Biodun Iginla, BBC News

Biodun Iginla, BBC News
Showing posts with label china's economy. Show all posts
Showing posts with label china's economy. Show all posts

Thursday, December 29, 2016

China vows to open up economy as investment declines


by Xian Wan and Biodun Iginla, France24, Shanghai


    © AFP/File | Foreign direct investment in China is estimated to reach $113 billion this year, China?s Ministry of Commerce said

    SHANGHAI- 
    Beijing has pledged to open up more economic sectors to foreign investment, an official statement said, as foreign chambers of commerce complain of a worsening business environment in the country.
    China will ?unwaveringly insist on the opening-up policy? and ?create fair competition environment by treating foreign and domestic funds as the same?, the State Council, China's cabinet, said in a statement late Thursday after a meeting hosted by Premier Li Keqiang.
    Foreign direct investment in China is estimated to reach 785 billion yuan (now $113 billion) this year, China?s Ministry of Commerce said Monday, lower than the total of $135.6 billion last year.
    The EU Chamber of Commerce in China has complained of an "unequal investment landscape" in the country and called for it to drop widescale prohibitions on foreign investment.
    China will allow foreign firms to operate fully-owned subsidiaries, rather than joint ventures, in sectors including rail transportation equipment and motorcycles, the statement said.
    It will also let them enter fields including auditing and architectural design for the first time.
    Foreign companies will be given the same treatment as Chinese firms in terms of capital required to set up shops, products purchased by the government, and preferential policies for high-tech enterprises, it added.
    Beijing has repeatedly pledged to make its economy more responsive to market forces.
    But China ranked 84th globally -- behind Saudi Arabia and Ukraine -- in the World Bank's ease of doing business index for 2016, and second to last in an OECD report on restrictiveness towards foreign investment.
    The country is trying to stem capital outflows with its yuan currency falling and its vast foreign exchange reserves dropping eight percent from January to November.

     
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    Monday, May 30, 2016

    To save China's economy, read more Marx, scholars say


    by Xian Wan and Biodun Iginla, France24, Beijing


      © AFP/File | Economics students at Chinese universities should study a curriculum composed of at least half Marxist courses, Chinese professors said

      BEIJING - 
      China's economics students are being "brainwashed by Western theories" and need to read more Marx, Chinese professors said in a letter to the education ministry, amid a widening crackdown on foreign ideas.
      As the world's number two economy faces a slowdown and struggles to adopt much-needed reforms, economics students at Chinese universities should study a curriculum composed of at least half Marxist courses, said the petition, otherwise they will become the "grave diggers of the socialist economic system".
      It is the latest effort by China's ruling Communist party to push its ideology in classrooms as President Xi Jinping, who has overseen tightened media censorship and a crackdown on dissent, has called for the Communist party to increase control over universities.
      ?It is in essence an ideological class struggle wherein the bourgeois class clashes with the proletariat class in education,? the letter?s co-author told the state-run Global Times Tuesday, adding that the letter had dozens of scholars supporting it.
      "How can a socialist university be allowed to educate such people who will become the grave diggers of the socialist economic system?"
      The petition did not address whether Marx, a German-born political theorist, revolutionary and philosopher who spent much of his life in England, should be considered ?Western?.
      Schools have become an ideological battleground for the ruling party, with the country?s education minister saying in 2015 that textbooks promoting so-called ?Western values? should be banned.
      Internet users have fiercely debated new revisions to China's primary and secondary school textbooks that state media criticised for paying too little attention to the Communist Party's revolutionary heritage and patriotic content.
      Replaced textbook contents included a passage inviting readers to imagine the experience of being an intercontinental ballistic missile and the tale of man punishing a "rich hooligan" by beating him to death, the Global Times reported.
      Although officially socialist in name, China has since the late 1970s embraced capitalism and experienced surging growth as the role of the state diminished and market forces fuelled a transformation of the economy.
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      Sunday, January 10, 2016

      Asian markets resume sell-off on lingering China fears

      11 January 2016 - 04H25


        © AFP/File | Analysts say market is concerned about China?s financial stability and its slowing economic outlook

        HONG KONG  - 

        by Xian Wan and Biodun Iginla, France24 financial news analysts, Hong Kong

                 
        Asian shares tumbled again Monday as another round of tepid data added to concerns about China's economy, which is already responsible for sparking a rout across global markets at the start of the year.
        After enjoying some minor relief on Friday, the region's trading floors were once again swathed in red as panicking investors dumped equities while oil prices also headed south, sitting around 12-year lows.
        The gains at the end of last week were not enough to help US and European markets, which ended deep in negative territory as a strong US jobs report was overshadowed by fears about China and its leaders' ability to manage a slowdown.
        "The market is concerned about China?s financial stability," Matthew Sherwood, head of investment strategy at asset managers Perpetual in Sydney, told Bloomberg News.
        "People are also quite nervous about the Chinese economic outlook. China is certainly slowing on a very gradual path down. A lot of people are fearing a hard landing is in play."
        On Saturday official figures showed Chinese consumer prices picked up slightly in December but inflation remained about half the government's target. Prices paid at the factory gate, a guide to future inflation, also sank for a 46th consecutive month.
        The figures are the latest highlighting the weakness in China, which is expected to have grown in 2015 at its slowest rate in a quarter of a century.
        In early trade Monday Shanghai slumped two percent at one point before paring the losses to sit 1.2 percent lower, while Hong Kong gave up 2.3 percent, Sydney shed 1.9 percent, Seoul slipped 0.9 percent and Singapore was 2.0 percent off. Tokyo was closed for a public holiday.
        - 'Kneecapping' -
        Investors extended losses from last week, which was one of the worst starts to a year on record with dealers rattled after trade was suspended twice in four days in Chinese markets. Shanghai ended the week about 10 percent lower, in echoes of a sell-off that fuelled global turmoil in the summer.
        London lost 5.3 percent over the week, Paris shed 6.5 percent and Frankfurt dropped 8.3 percent.
        And on Wall Street, the Dow and S&P 500 lost about 6.0 percent, marking the worst opening week of a year in the history of either index.
        Beijing's bungling of the handling of the crisis added to the nervousness.
        "Chinese equities have had a tough start to the year. This has flowed around the globe, kneecapping equities, where valuations were already deemed to be stretched," Mark Smith, a senior economist in Auckland at ANZ Bank New Zealand, said.
        "A weaker inflation outlook and heightened market volatility has also swung the pendulum back to more policy support."
        Oil prices continued their slump, with both main global contract dropping around two percent on Monday, with the crisis in China -- the world's biggest energy user -- adding to a worldwide glut, weak demand and a strong dollar.
        Worries about the global outlook also pushed up the price of gold, which is considered a safe investment in times of uncertainty. The precious metal, which is up more than three percent so far this year, bought $1,105 an ounce Monday.
        - Key figures around 0230 GMT -
        Shanghai - Composite: DOWN 1.2 percent at 3,149.33
        Hong Kong - Hang Seng: DOWN 2.3 percent at 19982.98
        Tokyo - Nikkei 225: Closed for a public holiday
        Euro/dollar: UP at $1.0938 from $1.0922 late Thursday
        Dollar/yen: DOWN at 117.17 yen from 117.26 yen
        New York - Dow: DOWN 1.0 percent at 16,346.45 (close)
        London - FTSE 100: DOWN 0.7 percent at 5,912.44 (close)
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        Monday, October 19, 2015

        China's economic growth slows to 6.9%

        by Xian Wan and Biodun Iginla, BBC News, Beijing


        27 minutes ago


        China's economy grew 6.9% in the third quarter, the weakest rate since the global financial crisis.
        The year-on-year growth rate is also below the government's 7% target.
        Though slightly above expectations, the data is expected to raise pressure on policymakers to step up monetary policy to stem the slowdown.
        China's economy has been hit by extreme stock market volatility over the summer and weak economic data, causing concern on markets around the world.
        Most analysts were expecting growth figures of 6.8% for the July to September period.
        The latest growth figure comes after a slew of disappointing data out of China. Earlier in the month, manufacturing data suggested the sector continued to contract for September.

        Imports saw a sharp fall for the past month while inflation eased by more than expected, adding to fears of a rapid slowdown in the world's second largest economy.

        'Upgrading the economy'

        China has been attempting to shift from an export-led economy to a consumer and services-led one.
        Beijing set an official growth target of "about 7%" for the overall year but Premier Li Keqiang said a lower growth rate was also acceptable, as long as enough new jobs were created.
        "In order to restructure, the economy will face some downward pressure," Sheng Laiyun, a spokesman for the Chinese statistics agency, told reporters.
        But despite a slowdown in the industrial sector, Mr Sheng said the services sector is expected to grow rapidly.
        "All this indicates the restructuring and upgrading of the Chinese economy are going steadily."
        However, analysts say the steep fall in imports suggests domestic demand is not as strong as the government would have hoped.

        Analysis: Andrew Walker, BBC economics correspondent:

        For three decades, China's annual economic growth averaged 10%. Since 2010 it has slowed. Last year's figure was 7.4%, and it's generally accepted this year will be slower, followed by a further deceleration in 2016.
        The quarterly figures we have had so far are consistent with that expectation. The first and second quarters both showed economic activity up by 7% compared with a year earlier.
        Yes, these are Chinese official figures whose reliability is widely criticised. But there is no real doubt that growth is slowing, perhaps by a good deal more than those official figures suggest.
        Read more from Andrew
        Image copyright AFP
        Image caption There has been a slew of disappointing data out of China

        More government measures?

        The slowdown comes despite repeated interest rate cuts and other stimulus measures introduced by Beijing.
        "The government's measures helped dampen the downside pressures but the problem is that these pressures on growth are actually pretty severe," Louis Kuijs of Oxford Economics told the BBC.
        They could be seen in the industrial production data, in heavy industry and other sectors, he explained.
        "What keeps China going at the moment is consumption but this can not fully offset those negative pressures on growth and therefore - even though we see some stimulus coming from the government and we see that having some impact - it's not enough to prevent growth from sliding further."
        In the second quarter, growth did beat expectations, coming in at 7% from the previous year, matching growth in the first three months of the year.
        Economists are, however, continuing to call for more government action, as volatility in the stock markets sparks concerns of financial turmoil and potential social unrest.

        More on this story

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        Media captionChina's great balancing act
        Imports saw a sharp fall for the past month while inflation eased by more than expected, adding to fears of a rapid slowdown in the world's second largest economy.

        'Upgrading the economy'

        China has been attempting to shift from an export-led economy to a consumer and services-led one.
        Beijing set an official growth target of "about 7%" for the overall year but Premier Li Keqiang said a lower growth rate was also acceptable, as long as enough new jobs were created.
        "In order to restructure, the economy will face some downward pressure," Sheng Laiyun, a spokesman for the Chinese statistics agency, told reporters.
        But despite a slowdown in the industrial sector, Mr Sheng said the services sector is expected to grow rapidly.
        "All this indicates the restructuring and upgrading of the Chinese economy are going steadily."
        However, analysts say the steep fall in imports suggests domestic demand is not as strong as the government would have hoped.

        Analysis: Andrew Walker, BBC economics correspondent:

        For three decades, China's annual economic growth averaged 10%. Since 2010 it has slowed. Last year's figure was 7.4%, and it's generally accepted this year will be slower, followed by a further deceleration in 2016.
        The quarterly figures we have had so far are consistent with that expectation. The first and second quarters both showed economic activity up by 7% compared with a year earlier.
        Yes, these are Chinese official figures whose reliability is widely criticised. But there is no real doubt that growth is slowing, perhaps by a good deal more than those official figures suggest.
        Read more from Andrew
        Image copyright AFP
        Image caption There has been a slew of disappointing data out of China

        More government measures?

        The slowdown comes despite repeated interest rate cuts and other stimulus measures introduced by Beijing.
        "The government's measures helped dampen the downside pressures but the problem is that these pressures on growth are actually pretty severe," Louis Kuijs of Oxford Economics told the BBC.
        They could be seen in the industrial production data, in heavy industry and other sectors, he explained.
        "What keeps China going at the moment is consumption but this can not fully offset those negative pressures on growth and therefore - even though we see some stimulus coming from the government and we see that having some impact - it's not enough to prevent growth from sliding further."
        In the second quarter, growth did beat expectations, coming in at 7% from the previous year, matching growth in the first three months of the year.
        Economists are, however, continuing to call for more government action, as volatility in the stock markets sparks concerns of financial turmoil and potential social unrest.

        More on this story

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