month in review • SECTOR NEWS SECTORNEWS
SHORT CIRCUIT: Japan drops out of the chain Meanwhile, electronics makers like
ZTE and Lenovo will probably begin paying higher prices to source parts from China, Taiwan and Korea – potentially shrinking their quarterly margins. Apple product manufacturer Foxconn may also slow production of the coveted iPad 2. Te tablet contains parts that would be hard to get from other suppliers, accord- ing to a report from IHS iSuppli. Chinese exporters to Japan, mean-
while, will be hit by a different trend: an initial drop in business as the crisis reduc- es consumption, followed by a surge in demand for lower value consumer goods and raw materials, including building materials, machinery and base metals like copper, as rebuilding begins. Reconstruc- tion could also be a boon for railway sup- pliers and Chinese steelmakers, although much of Japan’s demand may be for high- er quality Korean steel. Overall, exports to Japan account for
only 2% of China’s economy. But there is one aspect of the crisis that could threaten China’s economic health: Japan’s grab for energy and commodities will put upward pressure on commodity prices.
ECONOMICS & TRADE Gross domestic product grew by 9.7% in March, down slightly from 9.8% in February. The European Commission proposed a 12% anti-subsidy duty and an 8% anti-dumping duty on Chinese fine paper. Activity in China’s manufacturing sector grew for the first time in four months as the Purchasing Managers’ Index (PMI) reached 53.4 in March compared to 52.2 in February. The Consumer Price Index increased 5.4% year-on-year in March and the Producer Price Index increased 7.3%.
ENERGY & ENVIRONMENT China consolidated its position at the top of the Pew Charitable Trusts’ renewable energy investment rankings last year as spending rose 39% to US$54.4 billion. The country became the world’s largest
DIZZYING HEIGHTS: Shanghai passes new measures to ground property prices
manufacturer of wind turbines and solar modules, and overtook the US in terms of installed renewable energy capacity. China Uranium Development, a unit of Guangdong Nuclear Power Group, set the stage for a backdoor listing in Hong Kong through the acquisition of drug supplier Vital Group Holdings. China Oilfield Services Ltd (COSL), a subsidiary of state-owned energy giant China National Offshore Oil Corp (CNOOC), saw profits increase 32% as CNOOC - which is also COSL’s biggest customer - expanded exploration activities.
BANKING & FINANCE The People’s Bank of China announced
CHINABYNUMBERS
The number of ex- pats projected to live in Shanghai by 2021
800,000 8 China Economic Review • May 2011
that it would raise Chinese banks’ reserve requirement ratio by 50 basis points to 20.5%, the fourth increase this year. It raised the benchmark one-year borrowing and lending interest rates by 25 basis points. Agricultural Bank of China announced that 2010 net income increased 46% year-on-year to US$14 billion due to record profits at rural financial institutions that were struggling to survive a year ago. Spanish lender Banco Santander has agreed to take a 19.9% stake in a joint venture with China Construction Bank to set up “village and town banks.”
CONSUMER Wal-Mart is eying more land purchases in China as it seeks to expand its network of stores in the country. Gome Electrical Appliances announced plans to expand into e-commerce as it reported a 39% increase in 2010 net profit to US$298.9 million. Zhang Dazhong, who was recently appointed chairman, said that the company would add at least 100 stores in 2011.
PROPERTY The Shanghai government aims to limit property price growth to no more than
370,000 tons
Salt Chinese consum- ers purchased in one day following Japan’s nuclear accident
The number of Chinese citizens evacuated from Libya
35,860
Imaginechina
Imaginechina
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