Lucy's Feed
Oct 28, 2009

U.S.-China interdependence transcends trade

HANGZHOU, China, Oct 28 (Reuters) – U.S. and Chinese officials meet in Hangzhou this week at the annual Joint Commission on Commerce and Trade, a few weeks before U.S. President Barack Obama makes his first official trip to China.

With the two giant economies joined at the hip, the U.S.-China relationship is strained by issues like the value of the yuan, but is unlikely to unravel over any single dispute.

"Made in China" products accounted for less than 1 percent of U.S. imports a quarter of a century ago.

Now, China’s high rate of savings is used to buy U.S. treasuries, allowing Americans to buy Chinese exports. That has driven economic growth in China and lifted hundreds of millions out of poverty.

TRADE

By 2008, U.S. exports to China totalled $69.7 billion, but were dwarfed by $337.8 billion in exports from China to the United States, now Beijing’s second biggest trade partner.

The U.S. trade deficit with China has grown steadily since 1985, when its exports to China were worth $3.86 billion, $6 million less than the value of Chinese shipments to the United States. Bilateral trade was less than $2.5 billion in 1979.

Rising Chinese exports have alarmed U.S. industry and unions, while China worries that U.S. duties — like a safeguard duty on tyres — will threaten its export markets.

DEBT

China held $797.1 billion in U.S. Treasuries at end-August, displacing Japan in September 2008 as the largest foreign holder.

Beijing is concerned the value of its dollar holdings could be eroded by massive debt issuances to fund the U.S. stimulus.

PEOPLE

The 2000 census says 1.19 million people living in the United States were born in China. About half are U.S. citizens.

FOREIGN DIRECT INVESTMENT

As recently as the early 1990s, foreign direct investment accounted for less than 5 percent of total investment in China.

Foreign invested firms in China now employ more people than do China’s state-owned and collective enterprises.

Since the joint venture heyday of the 1990s, U.S. non-financial FDI in its trading partner has slid, accounting for 3.2 percent of utilised FDI in 2008, versus 10.5 percent in 1999.

Utilised FDI from the United States slipped to $2.9 billion in 2008, down from $4.2 billion in 1999, even as overall FDI in China nearly doubled to $92.4 billion last year.

China encourages its firms to "go out" and invest overseas, particularly in natural resources — but ran up against national concerns when China’s CNOOC tried to buy U.S. oil firm Unocal.

Chinese non-financial direct overseas investment leapt to $40.65 billion in 2008, almost half of the investment coming in. That is compared with $6.92 billion in outbound investment in 2005, about one-tenth of the investment into China in that year.

DIPLOMACY

China and the United States meet regularly through what is now known as the Strategic and Economic Dialogue.

The two countries are permanent members of the United Nations Security Council.

They are key players in the six-party talks over North Korea, and the Washington is seeking China’s cooperation over Iran.

China has become an enthusiastic participant in the World Trade Organisation [ID:nPEK143174].

Sources: American Chamber of Commerce 2009 White Paper; U.S. Census Bureau; The U.S. China Business Council; Chinese Ministry of Commerce; American Chamber of Commerce China Brief.

(Editing by Paul Tait)





Oct 28, 2009

U.S. seeks more clean energy market access in China

HANGZHOU, China (Reuters) – Commerce Secretary Gary Locke will press for more access for American companies in China’s clean energy sector, an area where Washington feels it can make inroads on its enormous trade imbalance with China.

China’s ambitious wind power plans, as well as national policies to reduce emissions and use water and fuel more efficiently, create a potential market for U.S. firms who have developed those technologies, Locke said in Hangzhou before the annual Joint Commission on Commerce and Trade (JCCT) meeting.

Oct 20, 2009

Hijacked China ship shows pirates extending reach

BEIJING (Reuters) – The hijacking of a Chinese coal ship in the Indian Ocean shows Somali pirates are extending their reach beyond the Gulf of Aden and the Somali coast, shippers said as traders worried that more coal ships could become targets.

The De Xin Hai, carrying about 76,000 tons of coal from South Africa to the port of Mundra, in Gujarat, India, was hijacked about 700 nautical miles off the east coast of Somalia on Monday, the European Union’s counter-piracy force said.

Oct 13, 2009

Nearly 1,000 Chinese kids poisoned by metal plants

BEIJING, Oct 13 (Reuters) – Nearly 1,000 children living in a major Chinese lead smelting base have excessive levels of the heavy metal in their blood, state media said on Tuesday, as environmentalists called on firms to detail their pollution.

The country’s biggest smelter has acknowledged some responsibility in the poisoning in central Henan province, and all children whose homes were within a kilometre of metal plants have been moved, the official Xinhua agency said.

"We do bear responsibility for the pollution," Xinhua quoted Yang Anguo, board chairman of Yuguang Gold and Lead <600531.SS> as saying. "Some pollution has accumulated over the past 20 years or more and the plant is too near homes."

Health officials in Jiyuan city decided to test children under 14 after a series of other scandals in metal producing areas of neighbouring Shaanxi province.

Of 2,743 who were checked, more than one-third had excessive lead in their blood. The city government has suspended production at 32 of the 35 lead plants, and on the most polluting production lines at the three major plants, Xinhua said.

Environmental campaign group Greenpeace on Tuesday slammed 18 major Chinese and international companies for failing to publish their pollution levels, in violation of environmental laws.

Firms fingered by Chinese officials for violating pollution standards are required to disclose the details of all their emissions within a month, but none of those Greenpeace found cited around China had done so.

"Our results demonstrate corporate … disregard for Chinese environmental regulations. This is especially disheartening given that all 18 companies are leaders in their respective fields," Greenpeace said in a report after combing local media and contacting officials and the companies to ask for data.

They said the lack of information undermined grassroots efforts to keep China’s land, air and water clean.

"A comprehensive environmental information system that is free and easy to access for the public … is essential to safeguard citizens and the environment from industry-induced risks," Greenpeace said in its report.

Environmental problems are an increasing source of unrest in China, worrying the stability conscious government.

"Mass incidents" — or riots and protests — sparked by environmental problems have been rising at a rate of 30 percent per year, according to China’s environment minister.

At the same time, the boom in metals prices has made investment in mines and smelters very profitable, and dangerously polluting plants have sprung up across the Chinese countryside.

A child who ingests large amounts of lead may develop anaemia, muscle weakness and brain damage. Where poisoning occurs, it is usually gradual. The average level of lead in the blood of Chinese children is five times the acceptable level in the United States, according to statistics from the China Daily.

Jiyuan officials cited by Xinhua attributed the poisoning to past accumulation of lead due to decades of smelting. (Editing by Jonathan Leff and Alex Richardson)





Oct 13, 2009

Top China lead smelter acknowledges poisoning role

BEIJING (Reuters) – China’s largest lead smelting firm has acknowledged partial responsibility after nearly 1,000 children living near some of China’s biggest lead plants showed excessive levels of lead in their blood, the Xinhua news agency said on Tuesday.

Some plants and production lines in Jiyuan, Henan Province, have been suspended since the poisoning of children living near smelters in other provinces became public in late August, triggering protests by parents in several regions. The area is home to China’s biggest cluster of lead smelters.

Oct 13, 2009

Battle for control shakes China’s Caijing magazine

BEIJING, Oct 13 (Reuters) – The future of one of China’s
best-selling investigative magazines is at stake in an
increasingly public battle for control that pits its
envelope-pushing editor against her financial backers.

Hu Shuli, known for her careful and influential
documentation of backroom deals and the twists and turns of
economic policy, is trying to wrest more budgetary and
managerial control over the popular business magazine Caijing.
She hopes to expand into online ventures and a news wire-like
service.

Oct 1, 2009

China marks 60 years with spectacle of power

BEIJING (Reuters) – China celebrated its wealth and rising might with a show of goose-stepping troops, gaudy floats and nuclear-capable missiles in Beijing on Thursday, 60 years after Mao Zedong proclaimed its embrace of communism.

Tiananmen Square in central Beijing became a high-tech stage to celebrate the birth of the People’s Republic of China on October 1, 1949, with the Communist Party leadership and guests watching a meticulously disciplined show of national confidence.

Sep 29, 2009

After 60 years, China’s Communists mean business

BEIJING (Reuters) – Shortly after the Communist Party took power in China, capitalists in Shanghai paraded through the streets with drums and flags, asking the Party to take over their businesses.

On Thursday, the Party will celebrate the 60th year of its rule over mainland China, having mostly abandoned its Marxist ideals for “socialism with Chinese characteristics” — a messy mix of competitive capitalism and political monopoly.

Sep 8, 2009
via Changing China

Misinformation age in Urumqi

Urumqi is a city cut off from the outside world. There has been no Internet access for two months. Phone links in or out of the region are sporadic. Text messaging is limited.  And so people gather in the streets to listen to rumors. Walking through the streets of Urumqi these past days, the main sounds I heard were of human voices. The snatches of conversation carried rumors of syringe attacks, and outbreaks of rebellious outrage. The words floated from open shop doors, from knots of people gathered at a bus station, and from people talking on cell phones as they passed me on the sidewalk. It was unusually quiet for China, and so the voices carried. Construction sites halted work on Friday and Saturday and road blocks kept cars out of the city so that demonstrators wouldn’t flood in, after thousands gathered in People’s Square on Sept 2 to demand the resignation of the region’s most powerful official. He came out on a balcony to address the crowds through a bullhorn; they threw bottles and stones at him. On Friday evening, at an intersection where police and paramilitary had disbursed thousands of ethnic Han Chinese trying to force their way to People’s Square, a knot of people gathered to listen to a grim woman, her voice clear and defiant. ”China is democratic and scientific now, but they have taken away our democracy by keeping us down.” Urumqi was swept by talk of syringe attacks, which the government blamed on separatists, and gripped by a resurgence of racial hatred, two months after 197 people were killed during a riot by Uighurs. Terrified of the mysterious syringe stalkers, Han Chinese took to the streets in disgust and fear to demand more security from the government. Troops were stationed at the entrance to Uighur neighborhoods, to prevent bloodshed by the angry crowds. The rumors varied with each group clustered on the sidewalks — some versions claimed Uighur women, in their distinctive headscarves, were sticking people with syringes. Others said men were targeting Han women and children. Still another blamed “Uighurs wearing suits.” On Saturday morning, about 20 men huddled around a Chinese man who was busy conveying the story of how a boy had been pricked with a needle, and how troops had prevented the crowd from beating up a nearby Uighur. Then an older man began a litany of complaints about mistreatment by the police and paramilitary. The others nodded in agreement. The syringe scare was started by a police department text message last Monday, warning residents against attackers with syringes. Based on the indictments so far, some drug addicts had robbed a cab driver by threatening him with a syringe; another tried to fend off police who were trying to rescue them. And then there was a teenager who stuck a needle in a fruit seller’s buttock. The government warned of a coordinated separatist attack. The effect of the text message, especially in buses crowded with Urumqi residents who are fearful and suspicious of each other, was panic. Over 500 people have gone to the police saying they were attacked; only 106 of them had a clear mark, bump or rash on their skin, official figures show. But it’s not all hysteria. Those 106 people were pricked with something.  Xinhua, the state news agency, said some were mosquito bites. But others were indeed injured, albeit slightly. Doctors, who reassured reporters that it was unlikely the attacks could spread AIDS, said that at least some of the verifiable injuries could be pin or sewing needle pricks. So who is sticking needles into people? Angry copycats who got an idea from that text message? People who want to enjoy the fuss? People who want to arouse tension and strife in Urumqi, the divided city? If the government wanted to reduce tensions, it has a tough job now. Its claims of a separatist plot have inflamed tensions, but it is so invested in them it would be difficult to back off now. If it said nothing was happening, people would believe a cover-up was going on. As I wrote this, the government ordered work units in central Urumqi to close at 6 pm, but gave no reason for the order. Instantly, more wild rumours flashed through the city.

    • About Lucy

      "I am the Reuters Insider correspondent in China, where I have lived for ten of the last 15 years. Prior areas of coverage include political and general news, as well as commodities and energy policy and markets."
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