1. Urban fixed-asset investment climbed a more-than-estimated 26.5 percent in January and February combined to 1.03 trillion yuan ($150 billion) from a year earlier, the statistics bureau said today in Beijing. Exports tumbled 25.7 percent.
2. Railway investment tripled from a year earlier, agricultural spending doubled, and coal-mining expenditure jumped 59.6 percent, the statistics bureau said. The number of new projects climbed 28 percent to 18,533.
As the world’s second-largest oil consumer, China has approved and started at least $35 billion of energy projects since the stimulus plan was announced in November, according to data compiled by Bloomberg. The nation last month began building the eastern section of its second west-east gas pipeline, valued at 93 billion yuan.
3. “China’s economic growth may rebound strongly in this quarter and the next because of the investment expansion prompted by the stimulus package,” said Xing Ziqiang, a Beijing-based economist at China International Capital Corp. “However, slumping exports may drag down investment by manufacturers, so that growth slows again in the second half.”
4. Surging spending outweighs a slump in trade because fixed- asset investment accounts for 40 percent of China’s economic growth, versus 7 percent for net exports, said Sun Mingchun, a Hong Kong-based economist at Nomura Holdings Inc.
(Source : Bloomberg)
I do not like to get myself into troubles by commenting political games between the American and the Chinese. My pragmatic purpose is to remind ourselves - read in between the lines on political motives when decoding market news in order not to miss the big picture. The American has been pressuring the Chinese to strengthen Yuan to shrink their trade deficits. So, they will keep labelling them an export oriented economy to put pressure on China not to devalue Yuan. I believe China has done a good job to maintain their behavior in order not to get into trade war. It was Hu Jintao that placed a phone call to Obama after Geithner accused China manipulating their currency. I was glad that just that one phone call diffused the tension telling the whole world US and China oppose trade protectionism. That was a wise action.
The American will also find ways to pressuring China by keep supplying them credit line - buying their treasury. It was the same tactic that they did to Japanese when they were roaring. I believe China will oblige to do so as they don't have many alternative outlets although they have been making some loans to third world resource-rich countries.
I can see they are making all kind of right moves that will benefit the global economy.
They are pushing hard to encourage consolidation to avoid excess capacities in a lot of industries like textiles, ship building, electronics, manufacturing and etc. They understand well excess capacity could prolong deflation and recovery.
If we read carefully into China's stimulus, beside infrastructure, they are giving all kinds of incentives to go after higher added value products or environmental friendly or enegy efficient programs. 3G-lah, fuel-efficient car-lah, digital TV-lah, phase out old technology-lah, and......
What I am alluding is China is pursuing progress and better quality of life for her people. They have caring leaders actually. I believe they will continue to reform and reform until they catch up with the advanced countries. This will a long time to do that but also means we are going to enjoy the spin-off effects of China for a long time to come. I believe the Western media will over-amplifying on the export headlines or speculate Yuan devaluation - to make our minds narrowly focused. China recent years export boom did generate a lot of trade surplus that attract a lot of jealousy. But with the American saving more, the tension should reduce down the road.
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