05/03/2009  Source: www.chinaview.cn

Kirk John-Williams registered a cosmetics trading company in China only three months ago. Although the world economy has been affected by the financial crisis, the Trinidad and Tobago businessman is confident in the Chinese consuming market.

“The financial crisis won’t have too much impact on Chinese consuming market. The upper class may have been affected by the economic downturn, but most people from middle class are not badly hit. Chinese consumers are still willing to spend,” he said.

Economists believe China’s exports may recover later this year. The most effective means to spur economy at the moment should be stimulating domestic consumption.

“China should have learnt a lesson that an export-oriented economy is not sustainable. Stimulating domestic consumption will not only spur the economy, but also meet the needs of the general public,” a researcher from China National School of Administration, Ding Yuanzhu, told Xinhua.

China’s economy rose 6.1 percent year on year in the first quarter. Consumption contributed more than 4 of those percentage points, retail sales during the same period increased by 15.9 percent. Urban residents’ disposable income rose 11.2 percent and rural residents’ rose 8.6 percent.

Chinese consumers are less pessimistic on economy than other countries’. According to a survey by Nielsen of 50 countries and regions, only 35 percent of Chinese people believed the domestic economy was in a contraction. The figure was the lowest among the 50 world markets.

The survey report said Chinese consumers were “willing to spend and feel that the next 12 months would be a good time to buy things they needed.”

“Chinese consumers still have strong confidence on economy. People are still willing to travel, spend money on clothes and buy advanced technologies. This is a young but energetic group,” Neilson’s Vice Chair Susan Whiting said.

The Neilson contributed the confidence to the 4-trillion-yuan (585 billion U.S. dollars) stimulus package and abundant domestic deposit.

In the auto market, stimulus packages are taking effect. Auto sales showed strong signs of recovery after the country cut purchase taxes for small engine-sized cars and rolled out detailed stimulus package for auto sales in rural areas.

According to the China Association of Automobile Manufacturers, auto sales topped 2.64 million units in the first quarter, up nearly 6 percent year on year. The quarterly sales overtook the United States for the first time to become the world’s largest auto market.

Ye Zi, who has been working in Beijing for nearly three years, just bought a 1.6 liter car which cost her more than 100,000 yuan.

“In such a big city, driving a car would be a lot more convenient. I can afford a car now, and the government reduced the purchase tax for small cars, so I bought it,” she said.

Echoing the recovering auto market, the 13th Shanghai International Automobile Industry Exhibition, which ended on April 28, became an auto fest for carmakers.

Floor areas for the exhibition hit a record of 170,000 sq meters this year. More than 1,500 auto and auto part companies, including those from China, the United States, Germany and Japan, took part in the exhibition.

“Automakers are cutting funds for auto exhibitions across the world, but the Shanghai exhibition is an exception. If they only have budget for one exhibition, that will be the Shanghai exhibition, because China is the only growing auto market in the world,” vice president for the Shanghai International Exhibition Co., the organizer, Lu Ren said.

During the 9-day show, more than 600,000 visits were made. Some high-end brand cars, such as Rolls-Royce and Bentley, were sold out on the media day before the exhibition started. The Chinese market has become the most important for automakers across the world.

According to Volkswagen’s first quarter report, China has overtaken Japan to become Bentley’s fourth largest market. Last year, Bentley’s sales in the global market fell 25 percent year on year, but rose from 318 units to 518 units in China, up more than 60 percent.

In addition to auto markets, home sales in the first quarter also showed positive signs.

At April’s Beijing Spring Real Estate Trade Fair, from April 8 to 12, more than 150,000 people visited the fair and signed intention contracts worth more than 3 trillion yuan.

“Houses are one of the largest spending for Chinese people. They may spur consumption in related sectors such as decoration, furniture and home electronic appliances. Home sales may play a big part in stimulating domestic consumption,” a researcher with the National Development and Reform Commission, Zhang Hanya, said.

“The catering industry may best reflect Chinese consumers’ willingness to spend,” John-Williams said. “In major cities like Beijing, Shanghai and Guangzhou, I have not seen any signs of economic contraction.”

Ding said there were two approaches to spur economy.

“One is short-term stimulus plan, which may rely on investing real estate industry and infrastructure projects. The other is long-term stimulus plan, such as urbanization, social insurance system improvement, education and technologies.”

The first round of stimulus package is aimed at quickly spurring the economy, but the new stimulus packages should focus more on long-term goals. People will spend more only when they feel social insurance has been put in place,” he said.

05/02/09  Source: Xin Hua

New rules to punish “statistical fouls” took effect Friday in China.

The rules, the country’s first of their kind, were jointly published by the Ministry of Supervision, Ministry of Human Resources and Social Security and the National Bureau of Statistics (NBS).

The rules impose penalties for publication of fraudulent statistics or unauthorized dissemination of statistical data.

Penalties including dismissal, demotion or unspecified “criminal punishment” face those who unlawfully alter statistics or ask others to do so and those who take revenge on people who refuse to fabricate data or blow the whistle on illegal acts.

People who leak data concerning state secrets, personal information or business secrets, or who delay the reporting of statistics, would face similar penalties.

The new rules require government offices to carefully maintain and deliver files of criminal cases and quickly release investigation results.

Analysts said statistics are not just key data for the government, they are also vital in making decisions about social and economic affairs.

Statistics “concern public credibility of both statistical authorities and the government,” said Fan Jianping, chief economist with the State Information Center.

As the world’s fastest expanding economy, China has faced questions about the accuracy of its national economic data. The most recent figure drawing global attention was the decade-low, 6.1 percent year-on-year economic growth rate in the first quarter, which was released April 16.

Since the country’s opening-up, the quality of statistics has improved. An article on the Wall Street Journal China’s website said China’s economic statistics were actually very impressive, “with relatively timely, accurate, and comprehensive data published on a range of key indicators”.

But it also pointed out that there is a political economy of numbers with an incentive at both the local and national levels to massage the statistics. Many China watchers have noted the incentives for local officials to over-report growth to please their political masters.

Officials who participated in drafting the new rules admitted that incorrect or falsified statistics have been released at times.

Statistical corruption has been found in China for years to exaggerate local economic growth, which is often related to officials’ promotion.

In April, southeastern Fujian Province said that it handled 754 cases concerning forged statistics last year and imposed fines up to about 1.38 million yuan (203,000 U.S. dollars).

“As the country strives to cushion the impact of the global slowdown and maintain steady economic growth, they should use the rules as a deterrent to statistical fouls,” said Wang Tongsan, an economist with the Chinese Academy of Social Sciences, a government think tank.

Wang also suggested the government should reform the evaluation system for officials and increase training for statistical staff.

China’s top statistics official, Ma Jiantang, has vowed to improve the quality and credibility of government statistics after foreign media voiced concerns about the authenticity of Chinese economic data.

“To keep (official statistics) true and credible is not only our duty, it also relates to our need to accept public supervision,” Ma said in a statement on the NBS website.

04/28/2009   Source: www.chinaview.cn

Police in south China’s Guangdong province yesterday claimed to have solved nearly 500 cases of “telephone fraud”, involving a whopping 11.85 million yuan (1.75 million U.S. dollars), this year.

The public security department of the province was quoted by Wednesday’s China Daily as saying cops started cracking down on the frauds at the beginning of this year.

The police have “uncovered and broken” 46 criminal gangs, which were involved in 486 cases of telephone fraud, involving 2.45 million yuan in cash and 9.4 million yuan in bank deposits, the department disclosed. The police have seized 323 people, suspected of either committing the crimes or being involved with the gangs, and confiscated 678 phones, 735 SIM cards and more than 2,800 credit or debit cards.

“There are at least three kinds of telephone frauds rampant in Guangdong at present,” the department said.

The first one is arguably the oldest trick in the book, where scammers send out text messages to a large number of cell phone users, telling them they have won a lottery, but to collect the huge sum of money they would have to first deposit a “transfer commission charge” to a particular bank account.

In the second trick, scammers call up people saying their relatives were involved in a major traffic accident and urging them to transfer some money for an emergency operation.

In another trick that has recently come to light in many provinces across China, con artists use computer software to change their caller ID and make their victims believe they are calling from authorized organizations, such as the telecommunication department, banks or government offices.

The victims are then told they have been fined for deferring payments for their telephone bills or credit cards and must transfer money to a particular account to avoid legal hassles.

Most of the victims, the department said, were women older than40 years of age, some of whom have been duped of “millions of yuan”.

Some victims said they received phone calls from people who claimed to be customer service officials of their respective banks, asking for their credit card information for “internal review”.

The cheats then call the bank back on the phone, saying they have lost their credit cards – they give out the information acquired from the original owner – and ask for the bank to issue a new card.

04/28/2009    Source: Xinhua

Over 50 Chinese companies signed 28 trade and investment contracts worth about 5.7 billion U.S. dollars with U.S. firms on Tuesday at the end of the China-U.S. Trade and Investment Cooperation Forum.

The deals covering mainly the machinery, electronic products and green energy technology will help gain trade balance between the two countries, said a spokeswoman of the visiting Chinese delegation led by Chinese Commerce Minister Chen Deming.

These deals will also help upgrade the technology and the value of Chinese products since the Chinese companies are importing U.S. high-tech products and investing in the fields of green energy, she said.

“The economic recession is affecting both countries, and these deals come at a critical time and will help both countries get out of the difficult time,” an official of Illinois State government told Xinhua during the forum.

He said a stronger commercial bonds between the United States and China will also help world economy to go up quickly.

Speaking at the forum, the visiting Chinese minister said “we will continue to encourage Chinese companies to import more from the United States, and we will also welcome U.S. companies and trade-promotion agencies to be more active in China.”

He expressed the hope that the two sides will work more closely to strengthen economic ties between the two countries and make joint efforts to weather the current economic crisis.

04/26/2009  Source: www.chinaview.cn

The mainland-Taiwan relations have ushered into a “new era of peaceful development”, after experiencing “major historic breakthroughs” over the past 60 years, mainland top negotiator on cross-straits relations Chen Yunlin said here Sunday.

Chen, president of the mainland’s Association for Relations Across the Taiwan Straits (ARATS), made the remarks at the meeting on cross-straits relations with his Taiwan counterpart Chiang Pin-kung on Sunday morning.

Sunday’s talks would focus on regular cross-straits flights, joint efforts on cracking down on crime and financial cooperation and relevant agreements were expected to be signed in the afternoon, Chen said.

The two sides would also exchange views and try to reach consensus on mainland investment in Taiwan.

Chiang, chairman of the Taiwan-based Straits Exchange Foundation, said joint efforts on cracking down on crime would be conducive to safeguarding social security on both sides and improving cross-straits investment environment.

If the agreement on financial cooperation was signed, it would set a foundation for market entering threshold of the financial sector, Chiang said.

Regular flights would ease the current shortage of cross-straits flights by increasing the number of both flights and terminals, he said, indicating that the tickets might be cheaper.

“I believe that with the efforts of both sides, the talks will achieve satisfactory results,” said Chen.

Chen and Chiang started their talks at around 9 a.m. in Nanjing, capital of east China’s Jiangsu Province.

This was the third round of talks between them in less than a year.

04/26/2009  Source: China Daily

Top Chinese legislators gave their final nod to the revised Postal Law on Friday, amid concerns that it may hamper foreign firms’ and private couriers’ access to the lucrative market.

The law, due to take effect on Oct 1, bans foreign companies from delivering express letters in China, which means they can only deliver express packages domestically and send express letters internationally.

The adoption of the law means years of lobbying by major global express-delivery companies in China to lift such a restriction has amounted to nothing.

The Conference of Asia Pacific Express Carriers (CAPEC), which represents four global express-delivery giants, DHL, FedEx, TNT and UPS, expressed regret over the new law, although legislators insisted the rule is in line with China’s commitments to the World Trade Organization (WTO) and creates no barriers.

“CAPEC regrets that the newly enacted China Postal Law excludes foreign business from entering a segment of the domestic market,” it said in a statement made to China Daily on Friday.

It said the exclusion provision will “erode the competitiveness of foreign invested firms against their domestic counterparts in the wider express market”, and wished for an “open and level playing field” in the near future.

Express delivery is big business in China, accounting for about 43 percent of the postal system’s revenue of 96 billion yuan (14 billion U.S. dollars) last year, according to figures from the State Post Bureau.

But He Yongjian, from the legislative affairs commission of the National People’s Congress Standing Committee, the top legislature, said on Friday the amendment doesn’t affect the development of foreign business operations in China, nor does it breach the nation’s WTO commitments.

He explained that on entering the WTO in 2001, China made commitments to open express mail services with the exception of “services monopolized by China’s postal department according to the law”.

The existing law, which was passed in 1986, stipulates that the delivery of letters in China is a monopoly of the country’s postal department.

Apart from the restrictions on foreign business, the new law also requires China’s privately-owned express-delivery companies to acquire a permit from the government.

Legislators said the market access system aims to regulate the rapidly growing sector, but insiders said it helps to maintain the State-owned postal service’s market monopoly.

“Express delivery is an open and competitive industry globally. But such a new rule creates a barrier for private operators in China,” said Liu Heping, general manager of Shanghai Huanzhi Transport Cooperation. He is also former vice-general-manager of Shanghai East Union Express, the first private express delivery company in the economic hub.

He said that as a direct result of the new law, many private delivery companies would have to turn to other business, or play “hide-and-seek” with local law enforcement officers, resulting in delayed deliveries.

“Therefore, the interests of customers will be affected,” Liu said, adding that for now State-owned delivery service doesn’t have the capacity to fully meet customers’ needs.

04/24/2009  Source: www.chinaview.cn

U.S. dollar is still the preferred settlement currency at the ongoing Canton fair, where China’s currency, the RMB yuan, has been given green light to test the market in trade.

The second phase of the month-long fair, the largest export event in China, opened on Friday, five days after the first phase ended.

“We are worried European and American buyers would feel declined if we insisted on yuan settlement,” said a Beijing-based porcelain producer at the fair.

He said the company would not risk losing any potential buyers, as the export environment is gloomy amid the global financial crisis.

Xu Jianguo, manager of a Shanghai-based stainless-steel dishware exporter, echoed the opinion saying that European and American buyers favor dollar settlement, which made the trial of yuan settlement difficult to win across the fair.

Export deals were down almost 21 percent year on year to 13.03 billion U.S. dollars at the first phase of the 105th fair which lasted from April 15 to 19 in Guangzhou.

Mu Xinhai, a fair spokesman, attributed the sharp fall to shrinking “external demand, especially from developed countries.”

The Chinese government gave the green light to five major trade cities — Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan — touse the yuan as an option to settle international trade deals right before the fair.

“The yuan settlement can benefit manufacturers and traders at home and abroad by reducing their exposure to exchange-rate volatility, increasing liquidity in foreign trade and reducing consumer burdens,” said Xu Xiaonian, professor with the China Europe International Business School.

But the yuan has a long way to go to become a leading international currency, he said.

The Zhejiang Taibao Bottle Cork Co. is one of the Chinese exporters that dare to be a vanguard in trying the yuan settlement at the fair.