December 20, 2024

You are here: Home / Archives for chinese exports

China to Investigate European Wine in Wake of Solar Panel Tariffs

June 5, 2013 by Leave a Comment

HONG KONG — China’s nouveau riche millionaires, wealthy princelings and bribing business executives may soon find their wallets a little thinner: The price for French Champagnes and Burgundies, Italian Barolos and pinot grigios and other European wines may soon rise in mainland Chinese stores.

Less than a day after the European Union said it was imposing preliminary import tariffs on Chinese solar panels, China’s Ministry of Commerce announced Wednesday that it had begun a trade investigation of wines imported from the European Union. The investigation could lead to the imposition of steep tariffs by China.

The European Union’s trade commissioner, Karel De Gucht, announced Tuesday in Brussels that he was imposing preliminary tariffs of 11.8 percent on solar panels imported from China, saying the panels were being “dumped,” sold for less than they cost to make, in Europe.

If China was trying to send a retaliatory signal to Mr. De Gucht personally, wine might be a good target. He owns a 50 percent stake in a wine-producing estate in the Tuscany region of Italy.

The Chinese commerce ministry carefully avoided linking the solar panels to Wednesday’s announcement that it would investigate European wines for improper duties or subsidies, saying instead that it was acting in response to a complaint from Chinese wineries.

But the ministry issued a separate statement expressing “resolute opposition” to the decision on solar panels. “We hope the E.U. will further show their sincerity and show flexibility, through consultations to find mutually acceptable solutions,” the statement said.

The 27 countries of the European Union exported $980.7 million worth of wine to China last year, most of it from France, according to customs data compiled by Global Trade Information Services in Columbia, S.C. That is much smaller than Chinese exports of solar panels to Europe, which reached $27 billion in 2011 before a combination of trade frictions and cuts in European subsidies to buyers of solar panels started to discourage shipments.

Threatening to retaliate against fine wines during a trade dispute with the European Union is time-honored tactic for international trade negotiators. Wine exporters are a powerful political constituency and national figures in some European countries, particularly France. A threat to limit their overseas sales is a way to bypass European leaders and appeal to public sentiment for a reduction in trade tensions.

Mr. De Gucht was already bucking widespread opposition in Europe by taking on Beijing over solar panels, with a range of national politicians and executives from other industries eager to expand — not curtail — trade relations with China.

In November 1992, in a dispute over European farm subsidies, the United States announced that it was imposing a 200 percent tax, to take effect in 30 days, on imports of still white wines from Europe, like Chablis from France and riesling from Germany, and a few red wines. The two sides quickly reached a compromise.

Until now, China has tended to pursue retaliatory trade actions against industrial products, including imports of polycrystalline silicon, the main material for solar panels. That material is already the subject of a Chinese trade investigation after the United States imposed antidumping and antisubsidy tariffs totaling about 30 percent on Chinese solar panels.

The Chinese threat against wine imports has the potential to upset consumers in China — at least some of the most affluent ones. The move may also end up impinging on some Chinese investors because growing wine consumption in China has prompted a surge of investment in French vineyards.

In recent years, Chinese companies and business leaders have snapped up more than three dozen chateaus in Bordeaux, the wine region that has drawn the greatest interest from Chinese drinkers.

The acquisitions involved mostly lesser-known vineyards among the close to 10,000 Bordeaux estates. Many of these properties have struggled in recent years to sell their wine in the traditional markets of Europe.

James Kanter contributed reporting from Brussels, Eric Pfanner from Serraval, France, and Hilda Wang from Hong Kong.

Article source: http://www.nytimes.com/2013/06/06/business/global/china-to-investigate-eu-wine-after-subsidy-and-dumping-complaints.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Wall Street Pushes Ahead

February 8, 2013 by Leave a Comment

Stocks traded higher on Wall Street on Friday after a trio of positive economic data points.

The Standard Poor’s 500-stock index added 0.5 percent in afternoon trading, the Dow Jones industrial average rose 0.4 percent, putting it back over 14,000, and the Nasdaq composite index jumped 0.9 percent.

Data showed that Chinese exports grew more than expected in January, while imports climbed 28.8 percent, highlighting robust domestic demand. German data showed a 2012 trade surplus that was the nation’s second highest in more than 60 years, an indication of the underlying strength of Europe’s biggest economy.

And American data showed that the trade deficit shrank in December to $38.5 billion, its narrowest in nearly three years, indicating the economy did better in the fourth quarter than initially estimated.

The S.P. 500 has risen for five straight weeks and is up 5.8 percent for the year. Its advance was helped by legislators in Washington averting a series of automatic spending cuts and tax increases earlier in the year, as well as better-than-expected corporate earnings and data that pointed to modest economic improvement but no immediate change in the Federal Reserve’s stimulus plans.

But the index, hovering near five-year highs, has stalled in recent days as investors await strong trading incentives to drive it further..

“The market has made a big run, a lot of this was anticipated and so now investors are saying, ‘Now what? What do we do for an encore?’” said Terry Morris, senior equity manager for National Penn Investors Trust Company in Reading, Pa. “It has made a big run and it is deserving of rest — in fact, it would probably be healthy if we had a little bit of a pullback.”

McDonald’s said that January sales at established hamburger restaurants around the world fell 1.9 percent, a steeper decline than analysts expected. Shares edged up 0.8 percent.

LinkedIn jumped 19 percent after announcing both blow-out quarterly profit and a bullish forecast for the new year that exceeded Wall Street’s already lofty expectations.

According to Thomson Reuters data through Thursday morning, of 317 companies in the S.P. 500 that have reported earnings, 69 percent have exceeded analysts’ expectations, above a 62 percent average since 1994 and a 65 percent average over the past four quarters.

Fourth-quarter earnings for S.P. 500 companies grew 5 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.

On Thursday, comments about the strength of the euro by the European Central Bank president, Mario Draghi, renewed concern about the euro zone economy and sent global equities lower. On Friday, European stock markets ended mostly higher, while the euro traded around $1.3358.

Article source: http://www.nytimes.com/2013/02/09/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

China’s Efforts to Cut Inflation Fall Short

May 11, 2011 by Leave a Comment

The latest data underlined the challenges that China faces as it tries to tame inflation while at the same time issuing trillions of extra renminbi to prevent the currency from rising quickly against the dollar, which would erode the competitiveness of Chinese exports.

Consumer prices were 5.3 percent higher in April than a year earlier. That represented a slight improvement from March, when consumer prices were up 5.4 percent. But economists had expected inflation to edge down to 5.2 percent or below, and the government’s target for the full year is 4 percent, a level not reached in any month so far this year.

Many businesses across China say that they see healthy sales and have the profits or bank lines of credit to allow them to invest in further expansion.

“Our domestic market is doing very well and continues to expand,” said He Lei, the vice general manager of the Zhejiang Qingsen Textile Garments Company. “Our year-on-year growth in this sector has been 30 percent.”

The Shanghai Composite Index of shares fell 0.6 percent in the first half-hour of trading after the release of the economic data, as investors appeared to conclude that persistent inflation made it more likely that the government would raise interest rates again, after already doing so four times since October.

Other economic statistics also released by the Chinese government on Wednesday presented a picture of an economy still expanding briskly, signaling that recent government moves to tighten credit have not had much effect.

Banks issued 739.6 billion renminbi ($114 billion) in new loans last month, higher than economists’ expectations of 700 billion. The People’s Bank of China, the country’s central bank, has been trying to restrain lending by raising repeatedly the percentage of bank assets that must be kept on deposit with it, but this has been offset by the large-scale issuance of renminbi to pay for currency market intervention, holding down the currency’s value against the dollar.

Retail sales jumped 17.1 percent in April from a year ago. Fixed asset investment grew even faster, climbing 25.4 percent last month from a year earlier, although Chinese fixed asset investment figures tend to be inflated somewhat by rising land prices, a factor that Western statisticians try to exclude.

Western economists had expected inflation to slow more quickly because food prices in China are flat or falling this year, unlike in many countries. Food is the largest component of China’s consumer price index, making up a third of it.

After vegetable prices surged at the end of 2009, partly because of a harsh winter, the Chinese government urged farmers across the nation to plant more vegetable farms. This winter was milder, and vegetable production surged so sharply that prices have fallen, leading to widespread complaints from farmers but limiting the cost of groceries for urban families.

Many economists had expected falling food prices to offset more fully the effects of rising world prices for many commodities, like oil and cotton. Changes in wholesale food prices are quickly and entirely reflected in changes in the prices that consumers pay for food at supermarkets and corner stalls.

But Jun Ma, an economist at Deutsche Bank, estimated in a research note on Tuesday that when prices of other commodity prices rise or fall in China, the price of the eventual retail product only rises or falls by one-sixth as much in percentage terms. That is because other raw materials, like rubber or cotton, tend to play a small role in the overall price of products like tires or clothing.

Hilda Wang contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=1fe19c8c4e903234e899200cde99f53f

Filed Under: Business News Tagged With: , ,

Chinese Exports Hit Record for April

May 10, 2011 by Leave a Comment

HONG KONG — China’s exports surged last month to a record level, as Chinese factories appear to have passed on rising costs to buyers who are finding that they have few alternatives in other countries.

China’s imports lagged, causing its trade surplus to widen sharply from the first three months of this year, to $11.43 billion. That was lower than last year, but still high enough to increase trade frictions with the United States and other countries worried that China is using a weak currency to claim an unusually large share of global job creation as the world economy climbs out of the recent economic downturn.

China’s regularly scheduled release of trade statistics came in between two days of negotiations in Washington between senior American and Chinese officials. In the first day of talks on Monday, American officials pressed China to improve its human rights record and allow interest rates and the Chinese currency to rise, while Chinese officials called on the United States to lead a global economic recovery and suggested that their shrinking trade surplus should not be a big concern.

China’s General Administration of Customs said that exports rose 25.9 percent in April compared with a year earlier, to a record $155.69 billion, exceeding a previous record of $154.12 billion in December. The increase was somewhat surprising because the spring is traditionally a weak period for Chinese exports.

Chinese imports rose at a slower 21.8 percent, to $144.26 billion, as government policies took effect to restrict bank lending in an attempt to control inflation.

Labor costs are surging by 10 to 30 percent a year in China and commodity costs are rising around the world, leading to warnings by suppliers of Western retailers that price tags will start rising globally. Many companies are searching for alternatives to manufacturing in China, but finding that nowhere else offers China’s combination of a large labor supply, world-class highways and ports and strongly pro-business policies, including a strict ban on independent labor unions that tended to hold down wages until very recently.

Josh Green, the chief executive of Panjiva, a New York company that advises 3,000 corporate buyers of goods from Asia, said his clients were extremely worried about the pace of price increases that they face from Chinese suppliers.

“That’s all I’ve been hearing from them over the past year, is concern verging on panic about the changing cost structure in China,” he said. “That has led to the hunt for the next China, which is a fool’s errand.”

Executives at three Chinese exporters said Tuesday that despite strong retail sales in the United States in April, they had not yet seen a sustained uptick in American orders, even as orders have risen from Europe and emerging markets. One reason might be that these and other exporters are now steadily marking up their prices to reflect the gradual appreciation of the renminbi, which has climbed 5 percent against the dollar since last summer.

“I am not worried about the rise of the renminbi since our company makes an adjustment every three months in the exchange rate used in our contracts,” said Mabel Lee, the sales manager at the Foshan Summit Sanitary Ware Company, a maker of bathtubs of toilets based in Foshan, in southern China’s Guangdong Province.

Hilda Wang contributed reporting.

Article source: http://www.nytimes.com/2011/05/10/business/global/10yuan.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,