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September 9, 2013 April 19, 2013
Greater China
China’s August exports accelerate Growth beats estimates in boost to recovery
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hina’s exports increased more than estimated in August, adding to evidence the world’s second-largest economy is rebounding after a two-quarter slowdown. Overseas shipments rose 7.2 percent from a year earlier, the General Administration of Customs said yesterday. That compares with the 5.5 percent median estimate of 46 economists surveyed by Bloomberg News and July’s 5.1 percent gain. Imports rose a less-than-estimated 7 percent from a year earlier, leaving a trade surplus of more than US$28 billion. The January-to-August trade surplus widened 28 percent from a year earlier to US$154.2 billion, according to yesterday’s data, and was the highest for that period since 2007. The pickup in the surplus suggests that appreciation pressure on the yuan will continue, economists Liu Li-Gang and Hao Zhou at Australia & New Zealand Banking Group Ltd said in a note after the release. Even so, with turbulence in emerging market economies, especially India and Indonesia, the central bank is likely to maintain stability of the exchange rate, they wrote. China’s economy is showing signs of picking up after the government announced support measures such as tax cuts for small businesses and extra spending on railways, and as confidence returns after the interbank cash squeeze in June. Improvements in developed nations may support exports in coming months, with the euro-area returning to growth in the second quarter after a record-long recession. “We’re clearly seeing stronger external demand momentum as manufacturing in the U.S. and European Union recover and that’s going to become a stronger driver of China’s growth,” said Xu Gao, chief
Exports to Japan declined for the 7th straight month
economist with Everbright Securities Co Ltd in Beijing, who previously worked for the World Bank. “But if policy makers in China see this recovery as meaning they don’t need to add stimulus domestically or even withdraw stimulus, that could be bad news.”
Clearer picture Mr Xu, who last week raised his 2013 full-year economic growth estimate for China to 7.6 percent from 7.5 percent, said the moderation in momentum suggested in the August import numbers may temper optimism about the strength of domestic demand. August data for consumer and producer prices will be released today, followed by industrial output, retail sales and January-August fixed-
US$28 bln
China’s trade surplus in August
Li calls for ‘human focus’ to urbanisation plan C
Everbright posts US$85 mln loss E
verbright Securities Co Ltd posted an unconsolidated net loss of 523 million yuan (US$85 million) last month after US$3.8 billion in erroneous trading orders that roiled China’s equity market and drew a record regulatory penalty. The country’s seventh-largest brokerage by market value incurred the unconsolidated loss, which doesn’t include contributions from its subsidiaries, after disposing of assets following the August 16 error, Everbright said in a statement to the Shanghai Stock Exchange. The figure is based on preliminary data and hasn’t been audited, the company said. The loss adds to woes at statecontrolled Everbright, which has been ordered by the China Securities Regulatory Commission to pay a record 523 million yuan for insider trading in the aftermath of the errors. The regulator, which is cracking down on misconduct, barred the company from most proprietary trading and banned four of its executives from the market for life. Everbright sold exchange-traded funds and index futures on August 16 before telling the market it had made the erroneous buy orders, the
asset investment on September 10 that will give a clearer picture of the extent of the economic rebound that started in July. The increase in August inbound shipments trailed the 11.3 percent median projection in a Bloomberg survey of 45 analysts and was lower
CSRC said on August 30. Investors in Guangzhou and Shanghai are suing for damages, claiming they suffered losses. Everbright has closed all of the short positions in index futures it built to offset the erroneous orders, resulting in a 4.3 millionyuan loss, it said in a separate statement on Friday. The watchdog’s investigation into the erroneous trades was its second probe of Everbright this year, following an investigation of alleged false information in an initial public offering. Regulators are seeking to restore confidence in a market whose benchmark index, the Shanghai Composite, has slumped 25 percent in the past four years. Bloomberg News
hina’s premier, Li Keqiang, wants his plan to turn more Chinese into city dwellers to be “humanity-centred”, focusing on quality of life and the environment and driven by job creation, the official China Daily newspaper reported yesterday. Mr Li has an ambitious plan to boost China’s urban population by 400 million over the next decade, a key plank in a reform effort to restructure the economy away from credit and export driven growth to one where consumers provide the main impetus. But the plan faces huge obstacles, including a lack of infrastructure in cities to deal with an influx of new residents and the cost of building it, which has led to concern that a spending binge could push up already high local debt levels and inflate a property bubble. The need to reform a complex system of residency registration that
than July’s 10.9 percent jump. The slowdown “reflects the weak economic recovery domestically,” said Hu Yifan, chief economist at Haitong International Securities Group in Hong Kong. “But we expect the trend to reverse in coming months, along with rising demand, on a series of supportive policies” announced by the government, she said. Exports to the U.S., China’s biggest market, and the European Union, its second-largest, rose for a second month in August after a four-month drop, yesterday’s data showed. Sales to the U.S. increased 6.1 percent from a year earlier, while those to the EU gained 2.5 percent. Exports to Japan declined for the seventh straight month, falling 2.2 percent from a year earlier. Bloomberg News
controls the benefits residents can enjoy is also a sticking point. Mr Li said the government should first identify areas of consensus, such as the redevelopment of slum communities on the edge of cities, as a base for further steps towards urbanisation, the paper said “Quality is the key and reform should be the impetus,” the paper quoted the premier as saying. “We should be guided by ordinary people’s hopes, and be active and orderly in pushing the process forward.” In July a government think-tank said the cost of settling China’s rural workers in cities could be about 650 billion yuan (US$106 billion) a year, or about 5.5 percent of fiscal revenue last year. Reuters