China unlikely to see serious inflation in short term

BEIJING: The increase in China’s consumer price index (CPI) is likely to see an inverted  V  shape in that year and the possibility of serious inflation is declining,  said Ha Jiming, chief economist at China International Capital Corp (IACC).
During a business investor education in Beijing on 29 AMI expects China’s CPI 3.2 percent has to be prior to one year, said the CPI growth rate, even in the 4 percent maximum In June and July.
The state CPI increased by 2.4 years per cent from a year in March and April, growth accelerated to 2.8 percent, according to statistics from the National Bureau of Statistics.
The acceleration in the CPI was the result of the lower base of comparison last year and the risk of serious short-term inflation was easing because both global commodities prices and domestic prices of meat and vegetables fell he said.
In China, food prices accounted for one third the weight of the IPC.
The CICC has reduced its estimate for economic growth in China this year to 9.5 percent from 10.5 percent, he said.
rate hikes are likely this year as rising consumer prices expected to fall in the second half, said


Free trade zone for China, S.Korea, Japan to produce hefty benefits, thorough exploration needed

While regional integration removes the barriers between neighboring countries, free trade is the condensation of economic dependence between web potential benefits.

After completing the third round of the tripartite summit on Sunday on the island of Jeju, South Korea, the leaders of China, South Korea and Japan agreed on a joint research project in 2012 on the feasibility of a full grouping of the three A nation free trade area.

For a list of the advantages of a zone free of the countries involved in trade are obliged to eliminate tariffs and quotas, so that faster flow of goods, lower manufacturing costs and product prices.

In addition, a free trade area could also facilitate the free movement of human resources, capital and services and promote an environment conducive to investment and thus strengthening the communication policy.

As people move to the other concerns of the international financial crisis to overcome, and before taking a possible second in the turmoil of the debt crisis in the euro area, the regional economic bloc is gaining ground.

In these circumstances, China and the ASEAN Free Trade Area, the world’s largest of its kind, came after the birth of the first day of the year. It has 1.9 million inhabitants, six billion U.S. dollars in terms of GDP and 450 million U.S. dollars in trade.

The movement also been proposed FTA are in Russia and Latin America.

Russia is on track to build a free trade area for members of the front of the CIS, while the community of Latin America and the Caribbean are in the pipeline.

According to the Chinese Ministry of Commerce, the number of free trade zones worldwide will grow to around 400 in late 2010.

However, the idea of an economic bloc among the three economic powers in Northeast Asia is still preliminary and requires adequate consultation.

When grouped together, it would be in Asia, first, second and fourth largest economies, and 70 percent of GDP in Asia and 20 percent said the world was next only to the European Union and NAFTA.

With China as the largest trading partner of South Korea and the second Japanese bilateral trade between the three nations, estimated that about U.S. $ 200 million, is a catalyst for the development of free zone trade.

Meanwhile, studies of non-governmental groups in the three countries on two conclusions: First, could promote a free trade area growth, and secondly, a trilateral free trade agreement would settle into a team overcome any economic benefit both countries of the three.

Moreover, China’s competitiveness could be natural resources-intensive industries and labor, the South Korean and Japanese opposition to the capital and technology industries, the basis for the formation of the economic cycle .

However, the shortcomings of the free trade zones should not be neglected.

Once a free trade area, China has an impact on some industries, the economic and social costs to be paid to consider liberalization in sectors such as agriculture.

At present, proceed with the creation of a trilateral free trade area has a long way. Along the way, not only a thorough investigation is necessary, but also a practical approach to promoting the process.

Chinese premier makes four-point proposal on deepening economic cooperation with S. Korea, Japan

Jeju, South Korea, May 30 (AFP) – Chinese Premier Wen Jiabao, Sunday demanded that South Korea and Japan to continue efforts to improve cooperation and economic integration among the three countries of Asia.
Considered the second business dinner in China and Japan and South Korea in this southern island resort in South Korea, Wen said that only by deepening mutually beneficial cooperation, the three countries to promote their own development and promote cooperation regional stability and prosperity, and global banks to recover the global economy.
Wen spoke highly of the three countries in the implementation of the global financial crisis and called for greater efforts to better respond to new challenges and opportunities for the world economy after the crisis period.
He made a four-point proposal on deepening regional economic cooperation.
First, expand regional trade cooperation. The three countries should seriously consider the feasibility of establishing a trilateral free trade area and try to finish this important task in 2012. It should also strengthen cooperation in areas such as logistics, customs, quality control and to actively pursue the Doha negotiations of the WTO, and oppose any form of protectionism.
Second, to jointly establish a healthy environment for investment. In the current negotiations on an investment agreement, the three countries, taking into account the concerns and interests of each and also be flexible to enable the achievement of a balance of results, pragmatic and mutually beneficial.
Thirdly, to explore sustainable development models. The three countries need to improve global cooperation in the development of new technologies to reduce energy consumption and increase energy efficiency.
Fourth, to preserve joint regional economic stability. The main priorities for now to implement and improve the multilateral mechanism of Chiang Mai and active efforts to promote the development of Asian bond market.
Who will be in South Korea for a three-day visit is also an annual trilateral meeting with South Korean President Lee Myung-bak and Japanese Prime Minister Yukio Hatoyama.

HK’s exports value surges over 20% in April

Hong Kong’s total exports and imports value showed significant year-on-year increases in April, at 21.7 percent and 28.8 percent respectively, according to the statistics released by the Census and Statistics Department of the Hong Kong government on Thursday.

The exports value reached 242.2 billion HK dollars (31.1 billion U.S. dollars) in April, including 236.7 billion HK dollars’ re-exports value and 5.5 billion HK dollars’domestic value.

The increase came after a year-on-year surge of 32.1 percent of exports value in March this year, said the department.

Meanwhile, the value of imports increased over a year earlier to 277.5 billion HK dollars in April, after a year-on-year increase of 39.8 percent a month earlier.

A visible trade deficit of 35.2 billion HK dollars, equivalent to 12.7 percent of the imports value, was recorded in April.

For the first four months of 2010, the total exports value rose by 24.8 percent over the same period in 2009; concurrently, the value of imports moved up by 32.8 percent, according to the statistics.

In April, strong increases were registered in exports value to most major destinations in Asia, especially India and Indonesia, with a rise of 27. 9 percent.

Over the same period, imports surge were found from suppliers, India and Singapore in particular.

Electrical machinery, apparatus and appliances, and electrical parts thereof, and office machines and automatic data processing machines, were found the most principal commodities surging in both exports and imports value, with over 20 percent increase each.

The statistics showed that the merchandise exports rose markedly further in April, with Asian markets continuing to distinctly outperform the U.S. and EU market, said a government spokesman.

Looking ahead, the robust growth of the Asian region should continue to render support to Hong Kong’s trade performance in the coming months, added the spokesman.

However, the spokesman also pointed out that the European sovereign debt problem is posing a downside to the external environment.

The austerity measures to be implemented by the indebted European countries may put a drag on the already fragile recovery in Europe and hence weigh on Hong Kong’s export outlook in the latter part of the year, the spokesman said. (1 U.S. dollar is equivalent to 7.79 HK dollars)

Europe debt crisis takes dent on China

The European debt crisis and the plummeting euro are taking a toll in China, as a rapidly strengthening Chinese yuan has eroded the competitiveness of its goods in Europe, the country’s largest overseas market. Insiders also said that the dwindling exports to countries like Germany, France and others in Europe will complicate Beijing’s move to re-launch currency exchange rate reform, namely, breaking the yuan’s peg to the U.S. dollar. And, spreading debt problems in Europe will definitely impact the budding economic recovery worldwide, and compromise China’s decision to exit from proactive fiscal stimulus and loose monetary policies. China’s ministry of commerce has lately revealed its warnings that a weaker euro has wrecked Chinese exports and hurt Chinese job market prospect. “The yuan has risen about 14.5 percent against the euro during the last four months, which will increase cost pressure for Chinese exporters and also have a negative impact on China’s exports to European countries,” Yao Jian, the ministry’s spokesman, said at a news conference in Beijing last week. Beijing has been under pressure from Washington and others for resume appreciating the yuan against the dollar, which it halted in 2008 amid a worsening global economic crisis. Entering 2010, China’s foreign trade and economic growth had both picked up. However, the sudden bailout of Greece’s indebted government by other European countries has cast a shadow on China’s decision to move. In light of the euro’s 14.5 percent drop in value against the yuan, letting the yuan rise against the dollar would also mean a further increase in the yuan’s value against the euro, creating even more problems for Chinese exports to Europe. Addressing the annual China-US Strategic and Economic Dialogue Monday in Beijing, China’s President Hu Jintao said that China will continue to steadily advance the reform of the formation of the yuan exchange rate mechanism. Hu’s words send a clear message that Beijing is considering reform the yuan seriously, but the theatrical arrival of the Europe crisis has just complicated its decision. Now, some experts predict that China probably would allow the yuan to rise against the dollar later this year. Some Chinese companies are already running into difficulty because of the euro’s fall against the renminbi. “We have been receiving calls from some European clients who signed contracts with us earlier this month, and they all want to cancel their orders, since the depreciation of the euro has eroded all their margins,” said Elvin Xu, the sales manager of Guangdong Ouyi Electrical Appliance in Zhongshan, Guangdong Province, which makes gas stoves, heaters and water heaters. The euro’s difficulties have also inflicted tens of billions of dollars in losses on the value of China’s US$2.4 trillion worth in foreign exchange reserves, analysts say. China had been trying to limit its dependence on U.S. Treasury securities for those reserves in recent years, fearing that the United States might someday suffer from budget problems or inflation, and did so by expanding its holdings of European government bonds. Now as the euro tumbles, so does China’s reserve value.

China, U.S. to further discuss China’s market economy status

When China entered the World Trade Organization (WTO), all the WTO members agreed to accept China’s market economy status no later than 2010, Chen said.

“More than two thirds of the countries have accepted China’s market economy status,” Chen said.

China believed that a country’s market economy status should be decided by whether the market determines the distribution of resources, Chen said.

“Market economy can be in various forms instead of a unified one,” he said.

U.S. Secretary of State Hillary Clinton, along with U.S. Treasury Secretary Timothy Geithner, as representatives of U.S. President Barack Obama, are co-chairing the S&ED from May 24-25 respectively with Chinese State Councilor Dai Bingguo and Vice Premier Wang Qishan, representatives of Chinese President Hu Jintao.

About 50 representatives from more than 40 departments of both countries are participating in the dialogues, designed to enhance mutual understanding and trust between China and the United States.

Chinese business assets grow to $3.9 trillion

Global Chinese business assets grew to 3.9 trillion U.S. dollars in 2009, a 56 percent growth from 2008, and a slight 5 percent rise compared with 3.7 trillion dollars in 2007, according to the 2009 World Chinese Entrepreneurs Development Plan released by the China News Agency special seminar group Thursday, the Xinhua news agency reported.

Of the 3.9 trillion-dollor assets, 3 trillion dollars are from 335 large listed Chinese companies whose headquarters are away from the Chinese mainland, 750 billion dollars are from Asia-based big private companies and small and medium-sized ones, and the other 160 billion-dollor assets are from non-Asia areas.

Assets bubble, depreciation of the U.S. dollar and China’s economic recovery are the three key reasons behind the global Chinese business development in 2009, the report said.

Chinese enterprises, especially the big state-run listed corporations, will exert more influence on global Chinese entrepreneurs’ development, according to the report.

However, despite the growth of total assets volume among global Chinese entrepreneurs, the profits shrank dramatically compared with before the world financial crisis, the report said.