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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RMB Trade Settlement Start in Five Cities
April 10, 2009
The State Council announced a pilot policy allowing cross-border trades in five cites to be settled in yuan, instead of foreign currencies as previously required, reported the Daily Sunshine The program will be implemented in Shanghai and four cities in Guangdong Province: Guangzhou, Shenzhen, Zhuhai and Dongguan.
Some observers have interpreted the government’s move as a response to a potential depreciation of the US dollar in the future. The Beijing News quoted Zhao Xijun, an economist from Renmin University, stating that with America increasing the monetary supply, its currency is facing downward pressure.
Also on the front page is the news about Larry Yung’s resignation from his position as chairman of the state-owned overseas investment company CITIC Pacific yesterday. The newspaper previously reported that Yung (荣智健) and other board members were investigated by Hong Kong’s Securities and Futures Commission in January.
Another widely-reported news item concerns a Ministry of Finance announcment that the government is planning to provide 850 billion yuan in three years to fund medical service reform package proposed by the State Council. 2/3 of the fund will be spent to cover the expenses of the patients and the rest would be used to improve the service quality of the the hospitals.
In non-financial news, seven suspects, including five former officials of the county government of Xishui, Guizhou Province, stood trial yesterday on charges of engaging in sex with minors. The news media previously reported the defendants paid the victims, who were under the age of consent, for sex. According to the article, a China Youth Daily reporter testified that sex trade involving underage girls is rampant in the province.
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Six regions compete for yuan settlement in foreign trade
March 10, 2009
As many as six Chinese regions, including Guangdong, Shanghai, Guangxi, Yunnan, Hong Kong and Macao are competing to begin a pilot program that allows the yuan to be used as the settlement currency in some regional trade, local media reported.
The Shenzhen-based Security Times, citing Guangdong province Governor Huang Huahua, said the local government is seeking the central government’s approval to start the yuan settlement in its foreign goods trade. Huang made the statement in a press briefing during the second session of the annual parliament meeting.
In early February, Shanghai said it had submitted the application for renminbi settlement in foreign trade.
China’s State Council, or the Cabinet, announced plans in December 2008 to begin yuan settlement trials with some economies. The program would permit Yunnan and Guangxi to use the yuan in trade settlement with the Association of Southeast Asian Nations (ASEAN). The Pearl and Yangtze River delta regions would also be permitted to use yuan for settlement of trade with Hong Kong and Macao.
At a press conference Friday at the ongoing National People’s Congress, central bank Governor Zhou Xiaochuan confirmed the pilot program would start soon.
Most of the competing provinces are located in China’s southeastern seaside, where foreign trade is very active. The renminbi settlement is expected to bring more business
Source: China Daily
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SMEs in S China to get financial aid amid global economic meltdown
December 7, 2008
Guanngdong province is coming in front of the regions hardly hit by financial crisis. Financial crisis most affected Guangdong due to the the fact that Guangong hosted low-end manufacturing industries depending on cheap labor widely. Now both nation-wide and regional support coming up one by one, here is one of the latest from Xinhua:
(Xinhua) — Authorities of south China’s Guangdong Province approved a financial plan on Friday to help small and medium-sized enterprises (SMEs) to survive the global financial crisis.
The provincial government will inject more than 10 billion yuan(1.45 billion U.S. dollars) as of next year in loan granting, tax reduction, business transformation and upgrading, and improving government services to SMEs, which are facing “unprecedented business difficulties and challenges”, Wang Yang, Guangdong’s party chief, said at a working conference on SMEs here.
The fund includes 1 billion yuan for technological innovation, 1 billion yuan as government mortgage for bank loans, and 200 million yuan to expand export, according to the plan. Other details are yet to be announced.
The initiative will be a key part of the province’s planned measures next year to allocate more investment to support SMEs development in the hard times, Huang Huahua, governor of Guangdong, said at the meeting.
The province had decided to earmark at least 8.5 billion yuan for business transformation of SMEs between 2009-2010, two years earlier than the original schedule.
The deepening global economic downturn has affected Guangdong, a famous home of labor-intensive and export-oriented companies, as demand of foreign buyers has continued to decline. However, many enterprises suffering shrinking orders or business suspension, predicted the hardest time may come next year.
The central government of China is revising policies and hopes to stimulate domestic demand to keep the national economy stable.
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China Auto Parts Industry
July 21, 2008
In 2007, China national macro-economy continued to maintain a rapid growth momentum. A further increase of residents’ income and price cut of passenger vehicles stimulated consumption demand to a great extent. Influenced by the factor, the auto industry continued to keep the good momentum of development recorded in the previous year. The year of 2007 witnessed a new record high in both production and consumption of auto, with auto production and consumption reaching 8.88 million units and 8.79 million units respectively.
Rapid development of China’s auto industry has provided a broad space for auto parts industry. In recent years, China’s auto parts industry has made a great progress and some innovative auto parts producers have grown up rapidly, fully demonstrating the vitality of self-brand producers of auto parts.
With the fast development of auto parts production base in Changchun, capital of Jilin province, Shiyan, a city in Hubei province, Wuhu, a city in Anhui province, Huadu, a city in Guangdong province and Beijing-Tianjin-Hebei Bohai Economic Circle, auto parts industry clusters and regional economic development have undoubtedly become the new hot spots in the recent years. According to incomplete statistics, China has around 1,000 auto parts based industrial parks across the country and among them 100 parks are key regional clusters or development zones.
China’s export of auto parts reached CNY14.5 billion in 2007. International auto giants have become more and more confident of the quality of China’s auto parts. Sales revenue of China’s auto parts producers reached CNY403.5 billion in 2006. It is estimated that the output value of China’s auto parts is expected to reach CNY800 billion in 2010.
Source: Shanghai Daily
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