BEIJING, May 20 (Xinhua) -- The Chinese mainland was scheduled to organize three buying teams to visit Taiwan for business talks and purchase of products and materials, Yao Jian, spokesman of the Ministry of Commerce (MOC), said Wednesday.
The MOC, the State Council Taiwan Affairs Office and the Ministry of Industry and Information Technology were endeavoring to organize three economic and trade facilitation teams to visit Taiwan at the end of May, in mid-June and early July to deepen the mainland-Taiwan economic and trade ties, Yao said in a Web site statement.
Yao did not specify how many mainland businesses would visit Taiwan and how much they planned to spend, but he said they would mainly focus on purchasing folk handicraft, processed food, daily necessities, machinery equipment and raw materials.
Li Shuilin, head of the Association of Economy and Trade Across the Taiwan Straits, a non-governmental mainland institution, would head the first team to visit Taiwan, with business people from home appliance, light industry and food processing firms in the delegation. The delegation would also carry out business talks in Taiwan, according to the statement.
BEIJING, May 20 (Xinhua) -- Chinese shares fell 0.94 percent Wednesday on profit-taking, erasing Tuesday's gains. The decline also followed an overnight drop on Wall Street.
The Shanghai Composite Index fell 0.94 percent, or 25.27 points, to 2,651.41.
The Shenzhen Component Index slid 0.53 percent, or 55.22 points, to 10,369.14.
Combined turnover contracted to 214.60 billion yuan (31.56 billion U.S. dollars) from 227.97 billion yuan on the previous trading day.
New energy firms gained for much of the day on talk that the government would unveil a support plan for the sector Thursday.
Donghua Energy, the Zhangjiagang-based liquefied oil storage company, rose 6.06 percent to 8.75 yuan. Shenzhen Topray Solar, a major solar consumer products manufacturer, gained 2.62 percent to 28.57 yuan.
However, new energy stocks were dragged down by profit-taking just 15 minutes before the markets closed, dealers said.
Airlines were broadly lower as the wholesale price of jet fuel rose 460 yuan to 4,450 yuan per ton as of Tuesday led by continuously rising crude oil prices.
Air China, the country's largest carrier, fell 1.38 percent to 6.41 yuan. China Southern Airlines retreated 2.38 percent to 5.34 yuan.
The State Council (cabinet) said Tuesday that the government would increase subsidies for consumers who replaced old models of vehicles and home appliances with new ones, as part of the effort to spur domestic spending and curb pollution.
Jinbei Vehicle Manufacturing, a major light truck maker, rose by the daily limit of 10 percent to 4.09 yuan. Dongfeng Motor climbed 3.70 percent to 5.05 yuan.
Suning Appliance, a giant consumer appliance retailer, edged up 0.07 percent to 15.16 yuan.
Despite the declines, the market still had the fundamental conditions for gains as the government continued to announce new measures to boost consumption, Chengdu-based Beising Investment said in a report to clients.
BEIJING, May 19 (Xinhua) -- Petrobras, the national oil company of Brazil, announced Tuesday that it has concluded negotiations with China Development Bank (CDB) for a bilateral loan of 10 billion U.S. dollars.
The money will be used to finance Petrobras' investment plan, which includes the procurement of goods and services from China, the company said.
The interest rate of the loan will be below 6.5 percent, said Sergio Gabrielli, CEO of Petrobras, at a press conference held here Tuesday.
Without releasing details, the two sides agreed to increase actual crude oil exports from Brazil to China.
A long-term export agreement was also signed Tuesday between Petrobras and UNIPEC ASIA, a wholly-owned subsidiary of China Petroleum and Chemical Corporation (Sinopec), Asia's largest refiner by output.
It provides that Petrobras export 150,000 barrels of oil per day to China starting from 2009 and 200,000 barrels of oil per day from 2010 to 2019.
The price of oil exported to China will be decided based on the market, said Gabrielli.
Apart from the agreement, Petrobras and Sinopec signed a memorandum of understanding (MOU) under which the two sides would cooperate in several areas such as exploration, refining, petrochemicals and the supply of related goods and services, said Petrobras.
Sinopec announced in February that it has signed a contract with Petrobras to import 3 million to 5 million tonnes of crude oil from the latter from February 2009 to January 2010 at market price.
Also in February, Sinopec and CDB signed an MOU with Petrobras regarding cooperation in the fields of oil and finance.
According to the memorandum, the annual trade volume between Sinopec and Petrobras will be raised from 3 million tonnes in 2008to between 10 million to 12.5 million tonnes before the end of 2010. Their future oil trading volume will reach 30 million tonnes.
¡¤Government will raise subsidies for auto replacements to 5 billion yuan this year. ¡¤Government willallocate 2 billion yuan to encourage home appliance upgrades. ¡¤CBRC said consumers will get loans without collateral for buying durable goods.
BEIJING, May 19 (Xinhua) -- China will increase subsidies for consumers who sell their cars and home appliances in order to purchase new ones, in an effort to spur domestic consumption and curb pollution, according to a cabinet meeting held Tuesday.
The government will raise subsidies for auto replacements from 1 billion yuan to 5 billion yuan this year, and allocate 2 billion Yuan to encourage home appliance upgrades, an executive meeting of the State Council presided over by Premier Wen Jiabao said.
The move will further help stimulate domestic spending after the rebate program for auto and home appliance buyers in the rural areas greatly boosted rural consumption, said a statement from the meeting.
Consumers who trade-in their used mid- and small-sized truck and some types of mid-sized passenger cars for new ones will receive a subsidy.
Subsidies will also be given to consumers who sell automobiles that no longer meet the government's emission standard, but are still within life expectancy.
The subsidy will be no more than the purchase tax of the automobile.
A pilot program of home appliance replacement will start in Beijing, Shanghai, Tianjin, Fuzhou, Changsha and provinces of Jiangsu, Zhejiang, Shandong, Guangdong, said the statement. No specific date was given.
Buyers will receive a subsidy worth 10 percent of the prices on five kinds of new appliances, namely, TV sets, refrigerators, washing machines, air-conditioners and computers.
Retail sales kept solid growth in China as the world's third largest economy turned to domestic consumption for growth after exports tumbled.
Retail sales rose 14.8 percent in April year on year to 934.32 billion yuan (136.8 billion U.S. dollars), the National Bureau of Statistics (NBS) announced last Wednesday.
The growth rate was 0.1 percentage point higher than in March.
From January to April, retail sales totaled 3.87 trillion Yuan, up 15 percent over the same period last year.
More than 1.15 million vehicles were sold last month in China, up 25 percent year on year, according to China Association of Automobile Manufacturers on May 8.
Sales were boosted by government stimulus policies, Zhang Yunpeng, an analyst with Beijing-based Huarong securities told Xinhua last Wednesday. China in January halved the purchase tax on passenger cars to 5 percent for models with engine displacements of less than 1.6 liters.
As part of the government effort to boost consumption, China Banking Regulatory Commission (CBRC) said on May 12 that the consumers will get loans without collateral for buying durable goods, including appliances and electronic products, and other private consumption such as travel and education.
China to create 3 mln jobs in light industry
BEIJING, May 18 (Xinhua) -- The State Council, China's Cabinet, Monday announced that it would endeavor to create 3 million new jobs in light industry in the coming three years by boosting domestic demand.
The State Council in February unveiled initial plans to boost light industry in a bid to buoy the economy together with the 4-trillion-yuan (586 billion U.S. dollars) stimulus package presented in November and nine other specific industry stimulus plans including petrochemicals, textiles and other sectors. Full story
China's oil processing capacity to increase by 18% by 2011
BEIJING, May 18 (Xinhua) -- China plans to raise its annual crude oil processing capacity to 405 million tonnes by 2011, the State Council, or the Cabinet, said on Monday in its restructuring and stimulus plans for the petrochemical industry.
That would represent an increase of about 18.4 percent over its processing volume last year, which topped 342.1 million tonnes, according to the January figures from the National Bureau of Statistics. Full story
China will meet economic growth target of 8%: senior economic planner
HONG KONG, May 18 (Xinhua) -- China will definitely be able to meet the target of achieving eight percent economic growth in 2009, a senior official of the country's top economic planning body said here Monday.
"Judging from the indicators of the first four months, I do believe it is highly possible to achieve an eight percent growth for the full year. In fact, I believe the target will definitely be met," said Xulin, head of the Department of Fiscal and Financial Affairs of the National Development and Reform Commission. Full story
On bumpy road, Chinese exporters tap into home market
GUANGZHOU, May 17 (Xinhua) -- At a sales booth in a special trade fair here in southern China, Zhou was complaining how hard it was to sell her products.
"We sell them at factory-gate prices, but buyers still bargain. That makes me mad," said Zhou, a Taiwanese senior manager of Poly Dragon Industrial, which is based in the booming city of Dongguan neighboring Guangzhou, capital of China's manufacturing base Guangdong Province. Full story
China allows consumer financing companies to boost consumption
BEIJING, May 13 (Xinhua) -- China will allow non-deposit-taking institutions both home and overseas to offer consumer loans to its citizens, a new measure to stimulate domestic consumption.
China Banking Regulatory Commission (CBRC) issued, on its portal Web site Tuesday, management measures on the experiment of consumer financing companies to seek public opinions. Full story
BEIJING, May 19 -- The 2008 China Financial Market Development Report, issued by the People's Bank of China on May 4, pointed out that various stimulus packages launched by respective countries would influence supply and demand relation in international financial market. This may probably lead to a large scale withdrawal of capital from emerging markets. "If the inflowing offshore funds in China begin to outflow, it may probably result in a drastic adjustment in the stock market and bond market of China," said the report.
The warning of the Chinese central bank is based on the financial crises as it occurred in different countries as well as the appreciation of the US dollar since the later half of 2008. The dollar value moving up resulted from the flowback of large sums of money from international markets to the US after subprime mortgage crisis.
After the financial tsunami broke out in the US in 2008, it is not only the US financial institutions that brought back the capital invested overseas to make up the shortage of liquidity but capital in the global market also sought a safer place--the US market. Therefore, it is no surprise that foreign capital withdrew from emerging markets considering that capital from other parts of the world also flowed to the US.
Various recovery measures and economic stimulus packages, which are announced by the affected countries with the aim of saving a depressed economy, will also change the trend of capital flows in the international financial market.
On May 5, State Administration of Foreign Exchange (SAFE) in China solicited opinion from all social sectors on the issue of administration of domestic foreign exchange accounts of foreign institutions. SAFE stated that these accounts of some foreign institutions tend to be a hotbed of illegal practices because of the absence of unified regulations. SAFE will reinforce the management of these accounts in domestic non-offshore banking sectors.
I believe that there are several key points here. First, SAFE will regulate the opening and operation of foreign institutions' domestic foreign exchange accounts, in order to keep track of cross-border capital flows. Second, it wants to prevent these accounts from being used for money laundering. Third, it intends to prevent the large-scale illegal flow of cross-border capital in these accounts from adversely impacting China's financial market. Fourth, it wants to avoid these accounts becoming the main channel for the escape of international hot money.
In recent years, with the increasing opening up of China, more and more foreign institutions have opened foreign exchange accounts in domestic banks. The volume of business keeps increasing rapidly. According to incomplete statistics, such accounts opened by foreign institutions within China exceeded 100,000 at the end of 2008.
A few years ago, when RMB was appreciating fast and domestic asset prices increasing in leaps and bounds, a large number of foreign institutions frequently opened accounts in domestic banks. This made a huge a mount of international hot money rush into China. The total volume of international hot money in China at that time was estimated to be $500-600 billion equivalent to 5 trillion yuan. After the financial crisis broke out, due to the reflux of the US dollar and the depreciation of RMB, the net outflow of the balance of payments accounts in China is estimated to be between $20 billion to $200 billion in the fourth quarter of 2008.
The trend of RMB exchange rate and the development of Chinese economy in the future will determine the direction of international hot money flow. Considering the fact that China's economy will recover earlier than other countries, if RMB exchange rate can be kept stable or even allowed to rise slightly, there is little chance of a massive outflow of international hot money from China, no matter how turbulent international financial markets are. If the flow of international hot money can be limited to a controllable range, we don't need to worry about it too much.
However, if China doesn't accelerate the pace of economic reform for dealing with key problems, China's economy will face many difficulties when the US and European economies revive after the crisis. By that time if the RMB is depreciated because of a slowdown of China's economic growth rate, it is possible that there would be huge amounts of international hot money outflow from China.
China should tighten the administration of the cross-border flow of capital. But it is unnecessary to strictly control the outflow of oversea capitals. The key to this issue is whether China's economy can keep sustained and steady growth.
The author is a researcher with the Institute of Finance and Banking under the Chinese Academy of Social Science
Posts
