The People's Bank of China (PBOC), China's central bank issued a report on the result of the monetary policy for the first quarter of the year. It shows that the money supply and consumer prices index (CPI) were still high in this period and will remain this momentum in the second quarter. But the report predicts a slow down in the second half of this year when the efforts on harnessing the overinvestment pay off.

The array of policies adopted by the government, including tightening bank credits and stricter control on market access of some overheating sectors, has aroused controversies and worries. Some are concerned that China's economy will have a sudden brake, which will hinder the global economic recovery and rebound. Others call for even bolder moves, such as interest rates hike.

But PBOC dismissed such fear. The report says its monetary targets --- 17 percent for money supply growth and 2.6 trillion yuan for new loans --- are still "basically achievable". And it takes time to have the effects of prudent monetary policy felt. This, the report believes, will take place in the second half of the year. Actually the issuance of this report itself has somewhat reassured the market. Some analysts take it a sign indicating no need of further actions by PBOC.

Curbing overinvestment is not only the affair of PBOC. The government will have a coordination system in place to ensure a perfect chorus by industrial and credit policies.

OECD happened to release its report on global economy on the same day as PBOK did. OECD's report, of course, says a lot about China's economy. It expressed its confidence in a soft landing of China's economy in the report. It also suggests more efforts on reforms of China's SOEs, banking system and social security system.

In addition, it recognizes China's imports growth has benefited its trade partners a lot. For Q1, China imported 1billion yuan worth of zero tariff products from ASEAN under the Early Harvest Programme.

Standard&Poor's also decided to keep its positive outlook on its sovereign ratings on China unchanged. The title of a report by S&P is China Likely to Manage a Soft Landing.

Reports of PBOC and OECD on pressure and prospect of China's economy

Macro-economy

Singapore becomes the second country to grant market economy status to China. The first is New Zealand. Singapore is sometimes used as a reference to judge the dumping rates when anti-dumping cases are launched against Chinese products. It has a positive attitude on starting free-trade agreement talks with China. Singapore recognizes China's full market economy status

There is a speculation swirling around that China will free its exchange rates or raise its interest rates to ease off the inflation pressure. But China's finance minister Jin Renqing confirmed at an ADB meeting that China still believes it is vital to maintain its exchange rate and "inflation is still under control". China to achieve a soft landing: minister

Prices of steel products began to drop in mid-March this year. Now the downward movement is still on and will continue. Macro-control policies in place by the state government, stronger dollar and shrinking demand all contributed to this. But the prices are still high. And steel production has not slowed down. Still prices falling back

China is an agriculture heavy country. But its agricultural products are not competitive enough in the world market. Now China is trying to improve the situation. It aims to double its agricultural exports by 2013, which stood at 21.2 billion USD in 2003. With technical barriers to trade (TBT), it is no easy challenge. More government support will be possible to agricultural exporters who are urged to improve their insurance awareness to fend off the risks. An agri-products exhibition was held in Beijing and the food safety was top on the agenda. China hopes to double agricultural exports in a decadeInsurance fund increase considered

As China will open its direct selling market at the end of this year, the law governing this industry is around the corner. Under the ban on direct sales starting from 1998, foreign direct sellers have had to change their way of operation. Avon, for example, has opened outlets or counters to sell its products. Amway are enjoying growing popularity among Chinese customers and its visiting executive is very pleased to have their voice heard by Chinese government. Draft direct selling law set for Sept.

As insurance companies will have more investment in stock market, the chances of risks is rising as much as the chances of making more money. To the relief of the insured, now they are asked to fend off risks with their risk prevention system. CIRC releases rules on risk prevention

Hong Kong's property market shows signs of sustainable recovery. Moody's showed optimism, albeit cautiously, toward the improvement of the market in its report called Momentum in Recovery Leads to Improved Credit Outlooks. It analyzed the reasons and companies benefiting the most. Moody's sees improved outlooks for HK property companies

A shipment of waste plastics from Japan has sparkled a sweeping ban of plastic wastes imports from Japan and stricter inspections on all imported goods imposed by China. China bans Japanese waste imports

Anti-dumping cases in US

Fuyao, China's largest auto glass maker and a blue-chip listed in Shanghai Stock Exchange, claimed its second victory in anti-dumping cases. The US Department of Commerce ruled a neglectable dumping rate of 0.13 percent for Fuyao's products. No major changes is expected for its final ruling in September. It won such case in Canada for the first time last year. When Chinese businesses are facing rising anti-dumping cases in the world, Fuyao's experience particularly implies a lot for industries, enterprises and the legal circle in China. Fuyao wins anti-dumping battle in US

"It not a gigantic amount of money", said a spokesman of the US International Trade Commission. But it is really enough to shock Chinese color TV makers who are facing steep anti-dumping duties in US. The ruling has sparkled wide attention in China beyond the TV industry. Chinese analysts are criticizing the unfairness of the ruling and political factors behind it. They think it is not reasonable to use the third market as a reference to decide whether the Chinese color TV makers are dumping their products.

They argue American consumers will not benefit from more expensive Chinese TVs. Actually it is the job losses in some Japanese or European companies in TV assembly business in US that leads to the legal action against Chinese products. Analysts in China are also suggesting the possibility of granting the market economy status by foreign countries like US to some specific Chinese industries, such as the TV sector, which are already market oriented. Chinese TV makers involved in the case vowed to take actions. US trade panel approves duties on Chinese TV sets

Chinese market and enterprises

China's logistics still has a long way to go before it can meet the needs of the economy. That also represents business possibilities for the industry. That's why overseas enterprises flocked into an international logistics expo in Shanghai this week.World-class logistic exhibition held in ChinaChina sees a rising need for logistics

S&P gives all companies in China upgrades in its recent industry report card. No one has received a negative rating. It also points out challenges faced by the Chinese mainland, China's HKSAR and Taiwan. S&P releases industry report card on Chinese companies

Five big chemical companies in China created a new giant in the industry after reorganization. Their ambition is also giant: to be one of the world's top 500 in three years. And the way to success, they said, is reorganization and reform. Newly born Chinese chemical giant eyeing world's top 500

Facing the fast expanding pace of foreign retailers in China, the government encourages and supports mergers and acquisitions in the commercial sector to make the industry stronger and operate in a more efficient way. Commercial circulation businesses have realized it and begun to act. The latest case is a possible alliance between two big retailers in Beijing. In Shanghai, the scheme for merger of First Department and Hualian, two listed companies, were approved by shareholders' conferences of the two on May 10. They are speeding up their reorganization. Alliance to boost retailer's performance

High prices and demand of basic materials such as iron, steel, iron ore, have sent revenue of China's leading metal traders and manufacturers into the sky. But this is not expected to sustain in the rest of the year. Policies of tightening investment in metal heavy industries, fierce competition and contracting demand will slow down the rise. SMEs have already felt the chill. Metal company's profits rocket 350%

China Merchants Bank, listed in Shanghai Stock Exchanges and based in Shenzhen, pioneers a nationwide launch of bank cards with BIN numbers which paves the way of overseas payment with RMB cards. It issues cards called All in One which can keep current and term deposits either for RMB or for foreign currencies. China Merchants Bank launched BIN cards

More financial tools and a boost to A-share market from outside

BNP Paribas believes it has every reason to launch derivative business in China. It has a solely-owned bank in Shanghai called International Bank of Paris and Shanghai which is one of the first foreign funded banks approved to offer RMB services in China. Changjiang BNP Paribas Peregrine Securities Co. is its joint venture. BNP Paribas to tap China's derivative market

Merrill Lynch, Hangseng Bank and SMBC of Daiwa Securities were granted QFII and more are lining up for approval. Their joining makes the number of QFIIs up to 15 with investment quota of 1.7 billion USD. Expectation for RMB appreciation is not the reason for overseas institutional investors' interest in China's A share market. Like Merrill Lynch, they base their decisions of investment on prospect rather than short-time market fluctuation. And they are confident in China's economic prospect in the next few years. Merrill Lynch granted QFII, more are expecting approval

Foreign-funded enterprises in China

German chemical giant inks equipment import accord for China operationsBayer will buy 300 million euros worth of equipment on international market for its 3.1 billion USD integrated polymer production base in Shanghai Chemical Industry Park..

LG eyes bigger GSM market shareLG, the world's top CDMA handset maker, will launch six GSM models in China's high-end market this year as it has found GSM is more popular than CDMA here.

Kodak's China strategy not black-and-whiteKodak has a diversified strategy for its operation in China where traditional cameras still has great potential.

World express giant DHL begins to provide domestic express service in ChinaIt will invest more than 215 million USD in its express business in China.

Daimler Chrysler's cooperation with Beijing Automotive Industry Holding this time will lead to a new facility to produce 25,000 vehicles annually.

Dongfeng, Renault agree on JV car projectTheir 50-50 percent company will be based in Shenzhen, Guangdong province with an annual capacity of 300,000 Renault passenger cars.

Multinationals pump up more in ChinaGoogle, known for its powerful search engine, views China its growth engine. VW and Nissan apparently share with its perspective.

Nokia's distribution center in Suzhou serves its global marketSuzhou in China's coastal Jiangsu Province in the east holds Nokia's first integrated distribution center in Asian-Pacific region.

BP on the road with Sinopec, PetroChinaBritish oil giants are speeding up their expansion in China. BP will spread 500 oil retail stations through its two joint ventures, BP Sinopec Zhejiang petroleum and BP PetroChina Petroleum. And Royal Dutch/Shell will have the same number of such stations in Jiangsu Province under its joint venture with Sinopec. These are all economically prosperous provinces in China. Besides, an oil futures market will be resumed in Shanghai.

Japanese consortium to bid on China's railway projectAs China's economy needs faster trains, foreign technologies can play a role. Both Japan and German lead the world in railway transportation technology. Now the two are competing for a big order in China: a nearly 900 million USD worth of contract. In fact, France has also long been eyeing China's railway sector.

Others

Two leading harbors, Shanghai and Hamburg, will join hand to face the global competition on shipping industry. Shanghai, Hamburg sign agreement on harbor cooperation

By People's Daily Online