Editor Picks - east asia
PBOC Shows Signs of Tightening Monetary Policy
According to Galaxy Securities' Co. chief economist, Zuo Xiaolei, China's central bank may tighten monetary policy this year after previously saying it would "fine-tune" it. Xiaolei says that the People's Bank of China has excessively loose monetary policy in the first two quarter of the year but that the last two quarters needed to be changed to "appropriately loose monetary policy". The People's Bank of China also said in a quarterly report that it will maintain a "moderately loose" monetary policy and guide "appropriate" loan growth. According to Xiaolei, the adjustment will avoid big ups and downs in China's economy and ensure growth. The central bank is selling more bonds to decrease the supply of yuan in the public's hands, in attempt to avoid inflation.
China vs. EU: Tariffs on Fasteners
China filed a complaint against EU tariffs on fasteners at the WTO, claiming its duties break global commerce rules. On January 2009, the EU imposed a five-year tariff on imports of Chinese iron or steel fasteners worth an estimated 575 million euros ($809 million) in 2007, which the country justified as for prevention of "further distortions" and to "restore fair competition". China, however, does not agree that the EU has been harmed significantly enough to defend the trade protection. China and the EU are consulting to sort through their WTO case. The two countries must now hold talks for at least two months to resolve the trade dispute, and if it persists, China may ask WTO judges to rule.
China Development Bank Will Expand to Brazil, Egypt and Russia
China Development Bank Corporation opened its first branch outside the mainland in Hong Kong on the 29th of July, 2009 as the state-run bank for public works projects plans to expand carry out. Russia, Egypt and Brazil are the locations of the next expansions. Moscow and Cairo will begin operating later in 2009 while Rio de Janeiro will operate in 2010, according to Vice President Li Jiping. The bank has already engaged in lending to the three countries and admit that their "...strategic goal is to become an internationalized bank" and support the nation's rapid economic growth in the next decade. Chinese Premier Wen Jiabao said on July 10th that the nation's $2 trillion plus of foreign exchange reserves "should be used to help companies invest abroad." The China Development Bank Corporation plans to invest in ports, steel mills and energy in Brazil, according to Rio de Janeiro state Governor Sergio Cabral. In addition, the bank has "expressed interest" in investing in projects in the 2014 World Cup Soccer tournament and Rio de Jainero's bid for the 2016 Olympics. In Russia, the bank lent $1.3 billion to Russia's state development bank, Vnesheconombank. Meanwhile, in Ghana, the bank lent more than $1 billion to finance a cotton facility in Malawi and power station in Ghana in 2007.
China Adjusts Gasoline & Diesel Prices to $3.14/gallon Max
China slashed gasoline and diesel prices by about 3.3 percent after three consecutive increases in prices caused widespread concern about fuel costs. The National Development and Reform Commission announced that pump prices for 90 octane gasoline will cost a maximum of about $3.14 a gallon in Beijing. China's top planning agency said it adjusted the prices to match the movement in crude-oil costs, taxes and profit for refiners, such as China Petroleum & Chemical Corporation and PetroChina Co. This is the second time in 2009 that the prices are cut to help reduce costs for manufacturers and encourage economic growth of 8 percent this year, create jobs and improve social unrest. Wang Jing, the chief oil analyst at Orient Securities Ltd. said, "This move is to some extent signaling that the Chinese government is bowing to public pressure in adjusting fuel prices... It also reassures the industry that the country will stick to the fuel pricing formula." The country's government may adjust fuel prices when crude-oil costs change more than 4 percent over 22 working days, according tot the reform commission.
South Korea's Economy Grew to the Highest in Seven Years
South Korea's economy expanded at the fastest pace in almost six years last quarter as exports and household spending jumped. Gross domestic product rose 2.3 percent from the first quarter, when the nation skirted a recession by growing 0.1 percent, the Bank of Korea said last week.
China Shipbuilding to Sell Around 2 Billion Shares
Chinese state-owned company, which is the biggest ships' maker, is planning to offer $942 million in initial public offering, according to a report from China Securities Commission.
Japan and Taiwan Exports Improve from May to June
Japan's and Taiwan's exports declined at slower paces in June 2009, compared to the last eight to twelve months. The fall in Japanese overseas sales went from 40.9 percent in May to 35.7 percent in June compared to the same time in 2008, reported the Finance Ministry in Tokyo. The Ministry of Economic Affairs in Taiwan said that exports in May had fallen 20.14 percent and the decline slowed in June, to total about 10.91 percent fall in exports compared to 2008. The slowing decline of exports means that the economy in the U.S and Europe are perking up, said Tony Phoo, an economist at Standard Chartered Bank in Taipei. Exports are always linked to the exchange rate of a country's currency. The yen weakened against the dollar, going from 94.30 to 93.59, as signs of improvement in exports gave investors incentives to buy riskier assets abroad. Exports are important for the two countries, since their significant growth before the recession was due to fast increases in exports. Chief statistician, Huang Ji-Shih from the Ministry of Economic Affairs expects Taiwanâ€™s exports to begin rising in the last three months of 2009.
China's Largest Housing Contractor will raise $7.3 Billion in IPO
China State Construction Engineering Company, China's largest housing contractor, is planning on raising $7.3 billion "in the world's biggest initial public offering since March 2008". It looks to sell about 12 billion shares from 3.96 yuan to 4.18 yuan each.
PBOC Begins Tightening Monetary Policy
The People's Bank of China sold one-year bills at the "highest rate this year," which increased money market rates to avoid bubbles in the stock and property markets.
Japan's Economic Forecast Downgraded but Remains Positive
The Bank of Japan is now expecting its economy to shrink 3.4 percent, higher than its previous forecast of 3.1 percent, "in the 12 months to 31 March 2010".
China Eastern Airlines and Shanghai Airlines Integrate
China Eastern Airlines is planning to buy Shanghai Airlines, a deal worth about 7 billion yuan ($1 billion).
China and the U.S Prepare to Discuss Global Warming
The U.S is planning on demanding China to decrease its tariffs on clean energy technology in order to further the two country's goals of combating global warming.