10/16/2009 Source: Xinhua

The U.S. government said on Thursday that China did not manipulate its currency against the U.S. dollar during the first half of 2009.

In its Semi-Annual Report to Congress on International Economic and Exchange Rate Policies, the Department of Treasury said that “no major trading partner of the United States” met the standards identified by a U.S. act of manipulating their rates of exchange against the U.S. dollar to gain unfair competitive advantage in international trade.

Based on a 1988 law, the Treasury is required to submit to Congress twice a year the report to identify whether its major trade partners manipulate their currencies to boost their exports to the United States or make U.S. products more expensive in overseas markets.

If China had been designated as a currency manipulator, it would trigger negotiations between the two countries and could lead to economic sanctions if the U.S. side took a case before the World Trade Organization.

The Treasury said that “China’s overall policies played an important role in anchoring the global economy in 2009 and promoting a reduction in its current account surplus.”

But it also alleged that the Chinese currency renminbi’s exchange rate showed a “lack of flexibility” in recent period.

The Treasury also claimed that it “remains of the view that the renminbi is undervalued.”

It said that the U.S. government will continue to work with China both in the Group of 20 (G20) and the bilateral Strategic and Economic Dialogue to pursue policies that permit greater flexibility of the exchange rate and lead to more sustainable and balanced trade and growth.

10/12/2009 Source: People’s Daily

The soon-to-be new owner of Hummer said the company will try to make the gas-guzzler adapt to the times.

“Tengzhong has been aware of the importance of energy-efficient vehicles,” said Yang Yi, CEO of Tengzhong Heavy Industrial Machinery Co, in an exclusive interview with China Daily.

Tengzhong signed a previously announced deal with General Motors (GM) on Friday in Detroit to purchase Hummer, a deal Yang says is likely to get Chinese government approval this year or early next year.

“A series of fuel-efficient vehicles including electric and renewable fuel models have already been under development. And environmentally-friendly products will be introduced to the market soon,” said Yang, who was in Detroit to sign the deal.

The Sichuan-based company will attempt to parry the unfavorable gas-guzzling image of Hummer and cultivate markets outside the United States.

“If Tengzhong adheres to the strategy of developing greener Hummer vehicles, there will be a bright future for the business,” said Jia Xinguang, chief analyst with the Chinese National Automotive Industry Consulting and Development Corp.
Hummer’s daunting gas tanks could be a challenge to Beijing’s efforts to foster energy-efficient consumption. Earlier this year, the Chinese government halved the purchase tax on cars with 1.6-liter or smaller engines to encourage sales of small vehicles.

The deal also needs to be approved by the US government.

If the deal goes through, Tengzhong would be the first Chinese company to purchase a famed Western auto brand.

The Ministry of Commerce said on Saturday it has not yet received an application about Tengzhong’s bid for Hummer.

The size of the deal was not revealed, but the Associated Press said it was $150 million, citing an unnamed source. Yang said Hummer’s production would remain in the US and GM would provide key components and assembly services over transitional period. Tengzhong plans to maintain Hummer’s headquarters in Detroit and retain existing senior management and operational team.

Some analysts doubt whether the deal itself is worthwhile.

“The labor cost of Hummer’s 3,000 employees who have been kept according to the deal is much higher than in China. Tengzhong, with an annual output of 3 billion yuan ($440 million), can hardly afford such a burden,” said Ma Guangyuan, a public policy researcher with the Chinese Academy of Social Sciences.

“The deal does not include Hummer’s core technology needed to make the vehicles,” Ma said.

Yang shrugged off concerns that Tengzhong, a long-time manufacturer of heavy machinery equipment such as road and bridge components and construction and energy industry equipment, lacks the experience in the automobile business.

“We have already made several automobile-related acquisitions prior to the deal, and plan to focus more on the high-end sport-utility vehicles.”

According to Yang, Tengzhong will devote marketing efforts to areas outside the US where year-on-year sales of Hummer plunged 64 percent from January to September.

“There is market demand for all terrain vehicles like Hummer in places with complex landscapes such as southwest China, and there are rich people who can afford it,” said automotive analyst Jia.

10/09/09 Source: www.chinaview.cn

Director of the BBC’s Global News Richard Sambrook said here Thursday that the BBC would continue to report all sorts of different dimension of China as fully as possible to the rest of the world.

Richard Sambrook, also Co-chairman of the first-ever World Media Summit(WMS), made the remarks in an exclusive interview with Xinhua before the convening of the WMS.
“In this ever more connected and interdependent world, we think it’s very important to reach out to China and to report China as fully as possible back to the rest of the world,” Sambrook said.

“Recently we moved our main hub bureau for Asia to Beijing and we have put more staff and more resources into that bureau, ” he said, adding the BBC was constantly looking for ways to report China more fully.

The BBC is trying to get more opportunities to report China in many different ways as it can, he said, citing the example of a successful China Week special program in 2005 and the Wild China series made as a partnership between the BBC and CTV (a subsidiary of CCTV).

Sambrook said it was important that China’s voice was heard around the world, and also that other voices from around the world heard within China.

“Communication is very important, particularly in the modern world where we face all the issues and problems together,” he said.

Sambrook said he was very much looking forward to the discussion at WMS.

“I am not expecting any easy answers to the problems we face together, but I’m quite sure that we can learn much from sharing experience.”

Sambrook admitted the BBC’s difficulty in coping with the impact of financial crisis, he said the BBC was still exposed to economic changes to property prices and the cost of doing business.

Although BBC is going through a difficult time, there are opportunities as well, particularly with new Technology and opportunities to create content in a new and more flexible way, he said.

He recalled his first time visiting China in 1986 for Queen Elizabeth’s royal visit, when he use a huge and expensive satellite to send the pictures back to Britain.
“Today our reporters can do the same thing with just laptop and mobile phone, that’s much cheaper and easier. technology helps us through these changes if we adapted it and explored it in the right way.” He said.

Sambrook was also keen to participate in the social media sites, like Twitter and Facebook, where he found a lot of creativity, innovation and energy.

“I think there is a profound change the internet is bringing to communication and to all the media, we all need to understand it and being involved to it,” he said.

10/06/2009 Source: Xinhua

The amount of non-cash payments in China’s eastern coastal region started to rise in the second quarter this year after three consecutive quarters of decline, according to the People’s Bank of China.

Non-cash payments, including commercial papers and bank cards, in China’s eastern provinces went up 2.3 percent in the second quarter this year, the central bank said in its latest report.

China saw its first-ever decline in non-cash payments in the third quarter last year, a proof of a less active economy amid the global economic downturn, according to a central bank report.

In the second quarter, transactions made with non-cash payment tools rose 25 percent to 4.44 billion times valued at 157.5 trillion yuan (23.06 trillion U.S. dollars), according to the report.

The report also showed non-cash payments in China’s central, western and northeastern regions grew faster than in the east, by 26.4 percent, 10.5 percent and 52.5 percent year on year respectively.

09/23/2009 Source: People’s Daily

China’s largest independent carmaker Geely Automobile Holdings Ltd announced Wednesday it will raise 2.59 billion Hong Kong dollars (334 million U.S. dollars) selling convertible bonds and warrants to a fund managed by Goldman Sachs Group Inc.

Geely’s stock rose nearly 26 percent in Hong Kong trading at 2.25 Hong Kong dollars Wednesday morning, the highest in more than nine years. GS Capital Partners VI Fund LP (GSCP) will have 15.1 percent of Geely if it converts the bonds and exercises the warrants, says a statement from Geely.

Geely will use part of the fund for acquisitions.

The carmaker will work with GSCP to further strengthen financial management, operational efficiency and corporate governance practices, said Li Shufu, Geely’s chairman.

Geely suspended transactions on Sept. 16 and restored them on Wednesday.

09/17/2009 Source: People’s Daily

U.S. President Barack Obama’s decision last weekend to impose punitive tariffs on tires imported from China has triggered concerns about the rise of protectionism in the lead-up to the Pittsburgh G20 meeting later this month.

Australian Trade Minister Simon Crean described the timing of the decision as “dreadful,” saying “it sends the wrong signal, we must be stepping back from measures that invite retaliation.”

He said the decision would make it more difficult to achieve progress at the G20 toward finalizing the Doha Round trade talks, according to the Sydney-based newspaper the Australian Wednesday.

Obama’s order raised tariffs for three years on Chinese tires — by 35 percent in the first year, 30 percent in the second and 25 percent in the third.

The decision was also opposed by the U.S. tire industry. The Tire Industry Association (TIA) said it was “deeply disappointed” with the decision.

The TIA is an international association representing all segments of the tire industry, including those that manufacture, repair, recycle, sell, service or use new or retreaded tires, and also those suppliers or individuals who furnish equipment, material or services to the industry.

The TIA believes tariffs will “price” low-cost tyres “out of reach for many customers and will lead to a tightening in the remaining supply of lower-cost tires,” according to a TIA press release.

“Also, given that lower-cost tires imported from China help those most vulnerable in this current economy… We are deeply concerned that many consumers may delay or even defer replacing their tires when necessary, thus creating a potential safety hazard on America’s roads,” added the TIA.

“TIA believes this was a politically motivated decision that will end up costing more jobs than it saves,” said TIA Executive Vice President Roy Littlefield.

GITI Tire (USA) Ltd., a member of the American Coalition for Free Trade in Tires, has already issued an official statement expressing its disappointment.

“This decision will cost many more American jobs than it will create,” said Vic DeIorio, GITI’s executive vice president. “It will also increase costs for, and take away choices from, American consumers.”

Bob Ulrich, editor of U.S. magazine the Modern Tire Dealer, wrote in an article titled “President Obama announces tariffs in the dark of the night” that “it was a hot button issue, one with potentially serious ramifications.”

Neena Shenai, an adjunct scholar at the American Enterprise Institute, warned Wednesday in a commentary article that “American consumers and downstream U.S. tire businesses will suffer, and trade relations with China will be needlessly damaged.”

Hankook Tire Co., the largest overseas tire maker in China, fell the most in almost eight months in Seoul trading after the United States slapped special tariffs on Chinese tires.

The price of the company’s shares dropped 8.8 percent in Seoul trading up to Wednesday, the biggest decline since Jan. 20, to close at 20,200 won. Aeolus Tyre Co., the largest Chinese-listed tire maker by market capitalization, also fell 3.3 percent in the Shanghai stock market.

“There is concern the industry could be affected by the U.S. decision,” said Kevin Lee, an analyst in Seoul.

China on Monday asked for talks with the United States on the tire tariff issue in accordance with the World Trade Organization (WTO) dispute settlement process.

On Sunday, China launched anti-dumping and anti-subsidy investigations into U.S. chicken products and an anti-subsidy investigation into automobiles produced in the U.S.

Chinese Ministry of Commerce Spokesman Yao Jian said China firmly opposed trade protectionism and discouraged the use of trade remedy measures.

China wanted to have talks and negotiations with the U.S. side on the friction and to practically promote the development of bilateral and multilateral trade relationships, said Yao.

Eswar Prasad, professor of trade economics at Cornell University, warned of an escalation of the disagreement.

“These protectionist measures, some of which amount to domestic political posturing rather than substantive restraints on trade, could easily ratchet up into a full-blown trade war and inflict serious economic damage on both countries,” he said.

An article by the Editorial Board of the Christian Science Monitor said it is likely that Mexico or other low-wage countries will simply step up their tire exports to the United States and fill a void left by fewer or more expensive Chinese tires.

“In the end, Americans who have worked in tire factories will need to retrain themselves for higher skilled jobs in emerging fields where the United States is more competitive. Meanwhile, this tariff means U.S. consumers will pay more for tires,” said the article.

“If the tariff ends up being for naught, then it is worth asking if Obama’s action hurts the American interest in free trade by sending the wrong signal to other countries,” it added.

09/11/2009 source: People’s Daily

CCB International (Holdings) Ltd., a wholly-owned subsidiary of China Construction Bank (CCB) said on September 10 that it was planning to set up CCBI Healthcare Fund, its first private equity fund of RMB. It will raise no more than 2.6 billion yuan and invest in an unlisted domestic health enterprise. China’s pending Growth Enterprise Board (GEB) has aroused bank-related institutions’ enthusiasm in RMB private equity funds.

Prior to this, BOC Suisse Fund Management, Bank of China’s asset-management arm based in Geneva, said on September 4 that it had received approval from the Swiss financial regulator to create a new set of funds, part of which would be settled with RMB yuan.

In August, US’ Blackstone Group signed a financial cooperation memorandum with the government of Pudong District in Shanghai. Blackstone will set up the first regional private equity fund of RMB in Pudong – Blackstone Chinese development and investment fund. It will raise about 5 billion yuan in key investment areas including Pudong and surrounding areas in Shanghai.

According to a report released by China’s Zero2IPO Group, in 2008, RMB funds in China raised a total of 23.7 billion USD.

According a CCB staff, CCB International (Holdings) has been actively making preparations for the CCBI Healthcare Fund since last year. China’s National Development and Reform Commission (NDRC) approved the fund in April 2009.

BOC’s new set of funds will make it possible for China’s domestic private and institutional investors to invest in world financial market without currency risks. Foreign investors can add China and RMB-related financial products to their asset allocation via BOC’s new funds.

Fang Ming, senior analyst of BOC’s Financial Market Department, said that the two bank-related institutions recent action marked the new approach of the internationalization of RMB.