work more efficiently, improve the quality of listed companies and protect the interests of small investors," the Shanghai exchange said in a statement.

The Shanghai bourse will also create an alert system for firms to warn investors of risks.

The two exchanges are soliciting public opinion on the planned moves until May 20 and a final version will follow, though no d ate was given.

On April 20, a stricter delisting rule for the ChiNext in Shenzhen - China's Nasdaq for start-ups - was put forth and served as a prelude for yesterday's delisting plans for the main boards and SME board.

Zhao Xiaoli, a Shanghai Securities investment consultant, said the new delisting rules are aimed at spurring public companies to improve their operation and pay more attention to their listing status.

The delisting rules come amid China's wider campaign to clean up its stock market. Regulators have already beefed up curbs on insider trading, pushed for more transparency by publicizing companies seeking listing, and urged firms to issue dividends to allow investors to benefit from the growth of the capital market.

On Saturday, the country's stock market watchdog published a new guideline for initial public offerings on the Chinese mainland, which aims to make the prices of new shares to be settled at "more reasonable" levels.

The rule sets out the responsi-bilities of issuers and other parties involved in IPOs and pledges to punish illegal practices. ]]> Sun, 29 Apr 2012 13:58:52 MDT admin Finance 2 http://mynews.mychinab2b.com/Finance/rules-to-ease-delisting-of-stocks-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-/ http://mynews.mychinab2b.com/Stock/chinext-to-allow-delisting-of-firms-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-1/
The Shenzhen Stock Exchange also said in a statement that companies on the ChiNext will be delisted if they receive three criticisms from the exchange in the recent three years, or if their share prices fall below their par value for 20 consecutive trading days, or if net assets become negative in the past two years after balance sheet adjustments due to false auditing.

The exchange said companies will be suspended from trading on ChiNext if they report negative net assets in the latest fiscal year. It also said it will tighten listing rules and backdoor listing will not be tolerated.

The action is a clear sign that the authorities intend to regulate the poorly-performing board more strictly for better management and control.

The ChiNext-listed firms saw their combined annual profit growth halve from that in 2010 to 17 percent last year. So far this year, ChiNext's performance has been worse than that of the main boards on the Chinese mainland.

ChiNext was launched in October 2009 to help innovative companies get access to funds but investors have been disappointed as their growth outlook was not as high as they had hoped. ]]> Fri, 20 Apr 2012 14:19:38 MDT admin Stocks 1 http://mynews.mychinab2b.com/Stock/chinext-to-allow-delisting-of-firms-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-1/ http://mynews.mychinab2b.com/Economy/import-duty-cut-praised-%7C-economy-%7C-chinadaily-com-cn/
China's decision to cut import tariffs, against the backdrop of lurking protectionism in "too many" countries, has been hailed by the World Trade Organization.

"At a time when too many governments are reverting to trade restrictive measures, news of China's market-opening initiative is most welcome," WTO spokesman Keith Rockwell said in an interview with China Daily in Brussels.

Rockwell was speaking after China announced a package of measures cutting import tariffs last week.

The measures will see duty reduced on "some energy products, raw materials, consumer goods closely related to people's lives, and key items that China does not produce".

And Beijing will encourage more purchases from countries and regions that have signed free trade agreements with China.

Boosting imports will entail a more open market for a range of goods, Rockwell said. The Ministry of Commerce will announce details of the measures soon.

Former deputy minister of commerce Wei Jianguo told China Daily last month that tariffs on a wide range of consumer goods, including luxury items, will be reduced at least twice this year.

"Time is crucial for China to take measures to promote imports as the nation's economy slows down," said Huo Jianguo, director of the Chinese Academy of International Trade and Economic Cooperation with the Ministry of Commerce.

Import growth has dropped since late last year. In January and February, imports grew 7.7 percent to $268.6 billion, according to the General Administration of Customs.

China cut its economic growth forecast to 7.5 percent for this year. Some analysts predict that the economy might have grown 8.4 percent in the first quarter, the slowest since the second quarter of 2009.

Minister of Commerce Chen Deming said on March 18 that China, now the world's second-largest importer, will become the biggest in a few years.

China not only provides the world with high-quality products at low cost, but also buys high-end goods supplied by global brands, Chen said.

The country's trade surplus narrowed 14.5 percent year-on-year to $155.14 billion in 2011, with imports up 24.9 percent to $1.74 trillion.

The latest import-boosting measures follow last month's annual session of the National People's Congress, the top legislature.

The NPC approved the restructuring of the economy by boosting domestic consumption and balancing exports and imports.

The international community will benefit from this restructuring, Zhou Shijian, a senior expert at Tsinghua University, said.

"I don't think anybody would be foolish enough to say no to China boosting imports."

Rockwell said these measures will help China's balance of trade.

China had been criticized by some developed nations over its trade surplus but ironically some countries, led by the United States, actually set export curbs on China.

"However, trade balances are largely driven by broader macroeconomic factors," said Rockwell, listing factors such as savings and consumption in particular countries.

Chinese companies will also benefit, Rockwell said.

"China is deeply integrated in global supply and production chains. To be competitive in such arrangements, companies need to be able to access imports at the lowest prices possible," Rockwell said. "Remember that tariff reductions are tax cuts, which mean lower prices for these valuable imports."

Duncan Freeman, a senior researcher with the Brussels Institute of Contemporary China Studies, said import duty reductions will help European companies in targeted sectors.

But this is only one element and providing credit to importers will also help, he said.

"China has a lot measures to adopt to ease access to its market. The bigger question will be how import demand develops," Freeman said.

This will depend on the sustained growth of the economy and rising living standards, which will create demand for technology and raw materials, as well as consumer goods, he said.

Ade Onitolo, director of Political Risk Forecasting at the London-based Exclusive Analysis, said China has already embarked on an ambitious roadmap in its 12th Five-Year Plan (2011-15) to remodel its economy.

"China made progress in this regard last year," Onitolo said. ]]> Thu, 05 Apr 2012 12:34:12 MDT admin Economy 1 http://mynews.mychinab2b.com/Economy/import-duty-cut-praised-%7C-economy-%7C-chinadaily-com-cn/ http://mynews.mychinab2b.com/Economy/steady-economic-expansion-in-march-%7C--1/
However, the sudden rise in March didn't erase economists' worries about the economy, as they believe there is still space for easing monetary policy to support industrial businesses depending on the situation.

The PMI, a measure of manufacturing expansion, jumped to 53.1 in March, the highest since April 2011, compared with 51 in February and 50.5 in January, according to a statement by the National Bureau of Statistics and China Federation of Logistics and Purchasing.

The figure is based on a survey of managers from more than 800 companies in 28 industries. A reading above 50 means expansion, and a number below 50 shows contraction.

Steady economic expansion in March

The March PMI indicated that economic growth was rebounding at a faster pace thanks to the increase of new overseas orders amid the easing European debt crisis, according to Zhang Liqun, a senior economist at the Development Research Center of the State Council.

According to the statement, a sub-index of new orders climbed to a 15-month high of 55.1 from February's 51. Meanwhile, the output index reached 55.2 in March, the highest since May 2011, indicating accelerating production in the industrial sector.

New export orders rose to 51.9, up 0.8 points from February, showing steadily increasing overseas demand, according to the statement.

"Exports are growing faster than expected, which is likely to support a GDP rebound in the second quarter after it hit bottom in the first three months," said Cao Yuanzheng, chief economist with Bank of China.

Cao predicted a GDP growth rate in the first quarter of 8.2 percent, the lowest in two years.

"The government may slightly ease monetary policy according to the changing economic climate and boost GDP to 8.4 percent in the second quarter," he said.

In addition, the sub-index of input prices of raw materials increased for the fourth consecutive month to 55.9, "which is a warning for the potential rebound of inflationary pressure", Zhang said.

A statement from the central bank released on Saturday night showed that the government will maintain a prudent monetary policy.

"Although the European debt crisis is easing, there are still uncertainties in the global economy," the statement said.

"But economic growth may still slow in the coming months because there is a gap between the PMI figure and the real business situation," according to Zhang.

HSBC Holdings Plc released its own PMI survey that gave a reading of 48.3 in March, a further drop from February's 49.6, signaling a fifth consecutive monthly deterioration in manufacturing operating conditions.

It was not the first time that HSBC's figures contradicted official figures. Different from the NBS and CFLP survey that covers many big State-owned businesses, most of the HSBC survey's more than 400 respondents are medium and small companies.

"The PMI from the government is more affected by seasonal factors, which have increased by 3.2 points on average in each March from 2005 to 2011 because of the re-started production after the Lunar New Year holidays," said Qu Hongbin, chief economist of Asian economic research at HSBC.

The Hong Kong-based bank said that a continually slowing growth dragged down by weakening new export orders is likely to prompt further easing of monetary policies.

"We still expect at least another cut of the required reserve ratio of 100 basis points in the first half and additional tax breaks and fiscal spending," said Qu in a research note.

The weak economic growth in the world's second largest economy may not improve through the year unless the government unleashes a new stimulus, said Wang Tao, chief economist in China with the UBS.

"The modest policy easing is already under way," said Wang. She expected new bank lending may increase to as much as 900 billion yuan ($143 billion) with one more cut of the reserve ratio in the next two months. ]]> Wed, 04 Apr 2012 13:27:01 MDT admin Economy 2 http://mynews.mychinab2b.com/Economy/steady-economic-expansion-in-march-%7C--1/ http://mynews.mychinab2b.com/Finance/time-may-be-right-for-rate-reform-pboc-chief-%7C-policy-and-regulation-%7C-chinadaily/
"The results of the restructuring of commercial banks have eliminated their financial weakness and laid the key foundation as we move forward to the next round of interest rate liberalization," Zhou wrote in the central bank-operated China Finance Magazine.

Meanwhile, Zhou said, deposit insurance was an important component of the "financial safety net" in risk control and resolution amid the global financial crisis.

He added that the authorities are studying the launch of such a system when conditions mature.

Deposit insurance protects bank depositors, in full or in part, from losses caused if a bank runs into trouble or fails.

Hu Xiaolian, vice-governor of the central bank, told a recent news briefing that the establishment of such a system is a pre-condition for interest rate liberalization, because it would help keep the banking system stable amid intensifying competition.

Zhou did not give a specific timetable for these reforms.

Economists see market-based interest rates as a key element of China's reforms that would help boost domestic consumption.

Domestic deposit rates were negative for a long period until last month, when the inflation rate finally fell back below the one-year fixed deposit rate.

Li Daokui, former adviser to the central bank, said in a speech at a forum last weekend that the State-owned banks are "dinosaurs" that are now big enough to fend for themselves.

"Banks have high profits, and we don't need to worry about protecting them," Li said.

However, concerns persist that that liberalized interest rates will unleash competition in the banking system and hurt smaller lenders, or even drive some out of business.

Zhou also wrote that China should open up its financial markets, enhance the two-way flexibility of the yuan and gradually open more channels for outbound capital flows and push forward the opening of the capital account.

EFSF investment

Officials with the PBOC's research bureau said in another article in the magazine that China should buy more bonds issued by the European Financial Stability Facility, even though the eurozone bailout fund's credit rating was lowered.

In January, rating agency Standard & Poor's cut its credit rating of the EFSF by one notch to AA+.

But Ji Min, director of the central bank's macroeconomic research department, said the EFSF is still a major tool for Europe to fight the debt crisis, so returns on its bonds are stable.

Meanwhile, buying more EFSF bonds will give China more leverage in dealing with bilateral trade with Europe, he said.

Valuations of some European banks have fallen significantly, which offers a good opportunity for China to invest directly in these banks, he said. ]]> Tue, 20 Mar 2012 15:20:48 MDT admin Finance 1 http://mynews.mychinab2b.com/Finance/time-may-be-right-for-rate-reform-pboc-chief-%7C-policy-and-regulation-%7C-chinadaily/ http://mynews.mychinab2b.com/Finance/japan-to-buy-10-3b-in-chinese-govt-bonds-%7C-economy-%7C-chinadaily-com-cn/
Japan announced on Tuesday that it has won Chinese authorities' approval to buy 65 billion yuan ($10.3 billion) in Chinese government bonds.

The move will help Japan diversify its reserves away from the dollar and strengthen ties between the two largest creditor countries in the world.

The timing of the purchases has not been set yet. A few months of preparation will be needed for the completion of technical procedures before the Chinese bonds can be bought, Jun Azumi, Japanese finance minister, told a news conference in Tokyo, according to Xinhua News Agency.

"We will consider trends in the financial markets to decide on a right time for the purchases," Azumi said.

He also suggested the initial purchases would be in small amounts and take into account conditions in Japan's foreign-currency assets.

"We think this ($10.3 billion) is an appropriate amount when you consider our common goal of strengthening economic cooperation between Japan and China," Azumi told reporters.

In December, the two countries agreed at a summit to promote trade in the yen and the yuan, as well as to invest in each other's bond markets.

Japan's announcement on Tuesday marks the first time it has given public information about the quota for purchasing Chinese government bonds.

The announcement also came after Chinese central bank officials said on Monday that China and Japan have "great potential" to work together in the fixed income market.

Yi Gang, vice-governor of the People's Bank of China and head of the State Administration of Foreign Exchange, said Japanese investors are welcome to invest in the Chinese bond market and that China would continue to buy Japanese government debt.

"But a decision to increase the investments would be made after considering mutual benefits, and yen purchases would be reduced if Japanese concerns arose over the yen's appreciation," Yi said.

Among all countries, China and Japan hold the largest foreign-exchange reserves and are also the top purchasers of US Treasury bonds. Moreover, both are looking to reduce their exposure to dollar assets at a time that the US economy is wobbling.

Japan's purchase quota for Chinese government bonds is equal to only 0.7 percent of Japan's $1.3 trillion in foreign reserves. The country's dollar assets, in comparison, make up more than 70 percent of that portfolio.

Xu Wei, a researcher with the China Center for International Economic Exchanges, said the plan to buy yuan is only a beginning. In the long run, both countries are likely to try to move away from US dollars and to work more closely with each other, he said.

"Considering the deepening debt crisis in Europe and the weak recovery of the US, investing in China's government bonds would be a smart step for the Japanese government to take," Xu said.

"It could help solidify confidence in the Asian market and thereby benefit the global recovery," Xu said.

Meanwhile, Japan's plan to buy Chinese government bonds has helped ease appreciation pressures on the Japanese currency while the country recovers from the earthquake and tsunami that struck it a year ago, she said.

Xu also considers Japan's purchasing plans as a sign of progress toward China's goal of making the yuan an international reserve currency. He said Japan's example may prompt other countries to follow it.

Earlier in January, South Korea also said that it might invest part of its $300 billion in foreign-exchange reserves in yuan-denominated assets.

According to statistics, the average yield on investment in five-year US Treasury bonds was 1.41 percent last year, while the average return on Chinese government bonds with the same maturity was 3.52 percent. ]]> Tue, 13 Mar 2012 13:12:26 MDT admin Finance 1 http://mynews.mychinab2b.com/Finance/japan-to-buy-10-3b-in-chinese-govt-bonds-%7C-economy-%7C-chinadaily-com-cn/ http://mynews.mychinab2b.com/Economy/february-cpi-declines-to-3-2-/
A fall in the rate of inflation in February has put an end to the "negative deposit rate" and will allow room for more measures to restore growth. However, massive policy easing may not be on the cards, as long-term pressures remain, said economists.

China's consumer price index, a main gauge of inflation, rose 3.2 percent year-on-year in February, the National Bureau of Statistics said on Friday.

The growth, down from 4.5 percent in January, hit the lowest level in the last 20 months. It was also the first time that the country's monthly inflation rate has fallen below 4 percent since Oct 2010.

Food prices were still the main driver of inflation, with an increase of 6.2 percent, while non-food prices rose 1.7 percent. The price of consumer goods gained 3.9 percent, and the price of services rose 1.5 percent.

According to the NBS, February's producer price index, a measurement of inflation at the wholesale level, was the same as the year-earlier reading.

The February CPI marks the end of the "negative deposit rate" era that's been in place since Feb 2010, as the inflation rate has finally fallen below the annual 3.5 percent rate for one-year fixed deposits.

"This is a landmark in China's efforts to control prices that started in the second half of 2010," said Jia Kang, a senior researcher with the Ministry of Finance.

Li Daokui, an adviser to the People's Bank of China, said he expected to see inflation ease to 2.5 percent in the middle of the year, and for annual CPI to be around 3 percent "as long as there is no extreme weather or an oil crisis in Iran, which could pose more inflationary risks".

Meanwhile, "the weaker CPI outlook leaves more room for the long-planned energy pricing reform", said Li on Friday.

The February data were released after Premier Wen Jiabao said on Monday that curbing prices will remain a major task this year, and vowed to bring full-year inflation to below 4 percent.

Although the inflationary pressure is lower this year, there are potential risks that will push up prices, and pose a threat to the economy if not contained, said Ma Jiantang, the head of the NBS, on Monday.

"The sharp decrease in the February reading was mainly caused by a higher base during the 2011 Lunar New Year, and retreating food prices after this year's festival," said Lian Ping, chief economist at Bank of Communications Ltd.

Lu Zhengwei, chief economist at Industrial Bank Co Ltd, said the CPI fall may have already undercut some future decreases, and will result in inflation not falling much further in the next three months.

Surging global oil prices and a rebound in the purchasing managers' index, a gauge of industrial activity, will slow the pace of monetary policy easing, said Lu.

Lian said the reserve-requirement ratio for lenders may be lowered at least twice, or possibly four times, this year to facilitate stable growth, but rejected suggestion that there may be massive reductions, because "time is still needed to digest excessive liquidity".

"As the pressure of long-term inflation remains, it's not necessary to reduce the benchmark interest rate," he said.

That comment was echoed by Jiang Chao, an analyst with Guotai Junan Securities Co Ltd.

"There is not enough motivation for the central bank to cut the interest rate at the moment," he said.

"Unlike in 2008, when the economy was in deflation, current economic growth is quite stable ... and the policy environment is one of de facto relaxation," he said

Apart from the price indices, other economic indicators released on Friday also indicated a slowdown.

China's urban fixed-asset investment climbed 21.5 percent in the first two months of 2012 from the same period a year earlier. Meanwhile, the growth of industrial value-added output slowed by 1.4 percentage points and retail sales by 3.4 percentage points.

Qu Hongbin, chief China economist at HSBC Holdings PLC, said the decreases suggest that the growth of the real economy, including manufacturing and services, might have already plunged below 8 percent. ]]> Tue, 13 Mar 2012 13:04:02 MDT admin Economy 1 http://mynews.mychinab2b.com/Economy/february-cpi-declines-to-3-2-/ http://mynews.mychinab2b.com/Economy/january-pmi-shows-chinas-economy-stabilizing-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-/
Their results, however, pointed to a stabilizing trend in the world's second-largest economy which remained a star performer last month amid slow economic growth worldwide, analysts said.

The official Purchasing Managers' Index, a comprehensive gauge of manufacturing activities weighted more towards large state-owned enterprises, sat at 50.5 in January, up 0.2 point from a month earlier, the China Federation of Logistics and Purchasing said.

In comparison, the HSBC China Manufacturing Purchasing Managers' Index, which is slanted more towards private and export-oriented companies, remained below 50 in January at 48.8, although it edged up a bit from December's 48.7.

In both surveys, a reading above 50 indicates expansion; below 50 means contraction.

"The rebound for a second month in the official PMI shows China's economy is stabilizing," said Zhang Liqun, an analyst appointed by the federation. "The improvement in new orders reflects a recovery in manufacturing thanks to healthy domestic demand."

Component indices showed that new orders rose 0.6 point from December to 50.4, while production gained 0.2 point to 53.6. Trading was weak as new export orders fell 1.7 points to 46.9 and imports shrank 2.2 points to 46.9 as well.

Chang Jian, an economist at Barclays Capital, said the official PMI increase should be treated with more optimism because it defied the seasonal decline in the month of the Chinese New Year.

"In our view, the upside surprise also suggests the stronger-than-expected momentum in December's data is not temporary or driven solely by seasonal factors," Chang said. "It reflects the effect of earlier selective monetary easing and proactive fiscal policy, and hence can be sustained."

For private and export-oriented manufacturers which still reported activities contraction, Qu Hongbin, chief economist for China at HSBC, said it called for more aggressive easing measures to support their growth.

"Given the inflation is no longer a concern, China should launch more supportive policies for smaller manufacturers," Qu said. He added that once filtering through, the policy easing should ensure a soft-landing this year in China's economy.

"But first quarter is likely to be tough, with gross domestic product to be around 8 percent," Qu said.

China's economic growth stood at an annualized 9.2 percent last year, compared with 10.4 percent in 2010. But the pace moderated to 8.9 percent in the final quarter of last year, the slowest in two and a half years. ]]> Tue, 31 Jan 2012 23:09:27 MST admin Economy 1 http://mynews.mychinab2b.com/Economy/january-pmi-shows-chinas-economy-stabilizing-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-/ http://mynews.mychinab2b.com/Economy/economy-davos-leaders-focusing-on-china/ Thu, 26 Jan 2012 20:44:22 MST admin Economy 1 http://mynews.mychinab2b.com/Economy/economy-davos-leaders-focusing-on-china/ http://mynews.mychinab2b.com/Investments/cic-buys-minority-stake-in-thames-water-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/
China Investment Corp said in a statement yesterday that it acquired an 8.68 percent stake in Thames Water through a wholly-owned unit. But CIC did not provide a value for the deal.

The CIC transaction followed a visit to Beijing earlier this week by George Osborne, the UK's finance minister, who is seeking Chinese investments in his country's infrastructure sector.

"It is a vote of confidence in Britain as a place to invest and do business. This (CIC) investment is good news for both the British and Chinese economies," Osborne was quoted as saying by Reuters.

The deal marks the second recent foreign acquisition of a stake in Thames Water, the UK's largest water and wastewater service provider, after the Abu Dhabi Investment Authority bought 9.9 percent in Kemble Water Holdings, the parent of the utility.

CIC executives previously said it was keen to invest in infrastructure of Western countries. The lingering European sovereign debt crisis has made assets there attractive to investors all over the world.

Thames Water says it services 8.8 million customers across London and the Thames Valley and handles sewage for an area with 14 million customers.

CIC faced criticism over the performance of investments made just as the 2008 global crisis was developing.

But its performance has improved since, and the fund said that it made an 11.7 percent return in 2010, the latest year for which results have been reported. ]]> Sat, 21 Jan 2012 20:11:16 MST admin Investments 1 http://mynews.mychinab2b.com/Investments/cic-buys-minority-stake-in-thames-water-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/ http://mynews.mychinab2b.com/Finance/fdi-registers-another-drop-in-dec-%7C-economy-%7C-chinadaily-com-cn/
BEIJING - Foreign direct investment (FDI) in China registered the sharpest year-on-year decline in December since August 2009, when the country was hit by the global financial crisis, the Ministry of Commerce said on Wednesday.

Officials and analysts attributed the slowdown to a fragile recovery for the world economy and increasing labor costs.

Yet they still believed China will maintain stable FDI growth in the future as the country continues to open up its market and improve its investment environment.

FDI in China declined by 12.73 percent in December from the year before, the second month in a row that had seen such a decrease, the ministry said.

In 2011, the country's total amount of FDI reached a new high of $116 billion but its growth rate slowed to 9.72 percent from 17.4 percent in 2010, according to the ministry.

Investment from the United States decreased by 26.1 percent in 2011 to $3 billion, while that from the European Union decreased by 3.65 percent to $6.3 billion, the ministry said.

"China's FDI increase in 2011 was one of the lowest in recent years," said Shen Danyang, a ministry spokesman.

He said the slowdown was mainly the result of a sluggish economic recovery in the US, the European Union and other developed economies, which has prompted investors to hold back.

In the meantime, foreign direct investment in the Chinese service industry outstripped the manufacturing industry for the first time, making up 47.6 percent of the total investment recorded in 2011, the ministry said.

"Pushed by a stronger yuan, China's labor costs have been increasing in recent years," said Lu Zhengwei, an economist with the Industrial Bank Co Ltd.

"This may squeeze the manufacturers' profits and pose difficulties to attracting FDI to the manufacturing sector."

Nevertheless, analysts said China still has the potential to retain its position as the most attractive place to invest in.

Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce, said the country should continue opening up its service industry to foreign investors.

China has improved its FDI structure with more investments flowing into the service industry. A more open service industry, along with improving investment opportunities in the western parts of China, will help the country maintain stable FDI growth, Huo said.

The value of China's outbound investment in 2011 stood at $60 billion, an increase of 1.8 percent from the year before - much lower than the growth rate of 36.3 percent recorded for 2010, the ministry said.

Pressed by the dismal world economy, countries have increasingly begun to take protective measures against investments by China's State-owned enterprises, Shen said, citing a report by the United Nations Conference on Trade and Development.

Investment outflows to the European Union jumped by 94.1 percent in 2011 to hit $4.3 billion and those to Africa increased by 58.9 percent from 2010 to hit $1.7 billion, according to the ministry.

Huo said the eurozone's debt crisis might provide an opportunity to bring about more cooperation among Chinese and European companies.

"The world has now reached a consensus: If we are to overcome the current global economic stasis, we must cooperate," Huo said.

This will provide an opportunity for Chinese companies to invest abroad, especially in the European Union, he said. ]]> Thu, 19 Jan 2012 20:00:35 MST admin Finance 1 http://mynews.mychinab2b.com/Finance/fdi-registers-another-drop-in-dec-%7C-economy-%7C-chinadaily-com-cn/ http://mynews.mychinab2b.com/Economy/china-gdp-gains-9-2-in-2011-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/
China's GDP totaled 47.16 trillion yuan... ]]> Mon, 16 Jan 2012 19:32:10 MST admin Economy 1 http://mynews.mychinab2b.com/Economy/china-gdp-gains-9-2-in-2011-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/ http://mynews.mychinab2b.com/Economy/december-export-growth-slows-trade-surplus-expands-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/
Overseas shipments rose 13.4 percent from a year ago, slowing down from a 13.8 percent increase in November, the... ]]> Mon, 09 Jan 2012 20:03:25 MST admin Economy 1 http://mynews.mychinab2b.com/Economy/december-export-growth-slows-trade-surplus-expands-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/ http://mynews.mychinab2b.com/Economy/tax-china-vat-reform-to-benefit-120000-businesses-in-shanghai/ Thu, 29 Dec 2011 19:58:39 MST admin Economy 1 http://mynews.mychinab2b.com/Economy/tax-china-vat-reform-to-benefit-120000-businesses-in-shanghai/ http://mynews.mychinab2b.com/Economy/china-eyes-11-industrial-growth-in-2012-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/
Miao said development... ]]> Mon, 26 Dec 2011 01:45:50 MST admin Economy 1 http://mynews.mychinab2b.com/Economy/china-eyes-11-industrial-growth-in-2012-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/ http://mynews.mychinab2b.com/Economy/reserve-ratio-for-banks-decreased-%7C-markets-%7C-chinadaily-com-cn/
The central bank will reduce the ratio of money that banks have to set aside on deposit by 50 basis points among commercial lenders, effective on Dec 5, said the People's Bank of China in a statement on Wednesday.

After the move, the reserve ratio for major banks will be 21 percent, while the ratio for small and medium-sized lenders will stand at 17.5 percent. Analysts expect the cut in the ratio will inject 350 to 400 billion yuan ($55 to $63 billion) into the market.

"The cut falls within expectations. The current liquidity in the Chinese banking system has become too tight and the liquidity shortage forced the central bank to inject money into the market," said Ma Jun, chief economist at Deutsche Bank Greater China.

China has increased the reserve ratio 12 times since 2010 to soak up liquidity and curb inflation, including six times in the first half of this year.

The latest move came a little earlier than expected and was mainly due to the dramatic decrease of yuan positions for foreign exchange purchases among Chinese bankers, said Li Huiyong, a Shanghai-based economist with Shenyin & Wanguo Securities Co.

In October, the yuan positions - an indicator of "hot money" inflows or outflows - fell for the first time in four years as it went down by 24.9 billion yuan.

"The passive contraction of liquidity and non-optimistic economic prospects jointly generated the necessity to inject more money," Li said, adding the cut indicated that the yuan positions for November will probably continue to decline.

Analysts expected the tone of China's macro policy may change during the nation's annual Central Economic Work Conference, which is scheduled this month, as inflation has already started easing.

Lu Zhiming, economist at the Bank of Communications Ltd, said the country's inflation rate is predicted to fall for a fourth consecutive month in November as the consumer price index, a main gauge of inflation, is likely to drop to 4.3 percent, dragged down by lower food prices, declines in global commodity prices and a higher base figure of one year earlier.

The index for 2011 will be 5.4 percent, before it falls to somewhere between 3 and 3.5 percent next year, he predicted.

Liu Ligang, head of Greater China economics at ANZ Banking Group, predicted an official purchasing managers' index for November will be around 49.7, the first time that the index would have fallen below the contraction line of 50 since February 2009.

"We believe it's very necessary for authorities to loosen the monetary stance generally to stimulate the economy."

He said a slide in property transaction volumes of more than 30 percent and slumping real estate prices add to the likelihood the Chinese economy may experience a hard landing.

But Guo Tianyong, economist at the Central University of Finance and Economics, said the cut in the reserve ratio should not be seen as a change in macro policy tone, because it mainly targeted the net liquidity drain among banks due to capital outflows in October.

"The monetary stance needs to remain relatively tight given that inflation is still at high levels, and given that economic restructuring as well as curbs on the real estate market are still ongoing," Guo said.

"We indeed predicted that China will loosen its monetary policies, but the government will not make the change high profile," said Wang Tao, head of China economic research at UBS Securities Co Ltd, adding the traditional year-end increase in expenditures of the nation's fiscal deposit will inject more liquidity into the system.

Lu said interest rates will stay the same for a while. "The right time for an interest rate cut has not arrived," Lu said.

Tian Yuan, a macroeconomics analyst at Bank of America Merrill Lynch, said the move doesn't necessarily mean that the People's Bank of China will change the direction of its monetary policy.

"The move is within our expectations, but it's mainly targeted at the banking system, which has witnessed a decline in deposits in recent months," she said.

"If the banks don't have enough money to lend, that will be a big problem in China, where bank loans are the main source of funding."

But she added that liquidity is still ample in society as a whole, and loosening monetary policies too much threatens to fuel inflation, which has just slightly eased.

Tian added that lowering the reserve ratio won't have an impact on the country's property market, which has just shown signs of decline after various government measures.

"The banks are simply not allowed to lend to developers. It's not about how much money they have," she said.

Wang Jianhui, chief economist with Southwest Securities Co Ltd, said the move marks the end of this round of tightening.

"Exports will probably face a sharp decline next year and the country's enterprises are seeing increasing raw material prices and wages. So if the tightening continues there will be problems in economic growth," he said.

The faster-than-expected reduction in the reserve ratio should be read in the context of the latest data from the purchasing managers' index, said Fan Cheuk Wan, managing director of Credit Suisse.

"If the index only declines modestly, a reduction in the reserve ratio may signal that economic growth is just slowing down. However, if the index drops drastically, it could flag the possibility of a hard landing," Fan said.

The reduction could be a pre-emptive action to buffer the impact of a possibly poor purchasing managers' index, suggested Banny Lam, associate director and economist at CCB International Securities. ]]> Wed, 30 Nov 2011 15:18:59 MST admin Economy 1 http://mynews.mychinab2b.com/Economy/reserve-ratio-for-banks-decreased-%7C-markets-%7C-chinadaily-com-cn/ http://mynews.mychinab2b.com/Economy/gdp-growth-forecast-reduced-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/
The gross domestic... ]]> Tue, 29 Nov 2011 13:50:30 MST admin Economy 1 http://mynews.mychinab2b.com/Economy/gdp-growth-forecast-reduced-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5/ http://mynews.mychinab2b.com/Economy/economic-growth-set-to-slow-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-/
The ministry's prediction is more optimistic than the projection by the World Bank which said on Tuesday that China's growth will slow to 9.1 percent this year, with expansion at a slower 8.4 percent next year.

In 2012 China's industrial sector may continue to weaken and the rate will moderate 1 to 2 percentage points from this year's 14 percent, said Huang Libin, deputy director of the ministry's Operation, Monitoring and Coordination Bureau.

"Industrial production has shown signs of moderation, but it is still on track to a relatively stable growth," Huang said. "While exports of manufactured goods are slumping due to deteriorating global economic conditions, domestic demand helps to keep industrial production at an elevated level."

In the first 10 months, industrial output in China grew 14.1 percent annually but it slowed to 13.2 percent in October from the same month last year amid shrinking demand from overseas markets.

But Jin Bei, a professor at the Chinese Academy of Social Sciences, said domestic demand has started to ease and "consumption in China has not lived up to expectations that it would lead the (economic) growth. The economy is still held up by investment, which can't be sustained for a very long time."

He also suggested Chinese manufacturers be prepared to cope with challenges, including rising production costs, higher standards in using natural resources and protecting the environment as well as shrinking domestic and overseas demand.

The preliminary reading for the HSBC Purchasing Managers' Index for November, released on Wednesday, declined to a 32-month low of 48. A reading below 50 indicates contraction. ]]> Fri, 25 Nov 2011 00:41:32 MST admin Economy 2 http://mynews.mychinab2b.com/Economy/economic-growth-set-to-slow-shanghai-daily-%7C-%E4%B8%8A%E6%B5%B7%E6%97%A5%E6%8A%A5-/