Category: Business

By XieJun (Global Times)09:59, July 02, 2019

On June 27, 2019, in the Economic and Technological Development Zone of Lianyungang, Jiangsu Province, workers saw the operation on the carbon fiber production line. (Photo by Geng Yuhe from People’s Daily Online)

China’s economy is stabilizing with latest statistics pointing toward a mild rebound in May, as domestic companies strive to shake off the negative impact of the China-US trade war through internal improvements and flexible business strategies.

According to data released by the National Bureau of Statistics (NBS) on June 27, above-scale industrial companies, referring to companies whose annual main business revenues are no less than 20 million yuan ($2.9 million), saw their profits grow 1.1 percent on a yearly basis in May, turning from a 3.7 percent contraction in April.

“There’s a rebound in the industrial sector, albeit not a very strong one, mirrored by narrowing industrial profit declines in recent months,” Liu Xuezhi, an economist at Bank of Communications, told the Global Times on June 27.

For the year to date, profits of above-scale industrial enterprises still declined, but at a slower pace. Profits fell 2.3 percent on a yearly basis in the first five months of this year, compared with 3.4 percent in the first four months, 3.3 percent in the first three months and 14 percent in the first two months.

Certain industries in particular are experiencing a warm-up. For example, profits of the electronics machinery industry grew 19.7 percent in May, according to the NBS data.

The coal mining industry’s profits also grew 20.3 percent in May, the data showed.

Faced with tariff increases imposed by the US government, China’s manufacturing sector has been focusing efforts on economic transformation, shifting from mass exports of low-end products to production of items with higher added value, experts said.

“With technological advantages, Chinese companies have strong market appeal Their products have few substitutes and are thus immune to external tariff changes,” Li Chunding, a professor at the College of Economics and Management under the China Agricultural University, told the Global Times on June 27.

According to the NBS data, above-scale high-tech manufacturers’ profit expanded 6.2 percent in May, compared with 15.1 percent slide in April, while strategic emerging industries grew 6.7 percent year-on-year in May, compared with an 8.4 percent decline in April.

Apart from industrial upgrading, some Chinese traders are also shifting to domestic markets or markets other than the US.

Several traders in Yiwu, the renowned marketplace in East China’s Zhejiang Province, told the Global Times that they are starting to tap the importing markets seeing the huge market potentials and the government call for imports.

Of the provinces that have released January-May trade data, South China’s Hainan Province had the fastest growth of 41.7 percent while South China’s Guangdong Province had the largest trade value of 2.71 trillion yuan.

Yang Chang, an economist at the research center of Zhongtai Securities, said that the continuity of China’s industrial rebound “is yet to be seen.” Pressure continues due to such factors as low profit margins and weak corporate liquidity, he wrote in a statement sent to the Global Times on June 27.

(Xinhua)08:38, July 03, 2019

BEIJING, July 2 (Xinhua) — Chinas Ministry of Commerce is intensifying efforts to clean up the restrictive measures on foreign investments that are not specified on the revised negative lists, the ministry said Tuesday.

The ministry will help implement the new negative lists and facilitate foreign investments through measures including cutting administrative red tape and cleaning up regulations and rules that are not in line with the foreign investment law, said Tang Wenhong, an official with the ministry.

China rolled out the revised negative lists for foreign investment market access to further cut the number of sectors, fields and businesses that are off-limits for foreign investors.

The two lists, one for the piloted free trade zones (FTZ) and the other for the rest of the country, contain fewer access-limiting measures. Pilot FTZs now have 37 listed items for foreign investors, down from 45, while non-FTZ areas are required to implement 40 items instead of 48.

The country saw a steady inflow of foreign investment this year as it further opens up its economy. Total foreign investment actually utilized in the past five months went up 6.8 percent year on year, previous data from the ministry showed.

(Xinhua)08:55, July 03, 2019

SHANGHAI, July 2 (Xinhua) — China and the U.S. should settle their difference on trade through dialogue and consultation on the basis of equality, officials of foreign parties have said.

Though Egypt is geographically far away from China and the U.S., Egyptians have paid close attention to the trade relations between the two major countries, said Mohamed Zamil Zaki Alakhtaby, general secretary of the Homat Almatan party in Alexandria, Egypt. Egypt expresses the hope that the two countries can resolve their trade frictions through consultations on the basis of equality.

The world today has become so interconnected that a conflict between the worlds two largest economies will have a negative impact on the global economy and peoples livelihood in many countries, Alakhtaby said at a seminar in Shanghai.

The U.S.-initiated trade frictions with China have bedeviled markets and the global economy for months, sending jitters to global capital markets and disrupting multinationals industrial chains.

Alakhtaby, also an engineering professor, spoke highly of Chinas continuous efforts on promoting multilateralism and free trade, adding that initiatives such as the Belt and Road had provided new opportunities for many developing countries.

From the viewpoint of many developing countries, Chinas growing competitiveness on the global arena will bring more equality, fairness as well as opportunities for development, Alakhtaby said.

Miguel Angel Sanchez, general secretary of Colombian Liberal Party, welcomed the fruitful results of the meeting between the Chinese and U.S. heads of state.

Trade is not only a key issue concerning the two countries, but also has wider implications on many countries in the world, Sanchez said. We call for resolving the economic issues through equal consultations.

Bachir S. Haddad, International Relations Officer of the Free Patriotic Movement of Lebanon, said Chinas success had inspired many developing countries, which were also keen to share the benefits of Chinas development.

We support Chinas attitudes towards openness and cooperation. We also oppose unilateralism and trade protectionism, Haddad said.

(Xinhua)09:00, July 03, 2019

NEW YORK, July 2 (Xinhua) — Global financial markets cheered on the first trading day after Beijing and Washington agreed to bring their trade talks back on track on the sidelines of the Group of 20 (G20) summit in the Japanese city of Osaka.

Major risk assets including U.S., European and Asian stock markets, as well as crude oil, soared following the good news.

The broad rally across risk assets on Monday showed a high degree of public jubilation over the outcome of the high-stakes and highly-anticipated meeting between Chinese President Xi Jinping and his U.S. counterpart, Donald Trump. Any move in China-U.S. relations is always reflected in the global market indices.

Taking the U.S. equities market as an example, ever since the United States unilaterally stirred up economic and trade frictions with China in March last year, the stock market boomed whenever the two countries made progress in negotiations, and plunged when negotiations faltered.

Following the U.S. governments sudden announcement to impose additional tariffs on 200 billion U.S. dollars worth of Chinese imports in May, all three of the major U.S. stock indices fell more than 6.5 percent.

Bilateral trade between China and the United States exceeded 630 billion dollars in 2018, and extensive cooperation between businesses of the two countries is seen in almost every industry. Any policy that is detrimental to one side will inevitably harm the interest of the other.

It was U.S. technology companies that bore the brunt of U.S. sanctions against Chinese telecommunications company Huawei. Micron Technology and ON Semiconductor, two major chipmakers, both plunged more than 20 percent from their monthly highs in May after the news broke.

U.S. manufacturers and retailers have already lowered their earnings forecasts for the year, warning investors of the negative impact the trade tensions could bring about and calling on the U.S. government to reconsider its trade policies.

In stark contrast, the news on June 25 that some chipmakers resumed supply to Huawei pushed up their shares, including Micron Technologies, which rose more than 13 percent the next day. On Monday, the SP 500s technology sector gained 1.45 percent, leading the market.

For more than a year, the roller-coaster ride in U.S. stocks can be taken as a silent protest by market participants against the U.S. governments disruption of the international economic and trade order.

In mid June, more than 600 U.S. companies, including many publicly-traded ones, sent a letter to the White House asking the U.S. government to stop imposing tariffs and return to the negotiating table. The reason behind such a move is self-evident: China is an indispensable market for many American companies. They cannot afford to lose it.

In addition, the impact of U.S.-China trade frictions is not limited to the two countries. It has already spread to the global market.

Oil prices fell in recent months as investors worried about weak demand due to mounting risks to the global economy. Analysts have attributed the slowdown in global economic growth to trade tensions, largely caused by unilateralism, protectionism and trade bullying.

Economists generally expect the global economy to lose 1 to 2 percentage points in the coming years if China and the United States fail to reach a trade agreement.

The trade issue between China and the United States can not be resolved overnight, given its high level of complexity. Washington needs to work with China to strike a balanced deal in order to better benefit the peoples of the two countries and the world at large.

(Xinhua)09:03, July 03, 2019

ADDIS ABABA, July 2 (Xinhua) — Positive trade and economic relations between China and the United States would have an affirmative advantage to global economic stability, an Ethiopian scholar said on Tuesday.

Constructive trade and economic relations between the U.S. and China, as the two largest global economies, will have certainly an affirmative advantage to the global economy, Costantinos Bt. Costantinos, who served as an economic advisor to the African Union (AU) and the UN Economic Commission for Africa (ECA), told Xinhua on Tuesday.

The latest positive developments between China and the U.S. to restart economic and trade consultations is good news to the global trade in general, and investors who were concerned by recent tariff standoff, he said.

China and the United States agreed on the sidelines of the G20 summit in Osaka, Japan, to restart economic and trade consultations on the basis of equality and mutual respect, after trade frictions since last year.

Costantinos, also professor of public policy at the Addis Ababa University in Ethiopia, also emphasized the vital imperative to sustain the multilateralism platform as a positive impetus to global economic stability.

The scholar also stressed the need to rule out actions and policies that bear the notion of protectionism, saying it will restrain international trade in favor of protecting local businesses and jobs from foreign competition.

(Chinadaily.com.cn)10:45, July 03, 2019

(Photo/Xinhua)

Apple will manufacture its new Mac Pro computer in China, shifting the production of its only major device assembled in the US to China, according to The Wall Street Journal on Friday.

The tech giant is working with contractor Quanta Computer to assemble the Mac Pro and aims to increase production at a factory near Shanghai, which can help reduce shipping costs with Apples other suppliers in China, the report said.

An Apple spokesman said, the new Mac Pro is designed and engineered in California and includes components from several countries including the United States, and final assembly is only one part of the manufacturing process, Reuters reported.

By the end of March, Apple earned about 18 percent of its total revenue from Greater China, and China is both a key market and a major production center for Apple.

The previous Mac Pro model, released in 2013, was assembled in the US.

But when Apple began to make the computer in its plant in Austin, Texas, it struggled to find enough screws, according to a previous New York Times report, and the company had to order screws from China for mass production.

Relative to the US, manufacturing in China remains a lower-cost alternative and benefits from an existing infrastructure, versus having to, potentially, rebuild one in the US, Tom Forte, an analyst at DA Davidson, was quoted as saying by Reuters.

(Xinhua)11:15, July 03, 2019

NEW YORK, July 2 (Xinhua) — As China and the United States have pulled back from further escalations over trade, the consensus reached between the two heads of state constituted a first step hopefully on the road to continued progress, a senior business professional has said.

The pullback is a welcome first step in efforts to reach an agreement, which if steadily built upon by taking positive future steps forward could result in sizeable benefits to both economies and build bonds for the future, said Carla A. Hills, chairman and CEO of Hills Company, a Washington-based advisory firm on trade and investment.

On the sidelines of the G20 summit in the Japanese city of Osaka on Saturday, Chinese President Xi Jinping and his U.S. counterpart, Donald Trump, agreed that the two sides will restart economic and trade consultations, and the United States will not add new tariffs on Chinese imports.

This development has brought hope, especially to the business communities, which was the most important outcome of this first step seeking a solution to differences between the two sides, Hills told Xinhua on Monday.

The progress to date has fueled hope by our business leaders, workers, and farmers that progress will continue, and the two governments will reach a positive outcome, said the female entrepreneur, who served as U.S. Trade Representative from 1989 to 1993.

Business leaders in both economies are hopeful of reaching a solution to the conflict that has resulted in tariffs, which have created not only disruption but considerable uncertainty, Hills noted.

Yet she pointed out that business leaders would still remain cautious and maintain a wait-and-see outlook until they see further steps forward.

As the two countries have agreed that their economic and trade negotiating teams will discuss specific issues, Hills suggested that they meet immediately and regularly to address the remaining issues.

She also hoped that China would continue to move forward to promote openness, which would have a positive impact on the countrys relationships with all its global trading partners.

Our aim should be to resolve the current issues and restore a strong and durable economic foundation for a strong U.S.-China relations for the years ahead, Hills stressed.

(Peoples Daily Online)13:24, July 03, 2019

(Photo/Chinanews.com)

Chinas rural industries have maintained strong momentum since 2012, Yu Xinrong, vice-minister of agriculture and rural affairs, said at a news conference at the State Council Information Office on July 1.

Chinas grain production capacity has remained above 600 billion kilograms since 2012. The business income for the agricultural products processing industry and tourism industry has reached 14.9 trillion yuan and 800 billion yuan, respectively.

In addition, a total of nearly 7.8 million people chose to start businesses in rural areas.

However, problems still exist in rural industries, such as the lack of industry categories, weak industrial chain, and low quality and efficiency, Yu pointed out.

He said the ministry would work closely with relevant departments in the future and promote the implementation of various policies to support the development of rural industries.

In the future, efforts should be made to keep secondary and tertiary industries dependent on agricultural resources in rural areas and leave more jobs and profits in the hands of farmers, according to a guideline on promoting the development of rural industries recently released by the State Council.

Rural revitalization is expected to make huge progress in the next five to 10 years, with the added value of various industries accounting for a significantly larger proportion of the GDP of rural areas, said the guideline.