Posts Tagged ‘china’
China’s Foreign Exchange Reserves Rank First in World
China’s foreign exchange reserves rose from 1,577 billion U.S. dollars in 1978 to 1, 950 billion dollars in 2008 to rank first in the world, said Yu Wenzhe, Chinese Ambassador in Ghana, on Tuesday.
To the same token, China’s per-capital annual income of 62.5 dollars in 1978 reached 9,863 dollars in the urban areas, showing an increase of over 100 percent.
Ambassador Yu Wenzhe announced this during a press briefing which was aimed at highlighting China’s significant socio-economic development for the past 60 years.
The People’s Republic of China would be 60 years on Oct. 1, 2009 and the Chinese people and its allies are expected to celebrate the country’s 60th anniversary with pomp and pride.
The stated achievement, he noted, was due to China’s vigorous pursuance of a strategy or model that featured high speed socio-economic development.
He was happy that China has metamorphosed from agricultural country to an industrial nation with the result that the country is now ranked the third largest manufacturing country in the world.
On the strength of China’s development, Yu urged African leaders to translate the continent’s advantage in natural resources into socio-economic development.
The ambassador disclosed that in 2006, the output of 172 categories of Chinese products ranked first on the world market, adding that about 70 percent of DVDs and toys; 50 percent of telephone sets and shoes; one-third of colour TVs, bags and suit cases were made in China.
To be part of Ghana’s future success, he said, China had invested more in Ghana in the fields of economic and technical assistance, which included grant and cash, human resource training among others.
Touching on China’s investment in Ghana, he said, China topped the list of countries with the highest number of registered projects in Ghana.
“Up to June 30, 2009, China had registered 387 projects in Ghana valued at 235.18 million U.S. dollars,” he added.
“To achieve a sustainable and steady development of China-Ghana bilateral trade, both sides should adopt effective measures to balance the trade,” he stressed.
Yu said this against the backdrop that China’s export to Ghana had increased rapidly between 2002 and 2007 as against Chinese imports from Ghana, which he noted, had decreased for two consecutive years since 2005.
SOURCE: http://english.people.com.cn/90001/90776/90884/6765964.html”>
Is a Trade War with China Looming?
US stock markets have had a very wobbly opening this Monday as fear spreads that the Obama administration has fired the first salvo in a trade war with China. President Obama made a long-awaited decision on Friday about imposing sanctions on China over alleged “dumping” of low-cost tires on the American market. Obama sided with trade unions and imposed stiff duties on $1.8 billion worth of Chinese tire imports.
The United Steelworkers brought the case against China back in April claiming that more than 5,000 tire workers had lost their jobs since 2004 because of cheap Chinese tires flooding the U.S. market. Obama’s order raises tariffs for three years on Chinese tires — by 35 percent in the first year, 30 percent in the second and 25 percent in the third.
The Chinese government hit back fast and on many fronts. On Sunday, Beijing announced it would investigate complaints that American auto and chicken products are being dumped in China or benefit from subsidies. China says the U.S. imports have “dealt a blow to domestic industries.” You can be sure Beijing won’t have much trouble arguing that U.S. farmers and automakers are heavily subsidized.
On Monday Beijing escalated its action with a complaint to the World Trade Organization (WTO). The Chinese complaint to the WTO in Geneva triggers a 60-day process in which the two sides are to try to resolve the dispute through negotiations. If that fails, China can request a WTO panel to investigate and rule on the case
With unusually swift and coordinated action the official Xinhua new agency quoted the government as saying, “China believes that the action by the U.S., which runs counter to relevant WTO rules, is a wrong practice abusing trade remedies.” The government said the U.S. imports have “dealt a blow to domestic industries.”
So far it’s a trade spat, not a “war” but it is an irritant as Washington and Beijing prepare for a summit of the Group of 20 leading economies in Pittsburgh on Sept. 24-25. Obama is set to visit Beijing in November and his reception could be very frosty.
Amazingly, American tire companies had begged the President not to go ahead with sanctions against China. “By taking this unprecedented action, the Obama administration is now at odds with its own public statements about refraining from increasing tariffs,” said Vic DeIorio, executive vice president of GITI Tire in the U.S. “This decision will cost many more American jobs than it will create.” GITI Tire is the largest Chinese tire maker, and a U.S. retailer of low-cost imports.
Although investors are not yet facing World War III between the two economic superpowers, it’s enough to make the markets very nervous. The Chinese ADR Index tumbled heavily at the markets’ opening but recovered swiftly as cooler heads prevailed.
Alarmists are worried that China, which holds about a trillion dollars worth of U.S. financial instruments could declare a real economic war. The tools Beijing could use are worrisome. China could:
1. Sell dollars they hold faster than they already are
2. Not buy at the treasury auctions in the near future
It’s a little too early for China to exercise the nuclear option in this trade dispute, but the events have spread fear in otherwise buoyant markets. Investors in U.S. stocks should exercise caution and consider diversification as worries about devaluation of the U.S. dollar, inflation and trade wars continue to loom.
Holders of Chinese ADRs should ride out this rough period if they are confident that the shares they hold are from companies which continue to grow profits by double-digits.
And, more importantly, they should not be invested in companies dependent on foreign exports.
Source: Jim Trippon’s China Stock Digest
