China - Latest News/Current Events, Economic Overview & Trade Relations
Quick Facts about China
| Official Name | People's Republic of China |
| Capital | Beijing |
| Location | Eastern Asia, bordering the East China Sea, Korea Bay, Yellow Sea, and South China Sea, between North Korea and Vietnam |
| Area | total: 9,596,960 sq km land: 9,326,410 sq km water: 270,550 sq km |
| Climate | extremely diverse; tropical in south to subarctic in north |
| Terrain | mostly mountains, high plateaus, deserts in west; plains, deltas, and hills in east |
Editor PicksBrowse Asia News Archive
China Gives $950 Million to Help Zimbabwe
The government says it needs some $8bn to rebuild the country following years of collapse. "The gvernment through the minister of finance, secured credit lines of almost $950m from China," Mr Tsvangirai said in a news conference.
China was one of the few countries to retain economic support for Zimbabwe in recent years. "We will encourage and facilitate more Chinese companies to seek development in Zimbabwe," Chinese official Zhou Yongkang told state news agency Xinhua. China has agreed to give Zimbabwe a loan of $950m (£573m) to help it revive its battered economy, Prime Minister Morgan Tsvangirai has said. Mr Tsvangirai had been criticised by supporters of President Robert Mugabe for failing to get more support during his recent trip to the West. Mr Tsvangirai and Mr Mugabe formed a power-sharing government in Februaryread source article
China and Hong Kong decide on Yuan
The yuan will now be used in cross-border trade between China and Hong Kong, in attempt to reduce the reliance on the U.S dollar. Joseph Yam, Hong Kong Monetary Authority Chief Executive and Zhou Xiaochuan, the governor of People's Bank of China signed the agreement today and affirm that the first yuan transactions will begin next month. The benefits that accompany the agreement are reduced transaction costs and reduced foreign-exchange risks.
"It's an important step to make the yuan an international currency," said Fang Ming, an analyst in Beijing at Bank of China Ltd., the nation's biggest foreign currency trader. "In the long-term, the world reserve currency system will consist of several major currencies, including the yuan and the euro, instead of just the U.S. dollar." Many worry about the $1.95 trillion in foreign-currency reserves but Zhou assures that China will not change its composition suddenly, but will rather do it gradually. Hong Kong Chief Executive Donald Tsang announced, "Our long-term goal to promote Hong Kong as an overseas yuan trade settlement center for China, and today's arrangement is a big step towards this goal." The People's Bank of China has now agreed to provide 650 billion yuan ($495 billion) to Argentina, Belarus, Hong Kong, Indonesia, Malaysia and South Korea through "currency swaps" to begin expanding it use.China Prevents Yuan from Strengthening
China is preventing its currency from strengthening against the dollar to support jobs and exports.
China is preventing its currency from strengthening against the dollar to support jobs and exports. This would make it easier for Chinese manufacturers to keep prices low for consumers abroad, like the U.S and Europe, which would help more factories stay in business. However, it would restrict China's spending power when importing raw materials and luxury goods, which furthers the stress between China and its trading partners. During the past four years, China has managed its exchange rate against an "undisclosed" basket of currencies "as a step toward making the yuan fully convertible," according to Bloomberg. Timothy Geithner, U.S Treasury Secretary urged China to allow its currency to be more flexible. He also advises the country to rely less on exports and more on imports to work for growth in the economy. He also stresses the importance for market-set interest rates and exchange rates to manage the economy. Trade gaps between its trade partners have "boosted the nation's foreign-exchange reserves." In March 2009, the reserves reached $1.95 trillion The Chinese government will be able to maintain an exchange rate that favors its manufacturers because the U.S. government needs its support to finance it's large budget deficit, said Chris Ruffle who helps oversee $3 billion of assets as co- chairman of Martin Currie Investment Management Ltd.'s China unit in Shanghai. China is the biggest foreign holder of U.S government debt. Its importance in the U.S bond market will keep China in control of its own currency.read source article
Trade Dispute: China, U.S and European Union
Both the U.S and European Union have reportedly criticized China for "unfairly limiting its raw materials exports" and instead give its domestic industry access to cheaper materials. China denies such claims and affirms that it is following its World Trade Organization obligations and protecting the environment and natural resources.
Both the U.S and European Union have reportedly criticized China for "unfairly limiting its raw materials exports" and instead giving its domestic industry access to cheaper materials. China denies such claims and affirms that it is following its World Trade Organization obligations and protecting the environment and natural resources. Bauxite, magnesium and coke, which is used to make steel are some of the materials that are causing the two countries to become concerned. Ron Kirk, U.S Trade Representative holds that China is "unfairly restricting exports of raw materials," and is therefore harming American steel, aluminum and chemical manufacturers that rely heavily on these materials to make their products. The U.S and E.U criticisms have resulted in a 60 day consultation period, where the dispute will be resolved. Should the two countries win against China, they would be permitted by the WTO to impose economic sanctions on China.Foreign Direct Investment in China fell from a Year Earlier
Investment slumped 17.8 percent in May to $6.38 billion, after falling 22.5 percent in April, the commerce ministry said at a briefing in Beijing on Monday.
Investment slumped 17.8 percent in May to $6.38 billion, after falling 22.5 percent in April, the commerce ministry said at a briefing in Beijing on Monday. According to the commerce ministry, foreign-invested businesses account for 30 percent of investment from abroad, 55 percent of trade and 11 percent of urban jobs. Chief Asia economist for Morgan Stanley in Hong Kong, Wang Qing says that companies are "not in the mood for aggressive overseas expansion," On June 12 and 13, Premier Wen Jiabao admitted that the world economic outlook was still unclear and that China still has to establish "solid foundations for a recovery." The economy expanded 6.1 percent in the first quarter compared to the same quarter in 2008, which was the slowest pace in 10 years. China's economic problems are due to falling exports, dwindling profits, industrial overcapacity, and unemployment. However, there are signs of increased retail sales, industrial output, and market confidence.read source article
Tax plan sets off a Protest in China
It was reported by officials in Nankang that "several hundred protesters blocked a major road while others delivered a petition to a local government office."
The officials said that the protest is based on a misunderstanding over the tax plan, since a few furniture-store owners mistakenly thought that municipal party and government wants the furniture industry to collapse. The tax plan: To enforce payment of taxes more strictly from the furniture makers and dealers. Due to opposition, however, the local government's plan has been postponed from June 15.Browse Asia News Archive
Trade Agreements
ASEAN - China Free Trade Area
The ASEAN - China Free Trade Agreement will apply in an area involving 1.7 billion consumers, making it the world's largest trading area. The agreement currently establishes a zero-tariff market. The agreement now contains trade in goods, services and dispute settlement. Investment is still under negotiation.
Macao – People’s Republic of China Closer Economic Partnership
The Mainland and Macau Closer Economic Partnership Arrangement was signed in 2003. Macau Products, under the agreement, are exempted from import customs. The agreement strives to support the growth and expansion of the Macau manufacturing, tourist and development industries. http://www.economia.gov.mo/page/english/cepa_e.htm
Pakistan – People’s Republic of China Free Trade Agreement
http://english.mofcom.gov.cn/accessory/200611/1164848706093.doc
People's Republic of China, Hong Kong Closer Economic Partnership
i. The Closer Economic Partnership (CEPA) between the People’s Republic of China and Hong Kong is a Free Trade Agreement that allows residents and companies of Hong Kong preferential access to the mainland market. The objectives of the agreement, as stated in the legal document, are to strengthen trade and investment between the two sides and promote development. Both parties meet regularly and add supplements to the agreement. The three main areas CEPA covers involve measures for promotion of trade and investment, opening the mainland market to Hong Kong service providers, and the elimination of tariffs on locally manufactured goods. CEPA also encourages foreign investors to establish businesses in Hong Kong to reap the benefits of both the Hong Kong opportunities as well as those in the mainland.
People’s Republic of China – Chile Free Trade Agreement
ChileThailand – People’s Republic of China Free Trade Agreement
Limited to agricultural products, the Thai-China Free Trade Agreement entered into force in 2003, and negotiations on a more comprehensive agreement are expected to conclude before 2010. http://english.people.com.cn/200506/19/eng20050619_191069.html
Trade Organizations
ASEAN Plus 3
Forum as a coordinator of cooperation between ASEAN and China, Japan and South Korea.
Asia Cooperation Dialogue (ACD)
The Asia Cooperation Dialogue (ACD) is an International Organization to promote Asian cooperation at a continental level, helping to integrate the previously separate regional organizations of political or economical cooperation such as ASEAN, SAARC
Asia-Pacific Economic Cooperation (APEC)
Asia-Pacific Economic Cooperation (APEC) is a forum for 21 Pacific Rim countries or regions (styled 'member economies') to discuss the regional economy, cooperation, trade and investment. The membership is claimed to account for approximately 41 percent of the world's population, approximately 56 percent of world GDP and about 49 percent of world trade. The activities, including year-round meetings of the members' ministers, are coordinated by the APEC Secretariat.
East Asia Summit (EAS)
The East Asia Summit (EAS) is a Pan-Asia forum of 16 countries in East Asia, with ASEAN in a leadership position.