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Quality watchdog: Don't let your kids play with these toys - (2008/07/04)

Two Guangdong toy companies on Thursday recalled products that failed to meet safety standards, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) said. The first, Shantou-based Dishijia Toy Co, recalled 1,800 containes of its "Animal Club" toys made between Sept 27 of last year and March 10 of this year. "The recall is because of errors in the production process, which used an outdated paint that did not meet national safety standards and might have potential safety problems," the company said in a statement. "The toys have not been sold outside China," Xia Wenjun, an AQSIQ press officer, said. Dishijia said buyers of the toys can return them for an exchange or refund. The second company, Xinhongji Toy Co, also based in Shantou, yesterday recalled 168 of its "King's Baby" toys, produced between December of last year and March of this year, which contained small parts that could pose a choking hazard. The two cases are the country's second and third voluntary toy recalls. The first was in April, when a company in Zhejiang province recalled 18,000 toys that contained small plastic parts. The AQSIQ on Thursday urged parents to check the safety of toys before buying them for their children. It forbids the sale of unsafe products and requires firms that do so to undertake voluntary recalls.

Trade surplus no more a key issue - (2008/06/17)

When the Sino-US Strategic Economic Dialogue was launched in 2006, the biannual talks co-chaired by the then Vice-Premier Wu Yi and US Treasury Secretary Henry Paulson was expected to address long-term issues. Narrowing China's trade surplus with the US was among the core issues then. This year, however, as Paulson meets the new Vice-Premier Wang Qishan today in Annapolis, Maryland, for the dialogue, pressures from trade imbalance have considerably eased, a trend experts predict to continue in the coming months.China's exports to the US stood at $74.31 billion in the first four months of this year, according to the latest statistics from the General Administration of Customs. The figure reflects an increase of only 6.9 percent year-on-year, down 12.4 percentage points from the previous year. Over the same period, China's imports from the US increased 25.6 percent to hit $28.04 billion, 7.9 percentage points faster than last year. Figures from the US side show China's surplus against the US dropped 12.4 percent to $16.1 billion in March - the lowest in two years. Experts attribute the decline in China's trade surplus to the US subprime mortgage crisis and the consequent economic slowdown. "The US domestic demand is decreasing as a result of the subprime crisis," said Li Jiang with the Chinese Academy of International Trade and Economic Cooperation. China has also taken a number of measures to curb exports of resource-intensive and polluting products, added Hu Yanni, an analyst at CITIC China Securities Co Ltd. And, imports are rising steadily as well. As the current economic dialogue gets under way, a Chinese business delegation is reportedly heading for the US to purchase US goods valued at $20 billion. Experts agree US demand will not see any big improvement as long as it does not find a solution to the subprime problem. Li predicted China's exports to the US will not increase as rapidly as in the past two years given the impact of the economic slowdown. "The growth in exports to the US is not expected to exceed 10 percent in the latter half of this year," he said. "The trade gap is unlikely to see a big increase from last year." US Secretary of Commerce Carlos Gutierrez told China Daily last month that the most important trade issue China and the US need to address is the pressure for economic protectionism. "I believe we are both facing similar issues in our own domestic markets. Some issues may be different, but I think the one we have in common is that we both face pressure for economic protectionism and isolationism," Gutierrez had said.

Minor policy change urged amid weaker economy fears - (2008/06/05)

A senior government economist has called for small changes to China's macro-economic policy to avert the risk of sharp economic slow-down. Adjustment needs to be made on earlier estimate on economic slowdown, especially after the devastating earthquake on May 12, said Chen Dongqi, vice president of the Academy of Macroeconomic Research under the National Development and Reform Commission. The economy would become a more important government concern if it slowed drastically, said Chen. The government had focused on using tightening policies to fight inflation and to prevent the economy from overheating. Some proactive fiscal policies, including cuts in personal and corporate income taxes, needed to be introduced, the 21st Century Business Herald cited Chen as saying. The purchasing managers' index fell to 53.3 in May, down 5.9 from in April. A reading over 50 means an expansion of activity, while one below 50 indicates contraction. China has increased interest rates six times and the reserve requirement ratio 14 times since last year, amid efforts to tame inflation and prevent economic overheating. The economy could expand by just 7 percent this year amid slow exports growth and declining property and equities prices, according to the ADB. The People's Bank of China (PBOC), however, on Tuesday rejected as "exaggeration" warnings that the nation's exports were set to drop sharply, leading to an economic hard landing. The quake that hit southwestern province of Sichuan had added uncertainties to the economy, but its regional and short-term impact would not change the economic fundamentals, the central bank said.

April trade surplus down 1.1% to $16.7b - (2008/05/13)

China's trade surplus reached $16.68 billion in April, the General Administration of Customs said on Monday. The figure was down 1.14 percent year-on-year but up 24.5 percent from $13.4 billion in March, and it was almost double the $8.6 billion posted in February. Exports in April rose 21.8 percent year-on-year to $118.71 billion, while imports rose 26.3 percent to $102.03 billion. The year-on-year decline reflected weakening external demand caused by the continuing global credit crisis, as well as the government's prudent monetary policy to reduce liquidity, said Zhao Jinping, an economist of the Development Research Center (DRC) of the State Council. According to Zhao, the continued strengthening of the yuan was a more significant factor in helping narrow the trade gap. The yuan's central parity rate against the US dollar surged 185 basis points to 6.982 on Monday. The currency has risen 4.26 percent against the US dollar so far this year. The credit crisis in the United States could affect other countries and demand could fall as the economy fell into recession, affecting Chinese exports, said Zhao. Zhang Liqun, an economist from the DRC, said a sharp slowdown in exports could cause serious problems for the overall economy. Total trade in the first four months hit $791.1 billion, up 24.4 percent year-on-year. The four-month trade surplus was $58 billion, down $5.32 billion year-on-year. Exports in the four-month period were $424.6 billion, up 21.5 percent, or 6 percentage points less than a year earlier. Imports were $366.6 billion, up 27.9 percent, or 8.8 percentage points more than a year earlier.

Higher yuan hits China-based exporters - (2008/05/02)

WASHINGTON -- The rapid appreciation of the Chinese currency against the US dollar is taking a big toll on Asian companies using China as base for exports to the United States, according to a top US business official. The yuan has risen 18 percent against the dollar since China abandoned a peg in July 2005, and the currency breached a key psychological level of 7.0 yuan to one dollar on April 10. The higher yuan makes US exports more competitive with Chinese goods in their home market, while business costs for largely Asian companies producing and exporting from China will rise as they pay more local currency for labor and raw materials and sell their products to the US market in dollars. Meanwhile US firms manufacturing inside China, most of which aim their goods for the huge Chinese domestic market, are not as greatly affected, said US-China Business Council President John Frisbie. "I think it is probably a bigger issue for all those companies from other economies in Asia that have invested in the Chinese mainland for the US market," he said. "And that's companies from Japan, Korea, Taiwan, Hong Kong, Malaysia and Singapore." Frisbie said many Asian companies selling to the US market had shifted their production to China over the last 10 years or so to be more cost-competitive. "I'm sure for them, the exchange rate change and other cost increases happening in China now are having an impact. That is a different set of companies than US companies, most of which invested in China for the China market," he said. Aside from the falling dollar, the Asian companies are also reeling from the effects of a weakening American demand on the back of an economic slowdown, reports said. The dollar has fallen about four percent to the yuan so far this year, after dropping seven percent last year. The yuan's rise, partly permitted by Beijing to contain soaring inflation, is a bit of an irony. Beijing has been accused for years by Washington of controlling the yuan's direction and keeping it low against the dollar to make Chinese goods more competitive in the global market. US lawmakers particularly had threatened to impose sanctions on China as the US trade deficit with the world's most populous nation sank deeper into the red. Frisbie said that his council's view on the yuan exchange rate had been consistent in that "the best determinant of its true value should be the market." The prices of China-made goods in the United States have gone up, but not as much as the yuan appreciation, while Chinese exports are growing much less rapidly, noted Nicholas Lardy, a China expert at the Washington-based Peterson Institute for International Economics, which recently published a book "Debating China's exchange rate policy." Lardy said while the salience of the yuan issue in the US Congress had diminished amid the Chinese currency's appreciation, the "underlying concern" over China's massive current account surplus remained. "We should not be looking at the bilateral renminbi (yuan)-dollar rate but at the renminbi vis-a-vis a trade-weighted basket of currencies of China's trading partners," he said. Since mid-2005, the yuan has appreciated by 18 percent against the dollar but "it only rose by 10 percent on a trade weighted basis and this is not going to make a dent on that massive surplus," Lardy said. In 2007 China recorded an enormous current account surplus of 378 billion dollars, or 12 percent of its gross domestic product. However, China's inflation has kept rising, partly because of the mounting current account surplus. China's central bank needs to flood the market with more yuan bills, in order to take reserve of all foreign currencies. Expanded liquidity of the yuan has extended liquity, and made inflation worse. China's inflation hit 8 percent in the first 3 months.

Electricity tariffs 'will not rise' - (2008/04/30)

The government will not increase the price of refined oil or electricity until inflation is brought under control, a senior official from the National Development and Reform Commission (NDRC) said Tuesday. Xu Zhimin, director of the NDRC's economic operations department said the commission is in discussions with several cabinet departments on a range of measures to deal with inflation, rising energy prices and the plight of power companies. It is possible the government will subsidize coal-fired electricity firms, which have seen their profits slide as a result of rising coal prices, Xu said. "Subsidizing electricity generating companies is one possible option, but we are still considering and discussing suggestions from all sides," he told China Daily. The NDRC has told provincial governments to urge major coal producers in their regions to refrain from increasing prices and to maximize their output, Xu said. "I am confident China, which is rich in coal reserves, has enough production capacity to meet the growing demand," he said. The price of coal for power generation has risen by about 10 percent this year, which has added about 30 billion yuan ($4.3 billion) to power companies' costs, he said. Despite the soaring price of coal, the government has ruled out the possibility of raising power tariffs, as it would add to the pressure on inflation, which has already reached an "unacceptably high level", Xu said. "Our top policy targets for this challenging year are curbing inflation and over-investment," he said. "All the decisions we make, should help us to meet these goals." Economic growth in the first quarter of this year was 10.6 percent, slower than the 11.9 percent reported for the same period of last year. However, the consumer price index - the key indicator of inflation - was up 8.3 percent year-on-year last month, and up 8 percent year-on-year for the quarter. The government last month told the National People's Congress that it will spare no effort to keep the annual inflation rate under 4.8 percent. Also at yesterday's press conference, NDRC spokesman Li Pumin ruled out the possibility of increasing the price of refined oil, saying that "lowering the inflation rate is the top priority" despite global oil price rises. China's oil-refining companies have relied on subsidies from the government to offset rising costs as central authorities attempt to bring the country's crude oil prices in line with the global market. "We are determined to deregulate the prices of resources, but timing has not been on our side so far," Li said.

HK's total goods exports up 5.5% in Feb - (2008/04/18)

HK's total goods exports up 5.5% in Feb (Xinhua) Updated: 2008-04-18 14:27 Hong Kong Special Administrative Region's volume of total goods exports grew 5.5 percent while the volume of imports rose 9.8 percent in February compare with the same month of last year, the Census and Statistics Department of Hong Kong said Thursday. Hong Kong's re-exports of goods also grew 5.9 percent in the same month of last year, while domestic exports shrank 4.5 percent. The price of total goods exports rose 2.8 percent and the price of goods imports grew 3.5 percent. The price of re-exports rose 2.8 percent while that of domestic exports grew 3.4 percent. In February, the total export volume to the Chinese mainland and Germany rose 12.2 percent and 7.4 percent respectively, while that to Japan, the United States and the United Kingdom fell 0.7 percent, 16.4 percent and 20.3 percent. Comparing the year's first two months with the same period last year, the volume of Hong Kong's re-exports of goods rose 11.4 percent, while domestic exports fell 2.6 percent. The volume of total exports of goods grew 10.9 percent while the volume of imports rose 13.7 percent.

Chinese consumers opting for local brands - (2008/03/28)

Chinese consumers prefer local brands to foreign ones, with domestic products the top choice in 39 of 57 categories, or 68 percent, in a recent survey. The "2008 Ideal Brands for Chinese Consumers" survey was conducted by the Business Brand Institute, International Advertising magazine and the Communication University of China. Two urban groups - household and potential consumers - were questioned for the survey, with 7,800 respondents nationwide. Household consumers have the most purchasing power and brand experience and are more sensitive to quality, reputation, service and price. Responses from this group accurately reflected brands' current standing in the market, the survey said. Senior university students formed the potential consumers group, which is in a transition period and has high brand awareness. This group is expected to become key purchasers when they graduate and enter the workforce. Respondents from this group provided a forecast for brand trends, the survey said. Local brands dominated the household appliance, clothing, edible oil, non-soda beverage, pharmaceuticals, banking and insurance sectors. But respondents preferred foreign brands for digital cameras, mobile phones, sportswear, snack foods, soda drinks, cars and personal care products. Haier was the top choice across three sectors - refrigerators, washing machines and water heaters. Meanwhile, respondents said Fotile was their preferred brand for kitchen ventilators and gas stoves. Foreign brand Sony was the No 1 choice for digital cameras and TVs, while Procter & Gamble's Olay brand won out in shower gels and body lotions. The survey also found that Chinese brands like China Mobile, China Telecom and Bosideng are stand-out performers in their industries - wireless communications, fixed telecommunications and down coats. These three brands were well ahead of their peers, with a gap of 40 percent to the next brand. "Unlike brand rating programs conducted by professional research institutes, '2008 Ideal Brands for Chinese Consumers' is the first consumer-concentrated large-scale survey on brands in China," Liu Libin, vice-chairman of BBI, said. He said Chinese consumers' brand awareness is increasing as the nation develops and living standards improve.

China's trade surplus likely to last - (2008/03/06)

China's top macro-economic planner Ma Kai said on Thursday that the country's trade surplus is likely to "last for another period of time." He added that the key question is not the existence of the surplus itself, but whether it is the result of fair play, beneficial to both sides involved in the trade, and whether it can be controlled within a certain scope. Ma, minister in charge of the National Development and Reform Commission (NDRC), made the remark at a press conference held on the sidelines of the ongoing annual full session of the National People's Congress, the national legislature. "One country's surplus is another country's deficit," Ma said. "It will be a long-term global issue in the process of globalization." The United States has enjoyed a trade surplus for more than 80 years in history, Germany has maintained its trade surplus for 55 years since 1952, and Japan for 26 years till now, he said. China's trade surplus soared 47.7 percent in 2007 to US$262.2 billion over the previous year. And in January, the country's trade surplus rose 22.6 percent year-on-year to US$19.49 billion, according to the General Administration of Customs. However, the trade surplus declined in monthly growth rate for the third consecutive occasion. The government has listed the slowdown in trade surplus growth and steady expansion of external investment as a major task for 2008, according to Ma's economic planning report submitted to the NPC session on Wednesday.

WTO steps to resolve tax dispute respected - (2008/02/15)

China will act according to the rules, officials said Thursday over a World Trade Organization (WTO) dispute on car parts which some experts have said is unfair to the country. "China respects the procedure of the WTO to solve the dispute," Foreign Ministry spokesman Liu Jianchao said at a regular news briefing. WTO panel ruled on Wednesday that the country improperly taxes imported car parts at the same rate as finished vehicles. The case, initiated by the United States, European Union and Canada, is the first time China has been the subject of a complaint that went all the way to the WTO's Dispute Settlement Body, since joining the organization in 2001. The Permanent Mission of China to the WTO said in a statement Thursday that China is investigating the initial WTO ruling. It said China respects the WTO procedure but otherwise will not comment before the panel makes its final decision. China taxes imported auto parts at the same rate as completed automobiles if more than 60 percent of parts the finished vehicles are made from are imported. The rules aim to prevent tax evasion by companies who import whole cars as spare parts to avoid higher tariff rates, officials from the Ministry of Commerce had said. The US and EU filed the case to the WTO in March 2006, complaining China's taxes on imports of foreign auto parts discouraged Chinese carmakers from using them. But analysts said the status quo will hardly change even if a sanction is imposed. "I don't think it will be a big help for them financially even if China slashes its tariffs on parts as requested," Liu Yuandong, an analyst with CSM Worldwide, an international industry consultant, was quoted by Reuters as saying. Zhou Shijian, a trade expert, said China's regulation on car parts aims to prevent tariff evasion and is not to prejudice against foreign carmakers. He said the WTO decision is unfair to China. "It could push China to re-examine the rationality of WTO rules," Mei Xinyu, a Ministry of Commerce researcher, said. China is the world's second-largest vehicle market after the US. Sales rose 22 percent last year to 8.8 million units, according to the China Association of Automobile Manufacturers.

WB cuts China growth forecast to below 10% - (2008/02/05)

The Chinese economy will grow at 9.6 percent this year, instead of 10.8 percent as forecast earlier, because of a global economic downturn, the World Bank (WB) said yesterday. The bank's latest quarterly economic update on China, however, says the impact of the snowstorms battering a large part of the country now would be limited and temporary. This is the first time in six years that the economy has been forecast to grow by less than 10 percent. And it comes on the back of a year that saw the economy grow by a 13-year-high of 11.4 percent. "The slowdown in the global economy should affect China's exports and investment in the tradable sector," WB director for China David Dollar said at a press conference, held to release the bank's report. The momentum of domestic demand, however, should remain robust and a modest global slowdown could contribute to rebalancing of the economy." For the first time in seven years, China's consumption outweighed net exports and investments in 2007 to contribute 4.4 percentage points of the overall 11.4 percent GDP growth. Investments contributed 4.3 percentage points while net exports, 2.7 percentage points, the National Bureau of Statistics (NBS) said on Thursday. The economy grew at a blistering 11.9 percent in the first half of 2007. But a series of policies implemented to anchor the economy slowed down exports in the second half, when consumption picked up. The slowing down of the country's economy should not be seen as a bad omen because the government is in a strong macroeconomic position to stimulate demand by easing the fiscal policy and credit controls if and when the US and global downturn worsens, the report said. Inflation, however, remains a serious challenge for the government, WB senior economist and the main author of the quarterly report Louis Kuijs said. The consumer price index (CPI), bellwether of inflation, is expected to have risen further in January after being above 6 percent during the last five months of 2007. But it is likely to ease after the short-term impact of the bad weather wears off, the bank said. "Most of the impacts (of the weather) would turn out to be temporary," Kuijs said, because "the government has been fast in responding to the crisis." The high rise in prices would not lead to generalized inflation, he said. "We don't see a lot of spillover of the food price inflation into more generalized inflation," although risks remain. Some analysts say China is revaluing the yuan at a faster pace to reduce the pressure of inflation because it will make imports cheaper. But the WB said that can't be the ultimate tool. It is irrational to rely too much on the exchange rate to manage inflation, Dollar said. A gradual revaluation would be more advisable because it gives the economy more room to adapt to changes.

Premier Wen calls for closer Sino-Japan economic ties - (2007/12/02)

BEIJING -- Chinese Premier Wen Jiabao called here Sunday for China and Japan to seize the opportunity to realize the sustainable, stable and healthy development of the bilateral economic and trade relations. China and Japan are important trade partners and economic and trade cooperation is the basis on which to construct the bilateral strategic and reciprocal relations, Wen said in his meeting with the visiting Japanese Foreign Minister Masahiko Komura. According to a press release from the Chinese Foreign Ministry, Wen also highlighted the current growth momentum of the Sino-Japanese relations, saying the two nations are facing good opportunities to further developing ties. "The two sides should seize the opportunity to boost the exchange and cooperation and make joint efforts to promote the peaceful coexistence, cooperation with mutual benefit, common development and long-lasting friendship," Wen said. When commenting on the ongoing first meeting of the China-Japan high-level economic dialogue mechanism in Beijing, Wen said the mechanism serves as an important platform to coordinate the different Chinese and Japanese governmental departments and exchange views on issues to each other's key concerns in an aim to improve the level of the bilateral economic and trade cooperation. Masahiko Komura, who was here to attend the mechanism meeting, said Japan and China could have a candid and comprehensive dialogue on the economic and trade issues, especially on economic policy, energy efficiency, environmental protection, investment and international and regional trade-related issues. Japan will continue its efforts to further expand the exchange and cooperation in various fields with China in a bid to step up the bilateral strategic and reciprocal relations, Masahiko Komura said. Masahiko Komura also met with Chinese State Councilor Tang Jiaxuan on the bilateral ties on Sunday afternoon. The China-Japan high-level economic dialogue mechanism was jointly launched by Chinese Premier Wen Jiabao and then Prime Minister Shinzo Abe of Japan during Wen's trip to Japan in April. Japan is China's third largest trade partner and the second largest source of foreign direct investment. China is Japan's largest trade partner and one of Japan's fastest growing export markets.

Supervision of exporters to be tightened - (2007/10/30)

China will strengthen supervision of Chinese exporters and ban exporting at the expense of environmental pollution, said Zhang Lijun, vice director of the State Environmental Protection Administration (SEPA), on Tuesday. Zhang said "environmental protection departments will set up a database to collect information of those exporters who violate environmental protection rules and also keep details of efforts made to clean up their act by these exporting companies." No date was given for the start of these new powers. Zhang said SEPA will enhance information exchanges with the Ministry of Commerce to strengthen the supervision of Chinese exporters. The SEPA and MOC have issued a notice earlier that exporters would be banned from trading abroad for one to three years if they were found seriously violating environmental protection rules. Before violating exporters have made corrections, the MOC would authorize local departments to suspend approving export-related applications, such as export quotas and licenses, contracts for processing, and applications for participating in national or regional trade fairs, of violating companies, based on reports from local environmental watchdogs. Analysts said they were the most severe measures the MOC had adopted to crack down on environmental violations in the last four years. There has been a shift in the style of punishments doled out by SEPA to polluters in recent years. Long-term restrictions designed to affect the way businesses operate are now favored over one-off fines.

Product quality being ensured - (2007/10/18)

The country is enforcing strict export standards to regain full consumer confidence in Chinese products after reports of substandard goods, a top product safety official said Wednesday. Despite a wave of recalls, orders for Chinese toys are on the rise in the run-up to Christmas, said Li Changjiang, minister of the General Administration of Quality Supervision, Inspection and Quarantine. He made the remarks during a group interview on the sidelines of the ongoing 17th National Congress of the Communist Party of China. Li said factory owners in the manufacturing heartland of Guangdong Province told him that business was booming and "the workers have to work overtime to meet the order deadlines". "The number of orders for toys shows that companies are still happy to manufacture in China," Li said. "Most of the toys exports are of good quality and substandard goods constitute only a tiny part". Li said the authorities will step up supervision and intensify crackdowns on illegally-made products. "China will provide safe and reliable toys to children around the world," he said. Li urged importers to buy more Chinese toys, adding: "I wish children around the world a Merry Christmas." According to Li, officials have taken substantive measures to ensure that goods are made by certified manufacturers with quality materials. The State Council, or the Cabinet, launched a four-month nationwide product and food safety campaign in August. There are checks at various stages of production, Li said, and authorities will also make it easier for exporters with good quality records to quickly pass customs inspections. He noted that quality problems are a global issue and criticized some media and foreign governments for "playing up the issue". "I am sorry to see that some countries have used this (product quality issue) for trade protectionism and trade conflicts," Li said. "It not only affects China but also benefits no other country," Li said, commenting on price rises of toys in some countries as a result of short supply. "I heard that the prices of Barbie dolls in the American market are expected to rise 10 percent. The restrictions on Chinese products are not conducive to the local market and people," he said, apparently referring to the United States. China is the world's largest toy manufacturer, and exports about 20 billion toys every year, contributing to nearly 60 percent of global toy trade. But it has come under the spotlight amid a spate of export toy recalls this year. The world's biggest toymaker, Mattel Inc, recalled about 21 million of its Chinese-made toys. A senior Mattel executive last month apologized to China for the trouble the recall had caused, an action Li praised. "We think this is a practical and responsible attitude." Li said that 87 percent of Mattel's recalled toys had design problems. "But of course, some of the recalled toys have excessive lead," he said, adding that inspections of lead paint will be strengthened to meet advanced global standards. Li said Beijing and Washington have been in close contact on the quality issue. "This month, I will send my deputy to talk with officials with the US Food and Drug Administration... on signing a memorandum on food safety," Li said.

Govt cuts tariff on electronic imports - (2007/10/09)

The import tariff on audio and video products and other electronic publications has been cut, the Ministry of Finance said on its website yesterday. The government reduced import tax from 17 percent to 13 percent on recorded cassettes, compact and digital video discs and floppy discs, effective September 15. Analysts said the move aims to encourage imports of these products in a bid to help reduce the country's trade surplus and rebalance its international payments. Last year, China imported $30.79 million worth of these products, an increase of almost 80 percent on the previous year. Based on that figure, the reduced tax rate may lead to a loss of about $1.2 million in tax revenue, experts said. "It is part of the country's efforts to encourage imports and promote the balance of international payments," said Chen Jijun, a senior analyst with Beijing-based CITIC Securities. China had accumulated foreign exchange reserves of $1.41 trillion by the end of August, according to government officials. The trade surplus has become a major contributor to the expanding reserves. Chen said the move should help reduce the surplus, given China mainly imports audio, video and electronic products from developed countries - the source of most of its trade surplus. China has cut the import tariff on key equipment and reduced export rebates on some energy-intensive products in its all-round macroeconomic regulations this year designed to narrow the trade surplus. In August, China registered a trade surplus of $24.98 billion, up by 32.8 percent. But the growth rate was 48.1 percentage points lower than the January-July period. "The regulatory measures have worked to some extent," Chen said, adding that imports are also growing steadily. China's imports in August were $86.38 billion, a record high on a monthly basis. But he warned that if China does not change its economic structure, it will be difficult to substantially reduce the trade surplus. China's low-cost labor and resources are behind the fast increase in the country's exports. Many foreign companies have shifted their manufacturing to China to take advantage of low local costs, and they are driving the country's strong export industry, he said. He said China should raise resource prices as a fundamental method to rebalance the economy.

China's export of electronic info products up 26.2% - (2007/10/02)

In the first eight months of this year, China's export of electronic information products reached $276.37 billion, up 26.2 percent year on year, according to a report from the Ministry of Information Industry. The export of electronic information products accounted for 36.1 percent of the country's total export during the period, and contributed 34.5 percent to national export growth, the report said. Of the total export volume of electronic information products, $186.03 billion or 67.3 percent was achieved by foreign companies in China, up 27.3 percent year on year, while $45.55 billion or 16.5 percent belonged to Sino-foreign joint ventures, up 19.1 percent. Statistics show that during the period China's total export and import volume of electronic information products was $490.16 billion, up 23.5 percent year on year. The import volume was $213.79 billion, up 20.1 percent and accounted for 35.4 percent of the country's total import.

More support for firms in IPR disputes - (2007/09/11)

The government is to establish a litigation response contingency fund to help companies deal with intellectual property rights (IPR) disputes, the State Intellectual Property Office (SIPO) has said. The move comes in the face of increased IPR disputes since China's accession to the WTO in 2001. The United States International Trade Committee (ITC) has launched 12 cases against Chinese companies - involving $1.66 billion - from January to August this year, Ministry of Commerce officials said. The number of cases and the amount of money involved showed a year-on-year increase of, respectively, 43.8 percent and 43.2 percent, Yu Benlin, deputy chief of the ministry's fair trade bureau, said. Such investigations have jeopardized China's hi-tech industries and structural upgrades in the country's trade exports, he said. For the fifth year in a row, China was accused of the most violations under Section 337 of the Tariff Act of 1930. By the end of last year, the US had launched 58 investigations against Chinese companies, since it joined the WTO. There were 13 cases lodged in 2006, accounting for 39.3 percent of the world's total. SIPO deputy chief Zhang Qin said there were two reasons for this. First, some Chinese firms do not fully understand IPR protection. Second: "We cannot rule out the fact that some transnational corporations abuse their IPR rights and attempt to snuff out the emergence of Chinese firms." Many small and medium-sized firms choose not to challenge IPR accusations in court because of time constraints, complexity and expense, Yu said. This may have given US investigation agencies the wrong impression that IPR infringements are common among Chinese firms, Yu said. "This situation has led to (problems) for Chinese companies and the issuance of exclusion orders by foreign companies preventing them from doing business in the US market." Global rivals request investigations against Chinese companies to prevent them taking significant market share and force them out of the US market because of prohibitive litigation costs, Yu said. According to the commerce ministry, Chinese companies have suffered lost opportunity costs of between $69.1 billion and $147 billion in recent years as a result of IPR disputes. The SIPO intends to create a steering committee on corporate IPR management and a mechanism for expert assistance, helping Chinese companies with their patent strategies. It also aims to provide research for new technologies and products, as well as drafting IPR management charters. Additionally, it aims to evaluate company performance regarding IPR protection, establish information platforms for domestic and global patents It will also introduce technology monitoring mechanisms to track the activities of competitors to Chinese firms.

US imports fail to meet packaging standards - (2007/08/31)

The quarantine administration said Thursday that its Shenzhen bureau has this year detected harmful pine wood nematodes (microscopic worms) in 13 batches of wooden packaging containing imported goods from the United States. The packaging was produced by six manufacturers with official US certificates, the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), said. The city's quality supervision official also discovered harmful living organisms in a further 10 batches of wooden packaging from the US, out of 70 batches sampled between July 14 and August 23, the administration said. The proportion of substandard wooden packaging from the US - 15.38 percent of the sample - was much higher than that for the European Union, Republic of Korea, Japan or Canada, the AQSIQ said. The administration believed that either the manufacturers or exporters were to blame for the problems with the packaging. It said the labels on some packaging were not clear, suggesting some exporters might have used fake ones. The administration said the seized packages had been improperly treated according to quarantine requirements, and it urged local officials to tighten the supervision of wooden packaging from the US. A day earlier, the administration said a cargo of 21.6 tons of frozen potato slices imported from the US was not up to standard in terms of carbonyl and acidity levels. The goods were destroyed according to relevant laws and regulations. The administration notified the US side and asked it to investigate the matter.

New haven for labor-intensive industries - (2007/08/13)

The mainland may be trying to do away with labor-intensive and high-energy consuming industries but some Southeast Asian and Latin American countries are welcoming them with open arms. China's second largest paper maker is one of the firms that has responded to such an invitation. Hong Kong-listed Lee & Man Paper Manufacturing plans to invest HK$1.6 billion in Vietnam to set up a paper mill, a paper-pulp factory and a power plant. It plans to start production as early as October this year. "Our capital expenditure is HK$6.6 billion ($844 million), and we plan to inject HK$1.6 billion in Vietnam because of that country's favorable investment policy and great development potential," CEO Raymond Lee told reporters in Ho Chi Minh City on August 5. The power plant will generate 150 megawatt (MW) in the first phase, but "the long-term target is to build a 600-MW plant". Lee & Man decided to move to Vietnam after the mainland government announced further curbs on high energy and resource consuming units. The Vietnamese government, however, has been rolling out the red carpet for foreign investors, and those who build factories in the country are given a 50-year land lease. A rent holiday for 15 years comes as a bonus, Lee said. "Vietnam's economy will achieve rapid growth in the next 15 to 20 years," said Lee. "The country is rich in natural resources, which is good news for us." And many firms see the backward facilities and lack of modern infrastructure in that country as a great opportunity for investment.

EU rule looms for exporters - (2007/08/10)

Exporters of energy-using products have been told to get ready for a new EU environmental protection regulation that will take effect from tomorrow. The EU directive on the eco-design of energy-using products (EuP) will affect all links in the industry chain - from design, manufacturing and transport to disposal. So said an official from the bureau of fair trade for imports and exports under the Ministry of Commerce, but he declined to be named. The directive will influence the trade of all energy-using products except vehicles and will have "a direct impact on companies involved in the machinery and electronics industries, chemicals and metallurgy", he said. The EuP directive was announced in 2005 and aims to reduce environmental harm. Products will be required to meet power consumption guidelines set by the European Union. Most manufacturers will also have to do lifecycle assessments of their products to determine environmental impact. In the short term, the directive will increase companies' outlay in product development - including research, environmental impact assessment, procurement of technologies and patents, and energy consumption testing, the official said. "In the medium and long term, however, firms can lower their costs by optimizing design, controlling materials during manufacture and reducing disposal costs, because environmental impact will be factored into their strategies," he said. Companies "shouldn't see it as an increase in costs or view as a loss any decline in exports as a result of the directive". But he suggested firms exporting in certain areas to the European Union get prepared for the change. Most exporters have been preparing for the regulation since it was announced several years ago, said Chen Yansheng from the China Association of Lighting Industry. He said a small number of exporters could give up on the EU market if they don't think they'll meet the requirements of the directive. The EuP directive will eventually become law in EU member countries. It follows three other EU directives on environment protection: RoHS, banning individual hazardous substances; WEEE, on the disposal of electronic products; and REACH, restricting the use of chemicals.