04/11/2009   Source: www.chinaview.cn

Chinese Premier Wen Jiabao, in an interview with Hong Kong and Macao reporters Saturday, said that the Chinese economy showed signs of better than expected positive changes in the first quarter as a result of the economic stimulus package adopted by China.

Firstly, the domestic demand rose on a sustainable basis. Meanwhile, investment in fixed assets increased rapidly and consumer demand grew steadily and relatively rapidly. Although lower from the same period of last year, imports and exports grew on a month-on-month basis in the three-month period, Wen said.

This indicates that some sectors and enterprises in China are in a process of gradual recovery.

Secondly, industries above the designated size registered month-on-month growth, with a year-on-year increase of 3.8 percent in both January and February, and a year-on-year increase of 8.3 percent in March.

Thirdly, the purchase management index and the entrepreneur confidence index of the manufacturing industry both rose, indicating that the Chinese economy has begun to stabilize and recover in some fields, according to Wen.

And fourthly, the market confidence went up and the economy became more active over the first three months, with increases in both the stock market and housing market transaction volumes.

The positive performances in economic fields suggest that the policies adopted by the central government of China have been timely and correct, and have led to successes, the premier noted.

The premier was here to attend the Association of Southeast Asian Nations (ASEAN) related summits. The Chinese premier went back home late Saturday ahead of schedule, after the Thai government postponed the summits because of domestic political unrest.

The premier said we should see that China’s economy is still facing very serious hardships, which can be attributed to the shrink of external demand and a relatively sharp fall in exports. This has negatively impacted export enterprises, export-oriented industries and export-oriented zones, and has resulted in decreases in business profit making, declines in financial revenues and heavier pressure on employment, he said.

As the international financial crisis is deepening and spreading, we should never lose vigilance, Wen warned.

As the crisis has not touched its bottom, we can hardly say that the Chinese economy alone has got out of the crisis. China cannot save the world, nor can it survive without the world, Wen said. What we should do is to exert our utmost efforts to minimize the effect of the crisis, he said.

When answering questions whether China will introduce additional economic stimulus plans, Wen said the government should now step up efforts to carry out the policies and measures of the existing stimulus package. The earlier they are put into effect, the more beneficial and active they will be, he said.

04/06/2009  Source: China Daily

How good was business at last week’s Beijing Wedding Expo?

The ATM machines ran out of money.

“I didn’t bring enough cash,” lamented 26-year-old Wang Lin, attempting to console his fiancee, Zhao Yue, as they waited in line at one of the few machines that was still operating.

“I never thought we’d make so many spur-of-the-moment decisions,” said Wang, an IT worker, as he and Zhao leafed through brochures for gifts, photo albums, clothing, banquets and honeymoons.

They were not alone. An estimated 34,000 couples mobbed the Expo over three days. They spent an estimated $29 million, 30 percent more than last year, as more than 1,000 merchants promoted everything from Lincoln Limousines to tours of France.

Weddings have always been big business in China, and this year is no exception.

More than 10 million people marry annually in China. Expenditures totaled $220 billion, or 13.36 percent of GDP, in 2006, the last year for which statistics are available, according to the Ministry of Commerce and the China Wedding Industry Investigation and Research Center.

Industry experts say the global financial crisis has forced some couples to scale back their plans, but it seems to have increased the number of weddings, as couples seek the security of marriage and a family during hard economic times.

Two astrological factors have also increased the number of weddings. Chinese believe the number nine is auspicious for weddings because it connotes longetivity. And according to the lunar calendar, this year has two “spring begins” – dates on which farmers traditionally begin planting.

By far the biggest change in the wedding market, however, is the expectations of the newlyweds as the “1980s generation” ties the knot.

As the first generation to grow up as the only child in their families, this generation typically has the resources of four adults to draw on, in addition to their own savings. An average couple spends $18,500 on a wedding, or 20 times their average monthly salary.

Wedding photography has grown geometrically in the past four years, according to Neil Xiao, an official of the Organizing Committee of the China International Wedding Expo.

In 2005, Xiao took representatives of 16 Chinese photo studios to visit wedding expos in several Western countries. They liked what they saw, and are now marketing lavish photo albums to Chinese couples.

Some are affiliated with studios in France, Italy, and North America. The Professional Photographers of America (PPA), a nonprofit association of professional photographers with 20,000 members in 54 countries, has opened offices in China and is now training wedding photographers.

Business is good, since Chinese couples tend to order three albums – one for themselves and one for each of their families.

Photography no longer ends with the wedding. In China, it is increasingly common for a photographer to accompany the couple on their honeymoon, snapping shots of them at scenic spots and memorable restaurants, while still leaving them plenty of time alone.

“We find people from the mainland are now spending more on clothing and wedding photography than people from Taiwan,” said Hou Tsun Jen, manager of the Sophia Wedding Photo Studio in Taipei.

Mainland couples tend to buy formal clothing and wear it to the banquet, rather than just rent it for the photo session, he added.

Hou’s company has factories making wedding garments in Taipei, Bangkok, Tokyo, and Shanghai, and plans to open a shop in Beijing to take orders.

“We were surprised to find that, because of the economic slowdown, orders have declined at all of our factories except Shanghai,” he said.

Honeymoons now know no bounds. A five-day tour of Taiwan, with photos at various scenic spots, was popular at the Expo, possibly because it costs only $2,000 per couple.

Hawaii, France, and Italy are also popular destinations. Group tours are the rule, but destinations and accommodations can be tailored to each couple’s desires.

The market for honeymoons abroad has barely been tapped, according to some in the industry. The Hawaii Tourism Authority, for example, came to last year’s Expo but had no specific tours to sell.

“Most organized tours involve both a domestic and a foreign agency, which adds to the cost,” said Samuel Warn, an international photographer who has recently opened a studio in China. “I hope foreign countries will make business easier.”

Platinum is the metal of choice for wedding rings and other jewelry. China accounted for 68 percent of the platinum jewelry worldwide in 2008, according to an industry association.

Li Xin, a white-collar worker, ordered two heart-shaped platinum rings, which cost him $2,924. “That’s about average for my friends,” he said.

Beyond the basics, couples at last week’s expo faced a truly daunting range of possibilities for their special day.

There were candies and cookies from every corner of the globe.

The Vineyard Wine Experience Shop offered couples the chance to make their own wine and design their own labels.

And Beijing Sweetie Gifts Co Ltd offered cartoon bouquets unique enough to entice one flight attendant to send them to friends in New York.

Of course, no wedding would be complete without a wedding planner.

Hu Ming quit a $20,000-a-year job with a foreign company eight years ago to become a wedding planner, and has never looked back.

“I usually charge $500 to plan a wedding and $400 to host it,” Hu said. “I do at least four weddings a month. I’m making at least twice what I did at my old job, and I get to meet a lot of people. It’s an ideal job for me.”

03/29/2009   Source: www.chinaview.cn

Chinese Vice Premier Wang Qishan has called on the international community to “act together” at the upcoming London summit to get through the global financial crisis, in an article published by the British newspaper The Times on Friday.

In the article entitled “G20 must look beyond the needs of the top 20,” with a subtitle “China believes the developing world should have a stronger say in how the international financial system is run,” Wang urged all heads of states to be present at the G20 London summit to “act together to get through the time of hardship.”

After the financial crisis broke out, China was quick to put in place a decisive plan to boost domestic demand, advance economic restructuring and improve people’s well-being, which have started to produce results, said the vice premier.

However, the Chinese economy still faces severe challenges, including to meet the demanding goal of maintaining economic growth by boosting domestic demand, ensuring employment and readjusting the economic structure. China also has to cope with shrinking external demand caused by the global economic downturn and trade and investment protectionism, Wang said.

“China will continue to take forceful measures to maintain steady and fast economic growth and contribute its share to an early recovery of the world economy,” Wang pledged in the article.

Since the G20 summit in Washington last year, said Wang, China has provided a lot of assistance and support through a variety of means to a number of countries and regions, and played a part in the creation of significant Asian and global economic and trade initiatives.

The Chinese leader stressed the significance of the international community to enhance coordination and cooperation to overcome the current difficulties.

“Efforts should be made to expand trade and investment cooperation to bolster economic growth, step up cooperation among small and medium-size businesses to ensure employment stability, and strengthen cooperation in energy conservation and emissions’ reduction, environmental protection and development of new energy technologies to nurture growth points for the world economy,” Wang suggested.

He firmly rejected trade and investment protectionism of all kind. “The international community should recognize that the trend towards economic globalization is irreversible and should take credible steps to reject all forms of trade and investment protectionism,” he said.

Wang also called on the international financial system to be reformed, “with the focus on readjusting the governance structure of international financial institutions and increasing the representation and voice of developing countries.” He asked the London summit to set a clear goal, timetable and road-map for such reform.

To prevent similar crisis from happening again, Wang, also a Chinese economic expert, suggested prudent regulation of all financial markets and institutions involved to be tightened and regulatory coordination and cooperation at both the regional and international levels to be increased.

On the hot topic of increasing financial resources for the International Monetary Fund (IMF), he said China supports the increase as far as the fund is safe and reasonable returns can be ensured.

“China is ready to play an active part in exploring ways to raise resources and will contribute to this effort within its ability,” Wang said. He asked the IMF to mobilize resources through the “quota-based” system as well as voluntary contributions, striking a balance between the rights and obligations of the contributing countries.

As a return, said the Chinese vice premier, the IMF must enhance capacity-building, reform governance structure and ensure that the resources play a significant role in easing the international financial crisis and countering the global economic downturn. China inclines to see the resources mainly to be used to help developing countries which are seriously hit by the crisis, Wang said.

Leaders of the world’s 20 largest economies will meet in London on Thursday to discuss, among other things, a coordinated response to the current global financial crisis.

China raised the export rebate on 3,800 items to maintain growth, the Ministry of Finance and the State Administration of Taxation (SAT) said Friday.

It was the sixth increase since last August when the government decided to raise refunds in an attempt to tackle slumping exports amid the global financial crisis.

The export rebate for the textile and garment, iron and steel, non-ferrous metal and petrochemical items will be effective April 1, according to the departments.

The tax rebate for textile and garment items would be 16 percent.

A special item, CRT televisions, would have a 17 percent of tax refund.

“It was an extraordinary measure taken under extraordinary conditions,” said Zhao Yumin, a researcher with the Ministry of Commerce.

He said slumping exports presented the Chinese government with unprecedented challenges. The refund increase underscored the government’s resolution to maintain economic growth and secure employment.

China’s exports plummeted 25.7 percent year-on-year in February, the worst decline in more than a decade, as global demand deteriorated amid the deepening recession.

Although previous data showed some signs of economic recovery, the economic outlook remained uncertain as profits of China’s major industrial enterprises contracted 37.3 percent year-on-year during the first two months of 2009, the National Bureau of Statistics (NBS) said Friday.

Bai Jingming, economist with the Ministry of Finance said more refunds meant enterprises could retain more cash in hand and they could use that money to restructure their business and improve production technology.

The SAT said last week that the actual export tax rebate in the first two months increased 20.8 percent year-on-year to 66.7 billion yuan (9.77 billion U.S. dollars).

Experts said nearly all Chinese exports had a 17 percent export rebate during the Asian financial crisis. Compared to that, China still has room for further rebate increases.

By Herbert Lash

World stocks bounced back from multiyear lows on Wednesday, buoyed by signs of economic recovery in China and plans by its government to increase fiscal spending, news that helped lift oil and metals prices.

U.S. crude oil futures jumped more than 7 percent, extending gains to top $45 a barrel after inventory of crude in the United States declined unexpectedly and demand for gasoline rose.

Euro zone and U.S. government debt prices mostly fell as the rebound in equities undermined investors’ appetite for less risky fixed-income assets.

But the cost of borrowing dollars over three months nudged higher as ongoing worries over the financial sector, where counterparty risks have risen, kept banks wary about lending to each other.

A key gauge of Chinese manufacturing rose in February for the third straight month, hitting a five-month high and lifting investor optimism on hopes the data signaled that China, a major driver of global growth, may be on the brink of economic recovery. China also said it will boost spending on infrastructure and manufacturing under a second stimulus package.

The Shanghai Composite Index .SSEC, the main Chinese stock index, surged 6.1 percent in its biggest gain since November.

European shares rallied, breaking three straight sessions of losses, and U.S. stocks snapped a five-day sell-off. Higher prices for oil and other commodities — driven by China hopes — spurred energy and natural resource stocks.

“The market is encouraged by the news from China,” said Joe Arsenio, president of Arsenio Capital Management in Larkspur, California. “They believe (China) will gain traction in the second quarter.”

Exxon Mobil (XOM.N) gained 2.1 percent while miner Freeport-McMoRan Copper & Gold Inc (FCX.N) rose 14 percent.

Shares of Caterpillar Inc (CAT.N), a big exporter to China and a major seller of equipment to the mining industry, rose 13.7 percent.

After 1 p.m., the Dow Jones industrial average DJI rose 117.08 points, or 1.74 percent, at 6,843.10. The Standard & Poor’s 500 Index .SPX gained 12.03 points, or 1.73 percent, at 708.36. The Nasdaq Composite Index .IXIC added 27.05 points, or 2.05 percent, at 1,348.06.

The FTSEurofirst 300 .FTEU3 index of top European shares closed at 696.23 points, up 4 percent.

Miners Rio Tinto (RIO.L) gained 14 percent and BHP Billiton (BLT.L) rose 12.9 percent on the back of higher copper prices, while steelmaker ArcelorMittal (ISPA.AS) rose 12.4 percent.

Copper jumped over 5 percent to its highest level in more than three months as investors pinned hopes on demand from China, the world’s largest consumer of the red metal.

The rise in equity markets around the world overshadowed more dire economic data suggesting that the U.S. and euro zone recessions have yet to hit bottom.

U.S. private companies hemorrhaged 697,000 jobs in February and the service sector slump deepened.

The dollar vaulted to a four-month high against the yen as another slide in the U.S. private-employer payrolls and persistent worries about the world economy boosted safe-haven flows into the U.S. currency.

But the dollar cut earlier gains against the euro and sterling as stocks rallied and investors took profits ahead of Friday’s government payrolls report and interest rate decisions due Thursday from the European Central Bank and Bank of England.

The dollar rose as much as 99.48 yen, closing in on 100 for the first time since early November, as investors worried about Japan’s struggling economy and the U.S. jobless data.

The dollar rose 0.97 percent at 99.25 against the yen, but it fell against a basket of major currencies, with the U.S. Dollar Index .DXY down 0.49 percent at 88.751.

The euro rose 0.40 percent at $1.2615.

U.S. government debt fell. The benchmark 10-year U.S. Treasury note fell 36/32 in price to yield 3.02 percent. The 2-year U.S. Treasury note slipped 6/32 in price to yield 0.98 percent.

U.S. light sweet crude oil rose $2.73 to $44.38 per barrel.

Gold fell in Europe, flirting with three-week lows, as the bounce in equities lured investors back into riskier assets.

Spot gold prices fell $8.40 to $906.85 an ounce.

Asian stocks rallied on Wednesday on hopes Beijing will step up efforts to support the Chinese economy,

Japan’s Nikkei share average .N225 rose 0.9 percent, after sliding to a 25-year low on Tuesday. The MSCI index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1.3 percent.

(Reporting by Edward Krudy, John Parry, Steven C. Johnson in New York and Emelia Sithole-Matarise, Ian Chua, Christopher Johnson, Jan Harvey and Rebekah Curtis in London and Peter Starck in Frankfurt; writing by Herbert Lash; Editing by Leslie Adler)

02/23/2009 Source: www.chinaview.cn

China’s central bank on Monday warned of deflation in the near term caused by continuing downward pressure on prices.Commodities prices were low and weak external demand could exacerbate domestic over-capacity, the People’s Bank of China (PBOC) said in an assessment of fourth-quarter monetary policy.

“Against the backdrop of shrinking general demand, the power to push up prices is weak and that to drive down prices is strong,” the PBOC said. “There exists a big risk of deflation.”

China’s consumer price index (CPI), a major gauge of inflation, rose 1 percent in January from a year earlier. In that period, the producer price index (PPI), a measure of inflation at the wholesale level, dropped 3.3 percent.

But the PBOC also warned of medium and long-term inflation risks.

As the central banks worldwide injected a huge amount of liquidity into the financial system, commodities prices could repeat earlier rallies if market confidence recovered, it said.

The PBOC stated that China’s economy faced further downside risks because of slackening external demand, over-capacity in some sectors and increases in urban job losses.

The gross domestic product expanded at a slower rate of 6.8 percent in the fourth quarter of 2008, as exports slumped and the property sector sagged, dragging down growth for the whole of 2008 to a seven-year low of 9 percent

But China had huge market potential and as the macro controls started to take effect, its economy was likely to maintain stable and relatively fast growth, it said.

To spur growth, the PBOC said it would ensure ample liquidity in the banking system and promote the reasonable and stable growth of credit.

It also reaffirmed that China would keep the Renminbi (RMB) exchange rate basically stable, while making it more flexible in a self-initiated, gradual and controllable manner.

02/19/2009 Source: www. chinaview.cn

An official of China’s National Audit Office (CNAO) said Thursday that the agency had not found any serious misuse of economic stimulus funds, but he vowed to step up supervision to ensure economic and social stability.

“I am gratified to tell you that the government policies have been implemented well across the local departments, and swift measures have been taken to ensure economic growth,” Liu Jiayi, the head of CNAO, told reporters.

The audits focused on whether funds were used in line with industrial restructuring policies, and whether the money went to high-pollution or energy-intensive projects.

Expensive projects and those concerning environmental protection, as well as money spent to tackle public emergencies, would be closely watched, he said.

Expenditures to improve living standards, including farm subsidies and investments in drinking water projects, would be fully audited, he said.

China unveiled the 4 trillion yuan (580 billion U.S. dollars) stimulus package in November to revive the economy. Growth slowed to 6.8 percent in the fourth quarter.

Auditors will reveal extravagance, large losses and waste in stimulus spending, as well as other serious violations and crimes, Liu said.

Although no major problems were found during the audits, “there was still room to improve,” he said.

He noted that money hadn’t become available quickly enough in some underdeveloped areas with limited fiscal revenue, and overlapping construction persisted in some areas due to poor planning.

About 6 billion yuan was misused in 2008. Most of the money has been confiscated, according to Liu.

“We will hit hard against violations. No mercy will be shown when dealing with illegal activities,” Liu said.

Liu said the CNAO would start a full-scale audit this year of how funds were used for the Beijing Olympic projects. The income and expenses of the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG) would also be audited.

Last year, selective audits were conducted on several Olympic projects and irregularities were found “in one or two”– meaning very few, Zhang said, without giving details. He added that the BOCOG had made immediate corrections.

The CNAO was now focused on checking the quality, fund management and land use of reconstruction projects in quake-stricken Sichuan Province, said Zhang.