MONTH IN RE VIE W
NEWSBRIEFS
14
Investment slows as output falls behind estimates
Home prices continue to rise
China’s fixed-asset investments slowed in April, Bloomberg reported, citing China’s National Bureau of Statistics. Industrial output also fell below analyst estimates for the first quarter of the year. Fixed-asset investment grew by 20.6% in January through April, down from 20.9% in the first quarter. Industrial production hit 9.3%, just below the expected 9.4%. The response from China’s new leadership will indicate the level of its tolerance for slowing growth. Gradually rising inflation could rule out heavy-handed stimulus spending as a way to boost investment and production.
Home prices continued to rise across China’s largest cities in April despite aggressive efforts by the government to curb the market, The Wall Street Journal reported. Average new home prices rose 5.34% year-on-year in April, the fastest rise since late 2011, according to a survey of real estate firms conducted by data firm China Real Estate Index System. Prices rose in 76 cities and fell in 24 others. Compared to March, prices rose 1% to US$1,638 (RMB10,098) per square meter. “This confirms (our) view that the recent government control measures will not prevent housing prices from rising,” Credit Suisse analyst Jinsong Du said.
EU to impose punitive solar duties on China
Cadmium-tainted rice found in Guangzhou
The European Commission agreed on May 8 to a proposal from EU Trade Chief Karel De Gucht to impose punitive import duties on solar panels from China, Reuters reported. The proposal, which says the duties would be levied by June 6, is the EU’s boldest response to what it sees as China’s dumping of cheap solar products into Europe. The EU’s investigation into dumping accusations against China’s solar panel makers has been extensive, but Brussels is cautious of souring a key relationship. Yi Xiaozhun, China’s ambassador to the WTO, said the decision was a mistake, but declined to comment on any reactionary moves from Beijing. The EU is also scrutinizing Chinese telecoms and airlines.
Half of the rice being sold in markets in the southern city of Guangzhou was contaminated with the carcinogenic metal cadmium, according to government tests, The Wall Street Journal reported. The Guangzhou Food and Drug Administration tested 18 samples of rice in the city, nearly half of which contained excessive levels of cadmium. The news was met with anger online. “First water, then the air we breathe, and now the earth. How can people still survive?” commented one person on Sina Weibo, a service similar to Twitter. Several food safety scandals have rocked China this year, including record pollution in Beijing and dead pigs in Shanghai’s water supply.
Chinese exports top expectations
Microsoft to hire thousands in China
China’s exports grew faster than expected in April, rising 14.7% year-on-year compared to 10% in March, Bloomberg reported. Imports rose 16.8% year-on-year in April, compared to 14.1% in March. The country swung back to a trade surplus of US$18.2 billion, after recording a trade deficit of US$0.88 billion in March. The figures were announced on the heels of trade data releases in South Korea and Taiwan that missed expectations. Louis Kuijs, chief China economist at Royal Bank of Scotland Group, said that exports may actually be 9 percentage points lower than reported because of businesses overstating export figures.
Microsoft’s CEO Steve Ballmer says the company plans to hire several thousand workers in China as its market share in smartphones and cloud computing services increases, Bloomberg reported. Ballmer said that China is the fastest growing market for its new smartphone operating system, Windows Phone 8. The mobile OS has received a tepid response from other markets around the world. The software giant also plans to launch its Windows Azure cloud computing system next month as a joint venture with Beijing-based 21 Vianet Group, which would make it the first company to offer cloud computing services in China.
June 2013