frictions

Chinese Official Reaffirms ‘Rebalancing’ of Economy

In doing so, the official, Zhang Ping, the chairman of the National Development and Reform Commission, glossed over recent data that suggested the reverse might be happening.

Mr. Zhang, whose agency oversees economic planning and coordinates the country’s economic ministries, said in a news conference held in conjunction with the 18th Party Congress that the Chinese economy was growing again, crediting government policies aimed at moving China away from its reliance on capturing an ever greater share of overseas markets for its exports. He also claimed success in easing the economy’s dependence on enormous investment, which has become less efficient and less productive as many industries struggle with overcapacity.

“Starting from August, the turn toward a slower economy has been effectively curbed,” Mr. Zhang said. “From the October economic data, we can see that the trend toward a rebalancing of the Chinese economy is all the more obvious.”

But independent economists question whether any such conclusion is justified. China’s General Administration of Customs announced on Saturday morning that the country’s trade surplus in October had soared to $32 billion, the highest level in nearly four years. Exports surged 11.6 percent from a year earlier, while imports rose 2.4 percent.

Chinese officials are acutely conscious of the frictions that their trade surpluses create with importer nations like the United States, and have argued for many years that the surpluses are temporary and should not be an issue because they might soon disappear. President Obama and Mitt Romney, the Republican nominee, vied during the presidential election campaign over who could be tougher in trade and currency disputes with China over the next four years.

Commerce Minister Chen Deming tried again on Saturday to allay foreign concerns about rising Chinese exports, describing the surge as unlikely to last. He said exports would probably not remain strong because of economic troubles in overseas markets and because of what Mr. Chen described as an international rise in protectionism.

“The trade situation will be relatively grim in the next few months,” he said, “and there will be many difficulties next year.”

Investment has also surged rapidly this autumn, government statistics released on Friday showed, as state-owned banks have lent heavily to state-owned enterprises.

A series of news conferences on economic policy — a third was held on Saturday evening on efforts to encourage industrial innovation — came as the 2,268 delegates to the Party Congress attended closed-door meetings on the third day of the gathering, which is held every five years. The Congress is scheduled to choose a new Central Committee of the Chinese Communist Party this coming week, and that committee will approve a list of leaders who are expected to run the country for the next decade.

Mr. Zhang said in his news conference that the economy was becoming less reliant on exports and investment spending. He omitted October in citing data from 2012’s first nine months that he described as showing that consumption had been playing a bigger role than investment in economic growth. He also said exports had been a drag on growth.

But investment, which had slumped early this year as the government limited bank lending and restricted real estate sales to pop a housing bubble, has been bouncing back as the restrictions have been eased. Exports were also very weak early this year because of Europe’s difficulties, but are strengthening as American demand rebounds.

Wang Tao, a China economist at UBS in Hong Kong, said short-term changes in various sectors of the economy made it hard to draw any reliable conclusions about whether policy makers had been able to shift the foundations of the Chinese economy onto a firmer and more sustainable footing.

But she expressed skepticism that any fundamental shift had taken place so far, saying: “These are cyclical moves. Rebalancing happens very slowly.”

At the news conference on innovation, corporate executives expressed concern about China’s ability to create its own inventions. But Liang Wengen, the president of Sany Heavy Industry, a big construction equipment manufacturer, answered a last question on American investment policies.

Mr. Liang is widely viewed as a well-connected industrialist with the best chance of becoming the first business tycoon to join the Central Committee, possibly this coming week. He bitterly criticized the Obama administration on Saturday evening for its decision not to allow an American company owned by Sany executives to install Sany-made wind turbines in or near restricted airspace next to a United States Navy site where drones are developed.

Mr. Liang promised a long legal battle against the decision, saying: “We will fight to the end. We hope we will achieve final victory, because we believe in the justice of U.S. law, the courage of the American people and the justice of the world.”

Patrick Zuo contributed research.

Article source: http://www.nytimes.com/2012/11/11/world/asia/chinese-official-reaffirms-rebalancing-of-economy.html?partner=rss&emc=rss

U.S. Companies File Complaint Over China’s Steel Subsidies

The allegations are much like the ones that solar panel manufacturers made in a similar case filed against Chinese manufacturers in October, namely that government subsidies were allowing foreign manufacturers to sell below cost in the United States, damaging the domestic industry. The filing is likely to increase the already escalating trade frictions between the United States and China.

Chinese officials were not immediately available for comment. The official Xinhua news agency had no immediate comment or reports on the issue.

The companies bringing the complaint buy high-quality plate steel and cut it so that it forms a slightly conical shape when it is rolled into a cylinder. They weld the long seam in the rolled structures, called cans, and then stack the cans to form taller units, each with a flange at top and bottom. The units are shipped to wind farms where they are bolted together to form a tower. Towers can reach 300 feet and weigh 350 tons, and the largest ones sell in the range of $600,000, a price largely determined by the price of steel.

The industry installed about 2,900 towers in 2010 and probably more in 2011.

Imports of towers from Vietnam and China roughly doubled in 2011, according to Alan H. Price, a lawyer at the firm that filed the case, Wiley Rein, which also filed the solar panel case. At one of the companies he represents, Katana Summit, an executive said that imports had been taking market share for the last several years and now had about half the market.

“Like in so much of clean energy sector, there’s tremendous Chinese government subsidies that have gone into this sector and distorting it,” Mr. Price said in a telephone interview. The complaint seeks duties of more than 64 percent on Chinese imports, and more than 59 percent for Vietnamese imports.

The United Steelworkers has previously brought cases against foreign steel manufacturers. It is not directly involved in this case, but a spokesman, Gary Hubbard, said, “We are encouraged that domestic producers of wind towers are standing up to fight unfair trade practices by foreign producers in renewable energy products.”

The case was filed by the Wind Tower Trade Coalition — comprising Trinity Structural Towers, DMI Industries, Katana Summit and Broadwind Energy — at the Commerce Department, which has 20 days to decide whether to initiate an investigation. In addition, another government agency, the International Trade Commission, will hold a hearing in about three weeks to decide whether there is reasonable indication that the domestic industry is suffering from the imports or is under threat from them. It should reach a preliminary determination in 45 days. If the commission says there is an indication of a threat, the Commerce Department would reach a preliminary determination within six months on whether the two countries are guilty of dumping. At that point, duties could be imposed.

A final determination would take about a year, if the wind coalition wins all the earlier rounds.

At Katana Summit, Kevin L. Strudthoff, the president and chief executive, said that his industry’s problem was probably similar to the situation of the domestic solar panel industry. In fact, the American wind industry is also subsidized, mostly through a production tax credit, but by all accounts the scale of Chinese subsidies is far larger.

His company, which is privately held, operates factories in Columbus, Neb., and Ephrata, Wash., employing about 195 people.

The wind industry faces problems beyond imports, however. Its biggest subsidy, the tax credit, expires a year from now, and to collect, wind machines must be in service by the end of 2012. Because many of the components take months to fabricate, ship and install, the credit is expiring “effectively about now,” Mr. Strudthoff said. Because of the uncertainty about whether the credit will be extended, he said, his customers, the turbine builders, have stopped stockpiling inventory and are ordering only what is needed to meet orders they have already taken.

Matthew L. Wald reported from Washington and Keith Bradsher from Singapore.

Article source: http://feeds.nytimes.com/click.phdo?i=c4c85bd64cb5b9df123f6b616405efbb

Chinese Official Reaffirms ‘Rebalancing’ of Economy

U.S. Companies File Complaint Over China’s Steel Subsidies

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