China This Week: The Economic Front

Shan Shan updates EA with the latest economic news from China:

Warning to Google "Multinationals 'should respect laws in China": Chinese trade experts said on Tuesday that Google's description of China's Internet restrictions as an unfair barrier to free trade is groundless, as the country's Internet regulations apply to everyone and are in accordance with the rules of the World Trade Organization.

"It is understandable that different countries have various laws and regulations with regard to the Internet,", said Wang Lequan, director of the research center on transnational corporations at the Ministry of Commerce.  "As long as these regulations fulfill China's commitment to the World Trade Organization, multinationals should respect that.”

China This Week: Kyrgyzstan, Beijing’s Help for US; Latest on Economy

Google said last week that it would ask the US and governments in Europe to press China to lift Internet restrictions.

Warning of Real Estate Risks: The credit risks associated with home mortgages are growing and a "chain effect" may reappear in real-estate development loans, the China Banking Regulatory Commission said in its annual report.

The regulator has told banks to report on risk exposure by the end of June to help prevent a credit boom from leading to more bad loans. Property prices rose by 12.4 percent year-on-year in May, the second-fastest increase on record.

The State Council issued a directive warning that some  quasi-independent financing vehicles, often used by local governments to fund infrastructure projects, were dangerously loaded with debt.

This is China's latest effort to tackle the mounting debt worries of local governments, which analysts have warned could become financial time bombs.

Chinese business confidence falls: Chinese confidence in the economy has fallen in the second quarter of the year because of concerns over rising production costs and shrinking demand, according to a survey by the People's Bank of China. Confidence has risen since the first quarter of 2009.

The report had a silver lining, with entrepreneurs  "prudently optimistic" about demand for exports.

WTO blocks US poultry ban on China: China appears to have notched up a victory in a dispute over a US ban on poultry imports, criticised in an interim report of the World Trade Organization.

"We think the US will not try to impose a similar ban in the next fiscal year, since it would be regarded as open defiance of the latest WTO ruling," a Ministry of Commerce official said Wednesday.

China's $47 billion for Qinghai quake reconstruction: China plans to spend 32 billion yuan ($46.8 billion) on the reconstruction of parts of northwest China's Qinghai Province battered by a 7.1 magnitude earthquake in April, the government said.

The money would mainly came from the central budget, supplemented by funds from the Qinghai government, donations and corporate funding, according to a circular published on the government's website, www.gov.cn.

The main reconstruction tasks should be finished in three years, according to the circular.