Archive for the ‘imports’ Category

China Learning To Play By The Rules?

November 17, 2008

President-elect Barack Obama told a Pittsburgh crowd this year that “trade with China will only be good for you if China itself plays by the rules.” Well, thanks to its membership in the World Trade Organization, China is learning to do precisely that.

The latest example came Thursday, when American, European and Chinese negotiators resolved a trade tiff over financial information suppliers. The dispute started in 2006 when Xinhua, China’s state-run news agency, insisted that foreigners hand over private client data and use Xinhua as their sole distribution agent. The agency aimed to set up its own competing news service, Xinhua 08 — presumably after stealing foreign client lists and business plans.

The Wall Street Journal

The move upset an earlier deal between China and such foreign firms as then-Reuters (now Thomson Reuters), Bloomberg and Dow Jones, which is owned by News Corp. and owns this newspaper. Xinhua had tried to muscle foreigners out of the market in the 1990s, and the U.S. and European Union agreed at the time that their firms would be subject to content oversight by Xinhua in exchange for permission to operate in China and sell directly to clients.

After the latest Xinhua power play, the Bush Administration filed a complaint at the WTO. The European Union and Canada joined the U.S. case. After eight months of negotiation, the governments announced Thursday that China had more or less caved. Foreigners will be allowed to distribute news directly to their clients, without interference from Xinhua, and will not be forced to cough up confidential client information to obtain a business license. China also promised to set up an independent regulator to oversee the industry, removing Xinhua’s oversight, by June 1 next year.

In other words, China agreed to play by WTO rules. This isn’t a one-off event….

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China’s Disquieting Trade Surplus

November 11, 2008

A huge trade surplus amid all the doom and gloom suddenly surrounding China’s exporters seems counterintuitive. Yet, China has just racked up its third record trade surplus — and markets are spooked.

The newly released October trade figures show that exports, at $128.3 billion, were up 19.2% year on year. That was the third consecutive monthly deceleration in export growth, but it was better than expected, especially as the export-driven south of the country has seen a wave of factory closings and layoffs. ( See “Cold Christmas For China’s Manufacturers”) It was also impressive when you consider that China’s European export markets are in recession and those in the United States and Japan contracting.

But a trade balance has two components and imports, at $93.1 billion, were up a less-than-expected 15.6%. That faster deceleration than exports is the reason the trade surplus widened and points to an accelerating cooling of domestic demand, though falling commodity prices would also have contributed to the value of imports.

The figures were announced after Asian markets closed but European stocks fell on the news as investors questioned whether the slowdown in domestic demand implied by the trade figures meant China would not be an effective engine of global growth. (See “Europe Worries About China Trade Surplus.”) At midday in New York, U.S. stock indexes were showing losses of around 3.0%, and the iShares FTSE/Xinhua China 25 Index (nyse: FXInews people ), an exchange-traded fund that reflects large companies in China that are available to international investors, slid 5.6%, or $1.49, to $25.12.

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China: Global Financial Turmoil Hits “World’s Factories”

October 15, 2008

By Tim Johnson, McClatchy Newspapers

GUANGZHOU, China — Global financial turmoil has sent gale-force winds across some factory floors in China , and barely a breeze across others. The differing fates of factory owners such as David Xu and James Jiang illustrate why China Inc. displays some resilience in the face of the global crisis.

Xu’s factory makes television sets of such low quality that they can’t sell in the United States and Europe . So he markets them in the Middle East , and sales are brisk.

“We don’t feel much,” Xu said of the financial turmoil. “I’m not worried.”

It’s a different story for Jiang. His factory makes low-cost musical keyboards for hobbyists and students. They sell in Target’s Australian stores and Fred’s Inc. , a discount store chain in America’s Southeast and Midwest. Orders now only trickle in.

“Nobody has money,” Jiang grumbled. “I think the orders may drop in half.”

Over the past few years, China has opened up vast new markets. Today, only half of its exports go to the United States , the European Union and Japan . The rest go to expanding markets in places such as South Africa , Russia , India and oil-rich Middle Eastern states. So in times of crisis, some factories may suffer severely while others escape unscathed.

A stroll Wednesday through the opening day of the Canton Trade Fair, the largest such fair in China and one of the biggest in the world, underscores the acumen of China’s strategy of diversifying markets. Arab merchants in dishdashas walked beside Russian vendors, German middlemen and Sudanese importers. Chatter occurred in a dozen languages. Translators were a hot commodity.

Some vendors reflected on the….

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China: World’s Factory Worries That Exports Will Fall With Demand

October 14, 2008

By JOE McDONALD, AP Business Writer 

BEIJING – As they prepare for China‘s biggest export fair this week, managers at Shunde Xiongfeng Electric Industrial Co. are anxious.

A worker checks timber outside a warehouse in Dalingshan, China's ...
A worker checks timber outside a warehouse in Dalingshan, China’s self-styled No.1 furniture export town, October 13, 2008. The cost of labour and raw materials has risen sharply in China in the past two years, while the currency has strengthened against the dollar and the government has lowered or eliminated many export tax rebates — all rendering exports more expensive. But one thing is certain: the outlook for exporters is worsening because of the global economic crisis, and many are now pinning their hopes on China’s burgeoning domestic markets. Picture taken October 13, 2008.To match feature CHINA-ECONOMY/EXPORTERS REUTERS/Bobby Yip (CHINA)

Sales of electric fans are down this year, and the financial crisis will likely further cut demand from overseas. The 5,000-employee company in the southern city of Shunde, near Hong Kong, sold 6 million electric fans abroad last year.

“We are worried that if our clients are short of capital, they might shut down,” said Shunde’s export manager, who would only give his surname, Zeng. “That’s certainly bad for us.”

China has been known as the world’s factory for everything from toys to T-shirts, and exports have powered its growth in recent years. But exports are taking a hit from the global financial crisis because of lower demand from overseas and tightening credit from state-owned banks.

A slowdown in Chinese exports would ripple through the world economy as China imports fewer raw materials, half-finished goods for assembly and supplies, such as Australian iron ore or factory equipment from the United States, Europe and Japan. Raw materials used for exports made up half of China’s nearly US$1 trillion in imports last year.

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China posts another record trade surplus despite global slowdown

October 13, 2008

by Robert J. Saiget 

BEIJING (AFP) – China said Monday its trade surplus hit a monthly all-time high of 29.3 billion dollars in September despite slowing global demand brought on by the financial crisis.

Containers are seen at a terminal overlooking Victoria Harbour ... 
Containers are seen at a terminal overlooking Victoria Harbour in Hong Kong. China has said its trade surplus hit a monthly all-time high of 29.3 billion dollars in September, although it was down slightly for the first three quarters of the year.(AFP/File/Mike Clarke)

Exports in September reached 136.4 billion dollars, up 21.5 percent over the same month last year, while imports during the period were 107.1 billion dollars, up by 21.3 percent, the General Administration of Customs said.

The previous monthly surplus record was 28.7 billion dollars in August.

China’s trade surplus for the first nine months of the year reached 180.9 billion dollars, down 2.6 percent year-on-year, the administration said on its website.

Despite the unexpectedly high trade surplus for September, China’s exporters would not be able to avoid the global economic downtown that has been exacerbated by the crisis embroiling financial markets, analysts said.

“September’s new record high surplus was mainly a reason of slowing import growth, due to the pullback of international raw materials prices,” Ma Qing, Beijing-based economist with CEB Monitor Group, told AFP.

“We are holding a cautious attitude to the outlook of China’s import and exports. We expect both to fall further in the future because Sino-US trade will definitely go down with the slowing US economy, while Europe is expected to experience economic meltdown.”

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Fighting inflation: Vietnam and China take different measures

March 21, 2008

The State Bank of Vietnam has been taking a lot of measures to tighten monetary policies in order to curb inflation. It has issued VND20,300bil worth of compulsory bonds, raised state banks’ basic interest rates, raised the compulsory reserve ratio, and has been purchasing foreign currencies at a moderate level.  
The said moves have had big impacts on the operation of commercial banks and led to a lot of side effects. The capital shortage has become more and more serious with the interest rate once hitting 25-27% per annum. Under the government’s instructions, the State Bank of Vietnam and Ministry of Finance will join forces to transfer the government’s money now kept at five state owned banks to State Bank branches for management. 
The transfer of VND52tril is believed will have big impacts on the monetary market. Experts say that the move may cause the lack of VND25tril for the banks, worsening the banks’ liquidity. Also aiming to curb inflation, the State Bank of Vietnam has asked commercial banks to limit loans for real estate and securities investments, and tighten consumer credit. The State Bank of Vietnam has urged commercial banks, which provided loans with mortgaged stocks, to ask for more mortgaged assets from clients as stock prices are decreasing.
If clients cannot give more mortgaged assets, commercial banks have to force them to bargain shares away to terminate credit contracts. As a result, a big volume of money has been flowing from the stock market to commercial banks’ coffers.
 Commercial banks have nearly stopped loaning to securities investors; this is considered one of the main reasons behind the stock market’s continued falls in the last time.  Lacking capital for production and business, which may lead to production stagnation and lower competitiveness, higher unemployment, continued falls of the stock market, are all consequences of the tightened monetary policies. 
Meanwhile, the Chinese government has put forward six groups of measures to fight high inflation, which include: (1) encouraging production expansion, especially the production of key products like food and foodstuffs (2) controlling tightly industries which use food and foodstuffs as materials (3) strengthening its storage system, controlling imports and exports, stabilising domestic prices. Moreover, it has also thought of measures to give allowances to poor people and control its distribution network to prevent massive price increases. 

(Source: TBKTVN)From: VietnamNetBridge

China’s trade surplus plunges 63 percent

March 10, 2008
By JOE McDONALD, AP Business Writer 

BEIJING – China‘s trade surplus plunged in February as sales of goods to the United States and Europe weakened and snowstorms disrupted the economy, the government reported Monday, but analysts said it appeared to be a onetime drop and exports should rebound.

The 63 percent drop in the trade gap from a year ago was due partly to a global slowdown but also to storms that hampered shipping and forced some factories to close, economists said. They said exports also looked unusually small because they were compared with a strong month last February.

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Vietnam imports inflation

February 22, 2008

Viet Nam Net Bridge
February 22, 2008
VietNamNet Bridge – IMF believes that with current policies, Vietnam is importing inflation and needs to take a new approach that makes every effort to reduce the rate to a single-digit level. 
Price storm2007’s inflation rate of 12.63% was a huge concern to Vietnamese people and authorities. However, what worries economists most is that Vietnam’s inflation rate was much higher than other regional countries, though dealing with the same influences from price increases on the world market. ADB’s member countries had an average inflation rate of 3.4% in 2005 and 3.3% in 2006.

According to IMF expert Bennedic Bingham, Vietnam’s situation is not actually very serious, but it is necessary to discuss measures to curb inflation now, before Vietnam suffers more serious consequences. As for countries like Vietnam, it is not easy to control inflation because of outside factors that are completely out of its control, according to Chairman of ADB Haruhiko Kuroda 
Suffering poverty 
This isn’t Vietnam’s first battle with inflation, in 2004 it hit 9.4%. However, current factors are very different. First, the dollar keeps devaluating, which raises questions regarding Vietnam’s exchange rate policy which currently aims to stabilize the exchange rate. 
Second, the foreign investment capital flow to Vietnam has become bigger and bigger. The State Bank of Vietnam has to buy foreign currencies and put VND into circulation, which has resulted in even higher inflation. Vietnam’s money supply growth rate is significantly bigger than regional countries. 
In a country with a high population and a high population growth rate, the number of poor people may increase correlatively with high inflation. Only a small number of Vietnamese people can make financial investments to protect themselves from price increases.
Meanwhile, poor people cannot protect themselves. They rely on their daily income.
 Prior to that, ADB also asserted that high inflation will lower the purchasing power of poor people and have bad impacts on economic growth 

Importing inflation 
Price increases in 2007 have been affecting many countries, but Vietnam’s developing economy is hit quite hard. The inflation rates of other countries in the region are much lower than Vietnam’s, including China, which has higher economic growth than Vietnam. IMF’s experts believe the main factor explaining why China’s, Malaysia’s and Thailand’s inflation rates are lower than Vietnam’s lies in its exchange rate policy. 
One of Vietnam’s primary goals is to stabilize the VND/US$ exchange rate to encourage export, and recently the dollar price has been fluctuating around the globe; meaning Vietnam imports the factors that cause inflation. 
Meanwhile, other regional countries let exchange rates fluctuate in accordance with world changes. The dollar has devaluated 9% against the euro, and 7% against the yen, which means that the prices of commodities in dollars are increasing very rapidly.
Other regional countries have wisely let exchange rates fluctuate in accordance with the dollar value, because this can help prevent the commodities prices from skyrocketing due to the devaluation of the dollar.
New policies, new ideas 
International experts believe Vietnam needs a new exchange rate mentality and monetary policies.

Vietnam should not try to keep the VND/US$ exchange rate stabile, while ignoring the fluctuations of the dollar prices on the world market, experts say. If Vietnam takes this approach, it will see inflationary pressures eased and will not have to spend so much VND buying foreign currencies.

Vietnam’s exports to the US increase

January 9, 2008

VietNam Net Bridge
January 9, 2008

According to the US Department of Commerce and Vietnam’s Embassy in the US, bilateral trade in 2007 saw satisfactory growth.

Vietnam’s export turnover to the US increased by 20% in 2007.  It is estimated that bilateral trade turnover reached $12.2bil in 2007, an increase of 26.6% ($2.6bil) over 2006. Vietnam imported $1.9bil worth of products from the US. 

By the end of September 2007, Vietnam ranked 31st of total exporters to the US, jumping three spots from 34th in 2006. Garment products retained the highest export turnover, at $3.31bil in the first nine months of the year, followed by wooden furniture ($882mil) and footwear ($745mil). 

Many domestic wood processing enterprises have built new workshops and installed more production lines to make products to be exported to the US, after they heard that US importers tend to place orders with Vietnam instead of China. 

According to Nguyen Hoang Vu, Deputy General Director of Savimex, as the US imposes the anti-dumping tax on Chinese products; US importers have shifted their interest to Vietnam Mr Vu said his company has signed contracts to export $10mil worth of products to the US since the beginning of the year. 

AA Construction and Architecture Company won a $6mil contract to provide wooden products to a hotel in the US. According to Nguyen Quoc Khanh, Deputy Chairman of the HCM City Wooden Processing and Fine Arts Association, US clients always highly value the quality of Vietnam’s wood products. They think they are superior to Chinese products in terms of quality.

Vietnam has labor and production cost advantages over Malaysia as well. That explains why domestic export turnover of wooden furniture increased sharply over the last three years, after Vietnamese enterprises first ‘conquered’ the US market.  

The US remains the biggest export market for garments and textiles, consuming nearly 60% of Vietnam’s $7.8bil export turnover in 2007. Pham Thi Minh Huong, Business Director of Phong Phu Corporation, said: “The US remains one of the most attractive markets, and we cannot miss our opportunity there”.

Meanwhile, according to Mrs Huong, in the eyes of US importers, Vietnam proves to be a good partner. The political certainty of Vietnam is always highly appreciated by US importers, which makes Vietnam superior to India or Pakistan. Vietnam’s imports from the US also saw a considerable increase if compared to the previous year. 14 of 15 items that Vietnam regularly imports from the US saw import turnover increase in 2007 compared to 2006.

Machinery, mechanical equipment, vehicles and plastics saw the biggest import turnover. 

Vietnam’s Catfish Farmers: Off The Hook

December 27, 2007
Thursday December 27, 2007

HANOI, Dec 27 Asia Pulse – The Association of Catfish Farmers of America (CFA) and US catfish processors have removed the names of 27 Vietnamese tra and basa exporters from the list of companies subject to the fourth administrative review, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

On August 31, 2007, the plaintiff in the catfish dumping lawsuit informed the US Department of Commerce (DOC) of the names of Vietnamese companies subject to the fourth annual administrative review.

However, the law firm Akin Gump Straus Hauer & Feld LLp, representing the plaintiff, sent a letter on December 20 to the DOC Secretary, announcing that the plaintiff has agreed to remove the names of 27 Vietnamese companies from the list. The DOC will conduct an administrative review of tra and basa exports to the US by Vietnamese companies between August 1, 2006 and July 31, 2007.

The 27 Vietnamese companies which have been removed from the list of those subject to review are: Afiex An Giang; Agifish; Anvifish Co., Ltd; Basa Co., Ltd; Cataco; Caseamex; Cafatex; Caseafood; CL-Fish Co., Ltd; Seaprodex Da Nang; Coseafex; East Sea Seafoods Joint Venture Co., Ltd; Gepimex 404; limited companies: Hai Nam, Hai Vuong, Hoan An, Hung Vuong, Kim Anh; Mekongfish; Nam Viet (NAVICO); Ngoc Thai; South Vina; Vietnam Fish-One Co., Ltd; Vinh Hoan (ong Thap); Vinh Hoan Corporation; Imex Cuu Long and Vinh Quang Fisheries Corporation.

All other companies named on the August 31, 2007 list will be subject to the fourth review.

The US catfish farmers brought suit against Vietnamese filet tra and basa producers five years ago, the result of which was the DOC’s decision to impose anti-dumping tax rates on Vietnamese companies’ exports. Every year, the DOC conducts an administrative review of named exporters, which decides appropriate tax rates for the companies.

Despite the anti-dumping tax rates imposed on exports to the US, Vietnam is still able to export a large volume of catfish globally, with turnover nearly reaching the US$1 billion level.

The demand for catfish keeps increasing on the world market. Exports to Russia, the second biggest market for Vietnam’s tra and basa fish, resumed after food hygiene problems were settled. Vietnam’s export products now meet the strict requirements set by major importers (the EU, US, Russia and Australia).

In the first three quarters of 2007, the EU remained the biggest importer of tra and basa from Vietnam, consuming 46.2 per cent in terms of quantity and 49 per cent in terms of export turnover. Russia is the second biggest export market for Vietnam’s catfish, followed by ASEAN countries, the US, Ukraine and Mexico.


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Tricky Vietnamese Truth About Catfish