China's Economic News & Updates

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China urban jobless rate steady at 4.3pc

Sunday, December 20, 2009

SHANGHAI: China’s registered urban jobless rate, the country’s only official measure of unemployment, will remain at 4.3 per cent at the end of this year, the official Xinhua news agency quoted a minister as saying on Saturday. The rate is unchanged from the previous three quarters, and compares with 4.2 per cent at the end of 2008.

“China maintains the registered unemployed rate of 4.3 per cent by the end of this year,” Yin Weimin, minister of human resources and social security, said at a meeting.

The government managed to create jobs for 11 million people this year, the Xinhua report said.

A recovery in employment is an essential precondition for Beijing to wind down its ultra-loose pro-growth policies adopted when the global financial turmoil devastated Chinese exports, leading factories to cut millions of jobs.

The registered urban jobless rate excludes migrant workers and farmers. Even government researchers say it offers only a partial picture of the job market and understates the unemployment rate by a wide margin.

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China will target 8pc growth in 2010’

Tuesday, December 22, 2009

‘BEIJING: China will target eight per cent economic growth next year as the government maintain’s pro-growth policies aimed at fighting the global turn-down, a top minister said on Monday.

“Based on the central government’s target for around eight percent economic growth, we’re aiming for around 11 per cent growth in industrial output,” Li Yizhong, Minister of Industry and Information Technology, said in a webcast.

“The recovery base has been gradually consolidated and the micro-economic policies will still be in place to boost the economy next year.”

China has targeted around eight per cent economic growth each year since 2005, but the economy has mostly steamed ahead at a pace much faster than the target until the financial crisis hit in late 2008.

Li further warned against “blind optimism” as the industrial recovery was mainly supported by government investment and bank loans rather than private investment, he said in the webcast on his ministry’s website. “The growth pace is necessary, achievable and appropriate. We will not set the target too high,” he said.

China’s economy could witness growth of more than 10 per cent year-on-year in the last three months of 2009, with full year growth of around 8.5 per cent, Yu Bin, a top economist at the cabinet’s State Council Developmental Research Centre, said last month.

China could also maintain double-digit growth next year, Yu told Xinhua news agency, but the economy faced several challenges, including inflation linked to a vigorous government stimulus package and the appreciation of the yuan.

China’s economy grew by 8.9 per cent in the third quarter the fastest pace in a year after expanding by 7.9 per cent in the second quarter and 6.1 per cent in the first three months, the slowest pace in more than a decade.

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China says GDP per capita to rise in 2010

SHANGHAI: The average individual share of gross domestic product in China is expected to rise 14 percent next year, even as the gap between urban and rural incomes widens, state media reported Tuesday. GDP per capita is expected to reach nearly $4,000 by the end of 2010 from $3,500 at the end of this year, the China Business News reported, citing a report published by a government think tank. Strong economic growth, slowing population growth and an expected appreciation in the yuan would underpin the increase, Li Peilin, a researcher at the Institute of Sociology of the Chinese Academy of Social Sciences and chief author of the report, was quoted as saying. However, the distribution of income was becoming “increasingly unfair”, Li said. In urban areas, disposable income per capita — already more than three times that in rural areas at the end of 2008 — would increase ten percent in 2009, according to the report, which forecast social conditions in 2010. afp

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China revises up 2008 growth on services strength

BEIJING: China on Friday revised up its 2008 growth rate to 9.6 percent, taking it well above the originally reported 9.0 percent after calculating that the service sector had been more productive than previously thought. The upward revision underscored that China was well on track to surpass Japan as the world's second-largest economy in 2010, if not sooner, and has burnt through less energy to deliver each additional ounce of growth.

China's economy grew at 7.7 percent in the first three quarters of 2009 compared with the same period a year ago. Peng Zhilong of the National Bureau of Statistics said the government would likely revise up growth figures reported thus far this year. The hidden strength found in China's services sector was a modicum of good news for policymakers in China and abroad, who have said that promoting the development of the country's non-tradeable sector is a key ingredient in rebalancing the global economy.

But it was still far from mission accomplished on that front.

China's services sector accounted for 41.8 percent of gross domestic product last year, up from the previously reported 40.1 percent. In developed economies, services often contribute more than 70 percent of GDP. "China always finds it hard to get accurate statistics about the services sector, and the upward revision is not a surprise," Zhang Xiaojing, a researcher with the Chinese Academy of Social Sciences (CASS), said. "But we cannot say China's economic structure is reasonable simply because of that." The revisions were also unlikely to have much, if any, impact on the country's current policy stance. The government has already begun to rein in its ultra-loose pro-growth measures adopted in the face of the global financial crisis.

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China likely to become top global exporter in 2009: govt

Friday, 25 Dec, 2009

BEIJING: China is likely to overtake Germany as the world’s largest exporter in 2009, despite a sharp fall in shipments as the global downturn took its toll, a high-ranking trade official has said.

The country’s share of global trade is expected to exceed nine per cent this year, up from 8.86 per cent in 2008, Vice Commerce Minister Zhong Shan said at a forum here on Sunday.

‘China will probably surpass Germany to become the largest exporting country,’ he said, according to a statement posted on the ministry’s website.

However, 2009 was a tough year for the Asian giant with full-year exports predicted to decline by 16 per cent on-year, Zhong added — the biggest decline in at least three decades, according to available ministry data.

He blamed the drop on ‘severely weak international demand’ and ‘rising trade protectionism,’ adding the value of trade disputes brought against China in terms of potential losses doubled this year to 12 billion dollars.

The country will face an ‘even more complicated foreign trade situation and more arduous tasks’ in 2010 given ongoing uncertainties in international demand and the stability of the yuan’s exchange rate, Zhong said.

China’s trade is ‘big but not strong,’ and the country must adjust its trade structure and beef up product quality and competitiveness to ‘realise… improvement in quality from an expansion in quantity,’ he said.

In the first 11 months of the year, the country’s exports were down by 18.8 per cent from the same period last year to 1.07 trillion dollars, official figures showed. —AFP

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China overtakes Germany as top world exporter

Saturday, January 09, 2010

FRANKFURT: China and its population of 1.3 billion has overtaken Germany, population 82 million, as the world’s top exporter, trade figures from the German national statistics office showed on Friday.

From January to November, Chinese exports were worth 1.07 trillion dollars, while German data showed that exports from Europe’s biggest economy amounted to 734.6 billion euros, or 1.05 trillion dollars.

The widely-expected crowning of a new export champion should be confirmed when Germany releases full-year 2009 trade figures on February 9.

Economic growth in both countries depend on exports, which critics claim contributes to overall global imbalances, urging Germans to consume more and Chinese authorities to let the yuan float freely against the dollar.

In November, the German trade surplus climbed to 17.2 billion euros, seasonally corrected figures showed, from 13.6 billion in October largely thanks to strong Asian demand.

German imports fell by 5.9 per ent to 53.4 billion euros, in part owing to fewer purchases of foreign autos as a car-scrapping premium expired, while exports gained 1.6 per cent to 70.6 billion euros.

“The German product specialisation with a high share of capital goods and high presence in Asian markets, make Germany one of the main beneficiaries of an investment-led global recovery,” ING senior economist Carsten Brzeski said.

He noted that German exports to China had increased by almost 12 per cent from November 2008, and that Germany’s unadjusted trade surplus of 17.4 billion euros was the biggest since June 2008.

Global trade was crushed later that year after the collapse of US investment bank Lehman Brothers.

China, meanwhile, expects its share of global trade to exceed nine per cent in 2009, Vice Commerce Minister Zhong Shan said late last month, from 8.86 per cent in 2008 despite a forecast fall in exports of 16 per cent on the year.

Chinese wares shipped abroad include items such as electronic goods and clothing while Germany exports automobiles, chemical products and specialised machine tools.

On December 30, China and southeast Asian nations established the world’s biggest free trade area in terms of population, and one which rivals the European Union and North America Free Trade Area in terms of value.

Germany benefits greatly from EU trade, which accounted for 63 per cent of its exports in November, providing 462 billion euros in revenues.

“It is good to know that the German economy can at least rely on a good old friend: its strong export sector,” Brzeski said.

Europe’s biggest economy is recovering from its worst recession since World War II, and is estimated to have contracted by around 5.0 per cent in 2009.

The German central bank forecasts growth of 1.6 per cent in 2010.

China’s economy likely grew by 8.5 per cent in 2009, a senior official has said, and could gain another 9.5 per cent this year.

In the end, most experts say increased trade benefits everyone, but efforts to boost global commerce remain deadlocked and the recent economic slowdown has fuelled fears of increased protectionism.

The Doha round of trade liberalisation talks has dragged on since its launch in 2001, dogged by a string of missed deadlines and setbacks.

For Germany, “export demand is set to show more moderate growth rates than at the beginning of the current recovery, not least as fiscal stimulus is increasingly phasing out and the global inventory cycle loses steam,” UniCredit economist Alexander Koch said.

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China’s reserves rise to $2.4 trillion

BEIJING: China’s foreign reserves, already the world’s biggest, surged 24 per cent last year to $2.4 trillion despite the global financial crisis, the central bank reported on Friday. China’s reserves are closely watched in the United States, which is looking to Beijing to help finance its stimulus spending by continuing to recycle its trade surpluses into buying Treasury securities and other government debt. The reserves grew by $453 billion in 2009, an even faster growth rate than the previous year, the central bank said. The reserves added $10.4 billion in December alone. China’s reserve growth is driven by its currency controls, which requires Beijing to buy dollars and other foreign currency that flows into the country in order to control the state-set exchange rate of China’s yuan.

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Germany loses export crown to China as trade crumbles

Wednesday, February 10, 2010

FRANKFURT: China overtook Germany last year to become the world’s leading exporter as German trade suffered its sharpest slump since 1950, figures from Germany’s national statistics office showed on Tuesday.

“According to information from the Chinese Ministry of Commerce, Chinese exports amounted to 1,201.7 billion dollars (876.5 billion euros), while German exports totalled 1,121.3 billion dollars” last year, the Destatis office said.

The total value of 2009 German exports came to 803.2 billion euros, a drop of 18.4 per cent, while imports fell by 17.2 per cent to 667.1 billion euros compared with 2008, the Destatis office said in a statement.

“This was the highest decline recorded in foreign trade in relation to both imports and exports since 1950,” the statement said.

Germany had been the global export champion since 2003, when it wrested the crown from the United States, a Destatis spokesman noted.

Europe’s largest economy also reported, however, that exports gained 3.0 per cent in December from the previous month, the fourth consecutive monthly rise and a positive sign for the future, according to economists.

“The trend in foreign trade is still clearly upwards and contributed positively to economic growth in the fourth quarter,” Commerzbank analyst Simon Junker said.

Exports were 3.4 per cent higher than in December 2008, the first year-on-year gain since the global economic crisis deepened in October 2008 and a key indication that a recovery is underway.

In the end, Berlin posted a trade surplus of 136.1 billion euros for 2009, though that was down from the 178.3 billion euros recorded in 2008.

The economy shrank by five per cent last year, Germany’s worst recession since World War II, but as consumption and exports slowly recover, the government has forecast growth of 1.4 per cent this year.

Germany benefits in particular from EU trade, which accounted for 62.7 per cent of its exports last year.

“At least there is one reliable source of growth,” ING senior economist Carsten Brzeski said.

“Since March last year, German exports have increased by more than 10 per cent.”

He noted however that the latest German data releases indicate the recovery lost steam late last year but stressed the overall picture was better than it seemed.

Inventory building would continue to underpin economic activity and trade should get a boost from the euro’s fall against the dollar that stemmed from fears generated by debt crises in Greece, Portugal and Spain.

The weaker euro was “bound to be a boon to European exporters,” said Howard Archer, chief economist for IHS Global Insight, a research consultancy in London.

Brzeski concluded that “the road might be bumpy but it is the road to recovery and not a dead-end street.”

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China Feb exports jumped 45.7pc

Thursday, March 11, 2010

BEIJING: China’s exports rose in February in a new sign of growing global demand that could help persuade officials to let the Chinese currency rise.

Exports were up 45.7 per cent over a year earlier, the Chinese customs agency reported Wednesday, beating analyst forecasts of 35 to 40 per cent growth.

Imports surged 44.7 per cent, the agency said, reflecting growing demand in China as it emerges from the global crisis.

“China’s trade is extending its recovery,” said Zhu Jianfang, an economist for Citic Securities in Beijing. “Exporters are getting more orders these days.”

February’s growth rate was boosted by comparison with last year’s weak trade amid the global downturn and came despite the weeklong Lunar New Year holiday, when many companies shut down.

Zhu said the data increase chances the government might allow China’s currency, the yuan, to rise in value.

Beijing has held the yuan steady against the dollar for 18 months to help Chinese exporters but is under pressure from Washington and other trading partners that say it is undervalued and is swelling China’s trade surplus.

Combining data from January and February shows exports surged 31.4 per cent during the period from a year earlier, the customs agency said.

Analysts say looking at that two-month period compensates for the distortion of the Lunar New Year holiday and produces a more accurate picture of China’s trade.

In a reflection of stronger global trade, China’s total February imports and exports were up 45.2 percent from the same month last year. China overtook Germany in 2009 as the world’s top exporter.

China’s central bank governor, Zhou Xiaochuan, said on Saturday that Beijing will be “very cautious” about easing exchange-rate controls because the global economic outlook is still uncertain.

China’s global trade surplus for the January-February period narrowed by 50.3 per cent from the same time last year.

http://www.thenews.com.pk/daily_detail.asp?id=228299

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China’s foreign direct investment rises 14.3pc

Sunday, June 13, 2010

BEIJING: Foreign direct investment in China rose 14.3 per cent year-on-year in the first five months of 2010, the government said on Saturday, in an announcement that could add to mounting concern over inflation.

Foreign companies invested 38.9 billion dollars in the world’s third-largest economy from January through May, commerce ministry spokesman Yao Jian told reporters.

That marked an acceleration from the 11.3 per cent growth logged from January to April and the 7.7 per cent growth of the first quarter.

In May alone, foreign direct investment totalled 8.1 billion dollars, a jump of 27.5 per cent over the same month in 2009, Yao said.

The figures were released a day after the government said the consumer price index, the nation’s main gauge of inflation, had surpassed an official target in May to rise a surprising 3.1 per cent year-on-year.

The increase outpaced a 2.8 per cent rise in April and overtook Beijing’s target of 3.0 per cent for the year, which analysts said could potentially increase pressure on policymakers to hike interest rates.

China’s foreign direct investment rises 14.3pc