The European Commission has forecast that China's economy will grow 8 percent this year and 8.1 percent in 2014, after it successfully avoided a "hard landing" in 2012.
According to its spring forecast released on Friday, EC officials said China remains exposed to a possible worsening of the international environment, but its principal risk factors remain domestic.
The report said the European Union economy is expected to stabilize in the first half of 2013, following recession in 2012.
The commission expects GDP growth in the EU to turn positive in the second half of the year before gaining momentum in 2014.
Projected GDP growth for the EU is minus 0.1 percent in 2013, and 1.4 percent in 2014, and 1.2 percent in the euro area — weak performances which the report attributed to constrained domestic demand due to a number of impediments, which are typical of the aftermath of deep financial crises.
It said the global average growth rate may climb to 3.8 percent from 3.0 percent in 2012.
However, the European economic pickup may not bring job creation. The jobless rate in the area is forecast to be the same in 2013 and 2014, as high as 11.1 percent. While the unemployment rate for the two years in the eurozone stands as high as around 12 percent.
"In view of the protracted recession, we must do whatever it takes to overcome the unemployment crisis in Europe," said Olli Rehn, the commission's vice-president for economic and monetary affairs and the euro.
On China, the report said that consumption is likely to remain the principal driver of growth in 2013. It said rising wages are likely to increase household incomes while real interest rates will remain positive, implying rising earnings on household deposits and an increase in financial wealth.
"Policy is likely to continue to be supportive for household income with a continuation of measures to broaden the social security net, as well as to support spending directly via measures to boost ‘green' consumption," the report added.
Officials said it is unlikely that the rapid growth in exports seen in early months of 2013 can be maintained in China, given the likely slow recovery in world trade, and the short-term prospects for the EU and the US, both major trading partners.
It said China's currency appreciation will not be helpful in increasing exports, a long-term driver of its rapidly growing economy, it added.
According to EC calculations, the real effective exchange rate of the renminbi has appreciated by around 5 percent over the last six months, which will act as a modest drag on export growth.
Pierre Defraigne, executive director of The Madariaga- College of Europe Foundation, a think-tank based in Brussels, said key global players such as China and the EU must maintain a close and direct dialogue over a vast array of important topics of common concern, starting with the grim global economic outlook.
Defraigne said both sides must provide a strong push to the economic and strategic cooperation between the EU and China, which are both confronted with huge reforms at home.
Those include the governance of the eurozone and the growth and jobs priority in Europe, and further progress toward economic growth, administrative effectiveness, and political accountability in China, it said.
"Bilateral cooperation, instead of protectionism in key areas such as energy, urbanization and telecommunications, should be strengthened quickly," said Defraigne.
Saturday, May 4, 2013
Monday, April 8, 2013
The Australian dollar is to trade directly with the Chinese Yuan
Trade between Australia and China just got a little easier.
The Australian dollar is set to become only the third currency to trade directly with the Chinese yuan -- a move that will help internationalize China's currency and smooth transactions between the major trading partners.
Australian Prime Minister Julia Gillard announced the deal Monday during a trip to Shanghai.
"Australia's banks, superannuation funds and financial houses will be even better placed to help in the growth of China's service economy," Gillard said. "This is good news for the Chinese economy and good news for the Australian economy."
Australia now exports more goods to China than any other country, and trade between the countries is growing.
In practical terms, direct convertibility means that Australian businesses operating in China will no longer have to use U.S. dollars to purchase goods. Instead, they will be able to use Australian currency without a conversion, which should lower costs.
Related story: Economy central for China's new leadership
The yuan, also called the renminbi, already trades directly with the U.S. dollar and the Japanese yen.
China is pushing to internationalize the yuan, and the currency is being used to conduct a growing number of transactions on international markets as Beijing loosens its grip.
Critics have long accused China of keeping its currency artificially low, making its exports cheaper and more competitive against foreign players.
But the currency has been allowed to appreciate recently, easing periodic tensions over the issue.
The Australian dollar is set to become only the third currency to trade directly with the Chinese yuan -- a move that will help internationalize China's currency and smooth transactions between the major trading partners.
Australian Prime Minister Julia Gillard announced the deal Monday during a trip to Shanghai.
"Australia's banks, superannuation funds and financial houses will be even better placed to help in the growth of China's service economy," Gillard said. "This is good news for the Chinese economy and good news for the Australian economy."
Australia now exports more goods to China than any other country, and trade between the countries is growing.
In practical terms, direct convertibility means that Australian businesses operating in China will no longer have to use U.S. dollars to purchase goods. Instead, they will be able to use Australian currency without a conversion, which should lower costs.
Related story: Economy central for China's new leadership
The yuan, also called the renminbi, already trades directly with the U.S. dollar and the Japanese yen.
China is pushing to internationalize the yuan, and the currency is being used to conduct a growing number of transactions on international markets as Beijing loosens its grip.
Critics have long accused China of keeping its currency artificially low, making its exports cheaper and more competitive against foreign players.
But the currency has been allowed to appreciate recently, easing periodic tensions over the issue.
Wednesday, March 20, 2013
China FDI overseas soars 147 percent
Chinese overseas investments are mainly focused on resource sector. That is why the top destinations are Australia, Canada, Africa.
BEIJING: Chinese investment overseas in January and February soared 147 percent year-on-year to $18.39 billion, official data showed Tuesday -- more than foreign direct investment into the country itself.
Incoming FDI, which excludes financial sectors, stood at $17.48 billion over the period, the commerce ministry said, down 1.35 percent year-on-year.
Beijing is keen to promote overseas investment in part of its efforts to reform China's growth model and acquire significant foreign assets in sectors such as energy, mining and high-tech industries, analysts said.
"It should be a trend in the long run -- it is highly likely that overseas direct investment will exceed foreign direct investment in the next few years," Ren Xianfang, a Beijing-based analyst with research firm IHS Global Insight, told AFP.
"It is a national strategy to transfer China to a big investor from a big exporter."
Chinese direct investment overseas increased almost 30 percent last year from 2011 as firms in the world's second-largest economy increasingly look to expand abroad.
The biggest rise in Chinese investment in a major market over January and February was in Australia, where it surged 282 percent, the ministry said.
It was followed by Hong Kong, up 156 percent, and the US with a 146 percent increase, while in south-east Asia it went up 114 percent and in the EU 81.9 percent.
However, in Japan, with whom Beijing has been involved in a territorial row, investment was down 31 percent. Overseas FDI to Russia also slipped 46 percent.
At the same time China's manufacturing competitiveness faces rising costs, while investor confidence is battered by weakness in the global economy.
Nonetheless incoming FDI in rose 6.3 percent to $8.21 billion in February, the first year-on-year increase in nine months, the commerce ministry said.
EU investment into China increased "quite rapidly" in the first two months of the year, the ministry said in a statement, rising 34.01 percent to $1.214 billion.
But FDI fell from the US and Asia, with Japanese investment down 6.7 percent over the period to $1.269 billion.
China's economy grew at its slowest pace in 13 years in 2012, expanding 7.8 percent from the year before.
But it has been showing renewed vigor, with GDP growth accelerating in the final quarter of 2012 to 7.9 percent, snapping seven straight quarters of weakening expansion.
BEIJING: Chinese investment overseas in January and February soared 147 percent year-on-year to $18.39 billion, official data showed Tuesday -- more than foreign direct investment into the country itself.
Incoming FDI, which excludes financial sectors, stood at $17.48 billion over the period, the commerce ministry said, down 1.35 percent year-on-year.
Beijing is keen to promote overseas investment in part of its efforts to reform China's growth model and acquire significant foreign assets in sectors such as energy, mining and high-tech industries, analysts said.
"It should be a trend in the long run -- it is highly likely that overseas direct investment will exceed foreign direct investment in the next few years," Ren Xianfang, a Beijing-based analyst with research firm IHS Global Insight, told AFP.
"It is a national strategy to transfer China to a big investor from a big exporter."
Chinese direct investment overseas increased almost 30 percent last year from 2011 as firms in the world's second-largest economy increasingly look to expand abroad.
The biggest rise in Chinese investment in a major market over January and February was in Australia, where it surged 282 percent, the ministry said.
It was followed by Hong Kong, up 156 percent, and the US with a 146 percent increase, while in south-east Asia it went up 114 percent and in the EU 81.9 percent.
However, in Japan, with whom Beijing has been involved in a territorial row, investment was down 31 percent. Overseas FDI to Russia also slipped 46 percent.
At the same time China's manufacturing competitiveness faces rising costs, while investor confidence is battered by weakness in the global economy.
Nonetheless incoming FDI in rose 6.3 percent to $8.21 billion in February, the first year-on-year increase in nine months, the commerce ministry said.
EU investment into China increased "quite rapidly" in the first two months of the year, the ministry said in a statement, rising 34.01 percent to $1.214 billion.
But FDI fell from the US and Asia, with Japanese investment down 6.7 percent over the period to $1.269 billion.
China's economy grew at its slowest pace in 13 years in 2012, expanding 7.8 percent from the year before.
But it has been showing renewed vigor, with GDP growth accelerating in the final quarter of 2012 to 7.9 percent, snapping seven straight quarters of weakening expansion.
Wednesday, March 6, 2013
China sets economic goals for 2013
2013 will be the first year of the new Xi-Li administration (10 years).
Chinese economy definitely needs some re-balancing.
Premier Wen Jiabao opened China's annual parliamentary meetings Tuesday by issuing a new set of targets for the world's second largest economy.
The target for gross domestic product growth will remain 7.5%, but the government said it will carry a larger deficit in 2013 to help finance spending plans.
China recorded its weakest growth in 13 years in 2012, but a rebound in the fourth quarter removed any lingering concern that its economy might be heading for a hard landing. GDP grew by 7.8% in 2012, beating the government's target of 7.5%.
Here are the government's stated goals for 2013:
Gross domestic product growth of 7.5%.
Consumer Price Index (CPI) target of 3.5%.
A projected deficit of 1.2 trillion yuan ($190.48 billion), 400 billion more than last year and a total of 2% of GDP.
Add more than 9 million urban jobs.
Keep the registered urban unemployment rate at or below 4.6%.
The government will work to ensure that real per capita income for urban and rural residents increases in step with economic growth.
China will continue to implement a proactive fiscal policy. The government will give priority to education, medical and health care and social security.
China will continue to implement a prudent monetary policy. The target for growth of the broad money supply (M2) is about 13%.
Chinese economy definitely needs some re-balancing.
Premier Wen Jiabao opened China's annual parliamentary meetings Tuesday by issuing a new set of targets for the world's second largest economy.
The target for gross domestic product growth will remain 7.5%, but the government said it will carry a larger deficit in 2013 to help finance spending plans.
China recorded its weakest growth in 13 years in 2012, but a rebound in the fourth quarter removed any lingering concern that its economy might be heading for a hard landing. GDP grew by 7.8% in 2012, beating the government's target of 7.5%.
Here are the government's stated goals for 2013:
Gross domestic product growth of 7.5%.
Consumer Price Index (CPI) target of 3.5%.
A projected deficit of 1.2 trillion yuan ($190.48 billion), 400 billion more than last year and a total of 2% of GDP.
Add more than 9 million urban jobs.
Keep the registered urban unemployment rate at or below 4.6%.
The government will work to ensure that real per capita income for urban and rural residents increases in step with economic growth.
China will continue to implement a proactive fiscal policy. The government will give priority to education, medical and health care and social security.
China will continue to implement a prudent monetary policy. The target for growth of the broad money supply (M2) is about 13%.
Saturday, February 16, 2013
Tuesday, February 5, 2013
Huawei will partner with Microsoft to sell Windows smartphones in Africa
Windows phones are not gaining any market share in America and Europe, so Africa may be a better bet.
Microsoft, taking aim at the world’s fastest-growing smartphone market, said on Monday that it would team up with Huawei of China to sell a low-cost Windows smartphone in Africa.
The phone, called the Huawei 4Afrika Windows Phone, will cost $150 and initially be sold in seven countries. Microsoft’s Windows Phone software is fourth among smartphone operating systems, with just 2 percent of the worldwide market in September, according to Canalys, a research firm in Reading, England.
“Microsoft is a small player in smartphones and it needs as many partners as it can get,” said Pete Cunningham, an analyst at Canalys. “And Africa is one of Huawei’s strongest markets outside of China.”
Microsoft’s choice of Huawei, a leading maker of mobile networking equipment for African operators, does not detract from Microsoft’s commitment to Nokia, which is relying on Windows Phone software to lift its new line of smartphones and return the company to profitability.
Fernando de Sousa, the general manager for Microsoft Africa, said that in the next few months, Microsoft and Nokia planned to introduce two new Windows phones for the African market.
Africa is the world’s fastest-growing region for smartphones, with an average sales growth of 43 percent a year since 2000, according to the GSM Association.
In sub-Saharan Africa alone, 10 percent of the 445 million cellphone users have smartphones, but that is expected to increase rapidly as operators expand high-speed networks.
By 2017, most consumers in South Africa will be using smartphones, up from 20 percent last year, according to the GSM Association. In Nigeria, the continent’s most populous country, the outlook for sustained growth is even greater, with smartphone penetration projected to reach just 30 percent by 2017.
The World Bank says that roughly a quarter of the one billion people on the continent are middle-class wage earners, the target group that Microsoft will try to reach with the Huawei phone, Mr. de Sousa said.
“Africans are generally quite conscious of brand, quality and image,” he said. “We are being very clear that we are not going to be building something cheap for this market. What we want to do is deliver real quality innovation at an affordable price. Compared to some smartphones that cost $600 here, this is very affordable.”
Microsoft plans to introduce the Huawei 4Afrika phone on Tuesday at events in Lagos, Cairo, Nairobi, Johannesburg and Abidjan, Ivory Coast. It will also be sold in Morocco and Angola.
The phone, which will run the Windows Phone 8 OS, will be sold with applications designed for African consumers. Some apps give easy access to African soccer results. Others, like in Nigeria, focus on the country’s entertainment and film industries. An application developed in Egypt allows a woman who feels she is being harassed to alert the authorities to her location with one touch of her phone.
By targeting Africa, Microsoft is trying to build on momentum it recently gained through its partnership with Nokia. The company sold 4.4 million Lumia Windows smartphones in the fourth quarter of last year, up from 2.9 million the previous quarter.
Microsoft, taking aim at the world’s fastest-growing smartphone market, said on Monday that it would team up with Huawei of China to sell a low-cost Windows smartphone in Africa.
The phone, called the Huawei 4Afrika Windows Phone, will cost $150 and initially be sold in seven countries. Microsoft’s Windows Phone software is fourth among smartphone operating systems, with just 2 percent of the worldwide market in September, according to Canalys, a research firm in Reading, England.
“Microsoft is a small player in smartphones and it needs as many partners as it can get,” said Pete Cunningham, an analyst at Canalys. “And Africa is one of Huawei’s strongest markets outside of China.”
Microsoft’s choice of Huawei, a leading maker of mobile networking equipment for African operators, does not detract from Microsoft’s commitment to Nokia, which is relying on Windows Phone software to lift its new line of smartphones and return the company to profitability.
Fernando de Sousa, the general manager for Microsoft Africa, said that in the next few months, Microsoft and Nokia planned to introduce two new Windows phones for the African market.
Africa is the world’s fastest-growing region for smartphones, with an average sales growth of 43 percent a year since 2000, according to the GSM Association.
In sub-Saharan Africa alone, 10 percent of the 445 million cellphone users have smartphones, but that is expected to increase rapidly as operators expand high-speed networks.
By 2017, most consumers in South Africa will be using smartphones, up from 20 percent last year, according to the GSM Association. In Nigeria, the continent’s most populous country, the outlook for sustained growth is even greater, with smartphone penetration projected to reach just 30 percent by 2017.
The World Bank says that roughly a quarter of the one billion people on the continent are middle-class wage earners, the target group that Microsoft will try to reach with the Huawei phone, Mr. de Sousa said.
“Africans are generally quite conscious of brand, quality and image,” he said. “We are being very clear that we are not going to be building something cheap for this market. What we want to do is deliver real quality innovation at an affordable price. Compared to some smartphones that cost $600 here, this is very affordable.”
Microsoft plans to introduce the Huawei 4Afrika phone on Tuesday at events in Lagos, Cairo, Nairobi, Johannesburg and Abidjan, Ivory Coast. It will also be sold in Morocco and Angola.
The phone, which will run the Windows Phone 8 OS, will be sold with applications designed for African consumers. Some apps give easy access to African soccer results. Others, like in Nigeria, focus on the country’s entertainment and film industries. An application developed in Egypt allows a woman who feels she is being harassed to alert the authorities to her location with one touch of her phone.
By targeting Africa, Microsoft is trying to build on momentum it recently gained through its partnership with Nokia. The company sold 4.4 million Lumia Windows smartphones in the fourth quarter of last year, up from 2.9 million the previous quarter.
Tuesday, January 29, 2013
Indonesia to import 2500 ships from China
China's ship building industry is already second largest in the world after South Korea.
I am sure this order will further boost China to become the number one ship builder in the world.
Indonesia will import 2,500 ships from China to improve the logistics and distribution among ports scattered throughout the archipelago.
The Indonesia Chamber of Commerce and Industry or Kadin will import the ships, Xinhua reported.
Kadin has signed an agreement with China worth $5 billion, said Natsir Mansyur, vice chairman of Kadin's trade, distribution and logistics division.
The ships will be delivered within five years starting 2013.
"Indonesia's logistics costs are quite high due to limited infrastructure and armada, we need to boost the logistics operations," Natsir said.
Located in South East Asia, Indonesia is the world's largest archipelago with 17,000 islands.
A report by the World Bank in 2012 showed Indonesia's position in logistics performance index was at 2.94 in the scale of 5, lagging behind its regional peers such as the Philippines and Vietnam.
I am sure this order will further boost China to become the number one ship builder in the world.
Indonesia will import 2,500 ships from China to improve the logistics and distribution among ports scattered throughout the archipelago.
The Indonesia Chamber of Commerce and Industry or Kadin will import the ships, Xinhua reported.
Kadin has signed an agreement with China worth $5 billion, said Natsir Mansyur, vice chairman of Kadin's trade, distribution and logistics division.
The ships will be delivered within five years starting 2013.
"Indonesia's logistics costs are quite high due to limited infrastructure and armada, we need to boost the logistics operations," Natsir said.
Located in South East Asia, Indonesia is the world's largest archipelago with 17,000 islands.
A report by the World Bank in 2012 showed Indonesia's position in logistics performance index was at 2.94 in the scale of 5, lagging behind its regional peers such as the Philippines and Vietnam.
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