China’s yuan gains sharply against weakening greenback
June 1, 2008
May 21Xinhua– The Chinese currency, the yuan, rose sharply to a fresh high on Wednesday following an overnight fall of the U.S. dollar.
The central parity rate of the Renminbi (RMB) was set at 6.9597per dollar, up 183 basis points from a day earlier, according to the China Foreign Exchange Trading System.
The currency has risen nearly 5 percent since the beginning of the year, and it was the 36th time that it set a new high against the greenback this year.
The yuan made a breakthrough to the 7-yuan mark against the dollar in early April, and the fast pace of its appreciation has slowed down in the past month as the dollar gradually gained on better-than-expected economic data.
Wednesday’s sharp gain of the yuan was buoyed by an overnight fall of the dollar, which fell against most major currencies on Tuesday, hit by U.S. inflation data and talk of higher euro zone interest rates.
The U. S. Labor Department said the producer price index rose 0.2 percent last month after rising 1.1 percent in March. However, core producer prices, which strip out volatile energy and food costs, increased by 0.4 percent, twice the rate forecast on Wall Street.
The report raised investors’ concerns about the impact of inflation on consumer spending.
The dollar was also hit by remarks from Wolfgang Franz, president of Germany’s ZEW research institute. Franz said the European Central Bank might be forced to tighten credit in the coming months in the face of rising inflation.
The Chinese government may come to rely more on the yuan’s appreciation to offset inflationary pressure, faced with a complicated situation of rising inflation, slowing export and the Sichuan quake that caused huge losses, analysts said.
China’s central bank has allowed banks in six cities that were hardest hit by the quake to temporarily keep their deposit reserve ratio unchanged, while lenders in other regions must raise the ratio on Tuesday to curb excess liquidity.
Ha Jiming, chief economist with the China International Capital Corporation (CICC) said the appreciation of the yuan would help curb inflation in China but might not be very effective, since the rise of global product prices and U.S. monetary policies also had an effect.
China’s consumer price index (CPI), the main inflation indicator, rose 8.5 percent year-on-year in April, compared with 8.3 percent in March and a nearly 12-year-high of 8.7 percent in February.
On Wednesday, the yuan also lost 666 basis points against the euro, 337 basis points against the Japanese yen, and 816 basis points against the British pound, while it strengthened against the Hong Kong dollar by 242 basis points.
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China, EU start up high-level economic, trade dialogue
June 1, 2008
Chinese Premier Wen Jiabao and European Union Commission President Jose Manuel Barroso jointly announced here on Friday the start of the Sino-EU high-level economic and trade dialogue.
The two made the announcement at a press conference here after talks.
The dialogue was co-hosted by Chinese Vice Premiang Qishan and EU trade commissioner Peter Mandelson on Friday afternoon.
In his two-hour talk with Barroso, Wen said the Sino-EU high-level economic and trade dialogue would become an important platform to realize mutual benefit and joint success.
He said the EU was China’s largest partner for economic, trade, scientific and technological cooperation, and that Sino-EU practical cooperation had brought about great benefits for both sides.
China and the EU had established more than 40 dialogue and consultation channels in politics, economy, finance, technology, energy and education, among others.
“It was in the common interests of both sides to strengthen cooperation between China and the EU,” Wen said.
He noted mutual benefits between the two sides greatly outweighed the contradictions and differences, and with respect and trust, the China-EU relationship would be further developed.
Wen said understanding and trust between the EU and China had been greatly strengthened in the past decade, and would be further reinforced in the upcoming dialogue.
Hailing the smooth momentum of the EU-China relations, Barroso said exchanges and cooperation between the two in fields of politics, economy and trade, science and technology and human science were active and constructive.
Barroso is leading a large delegation of nine commissioners, one-third of the EU executive, including trade chief Mandelson, for discussions on topics ranging from intellectual property protection to climate change in a bid to strengthen the China-European partnership.
According to Barroso, it was the first time the EU had sent such a large high-level delegation to visit China, which showed the high attention of the EU to fostering and deepening relations and cooperation.
The EU considered the stability and the prosperity of China of paramount importance for the international community and had expressed its appreciation for the successful opening up and reform of the country over the past 30 years, Barroso said. He added the EU understood the tough task China faced as a developing country and supported the government’s opening-up policy for all-round development and better living condition of its people.
The EU would like to join hands with China to confront challenges and opportunities brought about by globalization, he said.
The EU deals with the relations with China from a strategic and long-term perspective, and hopes to discuss frankly on bilateral and international issues on a basis of mutual respect so as to promote understanding and trust, he said.
Wen and Barroso reached extensive consensus in various areas during their talks.
They agreed to expand economic and trade cooperation between the two sides and jointly promote the Doha round talks process, and to continue to promote the Sino-EU comprehensive strategic partnership and maintain high-level contacts and consultations at various levels.
The two pledged to insist on dialogues and consultations to properly handle differences, based on the principle of equity, openness and mutual benefits.
They agreed to upgrade the mode for scientific and technological cooperation and strengthen cooperation on energy saving, emission reduction, environmental protection, climate change and technological innovation.
The two will also deepen cooperation on product quality and food safety in effort to safeguard the basic interests of the two peoples, and will promote people-to-people communication and youth exchange, according to the two leaders.
Wen briefed Barroso on the recent situation in Tibet and the government’s position on the issue.
“As Premier Wen just said, we had also an open and frank exchange of views on Tibet … I have first confirmed that the EU is attached to the territorial integrity and unity of China and this naturally applies to Tibet.”
Barroso voiced his objection to boycotting the Beijing Olympic Games, saying “the Olympics must be a celebration for the youth of the world and that it must be a success”.
The Lisbon native arrived here on Thursday as guest of Wen. This was his fourth visit to China since he took office in November 2004.
Source: China Daily
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China’s Jan.-April steel exports down
June 1, 2008
Rolled steel exports ebbed in the first four months of this year, reflecting China’s efforts to cut exports of the smokestack industries and the increasing anti-dumping actions against Chinese products abroad. The General Administration of Customs said on Tuesday that between January and April, China exported 16.17 million tons of rolled steel, down 23.9 percent year-on-year. The exports were valued at 14.36 billion U.S. dollars, up 4.1 percent year-on-year. In April, exports were 4.78 million tons, valued at nearly 4.44billion U.S. dollars. State-owned enterprises accounted for 56.5 percent of rolled steel exports during the first four months. Sales to the Republic of Korea, members of the Association of Southeast Asian Nations and the United States accounted for 68.6 percent of exports. However, exports to the United States and European Union dropped 46.4 percent and 27.3 percent, respectively. Source:China Daily
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