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China’s forex reserves account for 30% of world total

vahut — Thu, 25 Feb 2010 19:14:59 +0000

China’s foreign exchange reserves hit $2.4 trillion, accounting for 30.7 percent of the world’s forex reserves, according to foreign media.

It’s said that with the recovery of the global economy in 2009, the national foreign exchange reserves will also see a significant rise. According to statistics, China’s foreign reserve occupied 30.7 percent of total global reserves. BRIC countries (China, Russia, Brazil and India) are very much at the forefront, with $3.31 trillion reserves, accounting for 42.3 percent; while the G7 have only account $1.24 trillion.

It’s also understood that China’s foreign reserve in 2009 increased by more than 23 percent, equaling nearly 2 times the forex reserves of the G7. As a G7 member, Japan’s reserves are about $1 trillion, ranking the second largest country in forex reserves.

According to the survey, among the world’s ten largest reserves countries, there are seven countries from Asia. As for the United States, with its $45.4 billion foreign exchange reserves, it is only $2.4 billion more than Nigeria ($43 billion).

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Overseas direct investment may soar

vahut — Thu, 25 Feb 2010 19:10:54 +0000

China’s overseas direct investment (ODI) may see a double-digit growth this year to around $60 billion, on the back of government support and overseas expansion plans of domestic firms, officials from the Ministry of Commerce (MOFCOM) said.

Though foreign direct investment slumped worldwide in 2009, China’s ODI in the non-financial sectors rose 6.5 percent from a year earlier to $43.3 billion.

The growth momentum will be “sustained” this year, and would be even “more stronger”, Liu Zuozhang, director general of the Investment Promotion Agency of MOFCOM, told China Daily.

“There is little doubt that the nation’s ODI in 2010 will climb up to $60 billion,” said Liu, adding the year-on-year growth could range from 15 to 39 percent.

During the first half of 2009, China’s ODI slumped nearly 52 percent as the world economy was still in limbo and domestic enterprises shied away from investment. However, things started to change in the third quarter of last year after ODI rebounded nearly 190 percent year-on-year to $20.5 billion. This was fueled largely by the economic recovery in the United States and European Union and accelerated gross domestic product growth in China.

“The $60 billion target is certainly achievable, as domestic firms are now more convinced about investing abroad,” said Steven Wang, head of the research institute of Standard Chartered in Shanghai.

According to the United Nations Conference on Trade and Development (UNCTAD), global foreign direct investment dropped 39 percent to around $1 trillion in 2009, against a high of $1.97 trillion in 2007.

Related readings: China’s outbound investment to hit $42b in 2009 State firms increase overseas investment State firms invest $35b overseas in 2008 China’s outbound investment totals $183.97B.

China is one of the few countries that increased investments during the financial crisis. Most of the overseas investment projects were resource-oriented and backed by the Chinese government. “This year, the government will continue its measures to help domestic companies spread their wings abroad along with better policies and services,” said Wang Chao, assistant to the minister of commerce.

According to MOFCOM data, China spent nearly $2.36 billion for overseas investment in January this year. Over 70 percent of the investment was made through share purchase.

Forex reserves

“Overseas direct investment will accelerate this year,” said Zhang Xiaoji, director of the Foreign Economic Relations Department of the Development Research Center under the State Council.

“The government’s macro-economic policies and the enterprises’ strong willingness are the main triggers for the growth,” he said.

By the end of 2009, China had foreign exchange reserves of $2.4 trillion, accounting for 30.7 percent of the world total. Analysts are of the opinion that it is risky for China to hold such huge levels of forex while global economic prospects remain uncertain.

“A good way to reduce the risk would be if some of the forex reserves are used to help Chinese companies go overseas,” said Zhang.

Overseas investment could also help Chinese companies better utilize their disposable funds, especially when the government is tightening policies in sectors such as real estate to curb inflation.

Yet another attraction for domestic firms is the relatively low prices needed to buy overseas assets.

Retail sales up 17% during Spring Festival

vahut — Mon, 22 Feb 2010 19:13:26 +0000

China’s retail sales hit 340 billion yuan (US$49.8 billion) during the “golden week” of Spring Festival, up 17.2 percent over the same period of last year, the Ministry of Commerce (MOC) said.

Boosted by various sales promotion activities, the weeklong Spring Festival holiday, which started from Feb. 13 this year, is China’s closest equivalent to the West’s Christmas shopping season.

Food, tobacco and liquor were in great demand during the festival. Sales of food by China’s major retailers grew 16.5 percent year on year, while sales of tobacco and liquor were up 13.2 percent.

Communication equipments, Jewelry, garments and home appliances were also customers’ hot choices, sales of which soared 19.2 percent, 19.1 percent, 17.7 percent and 15.4 percent, respectively.

Tourism revenue up 26.9% during Spring Festival holiday

vahut — Mon, 22 Feb 2010 19:10:51 +0000

China’s tourism revenue rose 26.9 percent to 64.62 billion yuan (9.46 billion U.S. dollars) during the Spring Festival, the National Tourism Administration (NTA) said.

China received 125 million tourists during the holiday period from Feb. 13 to 19, up 14.8 percent from the same period last year, a statement on the NTA website said.

Of the tourism revenue, 4.6 billion yuan came from airlines while 2.83 billion yuan from railways. The tourists spent 26.51 billion yuan in China’s 39 key tourism cities and 30.68 billion yuan in other areas.

Among the tourists, 29.92 million stayed overnight and 95.13 million stayed for less than one day.

FDI into China rises nearly 8%

vahut — Mon, 22 Feb 2010 19:05:02 +0000

Foreign direct investment into China rose for the sixth consecutive month in January, up 7.79 percent year on year to US$8.13 billion, China’s Ministry of Commerce said.

The government approved the set-up of 1,866 overseas-funded ventures in January, an annual rise of 24.73 percent, the ministry said. FDI mainly flowed into the manufacturing sector, despite an overall drop in the sector of 11.57 percent annually, the statement said. The sector attracted 48.65 percent of total FDI.

China Ministry optimistic about iron and steel industry in 2010

vahut — Thu, 18 Feb 2010 17:51:37 +0000

A report by the Ministry of Industry and Information Technology said the overall situation of China’s iron and steel industry will be better than last year, thanks to the steady momentum of economic recovery.

The report said four factors will have positive impact on the iron and steel industry: increased government investment, a clear recovery of global economy, ample money supply in the market and a series of upcoming government policies aimed at promoting healthy development of the iron and steel industry.

However, the ministry held that the foundation of the current economic recovery still needs to be consolidated and external demand still falls short, creating fairly big difficulties for the operation of the iron and steel industry.

The report said in 2010 iron and steel companies must be prepared to face the challenges of over supply, sluggish international market and rising production cost.

In 2009, China’s 68 large and medium sized iron and steel companies made 55.39 billion yuan (8.12 billion U.S. dollars) in profit, down 31.43 percent year on year.