China’s new lending is expected to remain strong in next few months, with no signs of a slowdown. Analysts expect new yuan loans in June to probably exceed the level of May, with total new credit in the first half expected to touch 6 or 6.5 trillion yuan.

Chinese banks extended a total of 5.84 trillion yuan of local-currency loans in the first five months of the year, a record amount that easily topped the government’s minimum target of 5 trillion yuan for the whole year.

In an effort to meet their self-set half-year credit targets, banks are racing to make loans in the remaining two weeks, which may push the new loan growth in June to a higher level, analysts pointed out.

Government-led infrastructure projects and recovering housing sales could also prop up bank lending in the coming months.

“Demand for financing infrastructure projects will continue to fuel the credit surge in June,” said Wu Xiaoling, analyst, Greatwall Securities.

China Daily – 23rd June

China will remove or reduce export taxes on a range of products – from grain and rice to metals and other materials – effective from July 1, the country’s finance ministry said. This is aimed at preventing the trade situation from deteriorating further, analysts said.

Export taxes for indium and molybdenum would be cut from 15 percent to 5 percent; tax on some steel and tungsten products will also be reduced to 5 percent from 10 percent, and export tax on wheat, rice, soybean and sulfuric acid will be scrapped, according to the Ministry of Finance website.

“This shows the government’s intention to stabilize exports amid the continuous drop in growth of foreign trade since late last year,” Li Jianfeng, analyst from Shanghai Securities, told China Daily.

Due to the economic slowdown in the US, Europe and Japan, China’s key trade partners, the nation’s exports witnessed a drop for seven consecutive months since November last year. Analysts said exports might not show positive growth until later this year.

Premier Wen Jiabao said last month that China’s exports situation was severe and that the nation would give more incentives to exporters.

Since late last year, the government has reduced export taxes on a range of commodities, especially in labor-intensive sectors. It has also hiked tax rebates for exports seven times since August 2008.

China Daily – 23rd June

Suning Appliances, China’s second largest consumer electronics retailer, said it plans to raise funds worth 2.8 billion yuan ($409.79 million) through a private placement, in a bid to expand its network into second-tier cities and strengthen its logistics services.

The company said it would issue no more than 200 million new shares to private investors. Zhang Jindong, Suning’s chairman, will purchase shares worth 250 to 350 million yuan, or about 9 to 12 percent of the total.

Among the proceeds, 1.4 billion yuan will be used to build and develop 250 new stores in second-tier cities; about 1 billion yuan will be injected into setting up five logistics centers in Chengdu, Wuxi, Xuzhou, Tianjin and Chongqing, and into extending the Beijing logistics base. The rest will be used as working capital, according to the corporate announcement.

China Daily – 23rd June

To buy or not to buy – that is a question Suning, China’s second largest consumer electronics retailer by store number, has to answer soon. And the one who has evoked that question is its struggling Japanese counterpart, Laox.

The financial crisis has severely affected the world’s retail industry. Last November, Circuit City, the second largest household appliance retailer in the US, went into bankruptcy protection. In June, Germany’s retail giant Arcandor, which owns the department store chain Karstadt, declared bankruptcy.

Laox, one of the Top 10 retailers in Japan, may not be luckier than its global counterparts. Amid the stagnant economic situation, the 80-year-old company, which has witnessed losses for eight consecutives years, reported another big drop in profit in 2008. As the nation’s economy is still in trouble, the company is finding it hard to improve business even after it closed a slew of under-performing stores since late 2008.

That is why it turned to Suning for help. Japanese media said late last week that Laox was in talks to sell a stake of around 30 percent to Suning, which will make the latter Laox’s principal shareholder with board representation.

China Daily – 23rd June

BEIJING: European jet maker Airbus rolled out the first aircraft built at its China factory today and said it plans to produce 10 more this year. The plane is the first Airbus assembled outside Europe.

The A320 jet was assembled in Tianjin, east of Beijing, Amelia Xu, an Airbus spokeswoman in Beijing, said Monday. The plane was to be delivered to Dragon Aviation Leasing and operated by Sichuan Airlines in southwestern China, she said.

“We are planning to deliver around 11 A320 jets this year,” Xu said.

Airbus will raise production to four aircraft a month by the end of 2011 at the plant.

The aircraft had conducted a four-hour test flight from the Tianjin International Airport on May 18.

China’s aviation market is one of the biggest and fastest-growing. Despite financial problems this year for Chinese carriers due to the global slump, suppliers say airlines are expected to need as many as 3,400 new aircraft over the next two decades.

Airbus, a unit of Paris-based EADS, announced plans in 2007 for the Airbus Final Assembly Line China, or FALC, in Tianjin. Airbus says the Tianjin plant will be able to produce four A320s a month.

China Daily – 23rd June

China and the United States resumed high-level defense talks today in Beijing, the first of its kind between the nations for 18 months, to seek ways to cooperate on various issues.

The delegations will exchange opinions on maritime disputes, Taiwan issues and nuclear disarmament at the 10th Defense Consultative Talks (DCT), a military source who attends the talks told China Daily.

The two-day sessions are attended by a US delegation led by Michele Flournoy, the undersecretary for policy with the US Department of Defense, and a Chinese delegation led by Lieutenant General Ma Xiaotian, deputy chief of the general staff of the People’s Liberation Army.

“There are many areas for cooperation, despite disagreements,” the source said yesterday on condition of anonymity. “Both sides have the same need for cooperation.”

The source said issues at the two-day dialogue will likely include the Korean Peninsula, the Taiwan Straits and Afghanistan.

China Daily – 23rd June

Maths and science exams taken by students in China are more “interesting and demanding” than their British GCSE counterparts, it has been claimed by the Royal Society of Chemistry

The RSC, which has published online examples of science papers taken by Chinese teenagers, believes that the government has to address the situation “to ensure the country has the right skills for the future”.

The Chinese exam papers in chemistry and maths were taken last year by pupils studying at the same level as England’s GCSE students.

Earlier this year, Ofqual, the Government’s exam watchdog, said there were “significant concerns” that GCSE and A-Level standards were slipping.

Ofqual said English literature, maths and science exams were often failing to push the brightest pupils.

In physics GCSEs, Ofqual reported a “general reduction” in the mathematical demands placed on students and “predictable and formulaic” coursework.

The Chinese mathematics papers contain topical questions about the Olympic Games, held in Beijing last year, as well as earthquakes – in May last year, China experienced an earthquake in its Sichuan province. In one multiple choice question, the paper asks: “As of 19 May 2008, 21,600 Chinese and foreign reporters became registered reporters of the Beijing Olympics, amounting for the greatest number of reporters in the all previous Olympic Games. The scientific number 21,600 is expressed as…”

Dr Richard Pike, RSC’s chief executive, said: “In Britain most of the questions with some sort of mathematics or problem solving are very straight forward. With the Chinese ones you’ve got to think a little bit further, you can’t just stick down the answer. Many of the more complex questions in the papers we have seen involve a number of steps. The student really has to think things through.

“Some questions can be done by anyone but as you work through the paper they get harder and in that sense they are more demanding of the brighter kids than you would in Britain. I would say it’s almost a step below from the Chinese questions.”

Daily Telegraph – 23rd June

BEIJING, June 17 (Xinhua) — China’s political advisors brainstormed Wednesday on the country’s economic development and offered suggestions about coping with the impact of the global downturn.

They gave their advice as the standing committee of the 11th Chinese People’s Political Consultative Conference (CPPCC) National Committee continued its sixth meeting, which started Tuesday.

Li Yining, a renowned economist and one of the members of the standing committee, said restructuring and innovation were pivotal for an economic recovery. Once the problems of fair play and difficulty in financing were solved for private companies, their potential for innovation would emerge.

Other proposals ranged from fostering new growth poles to solving social disputes.

Jia Qinglin, chairman of the National Committee of the CPPCC, was present at the meeting.

He said Tuesday that maintaining steady, relatively fast economic development and safeguarding social stability and harmony were the foremost tasks facing China, and he asked the participants to focus their discussions on these themes and make valuable suggestions.

Xinhau – 17th June

DO CHINESE BRAINSTORM? – COMMENTS ARE VERY WELCOME

London and Beijing should work closely together as the world fights its way out of the economic downturn, said the UK’s top financial regulator.

Adair Turner, chairman of the UK’s Financial Services Authority, told China Daily that China and the UK should help list companies on each other’s stock markets.

“Britain would see it more likely to have Chinese companies listed in London over time, as the mutual financial cooperation enables companies to build a global profile,” Turner said.

And he said China’s role in the recovery will be crucial.

“It is very important, after the huge financial crisis, that we build up as much cooperation as possible between regulatory authorities across the world,” he said. “It is important that we learn lessons from each other about the way we regulate our banking systems and discuss common approaches to regulation, because some of these approaches are based on a common global basis.”

Additional cooperation with China is particularly significant, he said, because China recently became a member of the global Financial Stability Board (FSB) – the body the G20 hopes will better regulate the global financial system.

China will attend the board’s first meeting in Basel, Switzerland, next week.

Turner, who is on a visit to China, said the world is recovering gradually from the crisis and the next steps will be very important.

“Part of the purpose of my three-day visit here is to build links with people who will be my colleagues on the FSB board,” he said.

China Daily – 18th June

China Investment Corp (CIC), the country’s $200 billion sovereign wealth fund, said it would start a new round of global hiring to support an expansion of its operations as it seeks new overseas investments.

CIC, which currently employs about 200 people, will seek professional staff in 33 categories, including risk management, real estate, infrastructure, commodities and hedge fund investment, according to its website.

“We are a new company, so it’s natural for us to hire more people to grow,” a CIC spokeswoman said. She declined to indicate the exact number of people CIC plans to hire.

CIC, which became wary of overseas expansion after loss-making investments in Morgan Stanley and Blackstone, has recently shown renewed interest in overseas markets as the global financial crisis eases.

This week, it committed to invest $159 million in Australian property firm Goodman Group.

CIC added $2.2 billion to its previous $5.6 billion investment in Morgan Stanley earlier this month and plans to open an office in London. The fund is also looking at five or six distressed asset deals in both Asia and the West, people familiar with CIC’s plans have told Reuters.

China Daily – 18th June

Geely Automobile Holdings has reached a preliminary agreement with Ford Motor Co to purchase its Volvo unit and plans to produce a new Volvo model in Guangzhou Province, according to media reports Wednesday.

The Geely acquisition, following that of another firm’s earlier bid to purchase a foreign brand, is yet another opportunity for domestic car makers to expand into the global market.

China’s Sichuan Tengzhong Heavy Industrial Machinery Co announced recently it was to acquire General Motors Corp’s Hummer brand.

Zhejiang Province-based Geely aims to purchase Volvo and build a production line for the Volvo XC90 in Guangzhou Province’s Dongguan City, the National Business Daily reported yesterday. “It’s the right time for Chinese firms to make overseas acquisition during the slowdown in the economy,” said Jia Xinguang, chief analyst with the Chinese National Automotive Industry Consulting and Development Corp.

The value of the deal is not known but Volvo, which was bought by Ford for US$6.49 billion, won’t be sold for less than US$3 billion, according to Jia. Geely couldn’t be contacted for comment Wednesday.

China Daily – 18th June

SHANGHAI – Financially struggling China Eastern Airlines says it plans to buy 20 Airbus A320 jets following an agreement last week with the European aircraft maker.

The purchase will cost about $1.45 billion, based on 2008 catalog prices, Shanghai-based China Eastern said in an announcement late Wednesday to the Hong Kong Stock Exchange.

It said China Eastern, one of China’s three big state-owned carriers, gained what it called “fair and reasonable” price concessions in its negotiations with Airbus SAS.

The purchase was made under the assumption that the airline will “have steady and organic growth over the next few years … when the global economy recovers,” it said.

China Daily – 18th June

China’s potential wind power resources alone are sufficient to meet its entire electricity demand, the country’s top wind power research institute has said.

Xiao Ziniu, director of the National Climate Center (NCC), said China’s onshore wind power potential has been evaluated at between 700 gW and 1,200 gW, exactly within the range of the country’s 790 gW power generating capacity for 2008.

The NCC released the numbers after 10 of its experts carried out an intensive investigation of wind power resources across all the provinces of China.

“This result assures us that the country’s entire electricity demand can be met by wind power alone,” said Xiao, whose institution functions under the China Meteorological Administration.

China Daily – 18th June

Beijing is playing with fire by issuing a `Buy China’ edict for its stimulus package.

As the world’s top exporter with a $400bn current account suplus and an economy that lives off the America and European market, it will pay the highest price if it triggers a global retreat into protectionist blocs.

The Chinese elite no doubt feel provoked by what they call the “poison” of the US `Buy American’ clause, but the Obama White House managed to tone down the worst excesses of Capitol Hill and in any case the Chinese version is more restrictive.

It bans the purchase of foreign equipment for investment projects unless a special exemption is obtained. The measures apply to European goods, even though EU states have not imposed any such “Buy Europe” clause of their own. EU producers of wind turbines have already been excluded from a $5bn wind project, whether or not they have factories in China.

Daily Telegraph 17th June

The World Bank raised its economic growth forecast for China from 6.5pc to 7.2pc on the back of higher-than-expected government spending, but warned that the China growth-story could not be sustained in the long-term without fundamental reforms to the economy.

Government-related spending is now expected to account for almost 50pc of China’s GDP in 2009, masking a disturbing lack of economic activity in the private sector following a global slump in demand for Chinese exports.

“There are limits to how much and how long China’s growth can diverge from global growth based on government-influenced spending, given that China’s real economy is relatively integrated in the world economy,” the Bank said in its Quarterly Update for China.

The rise in the Bank’s growth forecast reflects unexpectedly high-levels of government spending in the first quarter of 2009 as China’s government ploughs billions of pounds into railways, public housing and social welfare programmes.

Daily Telegraph 18th June

China has issued a ‘Buy Chinese’ order as part of its £400bn government stimulus package in a move that could fuel tensions between Beijing and Washington over claims of trade protectionism during the current financial crisis.

The edict, issued from the highest level of China’s government, comes less than six months after China described the short-lived ‘Buy American’ clauses in the US stimulus package as “protectionist poison” that would undermine the world economic recovery.

The government order, issued by nine Chinese ministries and the legislative office of the State Council, China’s cabinet, requires government-backed stimulus projects to seek explicit permission before buying foreign goods and services.

“Government investment projects should buy domestically made products unless products or services cannot be obtained in reasonable commercial conditions in China,” it said. “Projects that really need to buy imports should be approved by the relevant government departments before purchasing activity starts.”

Daily Telegraph – 17th June

Hundreds of small businesses had the rare chance to grill UK embassy trade directors from 11 Asian countries and three heads of Chinese consulates last week at meetings in London and Manchester.

Many took advantage of the one-to-one briefings on offer to find out what opportunities the officials were seeing on the ground.

Your Business grabbed the chance to talk three of the experts: Alastair Morgan, UK Trade and Investment’s China director of trade and investment; Carma Elliot, consul-general for Shanghai and Brian Davidson, consul-general for Guangzhou, in south China, to hear what advice they were passing on.

Mr Morgan said that the conventional advice was that China “is not where you cut your teeth” as a new exporter but he added that for certain businesses, for instance those in information, communications technology (ICT), there was so much work available that it could be worth the risk. “There are real opportunities to go and do business quickly,” he said.

“If you are looking at global usage of mobile phones, where they are being made and what technical developments there is going on then China is a place you cannot ignore.”

Brian Davidson, consul-general in Guangzhou advised any small business considering following up leads in China to secure a business adviser because of the complexity of doing business in the country. “If you want to make a success of it investigate the market thoroughly – that would be my top tip. Take all the advice you can and find someone who could help as a guide,” he said.

Carma Elliot, consul-general in Shanghai, said “You can’t afford not to do business with China.” “In some way China will impact your business, either profitably or unprofitably. You need to address that.”

Daily Telegraph -9th June

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British fund managers have won mandates to help invest part of China’s $80bn National Social Security Fund.

Martin Currie and Schroders are among a group of global fund managers picked by China to run some of its national pension fund’s $80bn asset base.

Employee-owned Scottish firm Martin Currie, the largest foreign money manager in China’s A share market where shares in Chinese incorporated companies are traded, will invest in Asia-Pacific stocks, excluding Japan.

Others picked to invest money include BNY Mellon Asset Management, the fund unit of the Bank of New York Mellon Corp, and asset manager Fidelity.

The appointments are the latest move by China to diversify its global portfolio and follows its decision in 2006 to select 10 overseas fund managers to invest $1bn in foreign stocks and shares.

It is unclear how much money was being invested in foreign markets, but given the huge size of the NSSF it could provide a big boost to global markets. Nearly half of NSSF’s assets are managed by domestic or overseas fund managers as the nine-year-old fund seeks to sustain its annual investment return of 8.89pc.

Daily telegraph – 9th June

The President of the World Bank has said that China may over time seek to diversify its vast foreign-exchange reserves but cautioned any change would not happen overnight.

“Over time I could see China moving to some further diversification of its reserves,” Robert Zoellick said on Monday in Montreal, according to Bloomberg. He added that “China has been very sensitive about maintaining its exchange rate versus the dollar.You cannot do that unless you are buying dollars.”

Chinese concern over the their vast holding of US Treasury bonds has sharpened as Federal Reserve undertakes a policy of printing money to help drag America from recession. That has led to fears of inflation and a depreciation of the dollar that would erode the value of Treasuries.

Daily Telegraph – 9th June

A senior Chinese official has said China wants to produce one-fifth of its energy needs from renewable sources by 2020, a significant increase on the current target.

Zhang Xiaoqiang is the vice-chairman of China’s National Development and Reform Commission (NDRC), the government office responsible for masterminding China’s move towards green energy.

“We are now formulating a plan for development of renewable energy,” he told the Guardian. “We can be sure we will exceed the 15 per cent target. We will at least reach 18 per cent. Personally I think we could reach the target of having renewables provide 20 per cent of total energy consumption,” he added.

Daily Telegraph – 10th June

BEIJING – China built the finest optical telescope to scan 10 million celestial spectra in the coming five-to-six years, one of the world’s most ambitious astronomical endeavors to record key data portraying how the universe was formed.

The Chinese government, which awarded a 235 million-yuan ($34 million) contract to a consortium of elite astronomers and engineers, officially unveiled on Thursday the Large Sky Area Multi-Object Fiber Spectroscopic Telescope (LAMOST), the biggest telescope of its kind in the world.

The research team, led by Cui Xiangqun, a world-renowned active optics expert who heads the Nanjing Institute of Astronomical Optics and Technology under the Chinese Academy of Sciences (CAS), made a breakthrough in synchronized movements of 24 hexagonal mirrors of a Schmidt reflecting corrector, which is used to track celestial bodies for scientific analyses.

China Daily – 6th June

CHICAGO — The planned sale of General Motors’ iconic Hummer brand to a privately owned Chinese truck maker is drawing mixed reviews from industry analysts.

“Usually Americans are not exactly happy about the sale of any American icons to a foreign country. But there isn’t much uproar for this sale,” Angela Y. Lee, a marketing professor at Northwestern University, told Xinhua on Friday.

Sichuan Tengzhong Heavy Industrial Machinery Co. and GM have given no financial details about the planned sale of the Hummer brand.

Lee said Americans are reacting differently to the sale than they might for another US icon for a variety of reasons.

“For one, no one feels they should say anything about GM selling off assets, given the dire situation that the former auto giant is facing,” she said.

“Second, the Hummer has always provoked mixed emotions — it is a pure status symbol with not much functional value for the civilians. It hogs the road and is a gas guzzler — not very traffic friendly nor environmentally friendly,” she said.

China Daily – 6th June

NEW YORK — China Construction Bank Corporation (CCB), the world’s second largest bank by market value, opened its New York branch on Friday.

The New York branch, CCB’s first branch in the United States, extends CCB’s global presence and marks a significant milestone in CCB’s global strategy, said CCB’s Chairman Guo Shuqing told Xinhua after the opening ceremony.

The establishment of CCB’s branch in New York, the world’s largest financial center, will significantly improve CCB’s ability to provide worldwide services to its customers, he added.

China Daily – 6th June

Rio Tinto scrapped its interim dividend yesterday, after snubbing a “strategic investment” by Chinalco and calling on shareholders for $15.2bn to cut its $38bn (£23.7bn) of debt.

The rights issue was well received by shareholders who had been pressing for the move, but a “disappointed” Chinalco, the group’s biggest shareholder with an 8pc stake, is undecided whether it will taken up it entitlement.

Rio is also entering into an important iron ore joint venture with BHP Billiton, which will see its former suitor pay Rio $5.8bn to get an equal share of the assets. The companies will combine iron ore production at their adjacent operations in the Pilbara region of Western Australia.

Daily Telegraph – 6th June