Yuan seen to remain stable in long term
April 14, 2009
THE yuan may appreciate against the United States dollar over the short term but is more likely to remain stable in the long run, analysts said.
The Chinese currency dipped slightly against the greenback last week and ended at 6.8347 last Friday, according to the China Foreign Exchange Trade System. The yuan closed at 6.8320 by the end of the previous week.
The State Council, China’s Cabinet, last Wednesday picked Shanghai and four other cities in Guangdong Province to take part in a trial to settle overseas trade in the yuan rather than US dollars in a move to stabilize the trade and to build up the yuan’s position in the international monetary system.
“The trial settlement in yuan would favor the local currency and boost its appreciation in the short and middle terms,” according to a research note by Standard Charted.
Deng Xianhong, deputy head of the State Foreign Exchange Administration, last Friday said China “will move on with the trial of using yuan in overseas trade settlement and relax the cross-border financing restrictions to shore up support from foreign exchange to the economy.”
China’s exports last month fell by a slower pace of 17.1 percent from a year earlier to US$90.29 billion, the General Administration of Customs said last Friday.
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China’s Trade Numbers at January
February 18, 2009
Last week’s trade numbers from China could not have been more dismal. After declining by 2.8 per cent year on year in December, China’s exports plummeted 17.5 per cent in January, placing huge pressure on the country’s manufacturing sector. Already unemployment in China is surging.
Chinese import numbers are even more dismaying. After dropping 21.3 per cent in December, imports fell a staggering 43.1 per cent in January.
At first glance there seems to be a silver lining in the export numbers: they are not as bad as those reported by some other Asian countries. In December, for example, Taiwan’s exports fell by 42 per cent, South Korea’s by 17 per cent and Japan’s by 35 per cent, capping many months of contraction. Less developed Asian countries also performed worse than China, which suggests China may have increased its competitive edge over its trading rivals. But it is precisely this relative outperformance that indicates the severity of the adjustment yet to take place. China’s trade surplus for January was a mind-blowing $39.1bn (€31.1bn, £27.4bn), just under November’s all-time high of $40.1bn and edging out December’s $39bn for second place. In comparison, in the first half of 2008 China’s average monthly trade surplus was an already high $16.7bn. In the second half it surged to $32.9bn.
Pls read the rest of article at Financial Times
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China overtakes US as world’s top car market
February 11, 2009
CHINA overtook the United States as the world’s largest auto market for the first time when it sold more cars, 735,500 units, in January, the China Association of Automobile Manufacturers said yesterday.
But the January figure was a drop of 14.35 percent year-on-year and this indicated that sentiment in China’s auto industry is still in a downtrend because of a global financial crisis. Analysts, however, agreed that the market showed signs of an early recovery with government support and lower fuel prices.
Vehicle sales in China rose 6.7 percent to 9.38 million units last year. Sales may grow 5 percent this year, the slowest pace since 1998, CAAM said earlier.
January vehicle sales in the US plummeted 37 percent to 656,693 as more auto makers closed down plants and laid off thousands of workers.
The association reports said China’s passenger cars dropped 7.77 percent to 610,000 units last month, following a 12-percent slump in December
But the slower drop in sales was helped by the central government’s measures such as cutting fuel prices and halving a vehicle sales tax on small cars to counter a slump in the automotive industry since August last year.
“The fuel tax reform and tax cuts work effectively as sales of vehicles powered by 1.6-liter engine or less enjoyed rapid growth from a month earlier,” Zhu Yiping, a director at CAAM, said. “This helped passenger car makers to cut inventory by 80,000 units.” He added that the overall stockpile of Chinese car makers also hit its 13-month low.
Selling commercial vehicles remained tough due to the economic situation as their sales plunged 36.46 percent to 125,100 units in January, CAAM said.
China announced a 4-trillion-yuan (US$586 billion) economic stimulus package and favorable policies including tax cuts and road-toll abolishment in January to spur demand.
However, most analyst cautioned that the sales pickup won’t last long and they remain skeptical that China would remain the world’s biggest car market for the year.
“We should not be too optimistic as the impact of favorable policies may be weaker as time goes on,” said Rao Da, secretary general of China Passenger Car Association. “Sales of vehicles with engines larger than 1.6 liters are not expected to boom and overall sales will still be hampered by a weak economic outlook and lower exports.”
Source: Shanghai Daily
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Beijing’s total imports and exports were up 40.8 percent
February 1, 2009
BEIJING, Jan. 30 (Xinhua) — Beijing’s total imports and exports were up 40.8 percent to a record 271.7 billion U.S. dollars in 2008 mainly thanks to the Olympic Games, Beijing Customs said Friday.
Exports hit 57.4 billion U.S. dollars, up 17.4 percent, and imports 214.3 billion U.S. dollars, up 48.7 percent, making the city China’s 4th largest international trade region after Guangdong, Jiangsu and Shanghai.
Beijing Customs attributed the growth to the Olympic Games, which boosted demand and government procurement, particularly in urban infrastructure, venue construction, materials, machines and equipment.
The Olympic effect brought about a year-on-year increase of 55.8 percent in imports and exports in the first half of last year.
However, foreign trade began to slow in the second half of 2008with the increase rate dropping to 28.5 percent, due to the sluggish global economy.
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Indicators point to signs of recovery
January 24, 2009
SEVERAL economic indicators for December have shown signs of recovery, though China’s fourth-quarter growth slowed, said the head of the National Bureau of Statistics.
“Last December, the economy was hit quite hard by the global financial crisis, but the December figures also began to show some positive changes and these changes are very important for us,” Ma Jiantang said.
The rebound in money supply, which rose 17.8 percent, the quickest in seven months, and loan growth in December means that the moderate monetary policy has been effective, Ma said.
Retail sales jumped 17.4 percent last month in annualized terms, up from 16.6 percent in November, with a rebound in goods like cars, garments and cosmetics. Ma also pointed out that there was a pick-up in investment sentiment citing an ING report which said investor confidence in China rose to 103 in the fourth quarter from 88 in the third.
“Almost all major monthly indicators point to a recovery,” driven by rising domestic demand – a result of aggressive fiscal and monetary stimulus – and stable exports, Merrill Lynch’s economist Ting Lu said.
Crude steel production, a major indicator of industrial activities, rose to 37.79 million tons in December from 35.19 million tons in November, after China in November announced the 4-trillion-yuan (US$585 million) fiscal stimulus package to support growth.
China has raised export tax rebates by several steps to help revive exports. In December, the government increased export tax refunds on 3,770 tariff lines including mechanical and electrical products, or 27.9 percent of all exports. Exports shrank 2.2 percent in November, the first drop in seven years.
Goods that are eligible for export tax refunds saw positive export growth of 4.8 percent in December, against an overall negative growth of 2.8 percent, Ma said. “This means our export policies have started to show results,” he said.
Ma said the government would wait and see whether these positive changes are sustainable or just temporary. “But such positive changes are just like sunshine in cold winter and light at the break of a dawn, and also little sparks that can ignite a flame,” he said, adding he has confidence in China’s economy.
China’s gross domestic product growth slowed to 6.8 percent in the fourth quarter from 9.0 percent in the third as the global financial crisis deepened into domestic economy.
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