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China trade seen underlining economic rebound intact (Reuters)
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- China Inflation Over 3.5% May Prompt Rate Rise: NDRC Chen (Bloomberg)
China trade seen underlining economic rebound intact (Reuters)By Nick Edwards and Xiaoyi Shao BEIJING | Thu Mar 7, 2013 http://www.reuters.com/article/2013/03/07/us-china-economy-trade-idUSBRE92619I20130307 (Reuters) - Chinese trade figures on Friday are set to lead a flurry of indicators underlining that the world's second-largest economy gathered steam in February, adding some momentum to a recovery from its slowest full-year of growth since 1999. China's exports and imports likely maintained double-digit growth in the first two months of the year, a combination that markets will focus on because of distortions caused by the Lunar New Year holidays. "The global economy is getting better, not worse, so we can reliably, comfortably, even conservatively say that global spending is going to pick up as the year goes on," said Tim Condon, head of Asian economic research at ING in Singapore. "A second-half stronger than the first half is the baseline scenario," Condon told Reuters, reflecting his view that China's recovery is intact regardless of what seasonally distorted data for February might otherwise signal in the short term. Many Chinese firms shut for the long Lunar New Year holidays, which fell in January in 2012 and in February this year. Reading too much into one month's data is a particular risk given the undeniable impact of the nationwide holidays. A Reuters poll of 22 economists forecast that February exports grew 10.1 percent from a year earlier, while imports likely fell 8.8 percent. The trade balance is forecast to show a deficit of $7.8 billion. While in stark contrast to January's 25.0 percent export growth and 28.8 percent import growth, when averaged over the first two months of the year, exports may have grown 17.6 percent and imports 10.0 percent. "Our data in the first two months shows the foreign trade situation is improving," Li Linghong, chairman of Ningbo Port Group, operator of China's third-largest port, told Reuters. Ningbo port's container volumes rose 13.6 percent in January and February from a year earlier and cargo volumes increased 12.4 percent, Li said. "Usually the first two months are a peak season for companies to deliver orders, but it still shows the demand from the international market," he said. EXPORT UNCERTAINTY Still, the signs of recovery remain fragile after 2012 trade fell short of China's 10 percent growth target as major demand centers including the euro zone and the United States struggled to pick up from the global financial crisis. That was underlined by a decline in both new export orders and imports in China's official manufacturing purchasing managers' index (PMI) in February. That would hurt exports at a headline level and reduce imports to feed production lines in China's massive factory sector, which remains levered to foreign demand. Industrial output data for January and February -- combined to smooth out the impact of the Lunar New Year -- may show a rise of 10.5 percent on the year when the numbers are published. Up from 10.3 percent in December, the figures due on Saturday might still disappoint those who expected more following a pick-up in economic growth in the fourth quarter of 2012. China's economy expanded by 7.9 percent in the fourth quarter from a year earlier, bouncing from the 7.4 percent rate of the third quarter, the slowest three months of growth in the country since the first quarter of 2009 when the global financial crisis raged. Inflation and retail sales data are due for release alongside industrial output. Economists polled by Reuters expected retail sales growth of 15 percent year on year for January and February combined, in line with the pace at the end of 2012. The consumer price index meanwhile may have spiked to 3.0 percent in February from 2.0 percent in January almost entirely as a consequence of Lunar New Year effects on food costs. China's own official statisticians seek to avoid the distortions in industrial output, fixed asset investment and retail sales data by publishing combined numbers for the first two months of the year. (Editing by Neil Fullick) China Inflation Over 3.5% May Prompt Rate Rise: NDRC Chen (Bloomberg)By Bloomberg News - Mar 7, 2013 http://www.bloomberg.com/news/2013-03-07/china-inflation-over-3-5-may-prompt-rate-rise-ndrc-s-chen-says.html China may need to raise interest rates should gains in the consumer-price index stay at more than 3.5 percent for three months, a senior researcher affiliated with the country’s top planning agency said. “In theory, if CPI remains above 3.5 percent for three months, there should be an interest-rate movement,” Chen Dongqi, the deputy head of the National Development and Reform Commission’s macroeconomic research institute, said in an interview yesterday after a speech at Tsinghua University in Beijing. “But it also can be decided by authorities’ own judgment.” Speculation that China will raise interest rates for the first time since mid-2011 is rising as the world’s second- largest economy recovers from the weakest growth in 13 years, credit expands and property prices rebound. Premier Wen Jiabao this week set a 3.5 percent inflation goal for 2013, down from 4 percent last year, after price gains slowed to half the pace of 2011. “The timing of China’s interest-rate increase will depend on the CPI situation,” Chen said. “It could happen late this year or early next year or even later.” Consumer inflation may have accelerated to 3 percent last month, according to the median analyst forecast before data due on March 9. It was 2 percent in January and 2.6 percent for all of 2012. The median forecast of 40 economists is for a 3.1 percent rise in 2013. Policy Aim An acceleration in inflation in the second half and excessive investment from local governments after this month’s annual meeting of the national legislature are the two biggest risks to China’s economy, Chen said. Chen said separately in his speech at the Chinese Economists 50 Forum that while the government’s inflation goal is 3.5 percent, the real policy aim should be 3 percent. “If we allow the CPI to reach 3.5 percent or even higher in the late months of this year, it will reduce room for next year’s inflation control,” Chen said. There are some “structural bubbles” in China’s property market and two ways to deal with the situation, Chen said. “One is to gradually release the steam and the other is to put on a sudden brake.” Any excessive or hurried tightening may result in “big swings” in economic growth as the property market affects about 30 other industries, he said in the speech. The country’s new leadership faces the challenge of sustaining a recovery without triggering consumer and asset- price inflation. Wen, who this week set a target of 7.5 percent for growth this year, warned that “unbalanced, uncoordinated and unsustainable development remains a prominent problem.” The customs administration will today report trade data for February. Exports probably grew 8.1 percent, according to the median estimate in a Bloomberg News survey, down from a 25 percent pace in January. Data in the first two months of the year are distorted by the timing of the weeklong Lunar New Year holiday, which fell in February this year and in January in 2012. To contact Bloomberg News staff for this story: Xin Zhou in Beijing at xzhou68@bloomberg.net To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net Directory: 2013 2013 -> Annual InStructional unit plan 2013 -> The Ministry of Education and Science of Ukraine 2013 -> #1 a lifesafer of virginia inc 2013 -> Name(s): your name here team or Group #(if applicable): Professor’s name 2013 -> Alcott Local School Council (lcs) Meeting Minutes 2013 -> Table Of Contents introduction 2 2013 -> Supplemental demographic information 2013 -> 【Education&Working Experience】 Download 438.17 Kb. Share with your friends:
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