China Economy to Rebound as Stimulus Spurs Investment

(Bloomberg) -- China’s economy, the world’s third largest, may rebound this quarter as Premier Wen Jiabao’s 4 trillion yuan ($585 billion) stimulus package cushions the effects of the global recession.

Urban fixed-asset investment surged by almost a third in March and industrial-output growth accelerated, reports accompanying China’s gross domestic product figures showed yesterday. First-quarter GDP grew 6.1 percent, the slowest pace in almost a decade, as exports slumped.

“The economy has gained significant momentum since February,” said Sun Mingchun, an economist at Nomura Holdings Inc. in Hong Kong, who predicts the economy will expand 8 percent this year. “We still expect a V-shaped recovery.”

A pickup in China will contribute “strongly” to growth in the rest of Asia by increasing demand for commodities and products from around the region, according to the World Bank. Wen has cautioned that while the economy is in better-than- expected shape, China is yet to establish a solid foundation for a recovery.

“China has bounced and I think it’s very important,” Barclays Plc President Robert Diamond said in an interview yesterday in New York. “The impact that that can have, if we’re right and we see this continuation in stronger Asian countries, is pretty phenomenal.”

UBS AG yesterday raised its estimate for economic growth this year to as much as 7.5 percent from 6.5 percent previously and Royal Bank of Scotland increased its estimate to 7 percent from 5 percent. Merrill Lynch expects second-quarter growth of 7.2 percent, climbing to 8 percent for 2009.

Newman’s Optimism

“China got its stimulus plan started months ahead of the U.S. and it’s really working,” said Frank Newman, chairman of Shenzhen Development Bank, who served as a deputy secretary at the U.S. Treasury from 1994 to 1995. “We see a lot of it in action because we are financing it.”

Economists have been increasing their forecasts since February. The median estimate of 15 surveyed by Bloomberg News before the release of yesterday’s data was for 7.7 percent growth this year, up from 7.2 percent in February.

Nissan Motor Co. said its sales of passenger cars in China rose 36 percent in March from a year earlier as stimulus measures boosted confidence and attracted more buyers into showrooms. Anhui Conch Cement Co., China’s biggest maker of the building material, said this month that sales volume jumped 15 percent in the first quarter from a year earlier.

Wen’s Target

The government has targeted 8 percent economic growth for the year, a level deemed necessary to create enough jobs for its growing population.

The closure of thousands of factories has cost the jobs of millions of migrant workers, raising the risk of social unrest as China approaches the anniversary of the anti-government protests and crackdown in Tiananmen Square in June 1989.

While stimulus measures have started to produce results, China faces faltering export demand, industrial overcapacity, unemployment and weak private investment sentiment, Wen said yesterday. A rebound in industrial-output growth lacks momentum, the premier said.

“Growth may have bottomed out in the first quarter but with private sector and overseas demand still weak, China will not emerge from this downturn as rapidly as it went in,” said Mark Williams, an economist with Capital Economics Ltd. in London.

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PRESS DIGEST - New York Times business news - Aug 3

(Reuters) - * China's high-profile investment in the Blackstone Group
LP has produced an unusual backlash within China as
shares in the equity firm have dropped steeply since it went
public in June.




* Take-Two Interactive Software Inc. , the video
game publisher, said on Thursday that it was postponing the
release of the latest game in its wildly popular Grand Theft
Auto series. The delay is likely to have ripple effects on the
broader video game industry during its crucial holiday selling
season.


Read more at Reuters.com Mergers News

Toyota profit jumps on sales rise

(Reuters) - Toyota, the world's biggest and most profitable automaker, left its cautious annual forecasts unchanged, as expected.




The Japanese firm, valued at $215 billion -- more than 10 times the market capitalization of U.S. rival General Motors Corp. -- is on its way to a seventh straight year of record earnings, powered by a rapid expansion into developing markets such as China and Russia.


Read more at Reuters.com Market News

Asian Fish, Tainted With Drugs, Slip Past U.S. Inspectors, States Discover

(Bloomberg) -- Joseph Basile, an Alabama state
scientist, drops a frozen catfish filet into an industrial food
processor and pulverizes it into a fluffy white powder.

The grinding in a laboratory in Montgomery is part of a test
of imported seafood for drugs that U.S. regulators say can cause
cancer or increase resistance to antibiotics. Alabama officials
have reported finding banned medicines missed by the U.S. Food
and Drug Administration in seafood from China, Vietnam and other
Asian countries.


Read more at Bloomberg Exclusive News

Australian Wool Prices Fall to Lowest in Six Months on China Import Halt

(Bloomberg) -- Wool prices in Australia, the
world's biggest producer and exporter of the fiber, fell to
their lowest in more than six months after China's government
stopped taking applications for imports.

Benchmark prices fell 33 cents, or 3.6 percent, to A$8.96 a
kilogram ($7.71) today on the Eastern Market Indicator, David
Cother, wool services manager at the Australian Wool Exchange,
said from Sydney. That's the lowest since Jan. 10. Sales resumed
today after a three-week Southern Hemisphere winter recess.


Read more at Bloomberg Commodities News

China National, Reliance Win Australian Offshore Oil Exploration Permits

(Bloomberg) -- China National Offshore Oil Corp.,
Total SA and India's Reliance Industries Ltd. were among
companies that won offshore oil and gas exploration permits in
Australia.

Hess Corp., Santos Ltd. and Woodside Petroleum Ltd. also won
licenses in the bidding round, which will result in an investment
of more than A$800 million ($688 million) on exploration,
Industry Minister Ian Macfarlane said today in an e-mailed
statement.


Read more at Bloomberg Energy News

Madagascar, China sign deals worth $78 million

(Reuters) - China and Madagascar have signed four deals worth roughly $78 million for hotel construction and debt alleviation among other things, Malagasy officials said.

The deals confirmed agreements made at the China-Africa summit in Beijing last November between the Asian powerhouse and the enormous, mineral-rich island.


Read more at Reuters Africa

UPDATE 1-Buffett cuts PetroChina stake, sells 17 mln shares

(Reuters) - Buffett's stake in the total company, taking into account
the untradable shares held by PetroChina's parent, China
national Petroleum Corporation, amounts to about 1.29 percent
after the share sale.




Buffett, the world's second-richest person, sold the shares
on July 12 at between HK$12.44 and HK$12.46 each, the HKEX Web
Site showed.


Read more at Reuters.com Mergers News

Sudan assigns Chinese CNPC offshore oil block

(Reuters) - Sudan has signed a deal with Chinese state oil firm China National Petroleum Corp. (CNPC) to take a majority stake in its Block 13 exploration site, off the coast of the Red Sea, a senior Sudanese oil official said on Friday.

CNPC has a 40 percent stake, 15 percent for both Indonesian state firm and Sudanese state oil firm Sudapet.


Read more at Reuters Africa

China's Debt Rating Raised to A1 by Moody's on External Payments, Economy

(Bloomberg) -- China's debt rating was upgraded by
Moody's Investors Service, citing the country's swelling
foreign-currency reserves, surging exports and improvements to
the banking system.

The country's long-term foreign-currency rating jumped to
A1, the fifth-highest ranking, from A2, the ratings company said
in a statement today.


Read more at Bloomberg Bonds News

Paulson to meet Chinese leaders on currency

(Reuters) - The Treasury said Paulson would raise with Chinese leadership "issues of concern to the U.S. Congress"




"This trip is part of an ongoing process to strengthen our strategic economic relationship -- to address long-term issues such as working with China to rebalance its growth and increase the flexibility of its currency and also to address short term issues as they arise," Paulson said in a statement.


Read more at Reuters.com Bonds News

UPDATE 1-New Oriental Education shares fall on miss

(Reuters) - NEW YORK, July 24 - New Oriental Education and
Technology Group Inc. missed analyst expectations that
it would make a fourth-quarter profit, sending its shares down
as much as 17.5 percent on Tuesday morning.




The provider of private education services in China posted
a net loss of $1.6 million, or 4 cents an American Depositary
Share, for the quarter ended May 31.


Read more at Reuters.com Market News

China Will `Soon' Allow Insurers to Invest More Overseas, Regulator Says

(Bloomberg) -- China will ``soon'' allow the
nation's insurers to put more of their assets overseas to
compensate for higher interest rates at home, the industry
regulator said.

China's central bank on July 20 raised its benchmark
lending and deposit rates after a report showed the nation's
economy grew at the fastest pace in 12 years in the second
quarter. Higher rates draw demand away from fixed-income and
savings-substitute products offered by insurers, said a
spokesman for China's insurance regulator.


Read more at Bloomberg Emerging Markets News

Philippine Bonds Slump as Fitch Says Fiscal Deficit May Double This Year

(Bloomberg) -- Philippine bonds fell after Fitch
Ratings said the government's fiscal deficit may almost double
this year because of lower-than-expected revenue.

``There is concern that revenues may not be enough to meet
targeted spending,'' said Roland Avante, treasurer at Chinatrust
(Philippines) Commercial Bank in Manila. ``Definitely, the
tendency is for yields to adjust upwards.''


Read more at Bloomberg Bonds News

Taiwan's Export Orders Likely Rose Most in Three Months on China's Growth

(Bloomberg) -- Taiwan's export orders probably
increased the most in three months as China's economy expanded
at the fastest pace in 12 years and U.S. growth rebounded.

Orders, indicative of shipments in the next three months,
rose 12 percent in June from a year earlier, according to the
median estimate of 13 economists surveyed by Bloomberg. May's
gain was 11.9 percent. The number is due at 4 p.m. in Taipei.


Read more at Bloomberg Bonds News

Rubber Falls as Yen Advances Against U.S. Dollar, China Imports Decline

(Bloomberg) -- Rubber futures in Tokyo fell for the
first day in four as the yen strengthened to its highest in more
than six weeks against the dollar and China reported imports of
the commodity declined last month.

A gain in Japan's currency damps the value of yen-
denominated contracts for commodities such as rubber, which
trades globally in dollars. China's natural rubber imports
dropped 1 percent in June to 118,417 metric tons from a year ago,
the Beijing-based Customs General Administration said today.


Read more at Bloomberg Commodities News

UPDATE 1-China silences green GDP study, report says

(Reuters) - BEIJING, July 23 - China has stopped the public
release of an official study putting a cost to the nation's
environmental damage, a government researcher told a Chinese
newspaper, blaming official reluctance to confront pollution.




The Beijing News reported on Monday that the release of a
"green GDP" report computing the cost of pollution and ecological
degradation in 2005 had been "indefinitely postponed".


Read more at Reuters.com Economic News

Australian Dollar Set for Record Winning Streak as Commodities Prices Rise

(Bloomberg) -- The Australian dollar headed for a
12th day of gains, the longest winning streak since it was
allowed to trade freely in 1983, as the prices of raw materials
the country exports rose.

The currency traded near an 18-year high as the Westpac
Commodity Futures Index, an export weighted average of exchange-
traded commodity futures prices, advanced 4.5 percent to an all-
time high. The local dollar has surged 17 percent over the past
12 months as demand from China pushed up prices of raw materials,
which add about 14 percent to Australia's economy.


Read more at Bloomberg Currencies News

Mauritius to benefit from cheap Chinese loans - PM

(Reuters) - Mauritius is set to benefit from $113 million in cheap Chinese loans and grants to develop roads and communications, the Indian Ocean island's prime minister said on Saturday.

Speaking to Reuters less than a week after visiting China, Navin Ramgoolam said the trip had also yielded the promise of a series of private sector investments.


Read more at Reuters Africa

Hogs Post Biggest Weekly Gain Since March on China; Cattle Futures Climb

(Bloomberg) -- Hog futures in Chicago had the
biggest weekly gain in four months on speculation China may
import more U.S. pork to make up for a drop in domestic
supplies. Cattle rose.

China may have to buy as much as 100,000 additional tons of
pork worldwide after the spread of ``blue ear,'' a respiratory
disease in pigs, led to a culling of herds that drove domestic
pork prices up 75 percent in the past year. Hog futures surged
4.7 percent this week, the most since mid-March.


Read more at Bloomberg Commodities News