China Economy Forum

[Brotherhood]

Foreign investment hits 650 bln USD in decade: official - People's Daily Online June 05, 2011

Statistics official said Saturday that foreign investment that poured into China over the past decade has topped 650 billion U.S. dollars.

Yao Jingyuan, a chief economist with the National Bureau of Statistics (NBS), said at a forum that over past decade, China's foreign direct investment (FDI) reached 653.14 billion U.S. dollars at an annual growth rate of 9.5 percent.

The FDI in 2010 was 105.7 billion U.S. dollars, up 125 percent from 2001, Yao added.

Further, the total trade volume has shot up to 15.7 trillion U.S. dollars in the meantime, making China the world's second largest country in terms of trade volume after the United States.

China joined the World Trade Organization in November 2001, and has witnessed a leapfrog in its economy.

Yu Bin, a researcher with the Development Research Center of the State Council (DRCSC), said increasing overseas market demand, and domestic investment and consumption contributed to such a rapid economic growth.

The economy will continue growing at an annual rate of 9 percent in the next five years, Yu said, adding a downturn is expected in 2013, though.

The 4th China Opening-up Forum is being held in the coastal Ningbo city in east China's Zhejiang Province. The two-day event, organized by the DRCSC and Zhejiang provincial government, aims to discuss key issues related to China's reform and opening-up policy.

Source: Xinhua

 

[Brotherhood]

China-ASEAN trade to top 300 bln U.S. dollars this year: official - People's Daily Online June 06, 2011

Trade value between China and ASEAN nations is expected to top 300 billion U.S. dollars this year as the Free Trade Area (FTA) continues to offer boosts, said Xu Ningning, the executive secretary general of China-ASEAN Business Council.

The FTA, which started operation since the beginning of last year, has boosted economic exchanges between China and the ASEAN (Association of Southeast Asian Nations) member states, Xu said Sunday at a forum in Kunming, capital of Yunnan Province.

The estimated amount will be higher than the 292.8 billion U.S. dollars registered between the two sides in 2010, up 37.5 percent from a year earlier.

Customs data showed that in the first four months of this year, trade value between China and ASEAN nations rose 26.5 percent year-on-year to 110.2 billion U.S. dollars.

Under the FTA accord, the average tariff on goods from ASEAN countries to China is cut down to 0.1 percent from 9.8 percent. The six original ASEAN members, including Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, slash the average tariff on Chinese goods from 12.8 percent to 0.6 percent.

By 2015, the policy of zero-tariff rate for 90 percent of Chinese goods is expected to extend to Cambodia, Laos, Myanmar and Vietnam.

Source:Xinhua

 

[ahsanraza81]

Great China...keep up the good work!!!

 

[Brotherhood]

China delivers first inter-city railway train to Brazil - People's Daily Online June 07, 2011

In preparation for the World Cup in 2014 and the Olympic Games in 2016, the city of Rio de Janeiro in Brazil has been renovating its urban track transportation on a large scale. The first inter-city railway train purchased by the State of Rio de Janeiro from China will be delivered in Changchun, northeast China's Jilin Province on June 7, 2011, according to news from the communication department of the State of Rio de Janeiro.

Sergio Cabral, governor of the State of Rio de Janeiro, said a city without big transportation capacity is impracticable. The inter-city railway trains will offer convenient transportation services for citizens of Rio de Janeiro. This is a long-awaited dream for the local residents of Rio de Janeiro and its neighboring cities.

It is reported that urban mass transit system of Rio de Janeiro, the system with the longest rail lines and the most complicated network in Brazil, owns 98 stations connecting 12 neighboring cities and carries 540,000 passengers daily.

The communication department of the State of Rio de Janeiro sought to purchase 30 inter-city railway trains by inviting public bids in 2009. Fortunately, a Chinese enterprise won the contract worth 165 million U.S. dollars.

This is the biggest bidding project on inter-city railway trains for the State of Rio de Janeiro in 40 years as well as the biggest loan project in South America for the World Bank, said Sergio Cabral.

The inter-city railway trains produced by China can carry 1,300 passengers and have advanced technology as well as modern traction and brake systems. The carriages are spacious and comfortable and are installed with high-definition televisions and air-conditions. As a part of the contract, the Chinese enterprise will provide three-year technological services, including maintenance and replacing accessories, according to the communication department of the State of Rio de Janeiro.

In July, the first inter-city railway train will arrive in Rio de Janeiro. Chinese technicians will put the new train on the rail line of Rio de Janeiro and conduct an adaptive debugging. If everything goes smoothly, the train will be put into use by the end of July.

After the delivery of the first inter-city railway train, the Chinese enterprise will deliver three or four trains every two month.

With these China-produced trains in use, the inter-city railway of Rio de Janeiro will have a high-speed operation capability and be able to dispatch a train every three minutes.

In addition, the State of Rio de Janeiro will purchase 60 more inter-city railway trains by way of international competitive bidding this year. The bid-winning enterprise will undertake a task to improve existing 73 inter-city railway trains at the same time.

By Ye Xin, People's Daily Online

 

[Brotherhood]

China's Xinjiang to invest 7.7 bln USD in poverty alleviation in 2011-15 - People's Daily Online June 07, 2011

China's far western Xinjiang region will earmark 50 billion yuan (7.7 billion U.S. dollars) for poverty alleviation in the next five years, a local official said Monday.

Zhao Guoming, head of the regional poverty relief office, said 60 percent of the fund will be used on supporting distinctive industries and the rest on improving housing conditions in rural areas.

A total of 35 billion yuan, or 70 percent of the poverty alleviation fund, will go to the cities of Kashgar and Hotan and autonomous prefecture of Kizilsu Kyrgyz in southern Xinjiang, Zhao said.

The regional government aimed to help the per capita annual net income of farmers and herdsmen in poverty-stricken regions to grow at higher than nationwide average rate to 5,000 yuan in 2015, the official said.

He added that 10 billion yuan is from the central and regional governments, 30 billion yuan from various aid and 10 billion yuan from farmers and herdsmen themselves.

Source: Xinhua

 

[Speeder 2]

Ten reasons why China is different​

BY Stephen S. Roach
PUBLISHED 14:59, May 28, 2011


The China doubters are back in force. They seem to come in waves – every few years, or so. Yet, year in and year out, China has defied the naysayers and stayed the course, perpetuating the most spectacular development miracle of modern times. That seems likely to continue.

Today’s feverish hand-wringing reflects a confluence of worries – especially concerns about inflation, excess investment, soaring wages, and bad bank loans. Prominent academics warn that China could fall victim to the dreaded “middle-income trap,” which has derailed many a developing nation.

There is a kernel of truth to many of the concerns cited above, especially with respect to the current inflation problem. But they stem largely from misplaced generalizations. Here are ten reasons why it doesn’t pay to diagnose the Chinese economy by drawing inferences from the experiences of others:


Strategy. Since 1953, China has framed its macro objectives in the context of five-year plans, with clearly defined targets and policy initiatives designed to hit those targets. The recently enacted 12th Five-Year Plan could well be a strategic turning point – ushering in a shift from the highly successful producer model of the past 30 years to a flourishing consumer society.

Commitment. Seared by memories of turmoil, reinforced by the Cultural Revolution of the 1970’s, China’s leadership places the highest priority on stability. Such a commitment served China extremely well in avoiding collateral damage from the crisis of 2008-2009. It stands to play an equally important role in driving the fight against inflation, asset bubbles, and deteriorating loan quality.

Wherewithal to deliver. China’s commitment to stability has teeth. More than 30 years of reform have unlocked its economic dynamism. Enterprise and financial-market reforms have been key, and many more reforms are coming. Moreover, China has shown itself to be a good learner from past crises, and shifts course when necessary.

Saving. A domestic saving rate in excess of 50% has served China well. It funded the investment imperatives of economic development and boosted the cushion of foreign-exchange reserves that has shielded China from external shocks. China now stands ready to absorb some of that surplus saving to promote a shift toward internal demand.

Rural-urban migration. Over the past 30 years, the urban share of the Chinese population has risen from 20% to 46%. According to OECD estimates, another 316 million people should move from the countryside to China’s cities over the next 20 years. Such an unprecedented wave of urbanization provides solid support for infrastructure investment and commercial and residential construction activity. Fears of excess investment and “ghost cities” fixate on the supply side, without giving due weight to burgeoning demand.

Low-hanging fruit – Consumption. Private consumption accounts for only about 37% of China’s GDP – the smallest share of any major economy. By focusing on job creation, wage increases, and the social safety net, the 12th Five-Year Plan could spark a major increase in discretionary consumer purchasing power. That could lead to as much as a five-percentage-point increase in China’s consumption share by 2015.

Low-hanging fruit – Services. Services account for just 43% of Chinese GDP – well below global norms. Services are an important piece of China’s pro-consumption strategy – especially large-scale transactions-based industries such as distribution (wholesale and retail), domestic transportation, supply-chain logistics, and hospitality and leisure. Over the next five years, the services share of Chinese GDP could rise above the currently targeted four-percentage-point increase. This is a labor-intensive, resource-efficient, environmentally-friendly growth recipe – precisely what China needs in the next phase of its development.

Foreign direct investment. Modern China has long been a magnet for global multinational corporations seeking both efficiency and a toehold in the world’s most populous market. Such investments provide China with access to modern technologies and management systems – a catalyst to economic development. China’s upcoming pro-consumption rebalancing implies a potential shift in FDI – away from manufacturing toward services – that could propel growth further.

Education. China has taken enormous strides in building human capital. The adult literacy rate is now almost 95%, and secondary school enrollment rates are up to 80%. Shanghai’s 15-year-old students were recently ranked first globally in math and reading as per the standardized PISA metric. Chinese universities now graduate more than 1.5 million engineers and scientists annually. The country is well on its way to a knowledge-based economy.

Innovation. In 2009, about 280,000 domestic patent applications were filed in China, placing it third globally, behind Japan and the United States. China is fourth and rising in terms of international patent applications. At the same time, China is targeting a research-and-development share of GDP of 2.2% by 2015 – double the ratio in 2002. This fits with the 12th Five-Year Plan’s new focus on innovation-based “strategic emerging industries” – energy conservation, new-generation information technology, biotechnology, high-end equipment manufacturing, renewable energy, alternative materials, and autos running on alternative fuels. Currently, these seven industries account for 3% of Chinese GDP; the government is targeting a 15% share by 2020, a significant move up the value chain.

Yale historian Jonathan Spence has long cautioned that the West tends to view China through the same lens as it sees itself. Today’s cottage industry of China doubters is a case in point. Yes, by our standards, China’s imbalances are unstable and unsustainable. Chinese Premier Wen Jiabao has, in fact, gone public with a similar critique.

But that’s why China is so different. It actually takes these concerns seriously. Unlike the West, where the very concept of strategy has become an oxymoron, China has embraced a transitional framework aimed at resolving its sustainability constraints. Moreover, unlike the West, which is trapped in a dysfunctional political quagmire, China has both the commitment and the wherewithal to deliver on that strategy. This is not a time to bet against China.

(Stephen S. Roach, a member of the faculty at Yale University, is Non-Executive Chairman of Morgan Stanley Asia and author of The Next Asia.)

Ten reasons why China is different|European Daily




This is so typical of Morgan Stanley style – loads of words without touching the gist

Aren’t what Stevie really wanted to convey only 3 simple words:

(This is because China is a) High IQ Society ?

CardSharp, I am sure that you agree.

 

[Brotherhood]

China aims for 10-gigawatt solar power capacity in 2015 - People's Daily Online June 10, 2011

China's overall solar power capacity will reach 10 gigawatts by 2015, said an official with China's National Energy Administration.

Liang Zhipeng, deputy director of the department of the new energy and renewable energy with the National Energy Administration, said that the application of solar-power is accelerating in China. The country's installed solar photovoltaic generating capacity increased by 580,000 kilowatts in 2010 to 860,000 kilowatts.

"The total power-generating capacity of solar power projects still under construction is around 1 gigawatt," Liang said.

To achieve the goal of 10 gigawatts solar-power capacity in 2015, China will promote solar energy development in three ways.

In western China, which has adequate solar energy resources, the construction of grid-connected solar-power projects will speed up. The planned solar power generating capacity of these projects in western China was set at 5 gigawatts, according to Liang.

The promotion of distributed rooftop solar-power system in urban as, especially in economic development zones and industrial parks which have large roof areas, was another focus.

Meanwhile, Liang noted, in the construction of China's 100 pilot cities for new energy and 200 counties for green energy, the application of a photovoltaic power generating system will be actively promoted.

By Qi Shuwen, People's Daily Online

 

[Brotherhood]

Electric vehicle batteries 'must improve' - People's Daily Online June 10, 2011

BYD Auto Co Ltd's F3DM plug-in hybrid compact sedan on display at the 2011 Shanghai Auto Show. According to Zhen Zijian, deputy director of the office for electric vehicles at the Ministry of Science and Technology, 2015 might be the turning point for electric vehicles in China as the required technologies are likely to experience big breakthroughs. (Photo / China Daily)

China's new-energy vehicle production capacity is expected to hit around 300,000 units by 2012, according to the latest research from the Ministry of Science and Technology.

The number includes domestic automakers' production capacity of hybrids and pure electric and fuel-cell vehicles, excluding the production capacity of joint ventures, Zhen Zijian, deputy director of the office for electric vehicles, told China Daily.

The office, under the Ministry of Science and Technology, is deeply involved in mapping the nation's strategy for electric cars. However, the actual output will depend on market demand and government policies, he said.

China currently has more than 5,000 new hybrid buses on the roads. Electric cars are mainly used for taxi demonstration programs in some cities.

"Electric vehicles have yet to develop the strength to compete with conventional vehicles or serve as a substitute due to technical constraints such as immature battery technology," Zhen said.

However, 2015 might be the turning point in the market share for electric vehicles in China as the required technologies are likely to experience big breakthroughs, he added.

Although China's new-energy vehicle industry is considered "heated" or "overheated" by many people, it has enormous room for growth since continued development is vital to the auto industry and also to the nation's energy safety and environmental protection, he said.

Also, the coming years will see more integration among industries as key components and technologies of new-energy vehicles require greater synergy among industries.

Besides technological barriers, choice between battery swapping or fast charging is also a critical issue facing China's automakers and grid companies.

The State Grid Corporation, China's largest energy grid company, has previously indicated that it would prefer to establish more battery-swap stations, industry insiders said.

Yang Fang, an analyst at the State Grid Energy Research Institute, said whether battery swapping or plug-in models will become the mainstream depends on the development of battery technology, adding that the institute frequently exchanged views with China Southern Power Grid Co Ltd over establishing charging stations.

An electric taxi made by the Zhejiang-based Zotye Auto Co Ltd suffered spontaneous combustion in Hangzhou in April. The government said on Tuesday the accident was largely an issue concerning the battery pack, although each individual battery had no quality issues.

Zou Yuan, an assistant professor at the School of Mechanical Engineering at the Beijing Institute of Technology, said the quality consistency of batteries remains a major safety risk.

The government plans to invest 100 billion yuan ($15.4 billion) over the next 10 years to stimulate the new-energy vehicle industry. The volume of China's new-energy vehicles is expected to reach 1 million by 2015 and 10 million by 2020, according to the government's new-energy vehicle development road map for the next decade.

The energy-saving and new-energy vehicle industry has been nominated by the government as one of the seven key strategic emerging industries to be nurtured over the next five years.

Source:China Daily

 

[Brotherhood]

New breakthrough made in energy storage battery research - People's Daily Online June 09, 2011

According to the Dalian Physics and Chemical Research Institution of the Chinese Academy of Sciences, its self-developed energy storage battery has been in failure-free operation for 1,400 days and successfully completed a 10,000 charge-discharge circulation in the test evaluation period.

Currently the evaluation system is still in operation. Experts say that the successful development of the energy storage battery will play a crucial role in popularizing wind energy and solar power and achieving energy conservation and industry transformation goals.

By People's Daily Online

 

[Brotherhood]

Inside manufacturer of high-speed railway vehicles - People's Daily Online June 12, 2011

Two CRH380BL trains are seen at a plant of Changchun Railway Vehicles Co., Ltd. (CNR CRC) in Changchun, capital of northeast China's Jilin Province, June 11, 2011. The first EMU manufactured for Rio de Janeiro of Brazil was launched at CNR CRC on Tuesday. In late-June, twenty-two CRH380BL trains produced by CNR CRC will serve for the Beijing-Shanghai high speed railway. The CNR CRC is one of the leading railway vehicles manufacture enterprises in China. With advanced equipments and excellent research and development ability, the CNR CRC is able to produce 1,000 CRH trains, including CRH5 and CRH380 series, 1,200 subway trains, 500 common trains and 6,000 bogies each year. (Xinhua/Wang Haofei)

Photo taken on June 11, 2011 shows interior scene of a CRH380BL train in Changchun, capital of northeast China's Jilin Province.

A technician debugs in driving room of a CRH380BL train in Changchun, capital of northeast China's Jilin Province, June 11, 2011.

A worker debugs illumination equipment inside a CRH380BL train in Changchun, capital of northeast China's Jilin Province, June 11, 2011

A worker installs skirtboard for a CRH380BL train in Changchun, capital of northeast China's Jilin Province, June 11, 2011.

 

[Brotherhood]

Inside manufacturer of high-speed railway vehicles (10) - People's Daily Online June 12, 2011

A worker checks the bottom of a CRH380BL train in Changchun, capital of northeast China's Jilin Province, June 11, 2011

A CRH380BL train runs for a trial in Changchun, capital of northeast China's Jilin Province, June 11, 2011.

Photo taken on June 11, 2011 shows semi-finished CRH380BL train at a plant of Changchun Railway Vehicles Co., Ltd. (CNR CRC) in Changchun, capital of northeast China's Jilin Province, June 11, 2011

Semi-finished CRH380BL trains are seen at a plant of Changchun Railway Vehicles Co., Ltd. (CNR CRC) in Changchun, capital of northeast China's Jilin Province

Two technicians test video and wireless network services inside a CRH380BL train in Changchun, capital of northeast China's Jilin Province, June 11, 2011

 

[Brotherhood]

Staff prepare for operation of Beijing-Shanghai high-speed railway - People's Daily Online June 13, 2011

A high speed train is ready to have a test run in Shanghai, east China, June 12, 2011. Attendants started working on trains so as to get used to the new line which provides a four-hour link between Beijing and Shanghai once fully in operation late 2011. (Xinhua/Niu Yixin)

A train attendent stands next to a high speed train in Shanghai, east China, June 12, 2011. Attendants started working on trains so as to get used to the new line which provides a four-hour link between Beijing and Shanghai once fully in operation late 2011. (Xinhua/Niu Yixin)

A train attendent stands inside a VIP carriage of a high speed train in Shanghai, east China, June 12, 2011. Attendants started working on trains so as to get used to the new line which provides a four-hour link between Beijing and Shanghai once fully in operation late 2011. (Xinhua/Niu Yixin)

China sets trial prices for Beijing-Shanghai high-speed rail - People's Daily Online June 13, 2011

China's railway ministry announced Monday speed-based trial prices for the Beijing-Shanghai high-speed railway.

Tickets for trips on trains running at 300 kph will be priced between 555 yuan (85.6 U.S. dollars) for second-class seats and 1,750 yuan for business class. Prices for journeys 250-kph trains will range from 410 yuan for second-class seats to 650 yuan for first-class.

Prices will float according to the market and for the good of passengers, said Vice Minister of Railways Hu Yadong at a press conference.

There will be 63 pairs of trains with the speed of 300 kph every day, cutting travel time to 4 hours and 48 minutes. The additional 27 pairs of trains running 250 kph will complete the trip in about 8 hours, 2 hours shorter than the current high-speed trains.

The ministry decided to slow the speed to 300 kph instead of the previously planned 350 kph for cost and safety concerns, Railways Minister Sheng Guangzu said in April.

The 1,318-kilometer rail will go into commercial service at the end of this month, after trial operations that began May 11.

The 136 ordinary trains currently in use between the two metropolises will continue providing service after the bullet trains commence service, according to the ministry.

Source: Xinhua

 

[Brotherhood]

China ranks first worldwide in gold transaction - People's Daily Online June 12, 2011

A customer walks pass the chinese character "gold" of a gold store in Linyi, east China's Shandong Province, May 18, 2011.(Xinhua/Zhang Chunlei)

A total of 604.61 metric tons of spot goods of gold changed hands at the Shanghai Gold Exchange last year, ranking China the first in the world in terms of annual gold transaction volume, according to the China Gold Association.

China produced 340.876 metric tons of gold in 2010, remaining as the world's largest gold production country for the fourth consecutive year.

Global demand for gold totaled 2,778.6 metric tons in 2010, including 783.4 metric tons from India, 571.51 metric tons from China and 180.9 metric tons from the United States.

Source: Xinhua

 

[Obambam]

China shopping for Latin American oil, food, minerals
Nation needs commodities to keep economy growing, has $3 trillion in reserves

By IAN JAMES

updated 6/6/2011 8:47:28 AM ET

CARACAS, Venezuela — Latin America is blessed with a wealth of natural resources such as oil, copper and soy, and seeks investment and loans to capitalize on them. China needs the commodities to keep its economy growing and has about $3 trillion in reserves to burn.

Those interests have come together in a burgeoning and unorthodox partnership, as China lends and invests tens of billions of dollars in countries around Latin America in return for a guaranteed flow of commodities, particularly oil.

Recent deals have made China a key financier to the governments of Venezuela and Argentina. At the same time, Chinese companies have secured a decade's worth of oil from Venezuela and Brazil, and steady supplies of wheat, soybeans and natural gas from Argentina.

China is breaking new ground by aggressively locking down commodities around Latin America through large loans, investments and other financial arrangements, said Orville Schell, director of the Center on U.S.-China Relations at the Asia Society in New York.

"I don't know of any other government which has done this sort of securing of rights for commodities and natural resources so systematically around the Third World as China, and they've used a whole host of new financial instruments to do this," Schell said.

"China's been very, very prolific in spreading its investments around Africa and Latin America, even though the terms aren't ideal."

Ernesto Fernandez Taboada, director of the Argentine-Chinese Chamber of Production, Industry and Commerce, said China is simply making sure it has the resources it needs to continue growing its economy, which, by some accounts, is projected to surpass the U.S.'s by 2020.

"For China, this is a strategic, long-term investment," Fernandez Taboada said. "They're thinking in the future, not just in the moment. These oil investments, for example, are for 15 to 20 years."

Some of the largest investments have gone to Brazil and Argentina, but China has extended even bigger loans to Venezuela, agreeing to provide more than $32 billion to President Hugo Chavez's government.

Venezuela will pay its debt in oil, and in increasing amounts of it during the next decade. The infusion of cash has swiftly made China Venezuela's biggest foreign lender, enabling Chavez to boost spending ahead of next year's presidential election.

"Viva China!" Chavez exclaimed during a televised meeting with business leaders from Beijing, thanking them for helping set up mobile phone factories and build railways and public housing in Venezuela. He gushed: "I'm in love with China."

The relationship is driven in part by Chavez's eagerness to form alliances that exclude the U.S. But it's also good business for Chinese companies: Venezuela says it has been exporting to China about 460,000 barrels a day, about 20 percent of its oil exports, according to official figures. It hopes to double that soon.

"Venezuela has what we need," said Chen Ping, political counselor at the Chinese Embassy in Caracas. "And we also have what they need, for example technology ... Therefore we can help each other mutually."

The loans are typically secured against revenues from oil sales to Chinese companies, purportedly at market prices, though there could be discounts in some cases, said Erica Downs, an expert at the Brookings Institution think tank in Washington. She wrote a March report on the China Development Bank's energy deals worldwide.

In many cases, financing is being channeled through the state-controlled China Development Bank, which has worked with Chinese companies to lock in commodity supplies.

Downs said such loans give Chinese state oil companies an edge by allowing them special access to local projects. In some cases, she said, such as in Venezuela and Argentina, the loans appear tied to hiring Chinese companies that carry out public works projects for the borrowing government.

China's financing has also been unique, she said, in that in recent years "virtually no other financial institutions were willing to lend such large amounts of capital for such long terms."

Countries such as Venezuela and Ecuador would otherwise have few options for obtaining such large lines of credit, in part due to their presidents' hostility toward traditional lenders such as the World Bank and the International Monetary Fund, Downs said.

The China Development Bank has become a convenient "lender of last resort," Downs said, and Venezuela's government, in fact, has become the bank's biggest foreign borrower.

In Ecuador, the Chinese oil company PetroChina agreed in 2009 to lend $1 billion to state company PetroEcuador in exchange for oil deliveries. The China Development Bank also agreed to lend $1 billion last year to Ecuador's government, to be repaid through oil shipments.

The Chinese stake appears set to grow exponentially.

Direct Chinese investments totaled more than $15 billion in Latin America and the Caribbean last year — 9 percent of the region's foreign direct investment, according to a May report by the U.N. Economic Commission for Latin America and the Caribbean.

The report said that while the U.S. is still Latin America's largest investment source, China has climbed to third place, behind the Netherlands.

In Argentina, Chinese companies have even replaced U.S. and British corporations in controlling lucrative natural gas and oil resources.

Last year, the state-owned Chinese oil company CNOOC entered into a 50-50 joint venture with Bridas Energy Holdings Ltd., a family owned Argentine company. The joint venture then bought out British company BP's shares in Argentina-based Pan American Energy, giving it 18 percent of Argentina's oil and natural gas production. This year, the venture also purchased U.S.-based Exxon Mobil Corp.'s interests in

"Clearly, the U.S. remains the significant actor in Latin America and will remain so for the foreseeable future," said Eric Farnsworth, vice president of the Council of the Americas, a U.S.-based business group. "But China's a huge part of the scene now. It was commodities exports to China over the last five years that allowed Latin America to weather the economic turmoil."

One Chinese company not only locked in a long-term supply of commodities, but also set a more stable price for years to come and circumvented market rates, which have soared in part because of Chinese demand.

China and Chile created a $2 billion sales, finance and investment joint venture in 2005 that guaranteed China 836,250 metric tons of copper over 15 years, at rates partially fixed on what was then the market price of $2.07 a pound. Chile's state-owned Codelco mining company had to put up its entire 49 percent interest in the venture as collateral, and give China Minmetals Corp. an option to purchase 100 percent of one of the world's most promising copper mines.

Chileans criticized the deal as a threat to their patrimony as they became aware of its details and copper prices soared. Both sides backed off the Chinese purchase option in 2008 to fend off the criticism, but with copper now trading above $4 a pound, Chile's top client is still getting thousands of tons of copper at far below market prices.

China also controls 50 percent of Argentina's largest oil field, Cerro Dragon, and all the oil and gas reserves in the far southern Argentine province of Santa Cruz over the next 40 years, deals that became anti-government campaign issues in provincial elections.

During recent visits to Brazil, Schell said he has heard wariness from businesspeople about a system in which "Brazil sends their natural resources and China sends their flip-flops and consumer goods."

Rubens Barbosa, Brazilian ambassador to the U.S. from 1999 to 2004 and now a business consultant, said Brazilian officials have complained that cheap Chinese exports have destroyed domestic industries such as shoe and textile manufacturers. Brazil this year imposed antidumping tariffs on imports of some Chinese fibers within months of China becoming Brazil's biggest trading partner.

"With trade, we have a problem because the aggressiveness of Chinese companies is very strong," Barbosa said. "But the government still has a lot of interest in these relations with China. China is now the principal partner of Brazil."

China's commercial ties with Brazil continue to grow. About 14 percent of the South American country's oil production went to China in 2009, and that portion is expected to expand because Brazilian oil company Petrobras signed a 10-year deal with Chinese-owned Unipec Asia to export 150,000 barrels of oil a day in the first year. The deal calls for exports of 200,000 barrels a day for the next nine years. At the same time, Petrobras secured a $10 billion, 10-year loan from the China Development Bank.

Petrobras says the deals were separate and that the oil is not being used to pay back the loan. Still, the agreements ensure Chinese access to Brazil's booming oil production, which promises to skyrocket after vast offshore reserves discovered in 2008 come online.

China has also been active across Argentina. The China Development Bank has offered a $2.6 billion, 10-year loan to revive a freight train system connecting Buenos Aires to much of Argentina's central heartland. In the country's Rio Negro province, the Metallurgical Corporation of China has invested $80 million to reactivate an iron ore mine, and China's Beidahuang Group company has promised $1.4 billion in irrigation infrastructure in exchange for a 20-year contract to grow corn, wheat, soy and dairy on otherwise dry land for Chinese consumers.

And in remote southern Tierra del Fuego, near the tip of South America, Chinese companies are investing $1 billion, not only to produce fertilizer, but to build an energy plant, for which Argentina has promised China natural gas for 25 years.

"Two weeks ago, the Chinese commerce minister visited us with 60 business executives, and they showed great interest in investing in other sectors," Fernandez Taboada said. "There is a fundamental expansion of China in Latin America. In all the countries, from Mexico on south."

According to Schell, China is just getting started.

"This is a real tipping point moment, of which the Chinese investments in commodities and extractive resources of Latin America is just the opening bell," he said. "Who's got the money? And it's not the United States any longer. It's China. This is the next great pool of (foreign investment) that the world is going to reckon with in myriad ways."

http://www.msnbc.msn.com/id/43293236/ns/business-world_business/t/china-shopping-latin-american-oil-food-minerals/

 

[Aramsogo]

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BUSINESSJUNE 13, 2011
In China, Women Begin Splurging
By LAURIE BURKITT

BEIJING—Italian jeweler Bulgari SpA and sports-car maker Maserati SpA have succeeded in China largely by portraying themselves as the ultimate male status symbols.

But the two recently joined a growing number of luxury brands in China that have revamped their marketing tactics to also appeal to self-made female entrepreneurs, a rapidly emerging market segment that also wants high-end baubles and toys.


Bloomberg News
Chloé says that in two years China will become its biggest market because of female shoppers. Pictured, customers at a Chloe boutique in Shanghai.

Maserati has been hosting private cocktail parties with Giorgio Armani's cosmetics line and the Italian lingerie company La Perla to court newly rich female drivers in China. Thirty percent of the 400 cars Maserati sold in China last year were bought by women, compared with just 7% in 2005, according to the company. Maserati says the proportion of its Chinese drivers who are women dwarfs the ratio in the European and U.S. markets, where only 2% to 5% are women.

"Many people are inclined to believe that gentlemen are generously purchasing luxury gifts for women in China, but our observation is that the great majority [of the buyers] are women who have achieved great success in their business and are now rewarding themselves with the finer things in life," says Christian Gobber, managing director of Maserati China.

Women accounted for more than half of China's estimated $15 billion in luxury sales in 2010, according to a survey by consultancy McKinsey & Co. That compares with 45% in 2008, when McKinsey conducted its previous survey. The average female luxury consumer in China also spent 22% more in 2010 than in 2008, while men spent only 10% more.

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Rome-based Bulgari boosted its advertising in female-targeted magazines to 22 million yuan, or $3.3 million, in 2010, from a mere 106,000 yuan a year earlier, according to Beijing-based ad agency Charm Communications. Bulgari was recently acquired by LVMH Moët Hennessy Louis Vuitton SA.

China's luxury market—expected to become the world's largest by 2020—has been driven by men for the past decade. As they bought gifts for business associates, men spurred the growth in China of Swiss watchmakers, jewelry stores like Cartier and other luxury-goods purveyors like Louis Vuitton and Gucci, a unit of PPR SA. And while they often bought gifts for women, they were the ones making the luxury purchases.

Now that women have emerged as a growing force, brands that traditionally appeal to women are making a bigger push. The British company Burberry Group PLC and the French brand Chloé, owned by the Swiss luxury group Cie. Financier Richemont SA, are hosting more private sneak-peak viewings of their new fashion collections to give Chinese women an early glimpse of coming trends.

Women feel more pressure than men to stay up to date with fashion, says Yuval Atsmon, a principal at McKinsey, adding that Chinese shoppers are increasing their spending on ready-to-wear clothing, and the majority of those shoppers are women.

In two years, China will become Chloé's biggest market because of the rise of female shoppers, says president and chief executive Geoffroy de-la-Bourdonnaye. "Women in this country are becoming more independent, more career-oriented, and more powerful in the market," he says.

Many retailers are experimenting with new tactics online, where women are more likely to shop than men and where they often influence purchases by others via comments on blogs and social-networking sites, according to McKinsey.

Chanel invited Chinese artist Zhou Yi to attend its Paris fashion show in March, hoping she would plug the brand to her following of nearly 3,000 fashion types on Sina Weibo, a Chinese Twitter-like microblogging service. (She did.)

Givenchy, part of the LVMH empire, launched its own Weibo account in January and is using it to connect with female followers and announce the arrival of new products, such as Nightingale leather bags, which sell for 16,000 to 32,000 yuan. "Women want more ways to experience the brand—to touch and feel and interact," says Wilfred Koo, Givenchy's president of China, Asia Pacific.

The rapid growth in the world's No. 2 economy has fueled job opportunities and earnings potential for both sexes. Each year, 76% of China's female college graduates aspire to management positions, compared with 52% of their U.S. counterparts, according to the New York-based Center for Work-Life Policy.

China is home to 11 of the world's 20 richest self-made women, and it boasts 153 female yuan billionaires (around $150 million), according to the Hurun Report, a Shanghai-based firm.

Consumers like Sun Ningning, a sales manager at GlaxoSmithKline PLC, are the bull's-eye. The 32-year-old Beijing native recently bought a 12,600 yuan leather handbag as a gift for herself. The tan Chloé purse cost her around 15% more than her monthly salary.

"There's just something about buying luxury that makes me feel happy," says Miss Sun. "I can't really explain it."