According to the country’s top planning official, the economy is declining fast rather than getting better. But the government will take effective measures to increase domestic demand and create more job opportunities, said Zhang Ping, minister of the National Development and Reform Commission (NDRC).
He said at a press conference Read more…
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Peter Ammon, State Secretary of the German Federal Foreign Office, made his remarks during an interview on the sidelines of the Guangzhou stop in cultural festival “Germany and China—Moving Ahead Together”. He said that with today’s background of the global financial chaos, it is crucial for Germany and China to increase economic cooperation.
Trade between Germany and Guangdong province in China, which is larger that the trade between Germany Read more…
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According to Shanghai municipal statistics bureau, the city’s GDP grew 10.3 percent to 653.07 billion yuan in the first half of 2008, a whisker below the national growth rate of 10.4 percent in the same period, though the stock and property markets are depressed,
Cai Xuchu, the bureau’s chief economist and spokesman, said that the downturn of activities in the property sector weighed down the GDP growth rate by 0.4 percent while the bearish securities market did not made any contributions to Read more…
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According to a research thrown by Alibaba, 65 percent of its members have potential customers in China, while 22 percent of its members have sold their products in China. The need for some consumer goods, such as foods, high-end textiles and garments importing are increasing rapidly.
Some in the industry see a large market for import as Chinese people’s life taste become more and more internationalized. An increasing number of Chinese companies are purchasing hi-tech equipment and materials as they are trying to move the value chain. So there is a potential market in this sector. Meanwhile, many small and medium-sized foreign brands eager to get into the vast market in China, are expecting to enter China through local traders. One example is a small business which is registered on Alibaba. The company’s employees fly to South Korea to get the latest style design and later sell it to the customers in Shanghai.
Based on the trend, many China exporters shift to imports. A typical example is the experience of Liu Xuefei, a trader in Guangzhou, a southern China city. He halted his jobs of selling Chinese ceramics to Australians and Americans and shift to import wine in 2005. Liu changed his business for two reasons. Firstly, the number of rich people around him is increasing; Secondly the United States was urging Chinese yuan appreciation. And he said he majored in economics, and (based on his knowledge), he felt imports in China would be a promising business.
And his 3-year experience has proved his surmise is right. He now sells wine to Chinese who have started to appreciate the drink, which have been considered a part of Western upper-class lifestyle. For thousands of years, baijiu or white spirits has been the dominant drinking. Now China has become the fastest growing market for wine in the world. Liu’s small company sells nearly 60,000 high-end bottles to Chinese companies, including high-end restaurants, airlines and five-star hotels.
Liu is not alone, an increasing number of small and medium-sized Chinese companies have shifted to imports as China’s exporters grapple with rising costs. This phenomenon can be proved by the information proved on Alibaba’s online platform.
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With an increase of 5.1 percent compared with the end of December, China’s foreign debt rose to $ 393 billion by the end of March. According to the State Administration of Foreign Exchange (SAFE) such a phenomenon attributes to the growth in short-term debt, which indicates the risk of influx of speculative capital that expects yuan appreciation.
The SAFA said on Friday in a statement that the short-term accounts for 60.3 percent of the total foreign debt, amounting to $236.7 billion, with an increase of 88 percent, or $18.97 billion by the end of March. While the medium and long-term debt rose by $2.3 billion in the first quarter to $155.9 billion, making 39.7 percent of the total foreign debt.
Guo Tianyong, economist of the Central University of Finance and Economics explained “the increase in the proportion of the short-term borrowing may be related to the speculative hot money inflows,” “although the short-term borrowing look like normal debt, as it is included in the official statistics, the capital can be used for some speculative purposes”.
Guo also explained that official statistics show that China’s foreign currency lending has been rising in recent months, which is the main reason for the continual increase in short-term borrowing. Some banks, especially foreign ones, have borrowed from overseas to lend to domestic enterprises. “Some of the lending may be used for speculative purposes”.
As the yuan has kept appreciating, the speculative capital is estimated to flow into China in a accelerated pace, the total amount of which could be the same as China’s foreign exchange reserves.
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