Daily Archives: 07/19/2015

Business, China

News Analysis: China on track of 7.0 pct GDP growth for 2015

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News Analysis: China on track of 7.0 pct GDP growth for 2015LONDON, July 15 (Xinhua) — China’s 7.0 percent gross domestic product (GDP) year-on-year (yoy) growth in the second quarter is better than the going market predictions, suggesting that it is on track for around 7.0 percent GDP growth for all of 2015, economists said here.
China’s economy posted seven percent growth yoy last quarter, unchanged from the pace in the first quarter, China’s National Bureau of Statistics (NBS) announced Wednesday.
Julian Evans-Pritchard, China economist at Capital Economics, said in an analysis piece that China’s GDP growth data was better than market expectation consensus, which is 6.8 percent on a yoy basis.
Two reasons contribute to the stronger growth, Pritchard said: “The first, and most widely overlooked, is the impact of surging stock market turnover on brokerage activity, which is counted as part of the service sector. The second reason is the growing evidence of a recovery in the wider economy”.
He added: “With the drag from the structural slowdown in property and heavy industry now easing, we think that growth is on track to slow only gradually over the course of the next few years.”
Both the GDP growth and June economic activity data were largely above consensus, driven by faster growth in the services sector, infrastructure investment, and property sales, said HSBC’s global research team.
Official data showed that China’s industrial output in June expanded at 6.8 percent yoy, up from 6.1 percent in May; fixed asset investment grew by 11.4 percent during the first half of the year; and retail sales growth also strengthened in both real and nominal terms last month.
The largest driver appears to be the services sector. The GDP breakdown suggests that the services sector grew 8.4 percent yoy in the second quarter (Q2), up from 7.9 percent in Q1, said HSBC.
“A full sector breakdown has not yet been released, but finance likely remains the fastest growth sector, followed by some improvement in real estate,” added HSBC.
However, HSBC suggests: “The improvement in both investment and industrial output growth is still tentative and relatively modest. In order to strengthen and sustain the recovery, more policy easing measures are still needed and likely in the second half (2H) of 2015.”
“We forecast another 25 basis points (bps) policy rate cut and 200 bps reserve ratio cut in 2H 2015. We forecast full year GDP growth 7.1 percent for 2015,” added the bank.
Andrew Colquhoun, head of Asia-Pacific Sovereigns at Fitch Ratings, said: “Today’s data were in line with Fitch’s expectation and track the agency’s projection of 6.8 percent growth for the year.
The credit rating agency expects a further sequential pick-up in the second half of the year following recent monetary and credit policy easing.
“The resilience of retail sales in June is a further encouraging sign that downside risk, while not negligible, is receding, despite recent equity market volatility. Nonetheless, the longer-term outlook remains one of structural slowdown as the economy works through a painful process of adjustment and deleveraging,” said Colquhoun.  Enditem

Source xinhua

Xuefei Chen Axelsson

 

 

Business, China, News

PBOC allows qualified foreign institutions to trade, after filing, interest rate swap on interbank market

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BEIJING, July 15 (Greenpost) – Chinese central bank – the People’s Bank of China (PBOC) released late Tuesday a circular permitting qualified foreign institutions to trade, after filing, interest rate swap and other products on the domestic interbank market.
The decision was made to further boost foreign institutional investors’ investment in domestic interbank market.
Upon publication of the circular, such foreign institutions as foreign central banks, international financial organizations, and sovereign wealth funds are approved to file for recording to the PBOC before trading cash bonds, bond repos, bond lending, bond forwards, interest rate swap, forward rate agreements and others PBOC allows.
What’s more, foreign institutions are free to decide their investment size, according to the PBOC circular. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

Business, China, News

China central bank regulates overseas action in interbank market

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    BEIJING, July 14 (Xinhua) — The People’s Bank of China (PBOC), the central bank, issued a notice on Tuesday regulating overseas investment in the country’s interbank market.

Institutional investors, including foreign central banks or monetary authorities, international financial institutions and sovereign wealth funds, are now required to register with the PBOC before investing in the interbank market.

After registration, investors can trade bonds in spot and forward markets, conduct interest rate swaps, and trade forward rate agreements. They will be free to decide on the size of their investment.

“Overseas institutions should be long-term investors and conduct business in China’s interbank market based on the reasonable need to preserve and increase the value of assets,” said the PBOC.  Enditem

Business, China, News

China’s electroplating industry to embrace standard management

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BEIJING, July 15 (Xinhua) — Chinese authorities have formulated standards for the domestic electroplating industry and are now collecting public opinions on the standards, according to the Ministry of Industry and Information Technology (MIIT) on Tuesday.


The enterprise scale will be a rigid threshold for access to the electroplating industry, which will help enhance market share of leading enterprises, say analysts.
According to the standards, electroplating enterprises are required to build qualified wastewater treatment facilities and the waste water processed by those enterprises and enterprises with electroplating facilities has to meet environmental standards.
Meanwhile, the total amount of the bath solution should be no less than 30,000 liters during the production process. In addition, annual output value of the electroplating enterprise should be more than 20 million yuan. Enditem

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Business, China, News

China to stick to prudent monetary policy: PBOC

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          BEIJING, July 14 (Greenpost) — The People’s Bank of China (PBOC), the central bank, on Tuesday announced it “will continue to implement the prudent monetary policy, and improve the financial system’s capability to serve the real economy”.
The PBOC did not change its monetary policy stance after the latest quarterly meeting of its monetary policy committee, saying China will pursue a “prudent and balanced” monetary policy with more attention to striking a balance between tight and loose.
China’s economic and financial developments are stable on the whole, but the complexity of economic and financial operations should not be underestimated, the PBOC said in a statement.
The central bank will use multiple monetary policy tools in a flexible manner and maintain moderate liquidity in the market to ensure loans and social financing register reasonable growth.
The PBOC said it will work to improve reform of the financial system, enhance the system’s operational efficiency, improve the structure of financing, increase the proportion of direct financing, and reduce the cost of social financing.
High financing costs for Chinese enterprises, smaller firms in particular, has held back growth, experts said.
It also called for continued market-oriented interest rate reform, and for the renminbi’s exchange-rate reform to keep it stable.
The global economy is undergoing profound adjustments after the financial crisis, with major economies staging divergent performance, noted the statement.
The United States has witnessed more positive economic signs, while the European and Japanese economies are showing mild recoveries with deflationary risks, but some emerging markets face difficulties, said the PBOC.
The central bank said it will follow global economic and financial developments and the behavior of capital flows.
The quarterly meeting was chaired by PBOC governor Zhou Xiaochuan, also the chairman of the committee, and attended by senior government officials and economists.
China’s economy grew 7.4 percent in 2014, the slowest rate for 24 years. The PBOC has moved to combat the economic slowdown, cutting benchmark interest rates four times since November and lowering banks’ reserve requirement ratio twice since February.  Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson
Business, China, News

China nods local gov’nt bonds to be collaterals for banks’ Treasury cash deposits

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BEIJING, July 14 (Greenpost) – China has put local government bonds into the qualified collaterals pool for banks’ term deposits of Treasury cash on June 30, according to a circular released by the Ministry of Finance and the central bank Tuesday.
As the document says, bonds issued or to be issued by any Chinese local governments can be taken by banks as collaterals for their term deposits of Treasury cash from both the central government and local governments.
However, Chinese banks are required to pledge an amount of local government bonds whose par value is equal to 115 percent of the value of their Treasury cash term deposits to rein in risks.
Analysts held that Chinese regulators took the move to increase the relatively poor liquidity of local government bonds, issues of which was set to boom to at least 1.6 trillion yuan in 2015.
In future, MOF and the Chinese central bank will adjust the scale and proportion of collaterals for products to manage Treasury cash to guarantee safety of Treasury cash. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

 

Business, China

China can promote healthy development of capital market: premier

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BEIJING, July 10 (Xinhua) — China has the confidence and capability to promote the healthy development of its capital market and provide a sound financial environment for economic growth, Premier Li Keqiang said.

“China is and will face various challenges and risks during economic expansion. We will never take them lightly,” Li told a conference on the current economic situation on Thursday, according to a cabinet statement released Friday.
“We are confident that the government can ward off any regional or systemic risks in the economy and ensure we have an open, transparent, stable and healthy capital market,” said the premier.
Li’s remarks came as China is trying to arrest a stock market nosedive that devoured huge amounts of wealth in a three-week plunge.
For the premier, the country’s economic fundamentals are sound. Since the second quarter of 2015, the Chinese economy has been operating steadily with signs of improvement, according to Li.
“Economic vitality is increasing and market confidence is rebounding,” he said.
However, the premier warned that the foundation of the economy is not yet solid and external uncertainties are increasing.
“Therefore, we need to make more efforts to underpin economic growth,” said Li.
He reiterated the government’s determination to overhaul economic structure, cut redtape, encourage entrepreneurship and innovation, improve people’s livelihood, and boost public services.  Enditem
Business, China, World News

China H1 foreign trade drops 6.9 pct

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China H1 foreign trade drops 6.9 pct
BEIJING, July 13 (Xinhua) — China’s foreign trade dropped 6.9 percent year on year to 11.53 trillion yuan (1.89 trillion U.S. dollars) in the first half of 2015, official data showed on Monday.
Exports rose slightly by 0.9 percent from a year ago to 6.57 trillion yuan, while imports slumped by 15.5 percent to 4.96 trillion yuan, according to data from the General Administration of Customs (GAC).
Trade surplus expanded 1.5 times to 1.61 billion yuan in the Jan.-June period.
In June, foreign trade decreased by 1.9 percent from the previous year, with exports rising by 2.1 percent and imports falling by 6.7 percent, data showed.
Trade surplus in June jumped by 45 percent to 284.2 billion yuan.  Enditem

Business, China

China’s fiscal revenue rises 13.9 pct in June

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    BEIJING, July 15 (Greenpost) — China’s fiscal revenue rose 13.9 percent year on year to 1.53 trillion yuan (251.39 billion U.S. dollars) in June, the Ministry of Finance announced on Wednesday.

Combined fiscal revenue in the first six months hit 7.96 trillion yuan, a year-on-year increase of 6.6 percent. The growth was 4.1 percentage points lower than the rise seen in the same period last year.     Several factors have caused slower growth, the ministry said, including lower global commodity prices that triggered a fall in import value, slowing industrial activity, a reduction in business tax collected from a sluggish property sector, as well as the government’s efforts to cut taxes and fees to relieve the burden on businesses.
The ministry said it will strengthen budget management and keep cutting taxes and fees in the July-December period.
Fiscal spending in June hit 1.88 trillion yuan, up 13.9 percent year on year. Total fiscal spending in the first half of the year amounted to 7.73 trillion yuan, up 11.8 percent year on year, with spending on social security and employment up 20.9 percent to 1.04 trillion yuan.
Premier Li Keqiang, speaking at the opening of the annual parliamentary session in March, stressed that a proactive fiscal policy and prudent monetary policy would continue in 2015.
China plans to raise its budget deficit to 2.3 percent of its GDP for 2015, up from last year’s target of 2.1 percent.
China’s economy posted 7-percent growth year on year in the second quarter of 2015, unchanged from the first quarter, the lowest quarterly growth rate since 2009.  EnditemSource XinhuaEditor  Xuefei Chen Axelsson

 

Business, China

China to deepen reform to boost innovation and entrepreneurship

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 BEIJING, July 15 (Greenpost) — China will remove more vocational qualification and certification requirements to support creation of new businesses and bring forth new ideas.

A total of 62 vocational qualifications, including web advertising brokers and port cargo handling workers, will be abolished, according to a statement released after an executive meeting of the State Council presided over by Premier Li Keqiang on Wednesday.

The qualifications used to be required as a threshold to for people to enter the profession.       “China has been strengthening  innovation and entrepreneurship,” the statement read, “and will continue reform to remove unreasonable constraints for market entities, to let the market play the key role in allocating resources.”

Meanwhile, the government also promised to stabilize the exchange rate of the yuan at a reasonable and balanced level.
It also pledged to facilitate renminbi settlement to help enterprises avoid risks in cross-border trade, according to a statement released after an executive meeting of the State Council presided over by Premier Li Keqiang on Wednesday.
The cabinet also stressed providing more support to small and micro enterprises, as well as the development of emerging market.

Source Xinhua

Editor Xuefei Chen Axelsson
Business, China, News

More firms established in H1 amid improving business environment

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BEIJING, July 15 (Greenpost) — The number of newly registered enterprises in China continued to rise in the first half of 2015, official data showed Wednesday, indicating growing enthusiasm for innovation and entrepreneurship.
The number of new firms jumped 19.4 percent from a year ago to 2.1 million in the first six months, according to data released by the State Administration for Industry and Commerce (SAIC).
“This growth shows that a creative, entrepreneurial spirit has been stoked by business reform,” said Yu Fachang, a SAIC spokesperson.
By the end of June, there were around 74.20 million business in China, up 7 percent from the end of 2014, data showed.
The number of new firms registered in the service sector accounted for 80.3 percent of the total, or 1.607 million during the first six months, the SAIC data showed. This is a 22.6 percent increase compared to the same period last year.
Yu said this reflected improvement in China’s economic structure, with the service sector playing a bigger role in growth and job creation.
Amid an economic slowdown, China has been improving business registration processes since last year, removing the minimum capital requirements, replacing annual company inspections with a reporting system and loosening site requirements for businesses.
Easier market access and an improving environment for businesses also boosted employment at privately-owned enterprises.
A total of 264 million people were working in the private sector as at the end of June, an increase of 14.54 million from the end of 2014. Enditem