Leading economist warns against rapid yuan rise
Global monetary authorities should focus on stabilizing the price of the dollar and euro – as part of a new monetary regime that would also see the yuan appreciate slowly against the greenback, Columbia University Professor Robert Mundell told a financial forum in Hong Kong on Tuesday. Mundell, a Nobel Laureate in Economics in 1999 and also recognized as intellectual godfather of supply-side economics, said the approach would help curb volatility in global currency markets.
Geithner Says China Gets ‘Unfair’ Advantage From Weak Yuan
U.S. Treasury Secretary Timothy F. Geithner said the Obama administration will continue to press China to allow the yuan to rise so that companies around the world can compete fairly. “We think they should move faster,” Geithner said in a radio interview with National Public Radio’s “All Things Considered” program broadcast today. He said a stronger yuan is in China’s interest and would also help the global economy.
China’s Hu: currency system ‘product of the past’
China’s President Hu Jintao has said the international currency system was “a product of the past,” but it would be a long time before the yuan is accepted as an international currency.
Talk Of Chinese Currency Bill Coincides With Hu’s Visit
Talk Radio News Service/Jan 18
A bipartisan duo in the Senate is preparing legislation aimed at discouraging China from undervaluing its currency. In a letter to Treasury Secretary Tim Geithner, Sens. Sherrod Brown (D-Ohio) and OIympia Snowe (R-Maine) said they would reintroduce a bill that the House passed overwhelmingly just a few months back. The Currency Reform for Fair Trade Act would instruct the Commerce Department to “treat currency undervaluation as a prohibited export subsidy.” As a result, the federal government would have the power to impose taxes on Chinese exports.
China’s Currency Isn’t Our Problem
NY Times/Jan 17
When President Hu Jintao of China visits Washington this week, many Americans will clamor for Beijing to stop manipulating its currency. We think we are being cheated on a huge scale, but we should reconsider. When it comes to lost jobs, the negative impact of China’s currency, the renminbi, is less than one might think. Adjusting the exchange rate should not take priority over more vexing issues like North Korea, Iran and bilateral trade.
China’s lending hits new heights
Financial TImes/Jan 17
China has lent more money to other developing countries over the past two years than the World Bank, a stark indication of the scale of Beijing’s economic reach and its drive to secure natural resources. China Development Bank and China Export-Import Bank signed loans of at least $110bn (£70bn) to other developing country governments and companies in 2009 and 2010, according to Financial Times research. The equivalent arms of the World Bank made loan commitments of $100.3bn from mid-2008 to mid-2010, itself a record amount of lending in response to the financial crisis.
China Business Environment for U.S. Firms Fails to Improve, Chamber Says
The business environment in China for U.S. companies has failed to improve and has in some cases worsened, according to a survey by the American Chamber of Commerce in Shanghai. Nearly two-thirds of U.S. companies in China surveyed said the regulatory environment has “not changed” or has deteriorated over the past year, according to the report released today. A total of 71 percent of companies surveyed said China’s enforcement of intellectual property rights has remained the same or gotten worse, an increase from the 61 percent that answered similarly in the chamber’s 2009 survey.
Foreign investment in China rebounded in 2010
Foreign direct investment in China weakened slightly in December but ended 2010 up strongly after falling the previous year amid the global crisis, official figures showed Tuesday. Foreign spending on Chinese factories and other nonfinancial assets in December rose 15.6 percent from a year earlier to $14 billion, the Commerce Ministry said. That was down from November’s 38.2 percent surge.
China’s outbound direct investment up 36 percent last year
Xinhua, Jan 18
China’s outbound direct investment in the non-financial sector hit 59 billion U.S. dollars last year, up 36.3 percent year on year, the Ministry of Commerce (MOC) announced Tuesday. Total outbound direct investment in the non-financial sector had amounted to 258.8 billion U.S. dollars by the end of 2010. Though China’s outbound direct investment grew rapidly last year, most of it went to the Hong Kong Special Administrative Region, as well as countries in Asia and Latin America, with a very small amount to Europe, the United States and Japan, said MOC spokesman Yao Jian.
Chinese Overseas Direct Investment in the U.S. to surge
China’s investment in the United States will grow by more than 50 percent this year, as the US market becomes more open and transparent, said an official from the Ministry of Commerce.
Last year, China’s total overseas direct investment (ODI) in the non-financial sector grew by 36.3 percent from a year earlier to $59 billion, but comparatively, the nation’s ODI in the US surged by as much as 81.4 percent year-on-year to $1.39 billion, according to statistics released by the Ministry on Tuesday. As bilateral economic relations become stronger and Chinese companies’ aspiration for overseas expansion increases, the nation’s investment in the US will “probably continue to grow rapidly, say by 50 percent”, said Yao Jian, a ministry spokesperson.