China :: Business & Economy

Battered public confidence in bullet trains, the prospect of lower jet fuel costs and a rising yuan have combined to provide a fillip for the sagging market fortunes of Chinese airlines. The share prices of China's three biggest airlines took off the day after a high-speed train accident on the Hangzhou-Wenzhou line killed 40 people in Zhejiang Province, near Shanghai.China Eastern Airlines' shares increased by the 10 percent daily limit in the Shanghai market. China Southern Airlines rose 9.2 percent and Air China gained 6.9 percent. "The valuation of airline stocks is close to a record low and has fully priced in the impact high-speed railways were expected to have on flights," said Wu Li, an analyst at Essence Securities. "A lower-than-expected outflow of air passengers will trigger a rebound in airline stocks," he said. China Eastern Board Secretary Luo Zhuping told Shanghai Daily that the current rebound in airline stocks may not last long, but the futu...

China's nuclear power developers are turning to equity investors for funding as interest rate hikes and Japan's nuclear crisis have resulted in fewer bank loans. A subsidiary of the Hong Kong-based CLP Holdings Limited agreed with the state-owned China Guangdong Nuclear Power Holding Corporation (CGNPC) to buy a 17 percent stake of its Yangjiang nuclear power plant project on Monday. With a total investment of 70 billion yuan ($10.9 billion), the project is expected to get 11.9 billion yuan of investment from CLP Nuclear Investment Company Ltd. Analysts say the move would somewhat ease CGNPC's financial predicament. "As a result of the nuclear crisis in Japan and the Chinese government's monetary tightening measures, those nuclear power projects with a high liability ratio now have to sell shares to sustain construction," said Zheng Yuhui, director of the research center of the China Nuclear Energy Association. China's nuclear power develop...

THE United States' economy is at risk of slipping into another recession. It nearly stalled in the first six months of the year, the government reported on Friday. Growth was feeble in the second quarter and almost non-existent in the first. The new picture of an economy far weaker than expected made a second recession a more serious threat, and the threat will rise if Congress can't reach a deal to raise the government's debt limit. "The only question now is, how much weaker could things get?" said Nariman Behravesh, chief economist at IHS Global Insight. In April, May and June, the economy grew at a 1.3 percent annual rate, below expectations. And the government changed its growth figure for January, February and March to 0.4 percent, far below the previous estimate of 1.9 percent. Combined, the first half of the year amounts to the worst six-month performance since the Great Recession officially ended in June 2009. In the past year, the gross domestic product -...

China's nuclear power developers are turning to equity investors for funding as interest rate hikes and Japan's nuclear crisis have resulted in fewer bank loans. A subsidiary of the Hong Kong-based CLP Holdings Limited agreed with the state-owned China Guangdong Nuclear Power Holding Corporation (CGNPC) to buy a 17 percent stake of its Yangjiang nuclear power plant project on Monday. With a total investment of 70 billion yuan (10.9 billion U.S. dollars), the project is expected to get 11.9 billion yuan of investment from CLP Nuclear Investment Company Ltd. Analysts say the move would somewhat ease CGNPC's financial predicament. "As a result of the nuclear crisis in Japan and the Chinese government's monetary tightening measures, those nuclear power projects with a high liability ratio now have to sell shares to sustain construction," said Zheng Yuhui, director of the research center of the China Nuclear Energy Association. China's nuclear power developers ...

Watch Video Play Video The summer holidays are barely half way through, but London department stores, Selfridge's and Harrods, opened their Christmas shops on Thursday to cash in on the tourism market. It may be the height of summer but one London store is ready for winter. Selfridges opened its Christmas shop on Thursday (July 28), five months before the big day and earlier than ever before. The store said previous sales had shown that some customers, especially overseas visitors, were keen to buy Christmas decorations and souvenirs as early as July. Geraldine James, Buying Manager, Selfridges Chiristmas Shop, saaid, "We anticipate a lot of overseas visitors which we always get in central London at this time of the year, we forecast an increase in sales because the footfall of our overseas customers seems to be up." But not everyone agrees. Outside on Oxford Street the mood was less upbeat. A number of British retailers have closed recently, as consumers hit by inf...

THE word of the day in financial markets: Anxious. Yesterday, traders did something they rarely do: they sold what are considered to be the world's safest short-term investments. Traders typically buy short term US Treasurys yesterday because they want their money in a safe place in case something happens over the weekend to rattle markets. But this week, they instead bought longer-duration bonds as concerns grew that the federal government may not be able to pay all of its bills next month. Yields on bonds due in one month rose higher than those due in six months. The higher the yield, the higher the implied risk of the bond. Analysts say it's a clear sign a short-term default is a growing possibility. The sell-off in short-term Treasurys shows that "the market is very concerned," said Thomas Tzitzouris, head of fixed income research at Strategas Research Partners. "It's not panic, but we are pre-positioning in case something goes wrong over the weekend....

Watch Video Play Video Asian shares slipped Friday because of the ongoing deadlock over raising the U.S. debt ceiling. For more detailed analysis, let's turn to Arnold Gay in Singapore. Hello Arnold. Q1. Asian stocks are struggling ahead of a key vote in the U.S., investors are clearly in no mood to take on risks ahead of the weekend? Q2. Grim news for Nintendo but what about the rest of Japan's technology firms for the second half? It's sounding like the TV and display sectors will be weighed down, but what about everything else? Q3. Tough outlook for Singapore Airlines as well, with analysts cutting their target prices and recommendations? Editor: Li Wanran | Source: CNTV.CN

Watch Video Play Video More good news for airlines, and passengers too. Global oil prices are moderating, allowing some airlines to reduce fuel surcharges included in some international routes. So far, the list include Shenzhen Airlines, Cathay Pacific, Dragonair and Asiana Airlines. The reduction will take effect on August, 1st. According to online travel agency Ctrip.com, Shenzhen Air, a subsidiary of Air China, will cut fuel surcharges from 200 yuan per passenger to 179 yuan. Cathay Pacific and its affiliate Dragonair will cut surcharges by 2.4 percent. Dragonair will also reduce fuel surcharges on routes linking Hong Kong with India, Bangladesh and Nepal. Asiana Airlines will cut fuel surcharges on routes connecting Hong Kong to South Korea and Japan. Related stories Chinese airliners raise fuel surcharge 2011-05-27 Airlines raise fuel surcharges 2011-05-26 Editor: Li Wanran | Source: CNTV.CN

THE income tax threshold of 4,800 yuan (US$744) enjoyed by expats in China will remain unchanged when personal tax thresholds are raised. At present the threshold is 2,000 yuan with an extra 2,800 yuan for expats. From September 1, China is raising the threshold to 3,500 yuan but the extra sum for expats is to be cut to 1,300 yuan, leaving them with the same 4,800 yuan benefit. "We've received lots of inquiries from clients about the expatriate deduction," Freeman Bu, an Ernst & Young partner in Shanghai, said yesterday. "They have argued that the cost of living is also rising for them as inflation is the same for Chinese and expatriates." "The move is in line with China's aim to revise its tax law to let low and medium income families benefit from tax cuts," said Bu. "Expatriates are often deemed as high-income earners." Bu said that expats earning close to 18,000 yuan a month would pay more under the new tax system, which meant that...

UBS Global Asset Management today set up its wholly-owned asset management company in Beijing to tap into China's fledging US$650 billion equity investment industry. The Beijing branch will target business in areas such as direct PE investments, fund of funds investments, as well as mandated equity investment assets management. "China's strong economic growth has made the country one of the most promising emerging markets globally and resulted in a booming domestic equity investment market," Ling Xinyuan, chairman of China at the Swiss bank, said in a statement today. The new company will put its raised money in industries, infrastructure projects, commercial and industrial properties, and art collection businesses. Its art collection fund, the smallest of the Beijing company's planned funds, is expected to raise less than 1 billion yuan, Ling said. He said he felt positive that his company may play a role in funding China's public rent housing projects, which...

SHANGHAI benchmark index fell this morning, following shares in the US market plunged yesterday as the country edged closer to defaulting on its debt and the economy showed more signs of deteriorating. The Shanghai Composite Index lost 0.93 percent to 2,698.28. Turnover added slightly to 50.8 billion yuan (US$7.88 billion). Heavyweights such as cement makers and gold producers snapped their previous rallies and paced the decline in the morning session today. Fujian Cement Co shed 6.31 percent to 13.67 yuan. Zhongjin Gold lost 2.14 percent 28.40 yuan. Industrial & Commercial Bank of China, the country's biggest lender, sank 1.17 percent to 4.23 yuan. The Dow Jones industrial average fell 198.75 points, or 1.6 percent, to 12,302.55, its biggest one-day drop since early June. It has fallen for four days straight. The S&P 500 fell 27.05 points, or 2 percent, to 1,304.89. The technology-focused Nasdaq composite index fell 75.17 points, or 2.6 percent, to 2,764.79, its worst day ...

A Boeing Co worker works on the 767 assembly line in Everett, Washington. US businesses cut back on orders for aircraft, autos, heavy machinery and computers in June, sending demand for long-lasting manufactured goods lower for the second month in the past three. Orders for durable goods fell 2.1 percent last month, the US Commerce Department reported yesterday.

CHINA'S industrial profits rebounded in June as production picked up speed, but analysts said the monthly gain may be temporary as the outlook for the manufacturing sector remained gloomy. Net earnings of industrial companies increased 28.7 percent from a year earlier to 2.41 trillion yuan (US$374 billion) in the first half of this year, compared with 27.9 percent between January and May, the National Bureau of Statistics said today. Though unexpected, the acceleration was in line with the industrial production in June, which grew 15.1 percent year on year, up from 13.3 percent a month earlier. It ended a streak of profit growth moderation that started from the beginning of this year. "The profit rebound is a result of the diminishing impact from Japans' earthquake and still solid investment in the domestic market," said Li Maoyu, a Changjiang Securities Co analyst. "But with negative factors in both internal and external markets, China's manufacturers may se...

SHANGHAI stock market barely changed in the morning session today, thanks to rallies among gold producers and military related shares. Gold producers climbed higher after gold futures in world markets surged to an all-time high as investors sought to protect their wealth against a possible US default that may come as soon as next week. The Shanghai Composite Index edged up 0.06 percent to 2,704.72. Turnover declined to 43.65 billion yuan (US$6.77 billion). Shandong Gold climbed 1.03 percent to 49.85 yuan. Zijin Mining jumped 3.45 percent to 5.69 yuan. The December-delivery contract gained as much as 0.5 percent to US$1,626.90 an ounce on the Comex, beating the previous peak of US$1,626.30 set on July 25, before trading at US$1,624.80 at 10:35 am in Singapore. Spot bullion rose as much as 0.3 percent to US$1,624.02, compared to the record US$1,624.07. Gains by oil producers helped the market to stay in positive territory as oil price nears US$100 per barrel amid US debt talks. PetroChin...

SHANGHAI consumers were less confident about the city's economic outlook in the second quarter, and nearly half of local residents tightened their belt on daily basis to counter inflation, an index from the Shanghai Statistics Bureau showed today.Shanghai Consumer Confidence Index, a general gauge of people's sentiment over spending, fell 1.3 points from the first three months to settle at 107.7 in the second quarter. It dropped 5.7 points from a year earlier.A reading above 100 signals optimism and the new reading was the lowest in seven quarters."The index drop is mainly triggered by people's dwindling confidence in the overall economy, employment, household income and life quality," said the bureau in a report. "Consumers are increasingly cautious about spending, and their willingness to purchase big items like properties and cars remains weak."The component confidence index of the city's overall economy, employment, household income and life qual...

China collected 1.05 trillion yuan ($162.64 billion) of social insurance fund in the first half of 2011, up 26.6 percent from the same period last year, the China Business News reported on Tuesday, citing data from the Ministry of Human Resources and Social Security. The fund spent 840.92 billion yuan during the first half, up 21 percent year-on-year. According to Yin Chengji, the spokesman of the ministry, more people were covered by the social insurances, including pension, basic health, and unemployment, work injury and maternity insurances, during the past year. The report said because the social insurance fund is only allowed for deposits or investing on the national debt, its outcome was very low, with less than 2 percent yield. Experts have called for looser regulation on investment of the social security fund. Since inflation in China has kept to a high level, the 2 percent yield is a loss for the insurance payers' welfare.

Workers lay solar panels on a roof at Nanjing South Railway Station. China is giving attention to reducing energy consumption in industrial production. Dong Jinlin / for China Daily The Chinese government will double its investment in the circular economy this year to 2 billion yuan ($300 million) to support the national policies of energy conservation and emission reduction, a senior official said on Monday. The figure was provided by He Bingguang, a director-general level official at the department of resource conservation and environmental protection of the National Development and Reform Commission (NDRC). The NDRC will use financial support and tax breaks to draw investment into the circular (recycling) economy, which will benefit companies and society, He said. Most of the spending will go into the construction of industrial parks, the transformation of urban mining industries, clean production, food waste recycling and staff development, He sa...

CHINA International Capital Corp will become the country's first investment bank to manage a joint trust company, which it is expected to launch later this week as the company seeks to expand its business into other areas. CICC plans to buy a 35 percent stake in Zheshang Trust in Hangzhou, a company controlled by a department under the Zhejiang provincial government. CICC, which is partly owned by United States private-equity groups TPG Capital and KKR, will manage the joint trust company. The move marks the Chinese firm's efforts to expand its business to more areas beyond underwriting because foreign rivals such as Morgan Stanley and Barclays have already bought stakes in Chinese trust firms, which have for the first time overtaken retail funds in terms of assets under management, KPMG said in a survey yesterday. China now has 65 trust funds, which managed US$480 billion in assets last year, while mutual funds handled US$400 billion, KPMG added. "Trust firms saw unpreced...

Chinese stocks tumbled Monday as investors sold off holdings increasingly worried about a possible default of government debt by the United States which is to bring the global economy back to a serious slowdown. Also, railway shares plunged after the weekend deadly high-speed train wrecking accident in East Chinas Zhejiang Province which has killed at least 36 people and injured more than 200. The Shanghai composite index dived 82 points, or 3 percent, to 2,688.75 at the 3 p.m. close, the biggest drop since January 17. The Shanghai index has slumped 4.3 percent this year, compared with a 0.8 percent retreat for the MSCI Emerging- Markets Index, on concern the governments efforts to curb inflation will hurt economic growth. CSR Corp. and China CNR Corp, the countrys biggest train makers, tumbled more than 8 percent after the weekend train collision and prompted the government to order a rail safety inspection. China ordered a two-month inspection of rail safety and fired...

China's top banking regulator announced Sunday that it has given the nod to the establishment of a regional bank in the Tibet Autonomous Region, with initial capital adding up to 1.5 billion yuan (233 million U.S. dollars). The bank will be registered in Lhasa, the region's capital, and funded by 15 institutions, including the regional government, domestic banking institutions and several leading enterprises, the China Banking Regulatory Commission (CBRC) said in a statement posted on its website. The bank will be the first regional corporate bank in the region and also the first equity commercial lender to operate in the autonomous region since its establishment, the CBRC said. The Bank of Communications, China's fifth-largest lender, will be a strategic investor for the bank, the CBRC said. The establishment of the bank will strengthen financial services in Tibet and help promote its regional economy, the CBRC said. It will also provide fin...

China's top banking regulator announced Sunday that it has given the nod to the establishment of a regional bank in the Tibet autonomous region, with initial capital adding up to $1.5 billion yuan. The bank will be registered in Lhasa, the region's capital, and funded by 15 institutions, including the regional government, domestic banking institutions and several leading enterprises, the China Banking Regulatory Commission (CBRC) said in a statement posted on its website. The bank will be the first regional corporate bank in the region and also the first equity commercial lender to operate in the autonomous region since its establishment, the CBRC said. The Bank of Communications, China's fifth-largest lender, will be a strategic investor for the bank, the CBRC said. The establishment of the bank will strengthen financial services in Tibet and help promote its regional economy, the CBRC said. It will also provide financial support for the development of local small- and med...

Korean Air has launched a regular cargo flight between southwest China's city of Chengdu and Seoul, airport authorities confirmed Saturday. The Seoul-Chengdu-Singapore-Seoul cargo flight will arrive at the Chengdu Shuangliu International Airport at about 2:10 a.m. every Wednesday and arrive in Seoul at about 6:10 p.m. local time, an airport spokesman said. A Boeing 747-400F cargo plane with a capacity of 100 metric tons will be used for the flight, he said. "The new air route will allow international cargo dispatched from Chengdu to reach destinations around the world much faster than before," he said. The first cargo flight took place on July 20, he said. Source: Xinhua Weekly review ...

Henan Shuanghui Investment and Development Co., Ltd., the listed arm of China's largest meat processor Shuanghui Group, announced that it would clean up nearly 3,800 tonnes of clenbuterol-tainted meat in a bid to ease consumers' concern. The tainted meat, 3,768 tonnes in total, include factory stocks and those returned from the market in the group's subsidiary in Jiyuan City, the company said in a statement filed with the Shenzhen Stock Exchange on Friday. The statement said this would incur 62 million yuan (about 9.6 million U.S. dollars) of losses to the Jiyuan company. In March this year, the China Central Television reported that the Jiyuan subsidiary had used pork tainted with the fat-burning drug clenbuterol in its products. Clenbuterol is a chemical that can be fed to pigs to make them produce lean meat. The chemical is poisonous to humans and is banned as an additive in stock feed in China. Shares of the Shenzhen-listed company once stopped trading for more than one...

China's top quality watchdog said Saturday that it will strive to build credit files for all the food companies and food-additive producers in the country before the end of the year. The General Administration of Quality Supervision, Inspection, and Quarantine said the mechanism will better supervise companies for the quality of their products as food safety becomes a growing public concern in China. In the first five months of the year, quality regulators across the country found a total of 3,312 companies which illegally used food additives, according to figures released by the government agency at a meeting held in Chengdu, capital city of southwest China's Sichuan Province. The agency said authorities also revoked the production licenses of 24 food companies and three other food-additive companies. Further, authorities established credit files for 82,387 businesses during the period.

The U.S. dollar traded mixed against major currencies in late New York trading on Friday as European leaders reached agreement on new bailout plan for Greece. On Thursday, European Union leaders agreed to a new 157 billion dollar bailout plan for Greece during eurozone emergency summit. The leaders also emphasized their commitment to remedy the sovereign-debt contagion. However, skepticism about the eurozone's long-run ability to prevent contagion of debt crisis still weighed on the euro. The euro reversed its earlier gains against the dollar in late trading session on Friday. Meanwhile, uncertainty about the U.S. government's debt- ceiling problems still pressure on the dollar as the dollar index rose slightly by 0.27 percent to 74.21 on Friday. In late Friday trading, the dollar bought 78.43 yen, unchanged from late Thursday, and the euro fell to 1.4368 dollars from 1. 4409. The British pound rose to 1.6308 dollars from 1.6307. The dollar rose from 0.8163 Swis...

Photo taken on July 22, 2011 shows the designs of new 2010 series HK dollars in Hong Kong, south China, July 22, 2011. [Xinhua/Song Zhenping] The Hong Kong Monetary Authority (HKMA) and the three note-issuing banks, which are Standard Chartered Bank (Hong Kong), Hong Kong and Shanghai Banking Corp. and Bank of China (Hong Kong) unveiled the designs of the new 2010 Series banknotes on Friday, according to the HKMA. The new 100, 50 and 20 HK dollars banknotes incorporate the same state-of-the-art security features as the new 1,000 and 500 HK dollars banknotes, which are already in circulation, and also the design to facilitate the visually impaired to differentiate the denomination, the HKMA said. The new banknotes will be gradually put into circulation starting from this November, and all the existing banknotes will continue to be legal tender till they are gradually withdrawn from circulation when they become physically unfit for circulation. The HKMA will launch an extensive education...

The Ministry of Commerce on Friday announced that the country has made an appeal to the World Trade Organization (WTO) to conduct a review of the zeroing measure used by the United States in slapping anti-dumping duties on diamond saw blades from China. According to a statement on the ministry's website, the country has made the request following its previous complaint to the WTO in February for a similar measure used by the United States. in calculating dumping margins for certain frozen, warm-water shrimp from China. An official with the ministry said these two cases not only violated specific zeroing regulations of the WTO, but they also levied disproportionately high tariffs on the subject imports from China, which caused damage to the country's shrimp and diamond saw blade industries. The official said China expected a proper solution of these issues under the WTO dispute-settlement mechanism. On Dec. 8, 2004, the United States decided to slap anti-dumping duties of up to ...

The China Banking Regulatory Commission is denying recent dire reports claiming that 90 percent of rural credit cooperatives are on the verge of collapse. The commission has led the rural credit cooperatives to vigorously promote reform and strengthen financial supervision since the cooperative system started in 2003. As of now, the rural credit cooperatives' average capital adequacy ratio has reached 8 percent, indicating that they are operating smoothly. By People's Daily Online Weekly review Editor

SHANGHAI'S economy grew at a slower pace of 8.4 percent in the first half of this year, compared with 9.9 percent in 2010 and 12.7 percent in the first half of 2010, according to statistics released today. The city's gross domestic product totaled 916.4 billion yuan in the first six months. Inflation rose 5 percent in the first six months, buoyed by a 10.4 percent hike in food prices. Inflation in the same period last year was 2.2 percent. Shanghai aims to keep its inflation under 4 percent this year, after prices rose 3.1 percent in 2010.Economists said food prices, riding on soaring pork prices, have become the main driver of inflation.

Huang Guangyu, former chairman and founder of Gome Group, faces a lawsuit filed by two investors. Jailed retail tycoon Huang Guangyus headache never stops. The embattled founder of Gome, China's second-largest electronics retailer, faces lawsuits from two investors seeking compensation for losses they say were caused by Huang's insider trading. [ Related full coverage : Power struggle in Gome] The two investors, surnamed Li and Zhang, claim they suffered 600,000 yuan and 34,688 yuan in losses resulting from Huangs insider trading and stock manipulation of Beijing Centergate Technologies. The amount of compensation being sought has not yet been disclosed. Huang, who is serving a 14-year prison sentence for bribery and insider trading, is the former founder and chairman of Gome Electronic Appliances. Huangs lawyer confirmed that they had received a notice from court, and the court date was set for Sept. 6.

OIL topped US$100 per barrel yesterday for the first time since early June on an improving outlook for the US economy, and European leaders moved closer to agreement on more financial aid for Greece. The Conference Board said its index of leading economic indicators rose 0.3 percent in June. The increase suggested the economy won't fall back into a recession over the next few months, even with high unemployment and a weak housing market. Officials in Europe prepared a new rescue package for Greece at an emergency summit in Brussels. The move strengthened the euro relative to the dollar. Oil, which is priced in dollars, tends to rise as the dollar weakens and makes crude cheaper for investors holding foreign currencies. "We're getting some good news again," independent oil analyst Jim Ritterbusch said. "When that happens, commodities start to look attractive." Benchmark West Texas Intermediate crude for August delivery rose 73 cents to settle at US$99.13 per ...

Residential and commercial buildings stand in the Mid-levels district (bottom), with Victoria Harbour and the Kowloon Peninsula beyond in Hong Kong. The city's inflation jumped to the fastest pace since July 2008 on costly rents and higher prices for pork. Consumer prices rose 5.6 percent year on year in June, compared with a 5.2 percent gain in May, the government said yesterday.

CHINA'S manufacturing activities in July may have contracted for the first time in one year, a preliminary reading of the HSBC Purchasing Managers' Index showed today. The HSBC Flash PMI, the earliest available indicator of the industrial sector's operating conditions, settled at a 28-month low of 48.9 in July. The low was attributed to tighter monetary policies, higher production costs and dwindling overseas demand. It fell below the reading of 50 - more than 50 indicates expansion and less than 50 means contraction - for the first time since July 2010. The reading compared with June's final HSBC PMI of 50.1 and 51.6 in May. "Chinese manufacturing production declined at the fastest rate since March 2010," the bank said in a report, noting key component indices including output, new orders, new orders for export and employment all dropped below 50. Qu Hongbin, chief economist for China at HSBC, said: "This flash PMI suggests slowing momentum in manufactur...

The State Post Bureau of China closed down 73 unlicensed express delivery firms during the first half of its year-long crackdown on irregularities in an industry dominated by small private companies. The bureau said that by June 30 it had identified nearly 1,200 irregularities, censured more than 4,600 companies and suspended 73, most of them franchised outlets. The sector grew more than 20 percent annually from 2006 to 2010 with the rise of online shopping and e-commerce. Many delivery firms used a franchising system to speed up expansion, cutting costs by employing cheap labor and putting the quality of service at risk. In a bid to reduce irregularities, the bureau insisted franchised outlets must be licensed by May 1. According to the bureau, the sector's revenues reached 33.52 billion yuan (US$5.19 billion) in the first half of this year, 26.5 percent higher than a year earlier. Volume rose 52.8 percent to 1.58 billion items over the same period. It is understood that as a dire...

AN appreciating yuan will not eat into China's record US$3.2 trillion foreign exchange reserves, the currency regulator said yesterday. Meanwhile, the State Administration of Foreign Exchange called on the United States to take strong action to boost investors' confidence in US treasuries. SAFE is confident that a stronger yuan won't cause losses to the country's massive currency holdings, it said on its website yesterday. "The changes in the yuan's exchange rate against the US dollar cause changes in the paper value of the reserves when valued in yuan," SAFE said. "This is not a real loss and will not affect the real overseas purchasing power of the foreign-exchange reserves." The yuan hit a 17-year high yesterday as the People's Bank of China, the central bank, set a record reference rate before the sixth anniversary of the scrapping of a peg to the US dollar. The central bank set the central parity of the yuan at 6.4592 per US dollar, up 0...

China's foreign exchange regulator reiterated Wednesday that an appreciation of China's currency renminbi, or yuan, will not directly result in a loss of the country's foreign exchange reserves. Value changes in foreign exchange reserve assets only happen when they are converted to yuan, the State Administration of Foreign Exchange (SAFE) said in a statement on its website. "Currently China does not need to repatriate forex reserves massively," it said. Currency fluctuations only reflect a change to the book value, it said, adding it is not an actual loss and does not affect real purchasing power of the forex reserves. Government data shows China's forex reserves totaled nearly 3.2 trillion U.S. dollars by the end of June. The statement echoed the stance the SAFE voiced in May, which was made after a government researcher said in an essay that China likely suffered an accumulated loss of around 271 billion U.S. dollars on foreign exchange reser...

Watch Video Play Video For more on the US economy, we are joined by William Hess, Managing Director from China Analytics in Beijing. Thanks for joining us. 1. US Representatives have passed legislation to cut federal spending by 6 trillion dollars in exchange for a 2.4 trillion dollar increase in the nation's borrowing cap. How will this affect talks between Republicans and Democrats? 2. How likely is it that an agreement will be met before the deadline of August 2nd? If lawmakers fail to reach an agreement, what will be the worst case scenario in the US? Thank you indeed. William Hess, Managing Director from China Analytics. Related stories 'Cut cap and balance' debt measure passes House 2011-07-20 Poll: Americans impatient over debt talks 2011-07-20 U.S. House passes huge debt reduction bill 2011-07-20 Obama urges significant steps in debt talks 2011-07-20 Obama: Significant steps achieved in debt talks between Democrats, Republicans 2011-07-20 Editor...

While regulations are being finessed for the launch of the Shanghai international board, which would allow foreign companies to list on the Chinese mainland for the first time, attention is also being focused on one crucial element: a chronic lack of skilled financial professionals. The Lujiazui financial district in Shanghai. The difficulty in hiring and retaining high-caliber professionals has become the biggest business challenge for companies in the Chinese financial hub. [Photo/China Daily] Foreign banks and local securities companies are scurrying to find workers with the right skills and experience. Even Tu Guangshao, Shanghai's vice-mayor in charge of finance services, said the greatest inhibitor to the city's bid to be a world financial center was the lack of professionals. The latest statistics show that the number of people working in finance in Shanghai is 300,000, up from the 200,000 in 2006. However, that is only 2 percent of the city's total work force. In ...

Blockbuster sales of the iPhone and strong Asian business again helped Apple Inc crush Wall Street's expectations, driving its shares up more than 7 percent to record highs, Reuters reported. Sales of its iconic products far outpaced forecasts, helping drive a near-doubling of revenue in the fiscal third quarter. Its shares leapt to a high of $405 after a brief after-hours trading suspension. Apple sold 20.34 million iPhones during the quarter versus an expected 17 million to 18 million, which analysts say helped it vault past Nokia and Samsung Electronics to become the world's biggest smart phone maker. That "figure may indeed make them the largest smart phone maker by volume, which is somewhat ironic in a quarter that many thought would be about the Mac," said CCS Insight analyst John Jackson. "That they accomplished this without a new model speaks volumes about both their strength and the relative challenges facing competitors." Apple's earnings beat ...

A newly constructed home is sold in Springfield, Illinois, the United States. US builders broke ground on more single-family homes and apartments in June, helping the battered construction industry gain a little life after a dismal spring. The US Commerce Department yesterday said builders began work on a seasonally adjusted 629,000 homes last month, a 14.6 percent increase from May. Still, that's roughly half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market.

China's Ministry of Finance issued a report on July 18 telling the status of state-owned enterprises, which found that from January to June, gross profits increased by 22.3 percent year on year. The gross trading revenue of state-owned enterprises totaled 17.4 trillion yuan, a year-on-year increase of 24.4 percent, while gross profit totaled 1.1 trillion yuan. In the first half of 2011, the principal performance indicator of state-owned enterprises maintained a growth rate above 20 percent, but the growth rate of overhead has been relatively high. State-owned enterprises that account for a relatively large share of the year-on-year profit growth fall into the following sections: building materials, chemical industries, non-ferrous metals, coals and commerce. By People's Daily Online Weekly review ...

SHANGHAI'S key stock index fell the most in five days, led by banks, on concerns that they will start large-scale fund-raising activities due to insufficiency of funds. The benchmark Shanghai Composite Index lost 0.7 percent to 2,796.98 points. Turnover fell to 110.7 billion yuan (US$17.1 billion) from yesterday's 130.2 billion yuan. Banks led the decliners. China Merchants Bank fell 1.4 percent to 12.80 yuan after it announced a plan to raise as much as 35 billion yuan in a rights offer to shareholders in China and Hong Kong. "The capital adequacy ratio for China Merchants Bank fell to 7.66 percent by the end of the first quarter," said China International Capital Corp in a report. "The fund-raising will lift the ratio by 2 percentage points. It should be able to sustain the bank's development for another two or three years, but the actual length will depend on bank's performance and regulatory issues." Analysts worry that the fund-raising activitie...

The China Fastener Industry Association strongly demanded the lifting of discriminatory anti-dumping duties from the EU on fasteners from China in an open letter sent to the Council of European Union on Monday. Feng Jinyao, president of the association, said the country's fastener industry has suffered great losses in the recent two years due to the EU's unfair treatment on Chinese fastener makers. The association is a representative body of nearly 500 Chinese fastener manufacturers. Feng said the anti-dumping duties have affected the normal trade between China and the EU, while the EU market has also endured losses. China is the world's biggest producer of screws, nuts, bolts and washers, while the EU is its major market. The strong voice from the industry came after the appellate body of the World Trade Organization ruled recently that the EU is not complying with international commerce rules by imposing anti-dumping duties on the fasteners...

DEUTSCHE Post AG has sold its money-losing domestic express delivery service on the Chinese mainland and will focus on international business in future. It blamed fierce competition and a change in the law for the decision. DHL-Sinotrans International, a 50-50 joint venture by the German company and China's Sinotrans Air Transportation Development Co Ltd, said it had sold its domestic courier business to Shenzhen Uni-top, which was set up in 1998 with registered capital of 31 million yuan (US$4.8 million). DHL-Sinotrans bought Apex, a Chinese delivery company, for 300 million yuan in 2009 to tap the domestic express market, but it lost 99.2 million yuan as of the end of 2010 and 33 million yuan as of March 31 this year. "Foreign express companies lack cost advantages and face fierce competition in the domestic courier service industry, especially after the country revised the Postal Law on October 1, 2009," the venture said. "We decided to focus on international expr...

Chinese shares closed lower Monday with the benchmark Shanghai Composite Index down 0.12 percent, or 3.48 points, to close at 2,816.69. The Shenzhen Component Index fell 0.13 percent, or 16.39 points, to finish at 12,490.55. Source:Xinhua Weekly review Editor

The United States had a responsibility and an opportunity to reduce its deficit as much as possible and solve the problem in a real and comprehensive way, U. S. President Barack Obama said on Saturday. "For a decade, America has been spending more money than we've taken in. For several decades, our debt has been rising," Obama said in his weekly address. He said both parties had "talked this problem to death without doing enough about it," adding that it will take a balanced approach and shared sacrifice to solve the problem. "That means spending less on domestic programs. It means spending less on defense programs. It means reforming programs like Medicare to reduce costs and strengthen the program for future generations. And it means taking on the tax code, and cutting out certain tax breaks and deductions for the wealthiest Americans," Obama noted. The five-day White House debt talks failed to seal a deal this week, a...

A mixture of policy tools and taking balanced action are the best ways to battle inflation, which is now a "serious issue" in China, said Peter Sands, chief executive of Standard Chartered. China's Consumer Price Index (CPI), a main gauge of inflation, jumped to 6.4 percent in June, the highest level since June 2008 and well above the government's target of 4 percent for 2011. "I think that using a balanced mix of tools is more effective than simply depending on one." he said in a recent interview with Xinhua, referring to multiple economic levers such as allowing currency to appreciate, increasing reserve ratios and allowing interest rates to rise. "This is useful because inflation has multiple causes," he added. China's central bank has raised its benchmark interest rates three times this year, including a rate hike of 25 basis points announced on July 6. It also hiked its reserve requirement ratio six times this year, orderin...

Hong Kong Chief Executive Donald Tsang Friday pledged to propose measures to deal with Hong Kong's housing problem in his October policy address. Speaking at his Legislative Council question-and-answer session on Friday, Tsang acknowledged the housing problem is a crucial social issue, saying that the government will consider various subsidized housing schemes, and he has asked the Central Policy Unit of Hong Kong to discuss the issue. The government has adopted various approaches in tackling the housing problem, Tsang added, such as increasing land supply, to ensure the transparency of the property market and suppress property speculation. He said the moves have stabilized the market. Source: Xinhua Weekly review ...

Chinese insurance companies' premium income topped 805.66 billion yuan (123.95 billion U.S. dollars) in the first half of the year, up 13 percent year on year, the China Insurance Regulatory Commission (CIRC) said. In the first six months, premium income from the property insurance business rose 16.9 percent from a year earlier to 235.96 billion yuan, while life insurance premium income rose to 569.7 billion yuan, the CIRC said in a press release about the performance of the insurance market. Chinese insurers earned 103.11 billion yuan from their investments in the first half, an average return on investment of 2.1 percent, according to the CIRC. CIRC Chairman Wu Dingfu warned of "great challenges" to the insurance market amid rising inflation pressure and higher interest rates.

China pledged on Friday it will abide by World Trade Organization rules and apply "same policies" to both domestic and overseas companies in rare earth production, processing and export, Ministry of Commerce spokesman Yao Jian said Friday. Yao said China noticed that rare earth prices have kept rising over the past few years after the country's adjusted rare earth administration and boosted by factors including changes on the international market and speculation. The price rises, however, is conducive to regulating the rare earth industry and protecting the environment, he said. Source:Xinhua Weekly review Editor

The Ministry of Commerce (MOC) on Thursday announced the second batch of rare earth export quotas for this year, totaling 15,738 tonnes. The quotas almost doubled the corresponding second batch of rare earth export caps last year, which stood at 7,976 tonnes. Twenty-six rare earth producers will share the quotas, according to a table posted on the MOC website. Baotou Iron and Steel (Group) Co., Ltd. (Baogang Group), a mining giant based in north China's Inner Mongolia Autonomous Region, got the largest export quota of rare earth, or 3,220 tonnes, followed by China Minmetals Corp. (China Minmetals) with a quota of 1,327 tonnes. The MOC set the first batch of rare earth export quotas for this year at 14,446 tonnes. China's rare earth sales currently account for more than 90 percent of the global total. However, decades of excessive exploitation have resulted in its reserves falling to about one-third of the world's total from about 85 perce...

REMARKS by Federal Reserve Chairman Ben Bernanke that dimmed hopes for a third round of bond-buying pushed stocks lower yesterday. In a second day of testimony, Bernanke told lawmakers the Fed expects the economy to improve. He said the central bank would only step in with more economic stimulus if there is a significant downturn in the economy. "We're not prepared at this point to take further action," Bernanke said. Stocks turned immediately lower after the remarks and fell for much of the day. Bernanke was clarifying statements he made Wednesday that left the door open to new economic stimulus measures. Investors took his earlier remarks to mean that the Fed chairman had all but guaranteed new action to stimulate the economy, said Jeff Cleveland, senior economist at money manager Payden & Rygel. "They realize that's not the case now," Cleveland said. The Standard & Poor's 500 index fell 8.85 points, or 0.7 percent, to close at 1,308.87. The Do...

CHINA is to intensify tightening measures in cities where home prices remain extremely high to help fend off a speculative bubble, the State Council said yesterday. Premier Wen Jiabao urged local governments to abide by efforts to cool the overheated property market and to meet targets for building more affordable public housing for ordinary families unable to afford property due to surging prices. "Pressure on housing prices in some cities is still strong, and in some places controls have been relaxed," a government statement cited Wen as telling a State Council meeting yesterday. "The current real estate market is at a critical period. We must unswervingly stick to controlling the trends," it said. Home-purchase restrictions, at present mainly in larger metropolitan areas and regarded as some of the government's toughest policies to rein in housing speculation, should be extended to less affluent, or second and third-tier cities which have seen home prices gai...

Hidden problems in the rapidly-growing Chinese economy have drawn global attention, testing the wisdom of the country's economic and political leaders. Among the elites was Guo Shuqing, chairman of China Construction Bank, who addressed the sub-forum at the 16th Congress of the International Economic Association on July 6. The imbalance and unsustainable issues are still a very serious challenge, which will lead to a "vicious circle," warned Guo in his English speech. Therefore, China should continue reforms especially the land system reform, social security reform, education and medical reform, fiscal and taxation, foreign trade and foreign exchange reforms said Guo, a former central bank vice governor, State Administration of Foreign Exchange director and Huijin chairman, who has served as China Construction Bank chairman since 2005. Guo raised five major imbalances to be redressed: rural and urban development; the service and manufacturing industries;...

The Chinese currency Renminbi, or the yuan, strengthens 88 basis points to 6.4640 per U.S. dollar on Thursday, according to the China Foreign Exchange Trading system. In China's foreign exchange spot market, the yuan is allowed to rise or fall by 0.5 percent from the central parity rate each trading day. The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices before the opening of the market each business day. Source:Xinhua Weekly review Editor

China's gross domestic product slowed to 9.5 percent in the second quarter, easing fears of an abrupt slowdown and giving the central government room to tighten controls to fight inflation. Economic growth on the whole remained solid and stable, said a National Bureau of Statistics spokesman, and the major challenge for the rest of the year would be how to handle the relationship between maintaining stable growth, adjusting economic structures and managing inflation. China's gross domestic product grew 9.6 percent year-on-year in the first six months to 20.44 trillion yuan (US$3.15 trillion), the bureau said yesterday. The growth was 9.7 percent in the first three months and 9.5 percent in the second quarter, and compared with last year's 10.3 percent. "China's slower economic growth is in line with the central government's target of cooling the economy and restructuring it," said bureau spokesman Sheng Laiyun. China wants to steer expansion to a more mana...