• January 29, 2018

The Chinese yuan strengthened to the strongest level since Nov. 2, 2015 on Monday following prolonged weakness of the U.S. dollar. The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 169 basis points to 6.3267 against the U.S. dollar Monday, the seventh consecutive rise, according to the China Foreign Exchange Trade System. Huang Zhilong, a researcher with the financial research arm of the Suning Group, attributed yuan's strong reading to persistent weakening of the U.S. dollar. The dollar index, a gauge that measures the U.S. currency's strength against six other major currencies, have declined over 3 percent since the beginning of this year. The yuan has also gained nearly 3 percent against the U.S. dollar since earlier this year, tracking the dollar weakness by the same margin. A strong yuan is also backed up by solid fundamentals of the Chinese economy and improvements of the company profits, he said. In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day. The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

• January 22, 2018

XIAMEN -- A new freight train service linking the East China port city of Xiamen with Budapest, capital of Hungary, started Friday, making it the newest China-Europe freight train route. At about 10:45 am, a train with 35 containers left Haicang District station in Xiamen, carrying about 3.5 million US dollars of goods, including electric products, clothes, shoes and construction materials. The 11,595 km journey, which takes one stop at China's Southwest city of Xi'an, will take 18 days. It will operate every Friday and creates easier access for products from Xiamen and Southeast Asia to travel to Europe. The city has rail routes to five European countries, including Germany and Russia, with more than 200 trips made since services to Europe were launched in August 2015. The freight train of China Railway Express (Xiamen-Budapest), linking Southeast China's port city of Xiamen with Budapest, Hungary, leaves Haicang Station in Xiamen, Southeast China's Fujian province, Jan 19, 2018. The 11,595 km journey, which takes one stop at China's Xi'an, will take 18 days.

• January 22, 2018

BEIJING - Two-way movement will be normal for the exchange rate of the Chinese yuan in the future given uncertainties in the global economic recovery and the monetary policies of major economies, according to a senior official with the country's top forex regulator Thursday. China will continue to improve the formation mechanism of the renminbi exchange rate to enhance its flexibility and keep it generally stable within a reasonable range, according to Wang Chunying, spokesperson with the State Administration of Foreign Exchange (SAFE). The central parity rate of the Chinese currency renminbi, or the yuan, weakened 66 basis points to 6.4401 against the US dollar Thursday after three days of strengthening. The Chinese currency has risen by over 1.5 percent in value compared with the US dollar since the first trading day this year. Wang attributed the yuan's rise to a weakening dollar and steady domestic economic growth. The dollar index, a gauge that measures the US currency's strength against six other major currencies, staged consistent declines in the past trading days over domestic uncertainties and a strengthening euro due to stronger-than-expected EU economic recovery. In a sign of rising confidence in the currency, China's central bank decided last week to adjust the mechanism it created last year to support the renminbi and check capital flight amid worries of a weakening yuan. Chinese enterprises are gradually changing their old thinking on the renminbi exchange rate, with fewer betting on unilateral appreciation or depreciation, said Wang, adding that SAFE will continue to prompt enterprises to improve risk management.

• January 15, 2018

Last year brought steady trade growth to China thanks to domestic and global expansion, while behind the numbers, trends are emerging which tell of shifting engines of growth. China's foreign trade rose 14.2 percent to 27.8 trillion yuan (4.3 trillion U.S. dollars), following two years of decline. Exports increased 10.8 percent to reach 15.3 trillion yuan while imports were up 18.7 percent to 12.5 trillion yuan, according to the General Administration of Customs (GAC). GAC spokesperson Huang Songping attributed the growth to the global economic recovery, steady domestic economic expansion, rising commodity prices, emerging markets along the Belt and Road and a low comparison base. A closer look at the data reveals a more balanced economy is gradually taking shape. General trade, which has a higher added-value than processing trade, increased both in volume and proportion in 2017, expanding to 15.7 trillion yuan and accounting for 56.4 percent of total foreign trade, up 1.3 percentage points from 2016. The Belt and Road has expanded China's markets, and trade with countries in Latin America and Africa grew by 22 percent and 17.3 percent, respectively, last year. Private enterprises edged up 0.4 percentage points in their share of total trade. The private sector is the biggest contributor to trade growth. Trade growth is more balanced among regions. Less developed regions, including central and western China and the rust belt, all outpaced the national average. Electro-mechanical products remained a pillar of exports, with some high value-added products doing well. Exports of automobiles, computers and medical equipment grew 27.2 percent, 16.6 percent and 10.3 percent, respectively. The trade surplus continued to narrow last year, shrinking 14.2 percent to 2.9 trillion yuan, compared with a 9.1-percent reduction in 2016 that saw 3.35 trillion yuan in trade surplus. Imports of some key components and high quality consumer goods rose fast. Integrated circuits and aquatic products were up 17.3 percent and 19.6 percent. Trade growth momentum is waning as both exports and imports fell in December. Trade will face pressure in Q1 as surveys showed falling confidence and new orders in December. It will be difficult to keep up double-digit trade growth this year given global uncertainties and a high comparison base, Huang said. Solid global growth may provide some support for export growth, but, real effective exchange rate appreciation and an increase in U.S. protectionism could weigh on exports, narrowing the trade surplus further, according to securities trader Nomura.

• January 15, 2018

The Chinese yuan has huge room to improve its use in global systems partly due to increasing demand for yuan-denominated assets, a central bank official said Sunday. "Yuan's international status is far lower than the proportion of the Chinese economy in the global economy, which means enormous room for improvement in the currency's global use," Yin Yong, vice governor of the People's Bank of China, said at a forum held in Qingdao, east China's Shandong Province. The currency only accounts for around 1.8 percent of international clearing, 2 percent of foreign exchange (forex) transactions, and over 1 percent of forex reserves, Yin said. In contrast, China, the world's second largest economy, boasts more than 15 percent of global GDP and around 11 percent of trade. Thanks to solid economic growth, Yin believes there is demand for more yuan-denominated assets in financial markets and the real economy worldwide. Yin said the Belt and Road Initiative provides a significant opportunity for internationalization of the yuan. "In 55 countries along the Belt and Road, payment in yuan only makes up less than 5 percent of total trade volume." Along with opening up in China's capital market, yuan's global drive is moving forward in a steady pace. The International Monetary Fund in October 2016 officially added the yuan to its Special Drawing Rights, evidence of the currency's global potential.

• January 08, 2018

More industrial overcapacity will be cut to deepen supply-side reform for high-quality economic develop in 2018, People's Daily reports. China is expected to fulfill the goal proposed in 2016 to shut down 500 million tons of coal capacity and consolidate another 500 million tons into the hands of fewer but more efficient mine operators within three to five years in 2018. National Energy Administration proposed the country will cancel and delay about 150 million kilowatts of coal-fired power construction projects and cut 20 million kilowatts of outdated coal power generation capacity by 2020. Ministry of Industry and Information Technology also stated that strict inspections will be carried out in key provinces and a long-term mechanism to crack down on the production and sale of substandard steel products will be undertaken to complete the annual task of overcapacity cut in steel industry. China will use market-oriented legal measures to strengthen policy control and guide companies to cut overcapacity and outdated capacity to establish a long-term market clearing mechanism in order to improve the quality and structure of its industrial capacity in 2018, said He Lifeng, minister of the National Development and Reform Commission. Strategically, eradicating "zombie" companies will be on top of the agenda to cut off overcapacity and adjust industrial structure in the next stage, according to the report. Most "zombie" companies are of a certain scale, have a lot of employees and some even have a lot of debt burden, so more specific measures are needed to solve the problems brought by these companies and upgrade industrial structure, said Liu Jiejiao, researcher of Chinese Academy of Social Sciences' Institute of Industrial Economics. Meanwhile, we should turn to optimizing industrial capacity from merely cutting overall capacity and improve the capacity of advanced capacity with cutting-edge technology which is in accordance with the transformation and upgrading direction and green development concept, Liu added. The annual Central Economic Work Conference in December pledged that China will press ahead with supply-side structural reform in 2018 with more efforts to improve economic quality. In 2017, China has met the goal of reducing steel capacity by more than 50 million metric tons and cutting overproduction in other industries such as cement, as the country deepens industrial restructuring. Official data also show that the country's digital economy amounted to 22.58 trillion yuan ($3.43 trillion) in 2016, ranking second globally and accounting for around 30 percent of national GDP. Cutting industrial overcapacity was included as one of the top five tasks for reform of China's economic structure as early as 2015 at the Central Economic Work Conference. Besides cutting off outdated industrial capacity, the top authorities have also supported new industries, such as the mobile internet, cultural creative industry, the internet of things and high-end...

• January 02, 2018

China has set a goal of building itself into a global powerhouse in international trade by 2035 through further reform and fine-tuning of trade structure, including upgrading the quality of goods and services consumed in the local market and improving the quality of two-way investment, the country's commerce minister said on Monday. To reach the long-term target, the Ministry of Commerce first has to further enhance China's role as a major global trading partner before 2020 and deploy more resources to maintain a steady growth in international trade, make efficient use of foreign investment and ensure Chinese companies invest overseas in an orderly way in 2018, according to Minister Zhong Shan. "Next year, China will continue to deepen the cooperation and partnership with economies related to the Belt and Road Initiative and host an international imports exhibition to further boost trade and stimulate investment," Zhong said. The ministry's other priorities in the next five years include further tapping regional trade growth engines, fostering new trade momentum in high-end products and services, and building up new bilateral and multilateral free trade protocols, he said. Meeting the moderate goal of being a major trade player by 2020 would demonstrate that China is sufficiently strong in many elements of global trading, but there is still some way to go for China to grow into a truly global trading powerhouse. Problems and challenges it may still face include things like labor costs, environmental issues, lack of core technology and trade protectionism, said Ma Yu, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation. A country that is a global trade powerhouse needs to have many world-leading industries and a favorable investment and trading environment, with the support of preferential government policies, an advanced logistics network and sound infrastructure, Ma said. "Also the country has to be a firm proponent of multilateral economic cooperation and trading systems," he said. Ren Hongbin, director-general of the ministry's Department of Foreign Trade, said even though China is still confronting trade issues such as protectionism and outdated technologies in certain sectors, its perspective for next year will be promising, thanks to the recovering global economy and tangible results generated by supply-side structural reform. As the major driver and stabilizer of the global economy, China will push forward a new pattern of all-around opening-up to pursue mutual benefit with the rest of the world, according to a statement released after the Central Economic Work Conference concluded on Wednesday. The country will increase imports and cut import tariffs on some products to promote balanced trade, it said. China's foreign trade volume rose to 25.14 trillion yuan ($3.8 trillion) between January and November, which is a 15.6 percent increase in comparison with the same period the previous year, the General...

• January 02, 2018

China's economic growth results are expected to remain stable not only in 2017 economic reports yet to be released but also in 2018, despite a slight decline in a major index measuring the expansion of the manufacturing sector in December, analysts said. While there is some variation in the forecast, analysts said the country's GDP growth may register up to 6.9 percent for 2017. The official manufacturing purchasing managers index, released on Sunday, dropped to 51.6 in December, compared with 51.8 in November, according to the National Bureau of Statistics. Still, the index remained comfortably above the 50-point mark that separates growth from contraction, with numbers above 50 indicating expansion. "The manufacturing sector is stable and improving, a trend that has become more entrenched," Zhao Qinghe, a senior NBS statistician, said in a statement. The annual average reading of the index for 2017 was 51.6, which is 1.3 points higher than in 2016. "The December reading dropped a little bit, but it still reached the annual average level, indicating that expansion of the manufacturing sector remains strong," Zhao said. As seen in PMI changes in 2017, the trend of an improving economy has become more obvious, said Chen Zhongtao, an analyst at China Logistics Information Center. "The PMI has remained above 51 and even exceeded 52 in September. The overall trend is stable, with only small monthly fluctuations," he said. Based on the average monthly reading of PMI, Chen said China's GDP growth could reach about 6.9 percent in 2017. Growth in the fourth quarter could reach 6.7 percent and the whole-year growth could be 6.8 percent, said Li Chao, an analyst at Huatai Securities. China achieved GDP growth of 6.9 percent for the first three-quarters. Analysts generally predicted that growth could dip in the fourth quarter as the effect of environmental protection measures and slowing property sales growth unfolded. Growth in China's services industry picked up in December, an official survey showed on Sunday, as the sector continued to show solid expansion. The NBS also said that China's official non manufacturing PMI rose to 55 in December, up from 54.8 in November. The services sector accounts for over half of China's economic growth and analysts said the strong non manufacturing sector expansion, together with the manufacturing expansion, contributes to the stable GDP growth this year. The non manufacturing index reading has remained above 54 in 2017 except in August. Qu Qing, an analyst at Hua Chuang Securities, said the construction sector has helped bolster the index, indicating that infrastructure investment remains stable, which will help boost overall economic growth in 2018. Despite its stable economic growth trend, China also faces some challenges, such as an increase in raw materials prices and rising corporate costs, said Chen of China Logistics Information Center.