world growth

world growth

Sunday, February 21, 2010

Nigeria-China trade reaches $6.5 billon in 2009

Mr Rong Yansong, China’s Economic and Commercial Counsellor in Nigeria, says that the trade volume between China and Nigeria hit $6.5 billion in 2009. Yansong said this on Friday at a news conference in Kaduna. He said that the Chinese Embassy specified the amount in the trade statistics it compiled during the trade review for the year.

The counsellor was in Kaduna, ahead of the 31st Kaduna International Trade Fair, which opens on Saturday. Yansong said that the accumulated investment of Chinese enterprises in Nigeria also amounted to $7.24 billion during the year.

He said that various Chinese enterprises were involved in petroleum, iron and steel, manufacturing, agriculture, fishery, pharmaceuticals and transportation projects. He commended the Federal Government and the Kaduna State Government for supporting Chinese enterprises that started business in the country in the early 1980s. Yansong stressed that the trade fair would create another avenue for the two countries to further consolidate their trade relations through bilateral talks, seminars and agreements and other business activities.

He said that six Chinese companies had concluded plans to invest in cities’ development, infrastructure, water supply, agriculture and hydro-based power projects in the state.

Yansong said that trade delegations from China would hold talks with the Kaduna Chamber of Commerce, Mines and Agriculture (KADCCIMA), organisers of the fair, on the development of small and medium-scale enterprises.

“My office will collaborate with KADCCIMA and hold seminars to introduce investment projects for the benefit of both countries. My office will also provide more training opportunities for the Chamber to improve the capacity of its personnel and enhance its local content in future fairs,” he said.

Yansong said that the delegations would also meet with the state government to discuss other areas of cooperation. Meanwhile, preparations have been concluded for trade exhibitions at the 31st Kaduna International Trade Fair, which opened on Saturday.

Wednesday, February 17, 2010

China's economic growth benefits Japan

China's economic rise has silver lining for Japan

TOKYO — China is on the verge of unseating Japan as the world's number two economy, but student Shi Minfei is one reason why Beijing's rapid growth is not all bad news for its deflation-hit neighbour.

With Japan's consumers keeping a tight hold on their purse strings, leaving the country as reliant as ever on exports, Chinese tourists like Shi are a rare example of good news for the country's long-suffering retailers.

The 20-year-old engineering student from Shanghai said she had splurged about 300,000 yen (3,300 dollars) on clothing, bags, shoes and cosmetics during her visit to Japan.

"I'm going mostly to shopping malls," Shi said as she hopped aboard a tour bus in downtown Tokyo, adding that the Japanese capital still has an edge over Shanghai when it comes to splashing cash.

Another visitor, a 42-year-old housewife from Beijing, said she had spent 200,000 yen on "Gundam" combat robot toys for her 12-year-old son, out of a shopping budget for the trip of up to 500,000 yen.

It is a welcome boost for a Japanese economy that has suffered two decades of malaise after its stock market and real estate bubble burst in the early 1990s, ushering in years of deflation and sluggish economic growth.

Japan narrowly retained its title as the world's number two economy in 2009 ahead of China, extending a recovery from a brutal recession with a robust fourth-quarter performance, data showed Monday.

But surging China came close to unseating its neighbour from the position it has held for more than 40 years, after the Japanese economy contracted at the fastest pace on record last year, battered by a plunge in exports.

Average income per person in urban China was less than 3,000 dollars in 2009, still a far cry from nearly 48,000 dollars for a Japanese salaried worker, official figures show.

Even if Japan kept its number two rank last year, economists say it is inevitable it will soon be overtaken by China, which has a population of more than 1.3 billion and an economy that grew a blistering 8.7 percent last year.

While its relegation in the global economic rankings would be a blow to Japan's prestige, its economy might be in an even worse state if it were not for the boom in China, now its biggest trading partner and top export market.

With markets in Japan, North America and Europe in the doldrums, Japan's top carmakers and other manufacturers are increasingly relying on emerging economies including China.

Many Japanese manufacturers have opened factories in China, taking advantage of the lower labour costs and faster economic growth there. The flipside is that they face increasing competition from Chinese firms in overseas markets.

"As its population is ageing, we cannot expect Japan's domestic demand to recover," said Hiromichi Shirakawa, chief Japan economist at Credit Suisse.

"Japan has to rely on exports to limit the speed of its economic decline. Japan's outlook would be much darker if it weren't for China," he said.

Japan's government has taken notice and started issuing visas to individual Chinese tourists last July as demand for non-group travel increases.

Foreign visitor numbers to Japan last year plunged 18.7 percent from the previous year -- the fastest decline in nearly four decades -- to 6.79 million due to the global recession, a strong yen and the swine flu scare.

But arrivals from mainland China edged up 0.6 percent to a record one million.

It is no wonder that travel agencies are competing to woo Chinese tourists with sight-seeing trips that include beauty treatment and healthcare.

Nippon Travel Agency is offering a one-week tour for two for about one million yen (11,000 dollars), including stays at upscale hotels and cancer check-ups at a hospital with cutting-edge equipment, a company spokesman said.

Even remote places such as Abashiri in Hokkaido, 1,000 kilometres (620 miles) north of Tokyo, are seeing an influx of visitors, after the city was chosen as a filming location for a hit movie released in China last year.

And one day Japan's Chinese neighbours may snap up more than its bags, shoes and tourist trinkets.

"The time will come within the coming decade that Chinese companies will buy Japanese companies or that Chinese funds will buy Japanese properties. It could pose a question of whether Japanese can accept it emotionally," said Shirakawa.

Monday, February 8, 2010

China overtakes EU as Iran’s top trade partner

China has overtaken the European Union to become Iran’s largest trading partner, according to a new analysis of the commercial ties between the two countries.

The growing business links between Beijing and Tehran underline China’s reluctance to agree to any further economic sanctions on Iran as western countries escalate their campaign to contain the country’s nuclear ambitions.

The announcement by Mahmoud Ahmadi-Nejad, the Iranian president, that Iran will start enriching uranium to 20 per cent purity – a step closer to the 90 per cent required to build nuclear weapons – has given renewed impetus to western calls for the United Nations Security Council to impose more sanctions.

The Iranian atomic energy authority announced on Monday that further enrichment would begin on Tuesday.

While Russia has softened its opposition to placing more pressure on the Iranian economy, China has not done the same.

Official figures say the EU remains Tehran’s largest commercial partner, with trade totalling $35bn in 2008, compared with $29bn with China.

But this number disguises the fact that much of Iran’s trade with the United Arab Emirates consists of goods channelled to or from China. Majid-Reza Hariri, deputy head of the Iran-China Chamber of Commerce, said that transhipments to China accounted for more than half of Tehran’s $15bn (€10.9bn, £9.6bn) trade with the UAE.

When this is taken into account, China’s trade with Iran totals at least $36.5bn, which could be more than with the entire EU bloc. No definite conclusion is possible because it is unclear how much of Iran’s trade with Europe is channelled via the UAE.

Iran imports consumer goods and machinery from China and exports oil, gas, and petrochemicals.

Today, China depends on Iran for 11 per cent of its energy needs, according to the chamber.

In the past, China has allowed the passage of three UN resolutions imposing sanctions on Iran. But the country’s ambassador emphasised the need for talks.

“Our approach is that dialogue and negotiations always produce better results,” said Xie Xiaoyan, the Chinese ambassador to Tehran. “Sanctions will not produce the results set up [by the west], no matter how crippling.”

However, some analysts believe this stance may change. Yin Gang, a Middle East expert at the Chinese Academy of Social Sciences, said: “China is extremely cautious in dealing with Iran, even over trade and energy.

“China would not keep a very close relationship with Iran because this could damage its relationships with lots of other countries.”

If China were to prevent the Security Council from passing UN sanctions, the US and the EU would retain the option of imposing their own unilateral measures. The question is whether Iran’s links with China would cushion the blow.

Already, American and EU energy companies have withheld investment in Iran’s vital oil and gas industries. China has sought to fill the gap by signing multi-billion-dollar agreements to develop oil and gas fields.

But hardly any of these projects have gone on stream. A senior Iranian oil official has publicly complained about the poor quality of Chinese-made equipment.

A western diplomat in Tehran said: “If the international community is united, sanctions will be more effective, but nevertheless China is not the complete answer to Iran’s problems.”