world growth

world growth

Tuesday, June 19, 2012

Trade between China and Brazil heading toward US$100 billion

China’s Prime Minister, Wen Jiabao said Friday in Beijing that he expected trade with Brazil to total over US$100 billion in 2012, according to Chinese news agency Xinhua.

Wen Jiabao was speaking after welcoming the President of the Brazilian Parliament, Marco Maia, who is visiting China as the head of a Brazilian parliamentary delegation.

Prime Minister Wen Jiabao said that relations between Brazil and China were developing steadily and called for greater cooperation in industry, infrastructure, energy, mining, finance, and technology.

China is Brazil’s biggest trading partner with two-way trade totalling US$77 billion in 2011.

In the first quarter of 2012 trade between Brazil and China totalled US$17.9 billion.

Chinese investment in Brazil in 2010 totalled US$30 billion in the oil, iron ore, and soy sectors.

Monday, June 11, 2012

China's Trade Surplus unexpectedly rose in May

China is probably using export to offset the weakness in domestic demand.

China's exports and imports both rose sharply in May, a hopeful sign for the world's second-largest economy, especially after alarmingly weak trade data in April.

Exports rose 15.3% in May from a year earlier, China's General Administration of Customs said in a statement on Sunday. That is up from growth of just 4.9% in April, and also well above expectations for a 6.9% rise, according to an earlier Dow Jones poll of economists.

Imports rose 12.7%, compared with April's 0.3% increase, and economists' expectations for a 3.0% rise.

Economists reacted cautiously to the data, warning against reading too much into the strong figures.

"The fact that it is stronger than expectations is relatively positive news, but that should be caveated by the fact that monthly trade data is very volatile from month-to-month," said IHS Global Insight economist Alistair Thornton.

He warned that exports could fade in the coming months on economic turbulence in Europe, China's largest trading partner.

"It is doubtful that growth in exports and imports can keep up such a fast pace in the coming months," said Li Huiyong, an economist at Shenyin & Wanguo Securities, a local brokerage.

The monthly trade surplus rose slightly, to $18.7 billion in May compared to $18.4 billion in April. Economists had expected the surplus to decline to $17.8 billion.

Sunday, June 3, 2012

China and Japan start direct yuan-yen trade

For both countries, there will be lesser need for US dollars.

The launch of direct trading between the Chinese yuan and the Japanese yen is expected to considerably facilitate bilateral trade and investment. The move also marks another step to raise the yuan's international role.

Giving fresh impetus to the world's second and third biggest economies, the yen, after the dollar, is now the second major direct trading currency of the yuan.

Japanese Finance Minister Jun Azumi announced the decision in Tokyo, and stressed the cost benefits behind the move.

Jun Azumi, Japanese Finance Minister, said, "It will enhance the usability of both countries' currencies and reinvigorate the Tokyo market."

Experts say it's an important step towards the internationalization of China’s yuan currency.

Prof. Ding Zhijie, dean of School of Banking & Finance, UIBE, said, "It raises the convertibility of the yuan. And I believe the yuan trading will be accepted by more Asian economies as well as the international markets. It will also push forward the internationalization of the yuan."

The direct trading could save the two countries some 3 billion dollars of transaction fees annually. (I wonder who collects this transaction fee)

Zhu Yan, professor of political science & economics, Takushoku University, said, "The new mechanism means trade between the two nations can be settled directly, bypassing the US dollar."

China is Japan's largest trading partner, and bilateral trade reached as high as 300 billion US dollars in 2010. About 60 percent of Japan-China trade is conducted in dollars.

The direct trading will boost bilateral investment, as well as imports and exports. It will bring convenience in business and lead to considerable reduction of risks caused by fluctuation of the dollar's exchange rates on the world market.