China Watch Blog

China Watch Blog has learnt that the average customs clearance times of import and export goods in China have been respectively shortened by 43 percent and 16 percent after a series of reforms, including classified clearance, paperless clearance and other convenient clearance measures.

Yu Guangzhou, Minister of the General Administration of China Customs, said at the World Customs and Trade Forum 2011 on Nov. 24 that the fate of the global economy remains uncertain at this time, and as a country’s gateway, customs should pay more attention to the establishment of smooth communication channels to jointly promote global trade development and economic prosperity.

China Watch Blog has learnt that the Organization for Economic Cooperation and Development (OECD) has said that the rapidly deteriorating crisis in the eurozone has worsened the global economic outlook and decisive policies are urgently needed to stop the contagion of sovereign debt turbulence spreading.

Despite the worsening situation, the OECD did not lower its forecast for China’s growth in an economic outlook report released on Monday compared with announcements it made in October, the China Daily reported, citing that the OECD projected that the nation’s output growth will average just over 9 percent from 2011 to 2012.

It previously said China’s economic growth will drop to 8.5 percent in 2012, from this year’s estimated 9.3 percent. In 2013, it will pick up to 9.5 percent. Last year, it was 10.4 percent.

Experts said China needs internal reforms and adjustments to cope with this round of external challenges and sustain its economic and social development.

China Watch Blog has learnt that the International Monetary Fund in its September growth forecast has predicted emerging economies to grow by a healthy 6.4% this year and 6.1% next year. This would account for over three-quarters of global economic growth in total.

By comparison, the IMF growth forecast for advanced economies is 1.6% next year, with fiscal consolidation and high unemployment rates expected to drag growth down further.

Speaking at the APEC CEO Summit in the US earlier this month, President Hu Jintao said: “The new global economic governance structure should reflect changes of the world economic landscape, follow the principles of mutual respect and collective decision-making and increase the representation and voice of emerging markets and developing nations.”

There is much room for emerging economies to take up a bigger role in jointly promoting balanced, inclusive, innovative, sustainable and safe growth in the global economy.

As China’s global financial centre and as the premier international gateway to the Mainland, Hong Kong has an important role to play in this changing economic landscape.

To fortify linkages with the emerging economies, Hong Kong will continue to further strengthen its trade and investment co-operation with these new partners.

This will also help our entrepreneurs to achieve a more diversified business portfolio, rather than being overly reliant on our traditional developed markets in the West, says Financial Secretary John Tsang.

China Watch Blog has learnt that India has lifted restrictions on foreign investments in the country’s US$450 billion retail market, a move that global supermarket chains have welcomed, but they fear the policy’s small print may keep a lid on investment in the short term.

The Indian government approved 51 percent foreign direct investment in supermarkets late Thursday, paving the way for firms such as Wal-Mart Stores Inc, Tesco and Carrefour to enter one of the world’s largest untapped markets, the Shanghai Daily reported.

The move may breathe new life into the government of Prime Minister Manmohan Singh, who ushered in free market reforms 20 years ago, but has been bogged down by corruption scandals.

As well as appealing to India’s burgeoning urban middle class, the reform will draw in much-needed new investment to a sputtering economy. Policymakers said spending on cold-storage and warehousing will ease supply side pressures that have driven inflation close to a double-digit clip.

“It’s important not only for raising overall growth, but also for containing inflation and improving the quality of life for over 50 percent of the population,” said central bank Governor Duvvuri Subbarao.

China Watch Blog has learnt that Chinese companies are facing even tougher business conditions now than during the 2008 global crisis, according to a survey of more than 4,000 companies. The findings resulted in experts calling for less government intervention and more support for the private sector to improve the business environment.

Among the seven sub-categories of the research, conditions for companies in the fields of human resources, financial services, the legal environment, government administration, and infrastructure have worsened, the China Daily reported.

However, progress has been made in intermediary services and the social environment, according to the Business Environment Index for China’s Provinces 2011 Report.

The findings follow a three-part survey of businesses nationwide, conducted in 2006, 2008 and 2010. More than 90 percent of the 4,230 companies interviewed in 2010 were small and medium-sized enterprises (SMEs).

Non-State-owned enterprises contributed more than 90 percent of the sample, and more than 70 percent of the companies surveyed operate in the manufacturing sector.

The survey is based on both the operational data from companies and the opinions of business owners, who were asked to grade each category from one to five, with five being classified as “very good”. The average score improved significantly between 2006 and 2008, but declined in 2010.

China Watch Blog has learnt that China’s economy is expected to grow 8.5 percent in 2012, a slower pace than this year, an official from a government think tank said.

Soho Shanghai

Lu Zhongyuan, deputy director of the Development Research Center (DRC) of the State Council, or China’s cabinet, was quoted by China Daily as saying that he expects China’s investment to grow by 20 percent next year, adding that he expects exports to slow along with investment.

Investment, consumption and exports are regarded as three major factors in stimulating economic growth.

Lu said next year’s total consumption may outpace that of 2011 due to increased livelihoods and an improved domestic employment situation.

Lu said the slower economic growth is “reasonable and acceptable,” considering the improving quality and sustainability of China’s economic development.

In 2012, the country’s year-round consumer price index (CPI), a main gauge of inflation, is expected to reach 4.5 percent.

Chine Watch Blog has learnt that Hong Kong and Shenzhen have signed co-operation agreements on legal matters, the Lok Ma Chau Loop development, food safety and weather prediction technology.

The agreements were signed by Chief Secretary Stephen Lam and Shenzhen Mayor Xu Qin before the 2011 Hong Kong-Shenzhen Co-operation Meeting held in Hong Kong today.

Both Governments will formulate proposals to take advantage of Qianhai’s geographical location and to attract Hong Kong enterprises and professional service providers to invest and set up business in the area.

Mr Lam said both sides will pursue further co-operation as stipulated in the National 12th Five-Year Plan, and implement policies related to Hong Kong-Shenzhen co-operation announced by Vice Premier Li Keqiang during his Hong Kong visit in August.

Both sides have agreed to study the feasibility of introducing cards that can be used for public transportation and retail purchases in the two places, and to roll out a “two-in-one card” as soon as possible.

China Watch Blog has learnt that China’s annual GDP growth is expected to reach 9.2 percent this year and continues to experience a moderate cooling in 2012.

Shanghai airport

Expansion of the country’s industrial production in 2012 will also witness a growth pace that is one or two percentage points lower compared with this year, Huang Libin, an official at the Ministry of Industry and Information Technology, was quoted as saying in a China Daily report.

Huang expected the country’s industrial value-added output to rise by around 14 percent year-on-year this year.

Growth of exports, one of the major engines for the world’s second largest economy, may slow further next year amid sovereign-debt morass in other countries, rising protectionism and increasing pressure for the yuan to appreciate, he said.

“Although the current moderation is in line with the country’s macro-economic regulations, the trend of an acceleration in the slowdown should be monitored,” he said.

He noted that one of the government’s tasks next year should be to prevent major economic fluctuations caused by increasing uncertainties both at home and abroad.

Huang also said the timing and strength of regulations should be better tailored to prevent them having an accumulated impact on economic growth.

China Watch Blog has learnt that overall consumer prices rose 5.8% in October over the same month last year, matching September’s figure, the Census & Statistics Department said.

People, people, people in Hong Kong

Netting out the effects of the Government’s one-off relief measures, the year-on-year rate of increase in the Composite Consumer Price Index in October was 6.4%, also matching that for September.

The department said the underlying inflation rate was stable in October after its uninterrupted rise over the past year, notwithstanding the enlarged increase in private housing rents and food prices.

It said inflation is likely to peak out during the fourth quarter, as price pressures on both the external and domestic fronts are set to ease alongside the retreat of global food and commodity prices in recent months, and a slowing local economy.

On a seasonally adjusted basis, the average monthly rate of change in the Composite Consumer Price Index for August to October was 0.5%, and the corresponding rate of change for July to September was -0.6%.

Netting out the effects of the Government’s one-off relief measures, the average monthly rate of increase in the Composite Consumer Price Index for August to October was 0.5%, the same as that for July to September.

Year-on-year prices increases were recorded in October for alcohol and tobacco (19.9%), food (excluding meals bought away from home) (11.5%), housing (8.3%), meals bought away from home (6%), transport (4.8%), miscellaneous services (3.8%) and miscellaneous goods (3.1%).

China Watch Blog wishes to inform readers that our GCTL Insights Magazine Issue #9 highlighting the issues and challenges of Mega Container ships and Issue #10 dealing with supply chain management trends and solutions to e-commerce woes has been uploaded at our website.

Just go to our website www.GCTL8.com, register if you have not already done so, and get your FREE PDF copy or read the flash version from our website.

Get all the latest trends, issues and challenges from our POST Conference reports of ChaINA ’11 Live coverage and also the recent Shenzhen conference coverage that may help your business.

In our next year end issue, get connected with the latest trends, issues and solutions at the next big event in Hong Kong – the Asian Logistics & Maritime Conference that takes place on Nov 25, 2011 at the Hong Kong Convention and Exhibition Centre.