Posts tagged ‘Beijing’

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01/12/2015

Boost for China as it joins IMF elite – FT.com

The IMF on Monday gave a major vote of confidence to China and its reform efforts, giving the renminbi greater weighting than the yen or pound as it included the currency in its elite basket of reserve currencies.

Chinese one-hundred yuan banknotes are stacked for a photograph at the Korea Exchange Bank headquarters in Seoul, South Korea, on Thursday, Feb. 27, 2014. Photographer: SeongJoon Cho/Bloomberg

The vote by the board to make the renminbi the fifth currency in the basket used to value the IMF’s own de facto currency followed months of deliberation at the fund and years of lobbying by a Beijing eager for the recognition.

“The Rmb’s elevation to the club of elite global reserve currencies is a big step for China and a significant one for the international monetary system,” said Eswar Prasad, professor of economics at Cornell University and a former IMF China mission chief.

The renminbi will become the third biggest currency in the “special drawing rights” basket when it takes effect on October 1. The move is largely symbolic but Christine Lagarde, IMF managing director, called it a “milestone” in China’s economic reform “journey” and its integration into the global financial system.

Following the move the currency slipped 0.19 per cent to Rmb6.4374 against the dollar in offshore trading in Hong Kong.

The People’s Bank of China set its daily “fix” — the onshore rate around which the currency can trade 2 per cent either side — at Rmb6.3973 per dollar, its fourth consecutive slightly weaker rate.

Investors generally expect China to allow its currency to weaken gradually but few see much likelihood of a repeat of its 3 per cent August devaluation, which sent shockwaves through global markets.

Source: Boost for China as it joins IMF elite – FT.com

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07/11/2015

China-Taiwan Summit a Success for Singapore – China Real Time Report – WSJ

The choice of Singapore as the venue for Saturday’s historic meeting between the Chinese and Taiwanese presidents is a diplomatic coup for the famously neutral city-state.

The meeting is the first between China’s President Xi Jinping and Taiwan’s President Ma Ying-jeou, and the first time leaders from both sides have met since Taiwan and China split in 1949.

The decision to hold the summit in Singapore shows it maintains its reputation as a rare neutral ground in a region where tensions are rising, even after the death in March of the city-state’s widely-respected former leader, Lee Kuan Yew.

Mr. Ma said this week the summit is the product of years of diplomacy between the two sides, and that Singapore was chosen for its impartiality.

Singapore’s selection as host “further highlights Singapore’s role in international politics,” said Huang Jing, professor of U.S.-China relations and director of the Centre on Asia and Globalisation at the National University of Singapore. The meeting “gives Singapore a status that no other country except Singapore can match up to,” he said, adding that the city-state’s relations with both sides will likely improve as a result.

Mr. Lee, Singapore’s first and longest-serving prime minister, earned the admiration of many national leaders, such as Britain’s Margaret Thatcher and Ronald Reagan in the U.S., during his 31-year tenure in the top job. Many foreign leaders, including U.S. President Barack Obama, sought meetings with Mr. Lee to discuss international relations, both before and after he stepped down.

His son, Lee Hsien Loong, now heads a government that is keen to maintain Singapore’s regional relations. The younger Mr. Lee, although viewed as a competent and respected leader, has not inherited his father’s reputation for straight-talking, no-nonsense politics, and doesn’t yet have the leadership experience that drew his predecessor favor with other politicians in Asia.

Still, the younger Mr. Lee has worked to maintain diplomatic and economic relations with Singapore’s neighbors, sharing his father’s view that a small, multi-ethnic island surrounded by much larger countries is best served by fostering strong relationships, rather than by taking sides. It’s a position that is rare in a region brimming with diplomatic tension, as shown by current disputes such as the conflicting territorial claims in the South China Sea.

Singapore, which Chinese ethnic majority and large Indian and Malay populations, is frequently chosen as a diplomatic hub, hosting Asia-Pacific Economic Cooperation meetings and other summits. It is also the annual venue for the Shangri-La Dialogue, a high-profile international security conference.

The Shangri-La Hotel, close to the city’s central shopping district, was the venue of choice for Saturday’s meeting between Messrs. Xi and Ma. The National University of Singapore’s Mr. Huang said that allowed the Singapore government to maintain its policy on China-Taiwan relations by avoiding hosting the meeting in a government facility.

The city-state maintains a “one-China” policy on cross-strait issues, officially recognizing only Beijing as China’s capital. Lee Kuan Yew broke Singapore’s relations with Taiwan in 1990 to open them with China, although relations with both sides today are close. He also helped ease decades of tension between the two nations. In 1993, shortly after Mr. Lee stepped down from his post as prime minister to take an advisory role, Singapore hosted the first talks between representatives of China and Taiwan since the two sides clashed.

Source: China-Taiwan Summit a Success for Singapore – China Real Time Report – WSJ

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01/11/2015

Japan, China and South Korea ‘restore’ fraught ties – BBC News

The leaders of Japan, China and South Korea say they have “completely restored” trade and security ties, at their first meeting in three years.

Japanese Prime Minister Shinzo Abe, South Korean President Park Geun-hye and Chinese Premier Li Keqiang meet for trilateral meeting in Seoul - 1 November

They said in a statement they had agreed to resume regular trilateral meetings, not held since 2012. They also agreed more economic co-operation.

The talks in the South Korean capital Seoul were an attempt to ease ill-feeling fuelled by territorial disputes and historical disagreements. China and South Korea say Japan has not done enough to atone for its troops’ brutality in World War Two.

The BBC’s Stephen Evans in Seoul says the real significance of the talks is that they happened. They were held regularly until three-and-a-half years ago, when they were called off as bad feeling towards Japan intensified. “We shared the view that trilateral cooperation has been completely restored on the occasion of this summit,” South Korean President Park Geun-hye, Chinese Premier Li Keqiang and Japanese Prime Minister Shinzo Abe said in a joint statement, quoted by AFP.

Ms Park said the three leaders had agreed to work together to conclude the Regional Comprehensive Economic Partnership (RCEP), a 16-nation free trade area favoured by Beijing. She said they maintained their goal of “denuclearising” North Korea, AFP reported.

Our correspondent says that South Korea and Japan are torn between their allegiance to the US and their need to get on economically with Beijing. Mr Li met Ms Park on Saturday and the two agreed to try to increase trade, particularly through more Korean exports of food to China and co-operation on research into robotics. The two leaders were joined by Mr Abe on Sunday.

Source: Japan, China and South Korea ‘restore’ fraught ties – BBC News

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01/11/2015

China Pessimism Is Overblown, IMF Says, Citing Booming Services Sector – China Real Time Report – WSJ

Recent Chinese economic data is stoking fear the world’s second largest economy is decelerating at pace that could pull the global economy into a recession. But the International Monetary Fund’s top Asia economist, Changyong Rhee, says such pessimism may be unwarranted.

A booming services sector—such as shipping and retail—is offsetting the collapse in manufacturing, he argues. Advertisement “We don’t think there’s enough evidence based on the manufacturing sector that there will be a hard landing,” Mr. Rhee said in an interview. “They definitely have a manufacturing slowdown, an overcapacity problem. But other parts of China are actually growing faster.” If Beijing relies too much on monetary policy to stimulate growth, it could fuel China’s economic problems rather than fix them, the IMF official cautioned. His warning came as the People’s Bank of China on Friday cut interest rates again in a bid to revive growth.

Old ways of measuring China’s economy—such as looking at electricity consumption—are outdated because they don’t accurately reflect the changing nature of growth, Mr. Rhee said. Services now account for more than 50% of the country’s economy and there is a good chance their contributions are being underestimated, he said. On first glance, China’s trade data appears to support worries about the economy. But digging a little deeper into the numbers may actually show the country’s move towards a growth model more reliant on consumer demand is already bearing fruit.

Although the value of imports has fallen, volumes tell a different story. By adjusting for the fall in commodity prices and the appreciation in the yuan, the IMF calculates imports actually grew in July by 2%. And while the amount of goods imported has declined, imports of services are in double digits.

China’s real-estate sector has also fomented concerns. But Mr. Rhee said there are signs property prices are stabilizing. That is not to say the IMF believes there is no cause for apprehension. Beijing fueled its stellar growth rate over the last two decades through cheap credit. Souring global growth prospects revealed a country vastly overinvested in manufacturing capacity, particularly by state-owned enterprises. The IMF estimates overinvestment totals nearly 25% of the country’s growth domestic product. That means government-owned firms will struggle to pay their loans on mountains of credit. “If they mismanage the financial market, then they could have a hard landing,” Mr. Rhee said.

Beijing is facing a daunting task. Winding down the amount of credit in the system too quickly could stall growth. But failure to cut corporate debt levels and deal with bad loans quickly could create a bigger credit crisis over the next couple of years. “One question is whether China can manage this transition with the current governance system,” the senior IMF official said. “That is a critical issue.” Beijing will need to ensure government agencies take greater responsibility for their respective areas of oversight and state-owned companies will need to have stronger budget constraints, he said. China’s recent market turmoil revealed a weak regulatory structure. And overhauling a political system that relied on state-owned firms to boost growth and enrich regions is also expected to be a challenge.

That’s why, even though the IMF is backing more stimulus by Beijing to prevent too much deceleration in the economy, fund officials are concerned the government may depend too much on the old system of juicing the economy through credit. Counting on monetary policy, rather than using the budget to stimulate the economy, could exacerbate the problem of overcapacity.

“If they rely on monetary policy too much, then they would continue the classic credit expansion,” Mr. Rhee said. Besides fueling bad investments by state-owned enterprises, it could also “drag on necessary structural and governance reforms.”

Source: China Pessimism Is Overblown, IMF Says, Citing Booming Services Sector – China Real Time Report – WSJ

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01/11/2015

China Abandons the One-Child Policy – China Real Time Report – WSJ

China on Thursday said it would formally end its notorious one-child policy, which was intended to curb a surging population but has since been blamed for looming demographic problems in the world’s No. 2 economy.

As WSJ’s Carlos Tejada reports: In a brief statement on Thursday, China’s official Xinhua News Agency said all Chinese would be allowed to have two children. It didn’t provide a time frame or any other details. China effectively hobbled the one-child policy two years ago, when it allowed couples to have two children if one parent came from a household without other siblings. It has also long allowed exceptions in some parts of the country. Advertisement

Still, Thursday’s move marked a symbolic shift as well as an acknowledgment that China now faces a looming worker-shortage in coming decades. China’s fertility rate, or the number of births per woman, was below the replacement level at 1.17 in 2013, according to the most recent data from the World Bank. Demographers have been urging Beijing to do more to thwart a predicted labor shortage, arguing that they should lift birth restrictions entirely. Read the full story on WSJ.com. Sign up for CRT’s daily newsletter to get the latest headlines by email.

Source: China Abandons the One-Child Policy – China Real Time Report – WSJ

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20/10/2015

Xi Jinping visit: UK royals and MPs to greet Chinese leader – BBC News

Members of the Royal Family and politicians are due to greet China’s President Xi Jinping as he begins his four-day state visit to the UK.

Supporters of ChinaMr Xi and his wife, Peng Liyuan, will take part in a procession along The Mall to Buckingham Palace, ahead of a state banquet held by the Queen later.

Foreign Secretary Philip Hammond said Britain was going into closer relations with China with its “eyes wide open”.

He denied allegations the UK was acting like “a panting puppy” towards Beijing.

Ministers expect more than £30bn of trade and investment deals to be struck during the visit, which will also include talks between Mr Xi and Prime Minister David Cameron.

On Tuesday, Mr Xi will: Receive a ceremonial welcome from the Queen and Duke Of Edinburgh Take part in a state carriage procession to Buckingham Palace Address MPs and Lords at the Palace of Westminster Meet Prince Charles and the Duchess of Cornwall as well as the Duke of Cambridge Hold talks with Mr Cameron and Labour’s Jeremy Corbyn Attend a state banquet

Source: Xi Jinping visit: UK royals and MPs to greet Chinese leader – BBC News

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20/10/2015

Survey Shows China Passes U.S. in Stuff Built – China Real Time Report – WSJ

China is the world’s No. 2 economy by most measures, but by one it has surpassed the U.S. China has overtaken the U.S. as the world’s wealthiest nation in terms of built assets in 2014, and is likely to double that of the U.S. by 2025, according to the Arcadis Global Built Asset Wealth Index.

The study compares 32 countries in terms of their buildings and infrastructure – homes, schools, roads, airports, power plants, malls, rail tracks  and other structures. In fact, China’s stock of built assets will exceed the next four economies combined in the next 10 years, according to the index.

The firm calculates the data at purchasing-power-parity rates, which adjusts the figures to account for differing costs in each country. That measure tends to boost the size of figures from developing countries. China has the largest stock of built assets at $47.6 trillion in 2014 and the U.S. came in second at $36.8 trillion, according to the study released Monday. In the last report, the U.S. was ahead at $39.7 trillion in 2012 compared to China’s $35.4 trillion. China’s rapid asset building came alongside soft investment in the U.S. to replace old machinery, equipment and buildings, the report said.

The index is billed as an alternative economic indicator to measure a country’s performance. the index quantifies the value of a country’s infrastructure as well as its public and private property.

Policymakers have been trying to direct the Chinese economy to rely more on consumer spending rather than investment. Still,  the pace of economic rebalancing has been slow, leading to softer growth despite some positive signs in China’s consumer sector.

The transition “is encountering difficulties, as the government has repeatedly used fiscal stimulus to try to meet its growth targets,” said the report. “The proportion of the economy accounted for by investment is falling only very slowly.  This keeps China’s built asset stock growing rapidly.”

China’s economy grew at 6.9% in the third quarter this year, falling below 7% for the first time since 2009. In the past two years, Beijing has been struggling to turn to more sustainable drivers of growth amid mounting concerns about manufacturing overcapacity and an oversupplied property market.

“There is also likely to be significant underutilization of assets in China given growth is so rapid and much asset creation is pre-emptive, also known as ‘build it and they will come,’” said the biennial report. Since 2000, China has invested $33 trillion in built assets, with its investment in infrastructure at 9% of GDP, dwarfing the U.S.’s current 2%said the report. In per capita terms, however, populous China appears far from being overbuilt.

China’s built asset wealth per person stood at $34,100, which ranks it No. 24 worldwide, unchanged from its previous ranking in 2012, according to the index. The latest figure is slightly less than a third of the U.S. per capita figure of $114,100. The countries at the top of this ranking are disproportionately made up of smaller nations by population or area, hence the density of built asset stock is much greater per resident, the report said.

Source: Survey Shows China Passes U.S. in Stuff Built – China Real Time Report – WSJ

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18/10/2015

China’s Xi lauds Britain for ‘visionary’ openness, prods others to emulate | Reuters

Chinese President Xi Jinping heaped praise on Britain for what he called a “visionary and strategic choice” to strengthen commercial ties with China, as he prepared for a state visit to the United Kingdom that’s expected to be richer in pomp and considerably warmer in tone than his recent trip to the United States.

The trip comes at a time of global anxiety about China’s slowing growth. Xi himself acknowledged “concerns about the Chinese economy”, but sought to allay them in a written interview with Reuters.

China itself is worried about the slowing of the broader global economy, Xi said, even while he expressed confidence that China would weather the current downturn as it reshapes its economy to be more resilient in the future.

That confidence will be on display when Xi arrives in London on Monday evening to kick off a four-day visit that is expected to cement ties between Britain and China, including through a host of business deals.

“The UK has stated that it will be the Western country that is most open to China. This is a visionary and strategic choice that fully meets Britain’s own long-term interest,” Xi said in a written response to questions from Reuters.

“China looks forward to engaging with the UK in a wider range, at a higher level and in greater depth.”

WARMER WELCOME

Xi’s visit comes amid debate in Britain and many other Western countries over what is the best way to engage with a Communist-ruled China that has grown more influential economically and diplomatically, but which maintains stances in areas from human rights to the South China Sea that are often at odds with those widely held in the West.

Such tensions were on display when Xi visited the United States last month, with friction over issues from cyber theft to China’s maritime disputes with its neighbors at the center of discussions.

Xi’s visit to Britain, during which he and his wife Peng Liyuan will stay at Buckingham Palace as guests of Queen Elizabeth II, is expected to be much warmer, with Xi saying it could be the start of a “golden time” in bilateral relations.

Britain was the first Western nation to join the China-led Asian Infrastructure Investment Bank (AIIB) earlier this year, leading to a stampede of other countries signing up and marking an embarrassment for Washington, which had been pressing its allies not to join.

At the time, Britain said joining the AIIB at the founding stage would “create an unrivalled opportunity for the UK and Asia to invest and grow together”.

British finance minister George Osborne set the tone with a preparatory visit to China last month, when he courted Chinese investment into Britain and won praise from Chinese state media for having the “etiquette” not to press human rights issues.

Still, Xi’s visit, the first state visit by a Chinese president since 2005, will not be without potentially awkward moments. Newly installed opposition leader Jeremy Corbyn intends to bring up the issue of human rights when he meets Xi, his official spokesman has said.

Source: Exclusive – China’s Xi lauds Britain for ‘visionary’ openness, prods others to emulate | Reuters

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15/10/2015

China slaps one-year ban on imports of African ivory hunting trophies | Reuters

China slapped a one-year ban on African ivory hunting trophy imports, the state forestry authority said on Thursday ahead of a trip by President Xi Jinping to Britain, where members of the royal family have urged China to crack down on the ivory trade.

A government official picks up an ivory tusk to crush it at a confiscated ivory destruction ceremony in Beijing, China, May 29, 2015. REUTERS/Kim Kyung-HoonConservationists say China’s growing appetite for contraband ivory imports, which are turned into jewels and ornaments, has fueled a surge in poaching in Africa.

In March, Britain’s Prince William urged an end to the trade during a visit to a Chinese elephant sanctuary in the southwestern province of Yunnan.

Xi is scheduled to travel to Britain between Oct. 19-23, where he will stay at Buckingham Palace, home to the royal family.

China’s State Forestry Administration said in a statement posted on its website that it would “temporarily prohibit” trophy imports until Oct. 15, 2016 and “suspend the acceptance of relevant administrative permits”.

It did not give further details, though the official Xinhua news agency said a government review is under way on whether to extend a separate one-year ban made in February on imports of African ivory carvings.

The policy also follows a deal to enact nearly complete bans on ivory imports and exports made during Xi’s September state visit to the United States.

Within China, the trade and sale of ivory carvings are legal if the items were imported before the country joined the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) in 1981, or come from a stock of 62 tonnes of raw-ivory bought from four African countries in 2008 as a one-time exemption.

The government releases a portion of that stockpile each year to ivory carving factories.

China crushed 6.2 metric tonnes (6.83 tons) of confiscated ivory early last year in its first such public destruction of any part of its stockpile. However, the country still ranks as the world’s biggest end-market for poached ivory, according to the World Wildlife Fund.

In June, a Tanzanian government minister described elephant poaching as a national disaster, and urged China to curb its appetite for ivory.

Source: China slaps one-year ban on imports of African ivory hunting trophies | Reuters

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17/09/2015

Leaving Las Vegas: Chinese state railway companies to build US high-speed link from ‘Sin City’ to LA | South China Morning Post

Work on joint venture for 370km high-speed line linking Las Vegas to Los Angeles could start in 2016 and is part of mainland’s pursuit of overseas high-speed rail deals

A consortium of Chinese state rail companies has teamed up with an American company to build a high-speed rail line in the United States, with work possibly starting as early as September 2016.

It is the latest push by Beijing to export its high-speed rail technology and tap lucrative offshore markets.

China Railway International USA and the private rail venture, XpressWest, said in a joint statement on Thursday that they would form a joint venture to accelerate the launch of a high-speed rail linking the western cities of Las Vegas with Los Angeles.

The deal marks the latest attempt in China’s increasingly aggressive pursuit of overseas high-speed rail deals after the country built the world’s longest network in less than a decade.

Beijing recently clinched contracts in Russia, although it has faced hurdles in Mexico and Indonesia because of bureaucratic reversals of decisions in those countries.

XpressWest, a private venture of a Las Vegas-based hotel and casino developer, was given approval in 2011 to build and run the 370km high-speed line, according to its website.

The project has US$100 million in initial capital, the companies said in the statement, released at a government-organised forum before President Xi Jinping’s forthcoming visit to the US. China Railway International USA is owned by a consortium made up of subsidiaries from the mainland state companies China Railway Group, CRRC Corp, China State Construction Engineering Corp and China Railway Signal & Communication Corp.

Gary Wong, an analyst at Guotai Junan Securities, estimated that the XpressWest project was worth US$5 billion, which he said would likely offer the many Chinese companies involved little financial benefit.

However, it was significant as a deal because it would help open the undeveloped US high-speed rail market, Wong added.

“If this opens up the United States market for them, opportunities for future expansion will increase,” Wong said. “And if [their technology] is used in the United States, it will be easier for them to sell to other countries.”

 

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