All posts by RWZ - 235. page

China Economy recently reported that the Ministry of Commerce released a first quarter foreign trade review showing the market’s movement in six key areas: (1) The import and export growth rates significantly slowed down, which was a continuation of the direction established in the last quarter of 2011. (2) Chinese exports to Europe suffered a decline, while trade with emerging markets showed rapid growth. (3) Labor-intensive products (such as shoes) recorded very slow growth, while mechanical and electrical products exhibited healthy growth. (4) Coastal provinces reported much slower growth than the Middle West provinces. (5) Private companies were responsible for more than half of the growth in foreign trade. (6) Import growth significantly slowed. Some commodities were produced in much larger quantities, with lower prices.

Source: China Economy, April 27, 2012
http://www.ce.cn/xwzx/gnsz/gdxw/201204/27/t20120427_23280625.shtml

BBC Chinese recently reported on the macroeconomic numbers that the National Bureau of Statistics released on China’s first quarter of 2012. The GDP growth of 8.1% is lower than the market expectation of 8.4%. However it is better than the annual expectation of 7.5% that the government predicted. Another important number also released was the Consumer Price Index (CPI) of 3.8%, which is considered high even though it is below the government goal of 4.0%. Well-known economist Dr. Zhang Wei, from the University of Nottingham, suggested that it is more important to examine the fact that the combination of the GDP and the CPI numbers is irregular. Usually a lowered growth rate is coupled with a lowered inflation rate. However the latest Chinese number showed that a lowered growth rate actually brought about higher inflation. He believed that this means the central government’s economic policies will become harder to implement and the Chinese economy is facing a much bigger challenge.

Source: BBC Chinese, April 13, 2012
http://www.bbc.co.uk/zhongwen/simp/chinese_news/2012/04/120413_china_economy.shtml

Xinhua reported that China’s central bank announced that China will widen the yuan trading band against the U.S. dollar. On every trading day, the yuan is currently allowed to trade 0.5 percent on either side of a midpoint price set by the central bank. The new rules will allow the currency to fluctuate by up to 1.0 percent on either side. The move is expected to lower the possibility of a near-term large scale flow of “hot money.” Experts expressed the belief that the widened trading band is one step closer to a free-floating yuan exchange rate. Over the past 7 years, China has been taking steady steps toward the goal of internationalization of the yuan (RMB), which includes cross-border RMB settlements, RMB direct investments overseas, and supporting the Hong Kong off-shore RMB trading market.

Source: Xinhua, April 14, 2012
http://news.xinhuanet.com/fortune/2012-04/14/c_111780377.htm

On April 13, 2012, Chinese Premier Wen Jiabao chaired an Executive Meeting of the State Council. Measures discussed included planning near term policies for China’s macro economy. Among all of the decisions made, the key one was to stick to the current policies controlling the housing market. Wen emphasized the requirement of ensuring that those polices would not suffer any level of roll back. The Executive Meeting also identified some other near term challenges: the global financial crisis has not ended; the European debt crisis still persists; the Chinese domestic economy is declining; the pressure of inflation is increasing; small-sized businesses are having a tough time obtaining financial help; and Chinese exports are slowing down. In addition to the housing market policies, the meeting focused on policies in 9 economic areas, which included enlarging the domestic consumer market.

Source: China Review News, April 14, 2012
http://www.zhgpl.com/doc/1020/7/4/9/102074989.html?coluid=151&kindid=0&docid=102074989&mdate=0414090603

China Review News (CRN) recently published an article discussing key issues related to China’s overseas investments. The article referred to the World Investment Report 2011 released by the United Nations Conference on Trade and Development (UNCTAD), which indicated that the total for all global overseas investments in 2010 was US$1.32 trillion. China’s direct overseas investments ranked number five in this report, surpassing traditional investors such as Japan and Britain. Enterprises owned by China’s central government were the primary force in overseas investments. However these investments also experienced a large amount of losses. Since last May, the State-Owned Assets Supervision and Administration Commission (SAC) has released two risk management regulations. SAC recently issued a new order to further control the risks by banning state-owned companies from investing outside of their primary line of business. The article also pointed out another key issue. China lacks a global strategy to balance investments in the areas of research, manufacturing, sales, resources, trade, finance, and information.

Source: China Review News, April 14, 2012
http://www.zhgpl.com/doc/1020/7/4/9/102074945.html?coluid=53&kindid=0&docid=102074945&mdate=0414074702

Xinhua recently reported on the state of the Chinese job market during the first quarter of 2012. According to the report, general economic growth in China is slowing down. People in society are experiencing widespread worry about the job market. The spokesman for the Ministry of Human Resources and Social Security predicted that the market will be challenging this coming year; he stated that 25 million new jobs are needed for 2012. The primary problem in the Chinese job market is the mismatch between position requirements and the skill sets available. The first quarter figures showed that a large number of companies cannot find qualified, skilled technicians, while millions of college graduates cannot find jobs. Researchers suggested that the best immediate solution to enable the creation of new jobs would be to cut taxes for small businesses. They also suggested that the government needs to promote free secondary vocational education and to concentrate its resources on training migrant workers.

Source: Xinhua, April 7, 2012
http://news.xinhuanet.com/fortune/2012-04/07/c_111748444_2.htm