China Economy Weekly: Beijing Moves on Trade and Investment; Soaring Property Market; Labour Activism Against Apple?

Hu Reiterates China's Economic Policy: Chinese President Hu Jintao has said that the government should stick to the pro-active fiscal policy and moderately loose monetary policy in the second half of this year to ensure a stable and relatively rapid economic development.

More efforts should be made to strengthen economic forecasts and warning systems, as well to coordinate economic policies, Hu added.

China Seeks Trade Balance, Not Surplus: China will continue to seek balance instead of surplus in trade and it will oppose any form of protectionism, Chinese Premier Wen Jiabao said at a joint news conference with visiting German Chancellor Angela Merkel.

China This Week: Drills In The Yellow Sea; China’s Energy Progress; Dalian Pipeline Blast

These efforts should be praised and not criticised, particularly when compared with any major country that claims to double its exports to alleviate unemployment pressure, Wen added.

Wen made the remarks amid growing concerns that China's export growth would gradually drop despite the strong momentum in June.

China will continue to stimulate domestic demand as well as stick to an appropriately loose monetary stance and pro-active fiscal policy, Wen said, declaring that policy stability will be the government's economic priority in the second half of this year.

China Sticks to Opening-up Policy: Chinese Premier Wen Jiabao has denied that the investment environment in China is worsening, as he invited more foreign companies to put money into the country.

Foreign firms have voiced concern that China's indigenous innovation policy might provide incentives for government bodies to purchase products developed by Chinese companies. The World Bank in a July report gave China a low investment environment ranking.

But the amount of foreign direct investment (FDI)  that flowed into China in the first half of the year rose 19.6% year-on-year, according to data from the Ministry of Commerce (MOC). China attracted $12.51 billion in FDI in June alone, up 39.6% year-on-year.

Wen said, "Foreign investment will not pour into a country where the investment environment is worsening." He asserted that China has relatively good infrastructure as well as a fair and stable market environment.

China's 2010 Foreign Trade Trend: A "high-low" trend was emerging for China's foreign trade in 2010, as growth in the first half would be stronger than in the second half of the year, Yao Jian, a spokesman with Ministry of Commerce told a briefing Tuesday.

China's exports will only moderately increase in the next half of the year, since tightening monetary policies in emerging economies, such as Brazil and India, and the European sovereign debt crisis will curb overseas demand, Yao said.

The country's total value of imports and exports jumped 43.1% percent year-on-year to $1.35 trillion in the January-to-June period, but the trade surplus was down 42.5% to $55.3 billion U.S. dollars.

"Wrong" to Hit at Outbound Investment: Countries including the United States and India should not politicise outbound investment by Chinese enterprises or abuse investment protection tools to shield their own industries and jobs from the financial crisis, the Ministry of Commerce said on Tuesday.

China's outbound direct investment (ODI) surged by 24% from a year earlier to $55.18 billion during the first six months, the ministry said. The investment mainly went to sectors such as mining, commercial services, manufacturing, wholesale, and retail.

Despite the rapid growth, Chinese investment abroad has been frequently blocked by other countries, especially the US and India, during the past few months.

China May Reform Yuan Exchange Rate Calculation: China may calculate the yuan's exchange rate against a basket of currencies, instead of only against the US dollar, Hu Xiaolian, deputy governor of the People's Bank of China said in a signed article published on the PBOC website.

There should be various currencies in the effective exchange rate basket to reflect the diversity of China's trade and investment activities, Hu added.

Agreement for Business with Hong Kong: The People's Bank of China, and Hong Kong's Bank of China (Hong Kong) Limited, signed a revised Settlement Agreement on the Clearing of Renminbi (Yuan) Business in Hong Kong.

"There will no longer be restrictions on banks in Hong Kong in establishing renminbi accounts for and providing related services to financial institutions; and individuals and corporations will be able to conduct renminbi payments and transfers through the banks," said Norman Chan, the chief executive of the Hong Kong Monetary Authority.

Foreign Investors Eye China's Real Estate: China's property market has seen soaring investment from foreign institutional investors, driven by strong expectations of currency appreciation this year.

According to international real estate advisor Richard Ellis, the value of en bloc property transactions in 15 Chinese cities has hit 49.9 billion yuan ($7.36 billion) in the first-half of this year, among which 19.4 billion yuan came from foreign institutional investors, 10.2 billion yuan from Hong Kong, Taiwan, and Macao, and the remaining 20.3 billion yuan from mainland investors.

Total investments in the first six months of this year were almost five-fold those from the same period of last year.

China Honors All WTO Entry Commitments: China has honoured all the commitments it made when entering the World Trade Organization (WTO), said Yao Jian, spokesman of Ministry of Commerce, on Tuesday.

"China has set up economic and trade mechanisms in line with WTO rules and requirements, and become one of the most open markets in the world," he said.

Yao added that China will further cut tariffs on agricultural and industrial products by about 30 percent according to the latest Doha round of talks.

US Labour Group Offers Help with Apple: A San Francisco-based labour council wants to help its counterparts in Guangdong Province press IT giant Apple to allocate more profits to its scandal-hit Chinese manufacturer to improve the treatment of Chinese workers.

Apple Inc is a major brand customer of Foxconn Technology Group, which employs more than 800,000 people on the Chinese mainland, mostly in Guangdong.

The latest offer came after a dozen Foxconn workers committed suicide by jumping off buildings in the company's premises in the first six months of this year.

A 19-year-old intern from the Dongfang Vocational School of Technology in Hebei province died on Tuesday morning after he fell from his sixth floor dormitory at the plant in Foshan of Guangdong, Chimei said in a statement on Wednesday.

Police are still investigating the case.

China's Economy This Week: Mounting Difficulties, Investment in West China, Calls for Fairer US Market, & More

Difficulties for Chinese Economic Policy:Premier Wen Jiabao has warned that China's macroeconomic policy is facing mounting difficulties with the severity of the international financial crisis and the unpredictable nature of the global recovery.

"China's current economy remains good, but the domestic and international environment is extremely complicated," Wen said while addressing a symposium in Changsha, capital of central China's Hunan Province.

At the symposium, Wen reiterated the government's stance in maintaining the continuity and stability of macroeconomic policies, and making these policies more flexible and targeted.

Wen said the government would "work to promote stable and relatively fast domestic economic growth, restructure the economy and manage inflation expectations to ensure the government's goals for 2010 are met". The government would endeavor to resolve long-term structural problems while targeting urgent issues.

$100 billion for poorer West China: The central government has said it will invest more than $100 billion in 23 new infrastructure projects in the underdeveloped western regions this year to boost domestic demand.

The plan was announced on Monday after Premier Wen Jiabao said the Chinese economy is facing an "extremely complicated" situation and two purchasing manager surveys showed manufacturing activity had slowed in June.

China has long sought to boost development in the poor western areas. It spent 2.2 trillion yuan ($325 billion) on 120 major projects between 2000 and 2009.

At a conference in Beijing, President Hu Jintao said the western regions should be built within 10 years into the country's bases for energy resources, resource processing, equipment manufacturing and emerging industries of strategic importance.

Chinese steel maker buys rights to mine Australian iron ore: China's third largest steel maker, Wuhan Iron and Steel Corporation (WISCO), completed a joint venture on Wednesday with Australian Centrex Metals Ltd corporation (CXM) to develop iron ore mines on south Australia's Eyre Peninsula.

WISCO paid 51.5 million Australian dollars (US$43.7 million) to CXM for mineral exploitation rights and another 50 million Australian dollars to the joint venture to cover the cost of the first-phrase exploration, said sources of the central-China-based WISCO.

The joint project, with an estimated investment of US$1.5 billion, is expected to annually produce 33 million tonnes of raw iron ore, along with 10 million tonnes of refined iron ore, the sources said.

With a controlling share of the new joint venture, WISCO would have the final say on the exploration and operation of the Australian iron ore mines.

China steel giant calls for fair market environment in U.S.: China's Anshan Iron and Steel Group Corp. called for maintainence a fair market environment on Wednesday after 50 US lawmakers sought to block its investment in an American steel company.

In a recent letter to US Treasury Secretary Timothy Geithner, the Congressmen said the joint rebar venture proposed by Anshan Iand US Steel Development Co. threatens "American jobs" and "national security".

In a statement, the steel mill said its investments in the US and other regions were commercial acts based upon market demands and were attempts at international cooperation.

The steel "rebar" produced at the $175 million American facility, in which Anshan Iron and Steel has a 14% stake, would mainly substitute for US imports, it said. Rebar is a low-end steel product mainly used in construction. The 300,000-tonne plant in Amory, Mississippi would create jobs and increase tax revenues and would not harm local suppliers, it said.

Qi Xiangdong, deputy secretary-general of the China Iron and Steel Association, on Monday urged western countries to maintain the proper attitudes towards global trade and economic globalization. "If the (U.S) government supported blocking the deal, it was a protectionist attitude," Qi said.

Overseas grain purchasing agencies covet China's markets: Many of China's domestic grain purchasing agencies felt slighted by highly capitalized overseas purchasing groups in China's major wheat belts, Xinhuanet.com reported.

Some sources even worried that the groups will affect the central government's regulation of grain price.The foreign groups tempted the Chinese peasants with a higher purchase price which made them store the grain and wait for the better bid.

EU OKs Geely's takeover of Volvo: The European Commission said on Tuesday it had approved the takeover of Swedish carmaker Volvo by Chinese rival Geely and China's state-owned investment firm Daqing.

"The commission concluded that the transaction would not significantly impede effective competition" in the European Union, the EU's antitrust watchdog said in a statement.

The transaction did not initially qualify for the EU's one-stop shop review because the acquirers did not meet the triggering turnover threshold, but since it was notifiable in at least three EU member states, the parties asked the commission to examine the deal and the countries concerned agreed to it.

Geely signed a deal with Volvo in March, under which Geely would pay $1.8 billion in exchange for the whole shares. Part of the money came from Daqing.

China This Week: No More Iran Sanctions, Co-op with Pakistan & New Zealand, Concern on US-South Korea Drill, & More

China opposes expansion of sanctions on Iran: China said on Tuesday that UN Security Council sanctions against Iran should not be expanded.

"China has noted that the United States and other parties have unilaterally imposed further sanctions on Iran," said Qin Gang, Foreign Ministry spokesman, referring to the new sanctions approved by US President Barack Obama on 1 July.

China Watch: Beijing Media’s Global Expansion (Shan Shan)

Described by Obama as the "toughest" ones ever passed by the Congress, the new sanctions penalize international firms linked to Iran's energy industry, Revolutionary Guards or nuclear programs.

China, Pakistan ink six deals: China and Pakistan signed agreements, covering areas such as agriculture, health care, justice, media, economy, and technology, in Beijing on Wednesday. Chinese President Hu Jintao and Pakistani President Asif Ali Zardari vowed to jointly fight the "three forces" of extremism, separatism ,and terrorism.

As a sign of closer cooperation, a joint anti-terrorism drill, code-named "Friendship 2010", is between held between Chinese and Pakistani armed forces in northwest China's Ningxia Hui Autonomous Region.

Hu said China would explore new ways to cooperate and extend cooperation between the two countries in areas such as energy, transportation, telecommunication, infrastructure and agriculture.

Chinese combat troops "can join UN peacekeeping": China will consider sending combat troops overseas at the request of the United Nations, Senior Colonel Tao Xiangyang, deputy director of the ministry's peacekeeping affairs office, said on Tuesday.

He added that the UN has so far not made any such request to China and China has to be extremely cautious about the issue: "We will have to take into account our national defense policy, which is defensive in nature, the international community's response, as well as our troops' capability."

Since 1990, China has sent 15,603 soldiers on 18 UN peacekeeping missions. Three military observers and six soldiers died during the missions.

At the end of last month, China had deployed soldiers in nine UN missions, including those in Liberia, Congo, Sudan, and Lebanon.

China’s serious concern about US-South Korea drill: China said Tuesday it is seriously concerned about a scheduled joint naval drill between the United States and the Republic of Korea in the Yellow Sea.

The parties should refrain from doing things that might escalate tensions and harm the security interests of the countries in the region, Foreign Ministry spokesman Qin Gang said.

The four-day anti-submarine drills were originally scheduled for last month, as part of the response to the sinking of a South Korean warship in late March, which killed 46 sailors.

According to latest reports, the military exercise may be conducted after UN action against North Korea over the warship issue.

China, New Zealand eye closer energy co-operation: Chinese Premier Wen Jiabao and visiting New Zealand Prime Minister John Key agreed on Wednesday to further bilateral cooperation in areas such as energy, food security, and the green economy.

Wen and Key pledged to implement the bilateral Free Trade Agreement. Signed in October 2008, the pact was the first of its kind between China and a developed country.

China’s co-op with Myanmar and Tonga: Chinese Vice Premier Li Keqiang on Tuesday pledged to speed up and expand cooperation with Myanmar on energy and transport.

China and Myanmar had reached consensus on many issues regarding economic cooperation in recent years, Li said.

Meanwhile, China and Tonga pledged on Wednesday to strengthen military cooperation and exchanges on Wednesday. Military ties between China and Tonga have developed steadily with frequent visits and good cooperation in personnel training, said Chen Bingde, chief of the General Staff of the People's Liberation Army of China.



China to host UN climate change talks: China will host UN climate change talks in Tianjin in October, Foreign Ministry spokesman Qin Gang said Tuesday.

It is the first time for China to host the UN climate change talks and also the last round of negotiations before the next big UN Framework Convention on Climate Change (UNFCCC) gathering, taking place in the Mexican resort of Cancun from November 29 to December 10.

The Tianjin talks, part of the UNFCCC, will aim to consolidate the status of the Convention and the Kyoto Protocol as the main channels for negotiation and to make new progress, Qin noted.

China’s new nuclear power stations: China, which is currently building the largest number of nuclear power stations worldwide, is expected to use one of the most advanced technologies for constructing 10 of its nuclear reactors, an energy official said on Monday.

Compared with other reactors already in use in China, those using the third-generation technology are considered to be safer and able to operate longer.

As the world's second-largest energy consumer, China now has 11 nuclear power reactors in operation. These reactors have a total capacity of 9.1 gigawatts, accounting for about 1 percent of the country's total power capacity.

China is currently building 23 nuclear power units. The proportion of nuclear power is expected to account for 15 percent of the country's total power capacity in 2050, industry sources said.

China Watch: Beijing Media’s Global Expansion (Shan Shan)

Last week, Xinhua news agency, China’s main news service, launched a 24-hour global TV news network in English, China Xinhua News Network Corporation (CNC) World.

According to Xinhua’s report, CNC aims to reach 50 million viewers in the Asia-Pacific region, Europe, North America and Africa by satellite, cable, cellphone and the Internet within its first year. Plans are for it to be available on cable networks in regions including the United States by 1 Ocotber.

Meanwhile, Xinhua's North American headquarters will move to the top floor of a 44-story skyscraper in New York's Times Square, alongside media giants such as Thomson Reuters and Conde Nast, the Wall Street Journal reported.

The two efforts are being seen as attempts by China to enable “more voices to be heard by the rest of the world” and to counter foreign media views. Beijing officials contend that China is often misunderstood and misrepresented by the international media, which “present a biased or unfair view of news from the country, focusing on negative stories and ignoring positive developments”.



The move points to Xinhua’s intention to be “a global player” and to the recogntion of China "in the global arena that soft power is as important as hard power”. However, many critics are doubtful about CNC World’s independence and objectivity in news reporting because of Xinhua’s state-owned status and Chinese censorship.

Countering these views, Wu Jincai, controller of CNC World, insisted that CNC World is " a news channel, not a propaganda station". Unlike other Chinese media, CNC is “51% owned by Xinhua but also has private investors, including Gree --- a private Chinese home appliances maker”.

Shirong Chen, the BBC China Editor, points out that since 2008, Xinhua has made efforts to “transform itself from an official news agency to a multimedia empire with direct access to audiences both at home and abroad”. At the same time, even though international news will take up more than half of its programs, CNC World “is competing for the strongest forces for covering China news. With ubiquitous correspondents positioned throughout China, CNC World produces extensive and in-depth TV programs on China news.” Li Congjun, Xinhua President, summarised, "CNC World will report international news with a China perspective and China news with a global vision" for overseas audiences.

CNC World’s launch and Xinhua’s move are only part of efforts to expand China's influence abroad. It is also said that “Beijing has been pouring millions of dollars into the broadcasters in an attempt to promote its own messages about China to the wider world”.

In recent years, China’s media organiaztions have been trying to increase its presence outside the country, echoing Chinese President Hu Jintao's aspiration for "a modern communication system" and "communication capacity" for Chinese media at home and abroad. Integrating several media’s reports, China Central Television, the country’s biggest state-run television broadcaster, has been expanding overseas and offering broadcasts in English, Spanish, French, Arabic and other languages.

People's Daily, the flagship newspaper of the Communist Party, owns two newspapers: China Daily, an English-language daily newspaper, and an English edition of Global Times. The Xinhua news agency, which already has more than 10,000 employees and 120 bureaus around the world, has begun recruiting non-Chinese journalists from around the world to write for its news services.

Last month, the Southern Daily Group, which publishes one of the most influential liberal newspapers in China, the Southern Metropolis Daily, made a bid to purchase Newsweek magazine. Even though the bid was unsuccessful, it was reported that the Southern Daily Group's senior management was "expecting to make other similar purchases".