China Economy Weekly: Beijing-ASEAN Trade; Rare Earths “Not Bargaining Instrument”; 12th Five-Year Plan

China and ASEAN Trade: Premier Wen Jiabao, speaking at the 13th China-ASEAN Summit in Hanoi, Vietnam has said China is determined to develop economic ties with the Association of Southeast Asian Nations (ASEAN).

Wen proposed that bilateral trade be increased to $500 billion by 2015, promising that China will make an effort to buy more from ASEAN countries. He also suggested setting up an Industrial Cooperation Mechanism within the China-ASEAN Free Trade Area framework to handle any problems and differences that arise.

Rare Earths “Not Bargaining Instrument”:  Beijing has said that it will not use rare earths as a diplomatic "bargaining tool", in response to challenges against its management of the vital metals.

Zhu Hongren, spokesman for the Ministry of Industry and Information Technology, said that China will seek international cooperation to solve recent disputes over rare earths. He claimed over-exploitation of the metals has created many environmental problems, which justifies the country's production and export control policies.

The Ministry of Commerce has denied reports that export quotas will be further cut next year.

Reforms to be Extended?:  Chinese Premier Wen Jiabao said China should extend reforms of resources and factor pricing and of fiscal, tax, and financial systems in the next five years to facilitate the transformation of economic growth patterns.

Wen said that in the 2011-15 period, China will move to an equal focus on imports and exports and on absorbing foreign investment and investing overseas. The nation would also be shifting from "more attention on quantity to more on quality", he added.

Slower Growth Due to Economic Restructuring:  The People's Bank of China, the central bank, said Wednesday that the slowdown of China's economic growth since the second quarter this year was a result of the government's economic restructuring policies.

China's economy grew 9.6% in the third quarter year-on-year, after rising 11.9% in the first quarter and 10.3% in the second quarter.

The slowdown also reflected China's efforts in curbing soaring property prices, restraining local government debt, and strengthening energy-saving and emission-reduction efforts, the central bank said.

The People's Bank also said price pressures should not be ignored after the consumer price index (CPI) rose 3.6%, a 23-month high in September.

CPC Central Committee Calls for Further Financial Reforms:  China should further reform its financial system to steadily promote market-oriented interest rates and encourage a market-based managed floating exchange rate regime, the Communist Party of China (CPC) Central Committee has proposed.

The country should also improve its foreign exchange reserve management and gradually realize Renminbi convertibility under capital accounts, said the document.

China Hit by Imported Inflation:  Dollar supplies by the United States are "out of control", leading to an inflation assault on China, the Chinese commerce minister has claimed.

Chen Deming, speaking at a trade fair in southern China, said that exporters had done a good job of preparing themselves for exchange rate changes as well as rising labour costs but were suddenly confronted with new challenges.

"Because the United States' issuance of dollars is out of control and international commodity prices are continuing to rise, China is being attacked by imported inflation. The uncertainties of this are causing firms big problems," Chen said.

China, EU Join on Technology Research:  China and the European Union have agreed to jointly pursue financed research focused on sharing and developing technologies for cleaner, less-polluting, and safer aircraft.

The research will initially involve three main projects with budgets totaling 70.5 million yuan ($10.5 million).

WTO says US Ban on China Poultry Illegal:  The World Trade Organization put forth its final rulings on the China-US poultry dispute, outlawing "Section 727", applied by the US in 2009, which practically banned Chinese poultry from entering the American market.

The rulings were adopted without US appeal.

EU Imposes Duties on Chinese Wheels:  The European Union (EU) has imposed anti-dumping duties on imports of Chinese aluminum road wheels and sodium gluconate, stirring concerns over rising protectionism in the 27-nation bloc.

Chinese aluminum wheels, widely used by European car makers such as BMW and Renault, would be subject to a duty rate of 22.3% for a period of five years, while sodium gluconate would face a rate as high as 53.2%, although two Chinese producers.

China's Energy Demand Expected to Ease:  Energy demand growth in China in the fourth quarter is expected to slow as the government steps up efforts to save energy and cut emissions, National Energy Administration official Wang Siqiang has said. Growth in coal imports will fall as China's appetite shrinks.

Intel Opens First Plant in China: US computer chip giant Intel Corporation's first chip plant in Asia began production in Northeast China's Liaoning province on Tuesday.

The $2.5-billion plant is located in the high-tech Jinzhou New District north of the port city of Dalian. It covers an area of 163,000 square meters, roughly the same area as 23 soccer fields.

With more than 1,700 employees, 88 percent of whom are locals, it will initially produce chipsets for laptop computers, high-performance desktop PCs, and powerful servers.