10/12/10 Source: Xinhua

China has welcomed the final ruling by the U.S. Court of International Trade (CIT) directing the U.S. Department of Commerce (DOC) to scrap its imposition of countervailing duties (CVD) on tires from a Chinese manufacturer, China’s Ministry of Commerce (MOC) said Monday.

The U.S. court ruling on Oct. 1, together with its two previous rulings, showed that the DOC’s simultaneous imposition of CVD and anti-dumping duties (AD) based on the Non-Market Economy (NME) methodology on China’s Hebei Starbright Tyre Co., Ltd was unlawful, according to a statement provided by the MOC’s Bureau of Fair Trade for Imports and Exports.

The U.S. Commerce Department was also urged to correct its behavior on this issue, the statement added.

China had always maintained that the double use of these punitive duty measures infringed on U.S. rules of not adopting anti-subsidy measures against non-market economies, said an official from the bureau, who declined to be named.

It also went against the World Trade Organization (WTO) Agreement on Subsidies and Countervailing Measures and harmed the interests of Chinese enterprises, said the official.

The U.S. Commerce Department has yet to respond. The court gave the DOC 60 days to decide on an appeal in the Court of Appeals. China will use the ruling to encourage domestic enterprises to use legal means to protect their legitimate rights and interests, the statement said.

The U.S. Commerce Department decided on July 31, 2007, that it would launch AD and CVD probes simultaneously into China-made off-road tires.Further, it announced on Sept 4, 2008, that it would levy duties of 19.15 percent and another duty ranging from 2.45 percent to 14 percent on Chinese tires.

In 2008, China’s Hebei Starbright Tyre Co., Ltd sued the U.S. Commerce Department in the CIT.

The CIT ruled on Sept. 18, 2009, that the duties imposed by the U.S. Commerce Department on Hebei Starbright Tyre Co. Ltd. could cause double counting since “while Commerce may have the authority to apply the CVD law to products from a non-market economy (NME)-designated country, the CVD and NME AD statutes are unclear as to how Commerce is to account for the overlap between the statutes when imposing both CVD and AD duties on goods from a NME country.”

In response to the DOC’s appeal, the U.S. court made its ruling on Aug. 4, 2010, for the second time, which says that the U.S. DOC did not abide by the CIT’s ruling in 2009 and needed to halt the imposition of the anti-subsidy measures on China.

10/08/10 Source: China Daily

SHANGHAI – The Shanghai municipal government issued a new regulation on Oct 7 that took effect the same day, limiting families to the purchase of one new apartment as the nation tries to curb property speculation and soaring prices.

Beijing introduced the same measure on April 30.

According to the regulation, every household in Shanghai is permitted to purchase only one more commercial residential property as of Oct 7 and anyone found in violation of the regulation will not be allowed to register their ownership of the property.

“Speculation is rampant inShanghai’s housing market. This new regulation will prove to be a timely and effective means of cooling down the housing market,” said Chen Jie, a professor in the school of management at Fudan University who specializes in property research.

According to the regulation, property developers are required to pay value added tax on land, which ranges from 2 to 5 percent.

“This is a strict rule that will effectively press developers to sell their completed projects quicker to increase the cash flow,” said Xue Jianxiong, a senior analyst at the estate agency E-House China.

Chen explained that value added tax on land is based on the property’s sale price. The higher the property is priced, the more tax the developers have to pay.

“In the future, few property developers will put the highest price tag on their products, because that would entail the highest rate of tax,” Chen said.

“So far,Shanghai’s property regulation is the toughest in the nation, which might send a strong signal to the housing market. No speculation is encouraged in the sector,” Xue said.

The regulation stated that the city will take the lead in initiating a property tax in preparation for the official property tax to be launched by the government.

Shen Lu, a multinational white-collar worker who purchased an apartment with her husband two years ago, is pessimistic about the new regulation.

“It’s like a game of cry wolf,” she said. “Every time the housing department announces that it is going to combat housing speculation, the price just soars. If there is solid demand to support the price, no one can solve the problem,” Shen said.

Along with the new regulation to cool down the housing market,Shanghai plans to offer 1 million government subsidized homes over the next five years while it continues to increase the available housing stock.

09/27/2010 Source: Xinhua

While taking aggressive steps to acquire China’s domestic credit rating agencies, the United States keeps a tight “fence” against those trying to foray into its own market.

The U.S. Securities and Exchange Commission (SEC) on Thursday denied a bid by China’s largest credit rating firm to become an officially recognized statistical rating organization in the United States.

By blocking the Chinese rating agency, the Dagong Global Credit Rating Co. Ltd., from entering the international credit rating market, the United States aims to thwart China’s efforts to have a say in the international capital market, Chinese analysts and observers said.

The U.S. government’s decision may not be so surprising as the SEC had in April this year rejected the application of the Dagong Global Credit Rating Co. Ltd., which is currently the only one of China’s four major credit rating agencies that has not been controlled by foreign capital.

“The United States rejected Dagong’s application out of fears that its dominance in credit rating could be challenged,” said Mei Xinyu, an expert with the Research Institute of International Trade and Cooperation of China’s Ministry of Commerce.

“Quite obviously, keeping an absolute dominance in credit rating brings the United States substantial benefits,” Mei said.

Though Washington always brands itself as an advocate for such principles as free trade, it will not hesitate to sacrifice those principles for economic gains, added the expert.

The SEC said it rejected Dagong’s application for registration as a nationally recognized rating organization because it could not ensure the Beijing-based company would comply with U.S. reporting rules, a pretext suggesting that it cannot perform cross-border oversight and regulation.

Dagong contended that such alleged rules have never been used as a standard for the SEC to approve registration of rating agencies in the United States.

“It is a barrier specifically set for Dagong, which is obviously discriminatory against China and the Chinese rating agency,” it said.

Chinese analysts believed that the SEC’s denial of Dagong’s application indicates its intention to protect the monopolistic status of the “Big Three” Western rating agencies – Moody’s, Standard & Poors and Fitch, which have the make-or-break power over countries by upgrading or downgrading their bonds.

“The United State has the world’s biggest capital market…To be registered as the U.S. Nationally Recognized Statistical Rating Organizations (NRSRO) means obtaining the status of an international credit rating agency,” said Jiang Yong, director of the Center for Economic Security Studies under the China Institutes of Contemporary International Relations.

Therefore, foreign credit raters have long been cautiously protected by the United States, he said.

According to Jiang, so far, only 10 of some 200 credit rating organizations around the world have been registered as an NRSRO, among which seven are U.S. domestic companies, two Japanese agencies and one Canadian rater.

However, the latter three have never actually operated businesses after entering the U.S. market, Jiang said.

“The United States keeps its ‘fence’ even tighter against foreign credit rating agencies, especially after the outbreak of the global financial crisis, as the world has seen an increasing significance of credit rating in ensuring and protecting a nation’s financial stability and core interests,” said Jiang.

On the other hand however, the Big Three, two of which are now America-funded, are now penetrating deeper and deeper into the Chinese market through large scale stock acquisition, Jiang said.

“Over the recent three years, the ‘Big Three’ ratings agencies have penetrated very deeply into China’s domestic credit raters, enterprises, and even the government bodies,” he said.

“Through such means as buyout, they’ve built a massive database, the scale of which is far bigger than that of the government,” said Jiang, who himself was shocked by the fact.

The expert warned that the Big Three set rating standards that serve the interests of their own countries, posing a serious threat to China’s financial sovereignty and national economic security.

“Credit rating has already become a tool of the United States to strengthen its economic and political supremacy and contain the development of China,” said Wu Hong, who is from China’s Office of the Central Leading Group on Financial and Economic Affairs.

09/20/2010 Source: Global Times

An adviser to China’s central bank said Sunday that unlike Japan in the 1980s, China won’t cave to foreign pressure to let its exchange rate appreciate, a financial news website reported.

Li Daokui’s comments come after US Treasury Secretary Timothy Geithner called for Beijing to address “trade distortions” by letting the yuan strengthen.

“China, as it stands now, is not Japan in 1985, it is not a country that completely relies on external demand,” he said at the China CEO Forum taking place in Beijing, in a speech transcribed on finance.qq.com.

“We will not appreciate the yuan solely because of external pressure.”

Li appeared to refer to the 1985 Plaza Accord, where Japan agreed to let its yen currency appreciate against the dollar.

China vowed more flexibility in its foreign exchange policy in June, but Geithner said Thursday that despite the move, the yuan’s value was “essentially” unchanged in the past two years because of “very substantial” intervention by authorities.

Since June the yuan has appreciated about 1.6 percent against the greenback and gained about 0.7 percent this week ahead of Geithner’s testimony to US Congress.

Li said this kind of pressure won’t abate in the coming decade.

“Protectionism against China and India will continue to increase and pressure on the currency will also continue,” he said.

08/31/2010 Source: People’s Daily

The National Bureau of Statistics (NBS) published an article on its Web site on Aug. 30 in response to allegations by scholar Wang Xiaolu that 9.26 trillion yuan of incomes were not represented in official statistics and expressed its willingness to jointly improve the measurement of residents’ income statistics with the help of the public.

Some scholars believe there have been a large number of omissions in residents’ income statistics. This led the National Bureau of Statistics to successively publish two signed articles on its Web site to discuss with scholars the income survey and the estimation methods.

The signed article by Wang Youjuan and Shi Faqi published on the Web site of the NBS on Aug. 30 pointed out that the NBS welcomed feedback from scholars and express willingness to further study the questions under discussion.

The article pointed out that after discussions, both sides agreed that the omissions in the current income statistics are mainly caused by two reasons. First, some high-income residents were not willing to accept the survey and second, some households that were surveyed may have evaded and understated the data.

The article also said that in regards to the phenomenon of some high-income residents not wanting to accept the survey, the NBS plans to adopt three methods to remedy and revise the statistical results.

First, it will use the existing personal income tax data to estimate the proportion and income level of the high-income group.

Second, it will invite global bank experts to study the data on the current ongoing large sample statistics of national urban households. Third, it will use the data of the sixth national census to comprehensively revise and evaluate the sample structure.

In regards to the problem of some households evading and understating data, the article pointed out that the NBS plans to send some anonymous survey questionnaires by mail to the surveyed general households in order to compare the proportion of omissions in the accounting process and to evaluate the deviation of the national income survey results.

08/24/2010 Source: People’s Daily

China’s property developers will endure a cold business climate this winter with no let-up in the government’s tightening measures, and as housing supply gradually picks up and financing channels are blocked, industry insiders said.

“Based on signals from the central government, the tightening policies will definitely continue in the remaining months of the year, which will put many property developers in a very difficult situation,” said Huang Nubo, chairman of Zhongkun Group, a Beijing-based property developer specializing in commercial real estate.

Speaking at a meeting in Changzhou, Jiangsu province, on Saturday, Vice-Premier Li Keqiang called for the smooth implementation of the government’s tightening measures.

This is the second time in nine days that Li has made such a point, highlighting the central government’s determination to regulate the property market.

Meanwhile, Li pledged that China would complete the construction of 5.8 million affordable homes this year and increase the supply of commercial housing to meet demand.

“These measures indicate that the government will not let its guard down, and the construction of affordable housing will be the policy focus in the next stage of regulation,” said Qin Xiaomei, chief researcher with property consultancy Jones Lang LaSalle Beijing.

She estimated that a large number of affordable homes could come on the market within the next year, which would help to redress the current imbalance between supply and demand and thus ease price growth pressures.

Despite the better-than-expected financial performance of the country’s leading property developers in the first half of the year, analysts said most of the reported sales were achieved in the second half of last year when the property market was sizzling.

The tightening measures have already had an impact on realtors’ sales, said Qin, adding that these effects will continue to be felt for the rest of this year.

Meanwhile, as it is much more difficult for realtors to receive bank loans and get finances from trusts, some of them have been seeking high-cost financing, with interest rates ranging from 12 to 16 percent, compared with the benchmark rate of 5.31 percent for one-year loans.

“Even though some property developers are not encountering cash flow problems in the third quarter, the fourth quarter will be a really difficult period for them as they will evaluate their sales and revenue plans and try to end the year on a robust note,” said Qin. “I suggest that property developers cut prices as quickly as possible.”

Many realtors have in fact quickened their pricing adjustment to adapt to market changes.

Beijing-based Runfeng Real Estate, for instance, has just cut prices at its project in the south of the city by 10 percent. The effect is self-evident, as 90 percent of the apartments were sold out within a matter of days.

Sino-Ocean Land also plans to put units at its new project in the east of the city on the market 6,000 yuan ($882) lower per square meter than the average in that area, which is 23,000 yuan.

8/17/10 Source: Xinhua

Hong Kong Monetary Authority ( HKMA) welcomed on Tuesday the People’s Bank of China (PBoC) ‘s approval of Renminbi Clearing Bank and other eligible institutions outside the Chinese mainland to invest in the mainland’s interbank bond market.

The PBoC promulgated Tuesday a notice on a pilot scheme for the Renminbi (RMB) Clearing Bank and other eligible institutions outside the Chinese mainland to make use of their RMB funds to invest in the mainland’s interbank bond market.

Under the pilot scheme, the Clearing Bank and Participating Banks of RMB Business in Hong Kong can conduct trading in the mainland’s interbank bond market upon approval by the PBoC.

The Chief Executive of the HKMA Norman Chan said the HKMA will liaise closely with the PBoC on the implementation of the scheme, and will issue a circular to authorized institutions on this matter.

“The launch of the scheme has opened up a channel for RMB funds and financial institutions in Hong Kong to invest in the mainland. This will further promote the development of RMB trade settlement in Hong Kong, and enhance the attractiveness of RMB offshore business in Hong Kong,” said Chan.

Furthermore, under the scheme, central banks and monetary authorities outside the mainland can also invest in the mainland’s interbank bond market.

In this regard, Chan said the HKMA welcomes the new arrangement and will follow up with the PBoC accordingly.