China's Economy This Week: Development in the West, Growth Slows but Exports Up, China-Argentina Railway Deal

China's Western Region Development Plan: Ten years after it unveiled a strategy to promote growth in its western areas, China announced a plan to continue the initiative, even as the world's third-largest economy strives for more domestic-driven growth.

The move comes amidst Government steps such as subsidizing auto and home appliance buyers to boost demand and lessen reliance on exports.

The National Development and Reform Commission said it will unveil 23 new infrastructure projects in the western region this year, with a total investment of 682.2 billion yuan ($100.62 billion). The money will be used to build railways, roads, airports, coal mines, and hydro-power stations.



The western region has six provinces, five autonomous regions and Chongqing municipality, accounting for more than 70 percent of the mainland and the habitat of 75 percent of the country's ethnic minorities.

China, Argentina Railway Deals: China and Argentina signed railway deals totaling $10 billion on Tuesday, amid efforts by Beijing to forge stronger commercial ties with Latin America.

Twelve agreements were reached between the two countries during Argentine President Cristina Fernandez de Kirchner's five-day visit to China.

The 10 railway projects, ranging from two to five years,- include the purchase of Chinese railway technology and investments in Argentina's rail line electrification projects,. Other deals cover areas like infrastructure, fishery, and energy. The two countries agreed to collaborate in light rail and subway construction in Argentina, with China providing export credit to Argentina for purchases of locomotives.

China's Growth Slows: Economic data Thursday confirmed market expectations that China's growth rate has slowed, but officials said the country's economy is still on track.

The Chinese economy expanded at a 10.3% year-on-year rate in the second quarter, slower than the 11.9% growth in the first quarter and the 10.7% in the last quarter of 2009, the National Bureau of Statistics said.

Many economists welcomed the economy's cooling, saying the slower growth is more sustainable. The moderation, which the government expected, will help accelerate transformation of growth and prevent overheating, NBS spokesman Sheng Laiyun told a press conference.

June Exports Highest in Year: China's exports for June hit a high point since July 2008, and the trade surplus also surged, although economists insisted such strong momentum cannot be sustained and there is little possibility that the yuan will strengthen by large margins, as widely expected.

The General Administration of Customs said that China's shipment of exports last month grew by 43.9% from the previous year to $137.4 billion and imports rose by 34.1% to $117.4 billion. The $20 billion trade surplus is a record high.

"There are reasons for the fast growth in exports in June, but the prospects are unhopeful in the second half of the year given a series of factors, including the European debt crisis, gradual appreciation of the yuan and rising costs for raw materials and labor," said Huo Jianguo, director of the Chinese Academy of International Trade and Economic Cooperation, affiliated with the Ministry of Commerce.

Tightening of Property Policy to Continue: China will continue its tightening policies for the property sector, even as housing prices in June saw the first monthly fall since February 2009, the Ministry of Housing and Urban-Rural Development said on Monday.

To rein in runaway property prices, the government in April raised down payments, ended mortgage discounts, tightened rules on loans to developers, and made it harder to buy more homes.

The property sector usually accounts for about 10 percent of Gross Domestic Product, and construction consumes half of the nation's output of steel and 36% of its aluminum.

China looking to Latin America for Oil, Gas: The China National Offshore Oil Corporation is eyeing Argentina and other Latin American countries for oil and gas development.

CNOOC will facilitate this through a joint venture set up in March this year with Bridas Energy Holdings of Argentina, said Fu Chengyu, president of CNOOC during a meeting with Julio de Vido, Argentinean minister of planning and development.

Mainland Yuan Service for Taiwan: The People's Bank of China, the central bank, announced Tuesday that it has authorized the Bank of China (Hong Kong) Limited to provide RMB cash settlement services to Taiwan.

Currently, Taiwan banks can trade yuan in Hong Kong at the Hong Kong and Shanghai Banking Corporation and Bank of America.

China's Economy This Week: Exchange Rates, Growth, and Tariffs

Exchange Rate Reform: The Chinese central bank's declaration of further reform of the exchange rate has been welcomed by other countries and international organizations such as International Monetary Fund.

"Now China is reforming its RMB exchange rate regime and further improving its managed floating RMB exchange rate system," said Zhang Tao, International Department director with the central bank of China.

From July 2005, China has moved towards a managed floating exchange rate.



China "to Maintain Steady, Rapid Growth": China's economy is very likely to maintain steady and rapid growth in 2010, but it still faces a complex domestic and international situation, the People's Bank of China, China's central bank, said Wednesday.

It is imperative to continue support for economic restructuring and transformation of growth, the central bank said.

China and US Raise Anti-Dumping Duties: China said Monday it would impose anti-dumping duties ranging from 6.1 percent to 26 percent on certain iron or steel fasteners imported from the European Union beginning Tuesday.

The Ministry of Commerce said China's domestic industry of manufacturing certain iron or steel fasteners had suffered substantial damages caused by the EU's dumping of these products in Chinese domestic markets and the tariffs would last for a period of five years.

Meanwhile, the US Commerce Department Monday set final anti-dumping duties on imports of some $55.92 million woven electric blankets from China, a move might escalate trade disputes between the two countries.

The US International Trade Commission is scheduled to issue its final injury determination on or before 9 August.

Rising Industrial Profit & Revenue: Profits of China's industrial enterprises jumped 81.6 percent year-on-year for the first five months of 2010, China's National Bureau of Statistics said.

Profits of the industrial firms totaled 1.54 trillion yuan ($226.82 billion) from January to May, and revenues increased 38.2 percent to 25.35 trillion yuan. State-owned industrial firms accounted for more than one third of the total profit, reaching 524.38 billion yuan, 118.9 percent higher than the same period last year.

China is expected to receive 8 trillion yuan ($1.18 trillion) in financial revenue by the end of 2010, State broadcaster CCTV reported

If that happens, China will become the second-largest country in terms of income, trailing only the US.