Beijing will introduce tough new laws as well as an “accountability system” to crackdown on rampant food safety violations, the official Xinhua news agency reported, a significant move aimed at the elimination of food scandals that have claimed several lives in recent years.
China has officially opened the world’s longest high-speed rail network, spanning 2,298 kilometers from Beijing, the capital in the north, to Guangzhou, the southern commercial metropolis.
The opening of the new 2,298-kilometre (1,425-mile) line between Beijing and Guangzhou means passengers will be whisked from the capital to the southern commercial hub in just eight hours, compared with the 22 hours previously required.
The big news in the last few weeks has been the relatively positive economic data suggesting that Beijing could be in for a rebound. However, the “relief” data tell us nothing about the health of the underlying economy. In fact, growth rates in China will continue to slow dramatically in the next few years and if there are temporary lulls, as there must be, these do not represent any sort of bottoming out at all.
Despite the global economic slowdown, Chinese investments overseas actually tripled in the first half of 2012, according to a recent PwC report. The growing outflow of Chinese money has also shaken up numerous industries abroad – particularly the foreign energy sector as Chinese oil companies continually set ambitious targets for international production.
China’s Foreign Ministry on Wednesday warned India to respect “China’s sovereignty and national interests” in the South China Sea, after India’s Navy Chief Admiral D K Joshi suggested this week that New Delhi was ready to deploy vessels in order to protect their economic interests in the region.
Citing proactive fiscal policy and planned market reforms, growth in the world’s second largest economy could enjoy a rebound to 8.2 percent in 2013, said the Chinese Academy of Social Sciences, the country’s top academic and policy research institute.
The CASS, however, said that its GDP forecast is contingent on the stabilisation of the European debt crisis and the United States avoiding the expiration of Bush-era tax cuts as well as automatic cuts to defence and domestic spending programmes.
The Obama administration has ruled that China is not a currency manipulator, but nevertheless said that the renminbi remains “significantly undervalued”.
In its semi-annual report, the US Treasury said yesterday that China did not meet the definition of a currency manipulator. While the label is largely symbolic, the findings rule out any US trade sanctions against China.
China’s currency regulator has announced it will loosen rules and reduce red tape for foreign direct investment, the latest step in efforts to buoy slowing inflows.
China’s State Administration for Foreign Exchange announced yesterday that it would ease the complex review procedures related to capital flows and currency quotas of foreign enterprises.
What are the odds of the renminbi displacing the dollar, and does China want the yuan to become an international reserve currency? Besides the fact that being a major reserve currency would require the complete liberalisation of the capital account and a flexible financial system largely independent of government control, with clear and enforceable rules, it would also put China’s economy at the mercy of countries that want to turbo-charge growth by running large trade surpluses. Beijing, it appears, isn’t eager to accept any of these conditions.
The re-election of Barack Obama as the President of the United States has been met with mixed reactions among China’s business community. While some welcome the continuity it brings to US-China trade relations, others fear that more bilateral economic disagreements may arise in Obama’s second term.
With President Barack Obama winning a second term at the White House, some China exporters are breathing a sigh of relief.
But should they?
The consensus, at least at first glance, is yes.
