Vestas, the world’s largest wind turbine maker, is trying to remain on top of aggressive Chinese competition by localising and customising its products for use in the region.

Although the Copenhagen listed company has seen its world market share slide amid an explosive growth in the Chinese market, where domestic competitors take more than 75 per cent of orders for new capacity, Ditlev Engle, chief executive, insisted yesterday that he would not compete on price.

Financial Times – 17^th April

China’s economy grew at an annual rate of 6.1 per cent in the first quarter – its slowest pace since quarterly gross domestic product data was first published in 1992.

Beijing struggled to prop up activity in the face of the global crisis.  Growth fell from 10.6 per cent in the same quarter a year ago and 9 per cent for the whole of 2008.  But aggressive government stimulus measures begun in the fourth quarter last year have started to yield some signs of recovery.

Using quarter-on-quarter comparisons , Goldman Sachs and JP Morgan both estimated growth rebounded sharply to 5.8 per cent on a seasonally adjusted basis, up from 2.2 per cent in the fourth quarter last year.

“The worst time is over for China’s economy,” said Ha Jiming, an economist at China International Capital Corporation in Beijing.

Financial Ties – 17^th April

France’s Schneider Electric has agreed to pay a Chinese company $23m to settle a patent lawsuit – the largest recorded settlement in an intellectual property case in China.

Chinese IP lawyers said the settlement was a “wake-up call” to foreign companies about the growing risk of lawsuits from China groups asserting IP rights.

Traditionally, damage awards in Chinese IP lawsuits have been small, and the plaintiffs have usually been foreigners suing Chinese companies claiming infringement of IP rights.

But the Schneider case caught the attention of foreign companies in China because it turned that paradigm on its head: the plaintiff was Chinese and the damages substantial.

In 2007, a court in Wenzhou in China’s eastern Zhejiang province awarded damages of Rmb330m ($48m) in a patent lawsuit against Schneider, brought by low-voltage equipment maker Chint Group of Wenzhou.

Schneider appealed to the province’s highest court, but yesterday the company agreed to settle the case for roughly half the original damages.

The Zhejiang Province High Court yesterday said Schneider must pay the damages to Chint within 15 days, or the full award would be enforced against it.

Guy Dufraisse, president of Schneider in China, told the Financial Times yesterday it was “happy to stop fighting”.

With China showing tentative signs of an economic rebound, the theory that the world’s third largest economy could detach itself from the whims of the US economy – an idea that looked foolish during the autumn global slump – is being dusted off again.

China’s economy is expected to rebound later this year boosted by aggressive government policies.  But whether China can go back to its long-term trend of8-9 per cent annual growth, or whether it is facing a period of relatively sluggish expansion, will depend to a large extent on just how important exports really are.

Financial Times – 16th April

State is actively stockpiling metals to diversify out of foreign currency reserves.

Hard money enthusiasts have long watched for signs that China is switching its foreign reserves from US Treasury bonds into gold bullion.  They may have been eyeing the wrong metal.

China’s State Reserves Bureau (SRB) has been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons. 

Copper prices have surged 49pc this year to $4,925 a tonne despite estimates by the CRU  copper group  that world demand will fall 15pc to 20pc this year as construction wilts.

Beijing annunced last week that it would file a case against the U.S. at the World Trade Organisation over Washington’s effective ban on import of cooked chicken from China.  Which means a bout of food-safety-inspired protectionism is coming home to roost.

For the past two years Connecticut Democrat Rosa DeLauro, chairwoman of the House Appropriations Committee’s agricultural subcommittee, has inserted language in appropriations bills prohibiting the U.S. Department of Agriculture from spending money on any activity that would facilitate poultry imports from China.

This amounts to an import ban.  Under U.S. law, the USDA must certify that another country’s food regulators can do as good a job as the USDA does at home before that country can export to the U.S.  If the USDA cannot spend money sending inspectors to China to evaluate the poultry-inspection process, chicken imports cannot happen.

China National Petroleum Corp. suspended talks with Chevron Corp. over an oil-field stake in the Gulf of Mexico, spurning a chance for a key U.S. foothold.

CNPC apparently thinks it deserves a better deal in return for allowing the U.S. company access to one of China’s biggest natural-gas fields back in 2007. (Guanxi?)

Wall Street Journal – March 20th

Wang Zhibo runs a successful business, has plenty of money in the bank and would love to buy a house and trade in his humble second-hand car for a $14,600 Volkswagen Santana 3000.

Just what the crumbling world economy needs – a guy with money to spare and an appetite for houses and cars.

But Wang 33, won’t be coming to the rescue, at least not anytime soon.  The Beijing entrepreneur is hoarding cash until he sees how the Chinese economy is weathering the storm.

Wang’s cautious attitude is typical – and a key reason China’s 1.3 billion consumers are unlikely to dip into their vast savings and go on a shopping spree that would recharge spluttering factories in their own country and around the world.

Shanghai based reserach firm DDMA surveyed 602 consumers in five Chinese cities: 45% were reducing their spending because of concerns about the economy; 12% said they had already lost their jobs.

USA Today – March 20th

Shielding local companies – and perhaps the influence of the Chinese Government apparatus – from the muscle of foreign multi-nationals errects yet another unwelcome hindrance to the global movement of capital.  China would, of course, not be alone in such endeavours.  US lawmakers in 2005 managed to convince China National Offshore Oil Company to drop its bid for US oil group Unocal, citing largely spurious concerns over Unocal’s strategic importance.

Daily Telegraph 19th March

The Chinese Government owned Chinalco has cleared a vital obstacle in its bid to buy a significant stake in Rio Tinto, with the competition watchdog declaring it will not oppose the plans.

The Australian Competition and Consumer Commission ruled the A$28.2 billion purchase was unlikely to result in a lessening of competition.  The conclusion will be influential around the table at the Foreign Investment Review Board which has until June to provide a final ruling on the controversial bid.

China has called for the creation of a new currency to eventually replace the US dollar as the world’s standard, proposing a sweeping overhaul of global finance, reflecting a growing unhappiness among developing nations with the role the US has played in the world economy.