US Dollar Exchange Rates of 12th March 2013
China Yuan 6.2164
Report from China
Domestic demand to be a new driver of growth
Discussion of consumer-led growth is the talking point in economic
cicles in China as this is seen as crucial to narrowing the gap between
rich and poor in the country.
Earlier this year reforms were announced to spur income generation
amongst the county¡¯s huge low income population.
The outgoing Chinese Premier has said that when domestic demand can be
stimulated, growth in the economy will be less dependent on government
investment and exports. Forecasts are for a 7.5% expansion of the
economy in 2013.
The contribution of the non-manufacturing sector to the Chinese economy
is growing but the latest figures from the National Bureau of Statistics
show that the non-manufacturing purchasing managers' index was1.7 points
down from the 56.2 level in January.
However, while the index dropped to a five-month low, a reading over 50
still indicates considerable growth potential is envisaged.
See both:
http://www.stats.gov.cn/english/statisticaldata/monthlydata/t20130306_402877876.htm
http://www.stats.gov.cn/english/statisticaldata/monthlydata/t20130306_402877871.htm
2013 real estate investment continues
A press release form the National Bureau of Statistics says: ¡°total
investment in real estate development in the first two months of 2013
was yuan 667.0 billion, up by 22.8 percent year-on-year in nominal term,
6.6 percentage points higher than that in the same months of the
previous year.
Of the total, investment in residential buildings was yuan 458.3 billion
(up 23.4%). The trend in monthly growth can be seen in the graph below.
In February, the national real estate sentiment index was 97.92, down more
than 2% from December 2012.
For the full press release see:
http://www.stats.gov.cn/english/pressrelease/t20130311_402878958.htm
Policy measures aimed at cooling property market
News in the market is that the central government will introduce
measures to further tighten control of the property market in major
cities. Analysts report that a capital gains tax will be levied on those
selling homes.
This measure is likely to impact those who bought property as a
speculative investment. For example, a home that was purchased for yuan
1 million (approx. US$159,000) five years ago in Beijing is now worth
around yuan 3 million.
If this property is sold the seller would now be charged yuan 400,000 in
tax. Before the new tax regime was introduced the tax was only 1 to
2-percent of the sale price.
The property capital gains tax is designed to reduce speculative
investment in second homes. Analysts forecast that there will be a surge
in home sales before the new tax measures come into effect.
Alarm in US and China over plywood countervailing duties
On 27 February 2013, the US Department of Commerce announced preliminary
countervailing duties (CVD) on Chinese hardwood plywood after
determining that producers in China benefited from subsidies ranging
from 0.22 percent to 27 percent.
See:
http://ia.ita.doc.gov/ia-highlights-and-news.html
Immediately on release of the Department of Commerce statement the
American Alliance for Hardwood Plywood (AAHP) issued a press release.
See:
http://media.wix.com/ugd//43c11e_a376a8f21e7bfc412a0e332f129df8b1.pdf
The AAHP reacted strongly to the ruling saying: ¡°The three mandatory
respondents investigated in detail by the Department of Commerce in the
case all received 0.00 % CVD preliminary duty margins, effectively
refuting claims by the petitioners that Chinese hardwood plywood
producers are unfairly subsidized.
This finding clearly illustrates that American businesses importing
unique products from China ¨Clike the hardwood plywood under the proposed
scope of the investigation are doing so under fair business practices,
and are in full compliance with international trade laws.¡±
The AAHP press release goes on to say that ¡®Despite its affirmation that
the three investigated Chinese exporters were clearly not subsidized,
the Department of Commerce chose to severely penalize an exceptionally
wide group of hardwood plywood exporters that fully complied with the
investigation with a punitive 22.63% preliminary duty rate.¡±
The AAHP has indicated that it will work to resolve the apparent unfair
application of duties. The AAHP press release says ¡°AAHP believes this
preliminary duty will severely damage the American industries that
depend on this unique hardwood plywood; not only the small, family owned
importers, but also the large and small American manufacturers of a
variety of products ¨C from kitchen cabinets to recreational vehicles.¡±
The AAHP is an organization of American importers, distributors,
manufacturers and retailers of hardwood plywood, along with other US
companies who provide tens of thousands of jobs that depend on the
availability of global resources. Read more at
www.aahp.org
Chinese experts have commented that the method for calculating the CVD
is seriously flawed and that China¡¯s plywood industry will face huge
burden if the US proceeds to apply the preliminary CVD.
Analysts suggest that the China Forest Products Industry Association (CFPIA)
along with the Ministry of Commerce, Ministry of Foreign Affair and
other relevant authorities could work with those in the US such as the
AAHP to have the CVD reviewed.
Forest machinery exports of US$15 billion by 2020
The Chinese government has outlined a plan for further developing and
updating the equipment and machinery used for forest operations in the
country.
The plan identifies four major areas to be addressed: providing for
technical innovation and improved manufacturing, industrial
demonstration of new equipment; base line studies to assess needs and
expanded international cooperation for development of machinery
appropriate for conditions in China.
The Plan anticipates that by 2020 China will have a vibrant forest
machinery sector which could achieve exports worth US$15 billion.
Raute subsidiary promotes plywood technology to suit local conditions
Expanded domestic production of wood-based panels from a variety of raw
materials has improved China¡¯s raw material utilization.
In China, there are thousands of wood based panel manufacturers but the
average output is low and estimated at between 30 ¨C 40,000 cubic metres
per line. The scale of operation and the level of equipment used in
Chinese mills tends to be low and in need of up-grading.
The Finnish company Raute has developed a Twin-Peel rotary lathe and
last year Raute (Shanghai) Machinery Company introduced the improved
Twin-Peel lathe to the Chinese market.
As a subsidiary wholly owned by Raute Finland, Raute (Shanghai)
Machinery Company has invested in the promotion of new equipment to suit
the plywood industry in China.
In particular, research and development by the company has focused on
industrial techniques and equipment for wet veneer production, a
fundamental and key process in plywood production.
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