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More to do to increase economy

Yvonne Dong — Wed, 03 Dec 2008 03:09:34 +0000

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 in Beijing that they must take forceful and effective measures to stop undue slowdown of the economy.

Zhang’s words came a day after the central bank cutting the interest rate by 1.08 percentage points, which is the highest in 11 years. The act of cutting interest and the stimulus package are expected to boost domestic investment.

The additional importance of raising domestic demand is gained because of many foreign buyers having slashed their orders with Chinese companies.

The government has showed the details of how they will spend the more than 40 percent of the initial 100-billion-yuan investment package, according to Zhang. It has promised to stop the growth rate from sliding further from the 9 percent in the third quarter of this year with the investment package.

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Germany and China increase economic cooperation

Yvonne Dong — Mon, 03 Nov 2008 07:32:19 +0000

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 and India, is expected to hit a record high this year, said Michael Schaefer, German ambassador to China. There should be more room for a growth of the trade between Germany and Guangdong considering the economic strength of the province. According to Liu Xiaojie, deputy secretary general of Guangdong provincial government, trade between Guangdong and Germany hit $16 billion last year, which represented a 15 percent growth from the previous year. He also said, by then, German businesses like Siemens, Allianz, Osram, Bosch and Henkel had invested $1.5 billion in 296 projects.

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Sustainable urban development is a pressing issue in Guangdong, home to a number of rapidly expanding and populous cities, said Ammon. “Cultural show now in Guangdong is to jointly seek solutions to the major challenges brought by urbanization.” During the course of its development, Guangdong needs to import a huge amount of resources and is under great environmental pressure, Liu said.

The cultural festival between September 27 and mid-December, featuring 14 cultural, 15 educational and technological and 11 environmental and archeological events and seven business forums, Liu said. The Guangzhou stop follows those in Nanjing, Jiangsu province and Chongqing municipality.

During the stop in Chongqing, the event was accompanied by an extensive cultural and stage program. Furthermore, some German firms, including those engaged in insurance, environmental technology and logistics, considered investing in the city, Schaefer said. As Chongqing aims to find economic and ecological balance, archeological, design and city planning firms found opportunities in the city.

Under the joint effort of German Federal President Horst Koehler and Chinese President Hu Jintao, the traveling festival was officially launched by German Chancellor Angela Merkel in Nanjing in August. Over the three-year campaign, Germany will present “City in Motion”, which is business, culture and social related. Its central themes followed the example of the motto “Better City—Better Life” of the Expo 2010, where the event series will culminate.

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Shanghai economy still increases

Yvonne Dong — Tue, 21 Oct 2008 06:40:10 +0000

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 economic growth. In contrast, the two sectors contributed 19 percent to the city’s growth in the first six months of 2007.

According to Cai Xuchu, Shanghai’s housing sales slid 18.5 percent in the first half and the sales slid reach 12.28 million sq m, 10.7 million sq m in this were newly built residential apartments.

Cai said that the Shanghai economy is more easily affected by global economic conditions because of its openness. That’s why Shanghai’s GDP growth lagged behind the nationwide level for the second time. The first time this happened in 1992.

He pointed that the elimination of outdated production facilities also gave effect on the city’s growth in the economic improvement aspect.

CPI, in the first six months of this year from the same period a year ago, rose 7.1 percent and is the barometer of inflation

Cai made the conclusion that Shanghai would still face inflation pressure in the next half fuelled by the likely price increases of edible oil and vegetable products.

The bureau’s figures also showed that Shanghai’s fixedasset investment rose 2.3 percent to hit 197.2 billion yuan in the first six months, down 7.3 percent from the first half of last year due to the tightening macroeconomic control, decreased number of infrastructure development projects and the shrinking of capital supply.

The investment in real estate development rose 3.8 percent to 64.3 billion yuan in the first half, but the growth rate shed 2.4 percentage points from the same period of last year. Besides, 54.3 billion yuan was dived into the industrial investment in the first half, down 7.8 percent from last year

Although the demand in overseas market declined, Shanghai’s import and export volume still climbed 23.2 percent to reach $157.6 billion in the first half. The export sector gained $80.4 billion with 25.1 percent growth last year.

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A Vast Market for Import

admin — Wed, 09 Jul 2008 08:30:37 +0000

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.

China’s Foreign Debt Rises to $ 393 billion

admin — Tue, 08 Jul 2008 08:02:07 +0000

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.