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Europe and US pledge to create world’s biggest trading bloc

2013-08-12

The talks have been heralded as a “game-changer” that could help kick-start stagnant or contracting European economies back into growth by adding 0.5pc to GDP every year.

David Cameron pledged that Britain, which currently chairs the G8 group of countries, would do everything it could to help broker the difficult talks.

“Breaking down the remaining trade barriers and securing a comprehensive deal will require hard work and bold decisions on both sides,” the Prime Minister said.

EU and US economies account for nearly half of the world’s economic output and a third of global trade, meaning that a transatlantic free-trade bloc would hold great sway over emerging economic superpowers China, Brazil and India.

The talks are expected to be arduous, as trade relations and negotiations between the US and EU have previously been hindered by disputes over market access, regulations and non-tariff barriers, which are often used to protect domestic markets.

Strong Growth in Foreign Investment in China

2013-08-12

Foreign direct investment in China in June jumped 20.12 percent from the same period a year earlier, the Commerce Ministry said Wednesday, the quickest gain since March 2011.

China drew $14.4 billion in foreign direct investment in June, the ministry said, while in the first half, that investment totaled $62 billion, up 4.9 percent from the same period of 2012.

Foreign direct investment, or F.D.I., is an important gauge of the health of the external economy, toward which China’s vast factory sector is oriented, but it is a small contributor to overall capital flows compared with exports, which were worth about $2 trillion in 2012.

The June investment data show that overseas investors are still optimistic on the outlook of China’s economy in the medium and long term thanks to China’s recent efforts to move the economy up the value chain and its strong domestic consumption..

China expects stronger F.D.I. in the second half compared to the first, as we believe China can achieve a 7.5 percent, target for gross domestic product growth for 2013 based on recent messages from policy makers.

The investment inflows reflected a gradual rebound in the first half of this year, even though a single month’s figure would not signal a recovery in foreign investment.

The ministry’s data also showed that investment from the United States had risen 12.3 percent, to $1.8 billion, in the first half from the same period a year earlier, while investment from Europe rose 14.7 percent.

Investment from Japan was up 14.4 percent in the first six months from the same period a year earlier, to $4.7 billion, while inflows from 10 Asian nations rose 5.3 percent in the first half from the same period a year earlier, to $53.8 billion, including $39.7 billion from Hong Kong.

The foreign investment figures followed economic growth data released Monday that showed that annual growth in G.D.P. had slowed to 7.5 percent in the period from April to June, the 9th quarter in the last 10 in which expansion has weakened.

Doubts over whether China can still meet its full-year economic growth target have increased. But the Chinese prime minister, Li Keqiang, said Tuesday that the annual economic growth target of 7.5 percent remained achievable.

Central Bank Intervention Boosts Market

2013-08-21

In an effort to deflect a repeat of the cash crisis experienced by China's economy in June, the People's Bank of China reportedly pumped Rmb17 billion via seven-day reverse repurchase agreements into the money market on Tuesday June 30, being the central bank's first intervention of this kind since February 7 this year. Although the amount was relatively limited, it realized its goal of preventing cash rates from rising too high, and its impact on markets was immediately evident. As a vital indicator of short-term liquidity in China, the seven-day bond repurchase rate dropped by 14 basis points to 4.98 percent, while the Shanghai Composite Index gained nearly 1 percent.

With interbank lending rates climbing due to pressure at month-end for fund redemption, investors have been concerned that the central bank may steer the market into a similar situation as experienced in June. At that time the central bank held back from injecting cash into the system despite the fact that were rising. This led banks to hold back on inter-bank lending which sent money market rates to over 20 percent – an unprecedented level. To alleviate the problem, the central bank made emergency liquidity provisions available to cash-strapped banks. The message from the central bank was that the cash squeeze served as a warning to lenders to improve the management of their liquidity while reining in overall credit growth.

Official statements over the past few months have indicated that authorities are taking action to ward off financial risks, while at the same time promoting stable development of China's economy in the second half of 2013. Analysts are generally of the opinion that these statements reveal no sense of urgency and that the current stance of authorities is likely to prevail for the remainder of the year.

Starting a Business in Shanghai

2013-07-18

1-  Determine what type of business you need to open. Think about whether you need a representative office, a manufacturing facility, an import/export business or perhaps a joint venture with an existing company in Shanghai. A representative office is a common selection, although highly restricted in the types of functions it is allowed to carry out. A joint venture with a local resident of Shanghai is also a popular selection due to the fact that it allows you to circumvent a significant amount of red tape in the Chinese legal process.


2- Find a legal representative. Any business in a foreign land will benefit from having legal counsel that can advice you on local laws and regulations. In terms of opening a business in Shanghai, having legal counsel is also important because they will help you complete and translate all of the paperwork associated with forming a company, as well as help you make sure that your operations to not violate any legal regulations.


3- Obtain an application to register a Foreign Investment Enterprise. This application can be obtained by the Shanghai Administration of Industry and Commerce. A link has been added to the Resources section for your convenience. The application must be completed and signed by both you and the legal representative selected in the previous step. Submit the application and wait for approval on the company name you have selected.


4- Draft the Articles of Incorporation for your business. Obtain the assistance of your legal counsel on this point to help make sure your documents conform to legal standards in Shanghai. Attach a copy of the approval of your company name that was received in the previous step and submit all paperwork to the Shanghai Administration of Industry and Commerce. Wait for a certificate of approval on your Articles of Incorporation.


5- Gather together all remaining documents. You will need to lease an office or other premises for at least one year, and obtain a copy of the lease, along with a certificate from a licensed realtor. Also obtain a bank reference from your country of origin to state that you have good financial credibility. You will also need to draft a letter of appointment for everyone who will be on the board of directors, and obtain a photocopy of the passport for each individual.


6- Submit all documents gathered in the previous step to the Shanghai Administration of Industry and Commerce. Wait for the Administration office to send you a certificate of business registration, which contains a unique company number for you to operate under. You have now successfully opened a business in Shanghai.

Shanghai beats New York to become world's 2nd most attractive city

2013-08-12
The list of the "world's most attractive cities" was published February 21, with China's Shanghai ranking second, London ranking first, and New York City in the U.S. dropping from third place to tenth place.

According to a report published by "Rusnews" February 22, this list was created by the Paris Ile de France Capitale Economique with help from KPMG. The list was based on investigations by 500 merchants from different countries and investment data from 2011. The data was based on various indexes that KPMG had been analyzing in the past 5 years. In interviewees' opinions, the most important standards for assessing a city are political stability, legal safety and the city's economic condition.

London ranked first not only because all its indexes ranked first, but also because it is deeply loved by merchants. 42 percent of interviewees said London is the most attractive city. China's Shanghai ranked second, but some aspects of Shanghai, such as the amount of modern research centers and the amount of office buildings have exceeded those of London. In addition to Shanghai, 2 other Chinese cities also ranked in the top-10 with Hong Kong in third place and Beijing in fifth place. The report said that investors were quite willing to invest in China in the past several years. Representatives of the commercial circle believe that over the next several years, other Asian cities such as Bombay in India and Singapore may also jump into the top places on the list and push out the list's European cities.

The report also said that New York City in the U.S. was previously ranked third on the list before the financial crisis broke out, but this time, it fell to tenth place.

Besides London, only 1 other European city – Paris, was in the top-5. There are 2 reasons: First, the amount of investment in Paris did not decrease during the financial crisis and second, merchants generally believe that Paris is quite attractive because of its steady politics, high living standard and advanced infrastructure.

Trade with the world

2013-04-22

China's economy was once a world unto itself. We possess all things, the

Qianlong emperor boasted to British visitors in 1793, and set no value on objects strange or ingenious. It is, therefore, remarkable that China last year eclipsed America as the world's biggest trader.

New figures show that America's imports and exports of goods amounted to $3.82 trillion in 2012, compared with China's $3.87 trillion (see chart). These figures count only trade in objects (ingenious or mundane). If services are added, America retains its lead for the moment. Tax dodges may also inflate China's numbers, but its trade networks are spreading.

The Associated Press says 124 countries count China as their leading trade partner. The Qianlong emperor claimed, somewhat optimistically, that his dynasty's majestic virtue had penetrated every country under heaven. China's exporters and importers have now accomplished exactly that.

 

China to speed up service sector development

2012-09-27

 

BEIJING, Sept. 26 (Xinhua) -- The State Council, China's Cabinet, on Wednesday announced multiple tasks for accelerating the development of the country's service sector in the 2011-2015 period.

Developing the service sector is a strategic priority in the country's optimization and upgrading of its industrial structure, said a statement released after an executive meeting of the State Council presided over by Premier Wen Jiabao.

The country will make more efforts to raise the sector's value in the economy, lift the sector's development level, improve the quality and efficiency of public services and strengthen the sector's role in generating more jobs, the statement said.

Officials attending the meeting agreed on speeding up development in more specific sectors oriented toward boosting the industrial upgrade and agricultural modernization. These sectors include finance, transport, telecommunications, technological support, project consultation, human resources and environmental protection, according to the statement.

Sectors catering to the multi-level and varied needs of the public should be greatly promoted. They include goods trade, family services, legal consultations, sports and real estate services, the statement said.

The country will also push for further opening-up in the service sector by promoting service exports and attracting more overseas investment. Meanwhile, the country will expand international exchanges and cooperation in the sector, and further cooperation with Hong Kong, Macao and Taiwan, the statement said.

It said the government will relax controls on market access to the service sector and encourage the investment of various kinds of capital.

Furthermore, the State Council has underscored sectors as key areas in which the nation will make great efforts to promote, including modern logistics, high-tech services, culture, e-commerce, tourism, design consultation, health issues and elderly care, services targeted at the countryside and oceanic services, the statement said.

The statement said the service sector provided 34.6 percent of jobs in China in 2010. From 2005 to 2010, the sector created 5.79 million new jobs on average annually.

The State Council has outlined the major tasks over the next few years because the development of the nation's service sector remains low and is not as competitive as the sector's international peers, according to the statement.

Government data shows that China's tertiary industry accounted for 43.1 percent of the country'sGDP in 2011, up from 40 percent in 2005.

China will set its own course

2012-09-27

 

The Communist Party of China will continue to follow its own path of reform and development, instead of copying models from other countries, a senior Party think tank said on Wednesday.

Chen Yangyong, director of the first compilation and research department under the Party Literature Research Office of the CPC Central Committee, said the Party will uphold China’s path — a tailored way of economic development and institutional reform that fits China best — rather than blindly copying development methods from other countries that may not suit local conditions.

The office is the research institute of the CPC Central Committee. It does research on historical and contemporary documents of the Party, the State and the military force, and explores the life stories of the leaders as well as compiling their writings.

Chen said academics are still divided over whether China’s development experience should be distilled into a term of China’s path, but he believes that a suitable path is the lifeline of a Party, and the gist of China’s path is to follow one’s own way.

Discussion on whether China’s experience of development should be summarized into a term like “China’s path” or “China’s model” has been going on for years.

Zhang Hongzhi, the office’s deputy director, said the word "model" indicates a shaped and universal state that makes people feel as if experience can be applied in different situations, while the word “path” suggests the development method is made on the basis on China’s particular situation and cannot reference other countries.

He said members of the CPC always believe that a country should independently look for the way of development according to its own situation, and experiences from other countries can be used for reference but not blindly copied.

The remarks were made at a news briefing on Wednesday, as the Party is expected to have a new leadership lineup at the upcoming National Congress of the CPC.

Five senior researchers from the office, including Chen, came to the press briefing and explained how the Party’s theories on China’s path have developed in the past decade.

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