JWC Bimonthly E-Newsletter No.96
April 1st , 2012 by JWC Consulting Group
Advance notice: JWC Newsletter No.97will e-mail to you from June 1st , 2011.
Raymond LI goes to Shanghai work and living for 3 months
According to the climate changing arrangement in July 2011,Raymond LI Jinwei goes to Shanghai work and living for 3 months from April 1st to June 29th.
Pictures news: Raymond LI joined in Beijing the top leaders with Canada and China forum and witness the agreement between mid and large size enterprises of two countries .See right pictures.
China Home Prices Fall in More Than Half Cities Tracked
By Fion Li and Bonnie Cao - Mar 19, 2012 4:45 PM GMT+0800 LinkedIn Google +1 Print QUEUEQ
International Monetary Fund official Zhu Min said China will avoid an economic hard-landing even as government data showed property prices falling in most of the nation’s biggest cities.
“China’s heading for a soft-landing,” Zhu, a deputy managing director at the IMF, said in Hong Kong today. At the same conference, Reserve Bank of Australia Governor Glenn Stevens also expressed confidence in an economy he said is closing in on that of the U.S. Prices of new apartments fell in 45 of 70 cities in February from January, the statistics bureau said yesterday.
QMarch 19 (Bloomberg) –- Michael Klibaner, head of China research at Jones Lang LaSalle Inc., talks about the nation's home prices and official policy on real estate. February home prices posted the worst performance in a year with almost half of China's cities monitored by the government falling from a year ago as the country maintained curbs on the property market. Klibaner speaks with John Dawson on Bloomberg Television’s "On the Move Asia." (Source: Bloomberg)
QMarch 19 (Bloomberg) – Bei Fu, a Hong Kong-based analyst at Standard & Poor’s, talks about the outlook for China's real estate market and nation's property developers. She speaks in Hong Kong with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
QMarch 18 (Bloomberg) -- International Monetary Fund Managing Director Christine Lagarde talks about the global economy. She spoke yesterday in Beijing. (Source: Bloomberg)
QMarch 19 (Bloomberg) -- Tim Condon, chief Asia economist at ING Financial Markets, discusses the outlook for the Chinese economy. He speaks from Singapore with Caroline Hyde on Bloomberg Television's "First Look." (Source: Bloomberg)
Premier Wen Jiabao has prolonged a crackdown on real-estate speculation to reduce the risk of asset-price bubbles and make housing affordable, telling lawmakers this month that prices remain far from “reasonable.” Zhu’s comments contrast with JPMorgan Chase & Co. strategist Adrian Mowat saying last week that weakness in car sales and cement and steel production indicate the nation is already experiencing “a hard landing.”
Chinese stocks fell on the property data, with the Shanghai Composite Index down 0.2 percent as of 1:32 p.m. local time.
Zhu, a former deputy governor of China’s central bank, said the nation’s pace of investment remained strong even after moderating. Stevens said that “it seems likely that the Chinese economy will grow pretty strongly on average for a while yet,” adding that officials have “the will and the capacity” to spur the expansion as needed.
Matching the U.S.
The Australian central banker said Chinese gross domestic product may equal that of the U.S. in about a decade in purchasing power parity terms, which account for differences in exchange rates. He spoke at a Credit Suisse Group AG Asian investment conference.
Zhu, meanwhile, echoed IMF head Christine Lagarde in highlighting risks to the global economy even as he acknowledged signs of improvement. Europe’s financial markets are “very fragile” and while emerging-market growth is strong, it’s “weaker than expected,” he said. The world expansion is slowing, he added.
In Beijing yesterday, Lagarde cautioned policy makers against a false sense of security as the world economy stabilizes, highlighting elevated oil prices, debt levels in developed nations and the risk of slowing growth in emerging markets.
Elsewhere in Asia, South Korea today reported that department store sales rebounded last month, while Hong Kong reported that unemployment climbed in the three months through February to 3.4 percent, the highest rate in seven months.
European Reports
Italy may say industrial orders fell in January from the previous month, a Bloomberg survey showed. The European Central Bank will release euro-zone current account figures for January, while the European Union’s statistics office will report the region’s construction output for the same month.
In the U.S., the National Association of Home Builders/Wells Fargo may say its index of builder confidence rose for a sixth straight month to 30 in March, from 29 in February, according to the median estimate in a Bloomberg survey.
In China, a two-year campaign to rein in property prices has included measures such as higher down payments and mortgage rates, and purchase restrictions. A government program to build millions of low-cost homes may help to counter the drag on an economy that grew 8.9 percent in the fourth quarter.
China Policy Outlook
New home prices fell in 27 of 70 cities last month from a year earlier and prices were unchanged in six cities, the national statistics bureau said in a statement on its website yesterday.
“China’s home prices fell further, but it doesn’t mean there will be a policy loosening any time soon,” said Qu Hongbin, a Hong Kong-based economist at HSBC Holdings Plc. “The government is not worried too much about the impact of a slowing property market on economic growth because investment in social housing will still be big.”
Among major cities, home prices in both Beijing and the financial center of Shanghai fell 0.4 percent last month from a year ago. In the south, Shenzhen declined 0.2 percent, while Guangzhou rose by 0.3 percent from 2011.
“We’re still not sure when is the bottom but we’re sure that we’re still heading for the bottom rather than hitting the bottom,” said Bei Fu, a Hong Kong-based analyst at Standard & Poor’s. “Liquidity is the highest risk Chinese developers are facing.”
Prices have gone up “very substantially” over the past few years and the central government is very determined to control prices to maintain social stability, said Fu.
China to reform, grow economy, IMF eyes freer yuan
BEIJING (Reuters) - China cannot delay tough economic reforms, Vice Premier Li Keqiang said on Sunday, underscoring the top leadership's push for market-based change after the sacking last week of an ambitious provincial leader who wanted a bigger state role in the economy.
Li, widely expected to succeed Wen Jiabao as premier in a leadership transition that begins later this year, promised flexible policies to keep growth brisk and prices stable, with a focus on boosting domestic demand and pursuing structural reforms to make growth more stable and balanced.
"China has reached a crucial period in changing its economic model and (change) cannot be delayed. Reforms have entered a tough stage," Li said, echoing comments made by Wen last week.
"We will make policies more targeted, flexible and forward-looking to maintain relatively fast economic growth and keep price levels basically stable," Li said in a speech at an economic policy conference, attended by top Chinese officials, the head of the IMF and dozens of foreign business leaders.
He said China would "deepen reforms on taxes, the financial sector, prices, income distribution and seek breakthroughs in key areas to let market forces play a bigger role in resource allocation".
Li's renewed emphasis on reform-led growth comes after Wen said slower growth and bolder political reform must be embraced to keep the world's second largest economy from faltering and to spread wealth more evenly, promising to use his last year in power to attack discontent that he warned could end in chaos.
Wen told a news conference at the end of the National People's Congress (NPC) that growth would be made more resilient to external pressures, domestic property and inflation risks deflated and 10.7 trillion yuan ($1.7 trillion) in debt racked up by local governments dealt with, while also promoting political change.
He cut China's official 2012 growth target to 7.5 percent, down from the 8 percent targeted in each of the last eight years, aiming to create leeway to deliver reform of items including subsidies, without igniting inflation.
China's annual rate of inflation cooled to 3.2 percent in February, below the government's 4 percent target for the first time in more than a year. But policymakers remain particularly sensitive to elevated commodity prices, given China's huge imports of raw materials.
PRO-GROWTH POLICIES CRUCIAL
Zhang Ping, head of the country's top planning agency, the National Development and Reform Commission, told the Sunday conference that economic policies maintaining relatively fast growth were key to the country's future.
"First of all, we need to maintain steady and relatively fast economic growth -- development is the key for resolving all problems in China," Zhang said.
The government would maintain prudent monetary and pro-active fiscal policies, and stand ready to fine-tune settings -- a consistent refrain from China's leaders since the autumn of 2011.
The show of unity over pro-market reform took on new significance last week when China's central leadership moved to bolster control over the southwest city-province of Chongqing after ousting its contentious but popular chief, Bo Xilai.
The calls for unity with the ruling Communist Party's top leaders were emblazoned on the front pages of Chongqing newspapers on Saturday. They made no mention of Bo, removed from power after a scandal when his Vice Mayor Wang Lijun took refuge in February in a U.S. consulate until he was coaxed out.
After arriving in Chongqing in 2007, Bo, 62 and a former commerce minister, turned it into a bastion of Communist revolutionary-inspired "red" culture and egalitarian growth, winning national attention with a crackdown on organized crime.
His self-promotion and revival of Mao Zedong-inspired propaganda irked moderate officials. But his populist ways and crime clean-up were welcomed by many residents and others who hoped Bo could try his policies nationwide.
Li said that while the overall trend of China's economy was stable with sound fundamentals, it faced structural obstacles that must be overcome, adding that Beijing would push forward structural reforms while encouraging technological innovations to generate new sources of economic growth.
CURRENCY REFORM CARROT
International Monetary Fund managing director, Christine Lagarde, dangled an additional reform carrot at the same economic forum on Sunday, saying that the yuan could become a global reserve currency with the right mix of market-oriented structural change.
"What is needed is a roadmap with a stronger and more flexible exchange rate, more effective liquidity and monetary management, with higher quality supervision and regulation, with a more well-developed financial market, with flexible deposit and lending rates, and finally with the opening up of the capital account," Lagarde said.
"If all that happens, there is no reason why the renminbi (yuan) will not reach the status of a reserve currency occupying a position on par with China's economic status."
China, the world's biggest exporting nation and the second-largest importer, has long wanted to break the dollar's dominance as the principal global unit of cross-border trade, in part to battle internal inflation risks and also to enhance Beijing's influence on the international financial system.
China's has a closed capital account system and its currency is tightly controlled.
Although Beijing has increased the use of the yuan to settle cross border trade, undertaking a series of reforms in recent years to that end, yuan settlement was only about $300 billion in 2011, which Chinese exports were worth about $1.9 trillion.
Li said he expected China's total trade to maintain double-digit growth this year. The government has an official target of 10 percent growth in both imports and exports for 2012.
Exports are a key source of demand and jobs for China's vast factory sector and have been a principal driver of wealth creation for much of the last decade in the wake of the country's accession to the World Trade Organization.
China's trade balance plunged $31.5 billion into the red in February as imports swamped exports to leave the largest deficit in at least a decade and fuel doubts about the extent to which frail foreign demand drove the drop.
Li said that there were some encouraging signs emerging about the pace of global economic recovery, and forecast that China's total trade would top $10 trillion in the five years 2011-2015, but added that the outlook was not certain, with efforts to resolve Europe's debt crisis still evolving.
Economists expect China's annual economic growth to slow to close to 8 percent in the first three months of 2012, down from 8.9 percent in the last quarter of 2011. That would be the fifth successive quarter of slower growth and leave China on track to end the year with its weakest expansion in a decade.
A raft of economic indicators in the last two weeks have signaled that China's economy is on a gentle glide lower and on course to avoid a so-called hard landing.
China to speed up reform to cushion risks: Wen
China will speed up economic reforms and let its currency float more freely in a bid to make growth more sustainable and cushion the country against external pressures and property market risks, Premier Wen Jiabao said on Wednesday.
Mr. Wen said China’s recent decision to cut its economic growth target to 7.5 per cent for 2012 from the 8 per cent eyed in each of the previous eight years was necessary to help transform the economy, and create more widespread wealth while keeping inflation under control.