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Australia has once again turned down an investment plan by a Chinese company in a proposed mine near an outback missile testing range, citing security concerns.

Australia\’s Defense Department knocked back the proposed bid by Wugang Australia Resources, a wholly owned subsidiary of Wuhan Iron and Steel Corp (Wisco), to buy half of the Hawks Nest magnetite mine, which falls within the Woomera prohibited military range.

Under the joint venture proposal, Wugang Resources was set to receive 21.1 million shares in Western Plains, Wugang\’s proposed Australian partner in the mine, and a 50-percent stake in the project for A$45 million.

It is the second time this year that the Australian Defense Department has vetoed an application from a Chinese company for investment near the Woomera prohibited area.

In March, the government blocked China Minmetals Nonferrous Metals Co from buying Australian miner Oz Minerals Ltd for AU$2.6 billion because one of the assets, the Prominent Hill gold and copper mine, was within the range precincts. China Minmetals eventually bought Oz Minerals minus the mine for AU$1.7 billion.

Industry insiders said Australian mining companies have generally welcomed Chinese investors, as they needed capital to expand their businesses. However, China\’s eagerness to extend its footprint in the Australian resources sector has triggered tensions.

\”On the one hand, Australia welcomes Chinese investment as it knows its economic development cannot ignore China, but on the other, it hopes it can get the most benefits in the cooperation and is reluctant to see Chinese companies taking the major stake in the resources sector,\” said Yu Liangui, director of research center at Mysteel.

Zou Weimin, chairman of the Metallurgical Corporation of China Overseas Ltd, told China Daily in a July interview that he had not seen a favorable attitude by the Australian government toward Chinese companies investing in mines in the country.

But Australian DM John Faulkner said while other mines had been allowed within the Woomera area, the problem with the Hawks Nest mine was that it was in the missile firing line, and it was not because it was Chinese in origin.

\”China has all along held an open attitude toward foreign enterprises investing in China, and we hope other countries will take the same stance on Chinese companies (intending to invest there),\” Chinese Foreign Ministry Spokeswoman Jiang Yu said yesterday.

(China Daily September 25, 2009)

China\’s foreign exchange reserves rose from $1,577 billion in 1978 to $1,950 billion in 2008 to rank first in the world, said Yu Wenzhe, Chinese Ambassador in Ghana, on Tuesday.

To the same token, China\’s per-capital annual income of $62.5 in 1978 reached $9,863 in the urban areas, showing an increase of over 100 percent.

Ambassador Yu Wenzhe announced this during a press briefing which was aimed at highlighting China\’s significant socio-economic development for the past 60 years.

The People\’s Republic of China would be 60 years on October 1, 2009 and the Chinese people and its allies are expected to celebrate the country\’s 60th anniversary with pomp and pride.

The stated achievement, he noted, was due to China\’s vigorous pursuance of a strategy or model that featured high speed socio-economic development.

He was happy that China has metamorphosed from agricultural country to an industrial nation with the result that the country is now ranked the third largest manufacturing country in the world.

On the strength of China\’s development, Yu urged African leaders to translate the continent\’s advantage in natural resources into socio-economic development.

The ambassador disclosed that in 2006, the output of 172 categories of Chinese products ranked first on the world market, adding that about 70 percent of DVDs and toys; 50 percent of telephone sets and shoes; one-third of color TVs, bags and suit cases were made in China.

To be part of Ghana\’s future success, he said, China had invested more in Ghana in the fields of economic and technical assistance, which included grant and cash, human resource training among others.

Touching on China\’s investment in Ghana, he said, China topped the list of countries with the highest number of registered projects in Ghana.

\”Up to June 30, 2009, China had registered 387 projects in Ghana valued at $235.18 million,\” he added.

\”To achieve a sustainable and steady development of China-Ghana bilateral trade, both sides should adopt effective measures to balance the trade,\” he stressed.

Yu said this against the backdrop that China\’s export to Ghana had increased rapidly between 2002 and 2007 as against Chinese imports from Ghana, which he noted, had decreased for two consecutive years since 2005.

(Xinhua News Agency September 25, 2009)

The European Union decided Thursday to impose five-year duties on aluminum foil imported from China, Brazil and Armenia over alleged dumping charges.

The EU said in its decision that the duties were up to 30 percent as a punishment to Chinese exporters for selling the product at below cost, or dumping. Reports say that Shanghai-based Alcoa Aluminum Products Co. was affected by the punishment.

The tariffs on Brazilian products are 17.6 percent, Armenia\’s are 13.4 percent.

The EU accepted an offer by Brazil\’s Companhia Brasileira de Aluminio to sell at a minimum price in return for an exemption from the anti-dumping duty. It rejected a similar proposal by Armenia\’s Rusal-Armenal company.

The five-year duties came after six-month provisional duties expired and will go into effect once being published in the EU\’s Official Journal by Oct. 8. The six-month levies were up to 42.9 percent.

The EU staged a probe into the products from the three countries began in July 2008 after receiving a dumping complaint by the European Association of Metals.

The measure covers aluminum foil in rolls as wide as 650 millimeters and a weight exceeding 10 kilograms, with a thickness between 0.008 millimeter and 0.018 millimeter.

On the same day, the EU decided to slap tariffs as high as 39.2 percent on Chinese steel seamless pipes and tubes.

(Xinhua News Agency September 25, 2009)

China\’s industrial output rose 8.1 percent in the first eight months from the same period last year, said the Ministry of Industry and Information Technology (MIIT) Friday.

The growth rate was 7.6 percentage points lower than that in the same period last year, but 1.1 percentage points higher than that in the first half year.

In August alone, China\’s industrial output expanded 12.3 percent year on year. The growth rate was the largest since September last year when the global economic slowdown hit China.

China\’s exports in August dropped 23.4 percent year on year, indicating the country faced a tough exports situation, said a report on the MIIT website.

China finished 662.4 billion yuan (96.98 billion U.S. dollars) of industrial investment in August, up 23.1 percent year on year. Total industrial investment was 4.73 trillion yuan in the first eight months, up 26.6 percent year on year.

(Xinhua News Agency September 25, 2009)

By Yi Xianrong (blog.china.com.cn)

The Shanghai Composite Index, China\’s stock market benchmark, began a steady climb from 1,820 points at the start of the year to reach a high of 3,478 in August, a growth of 91 percent. Major volatility closely followed, though, pulling the index down to 2,639 before sending it up again recently, to 3,068. Before long, the index tumbled once again, down to 2,900.

The indexes suggested an upward trend in the national stock market during the first seven months of the year. Why, then, would a major downturn suddenly hit in August, especially when, at the same time, the US Dow Jones Index saw a fresh high, beating its performance just before the market crashed in September 2008.

In other words, while extreme challenges lay ahead for the international financial situation, the Chinese stock market had already begun its recovery, as evidenced by the soaring index. But, as the international markets became more stable and stock prices began rising, the Chinese stock market oddly started plummeting. The subsequent pessimism felt as a result of the volatility in turn affected some international markets, though not quite as seriously, and indexes like the Dow Jones began to climb after a temporary dip.

Another question we have is how long this volatility will last. The plunge at the beginning of August, according to market analysts, was a natural adjustment to the preceding upward frenzy. The present adjustment brought the index down from 3,478 to 2,639, a loss of more than 800 points, or more than 25 percent, a decline that is by all means too acute to go unnoticed.

In my opinion, two key factors contributed to the recent instability. First, the Chinese stock market has never freed itself from being capital driven – every large influx of capital would give the market an instant surge. From January to August this year, credit funds in China increased by 8.15 trillion yuan (US$1.193 trillion). Since the economy was in a healing process, a large amount of the funds that were originally aimed at financing large-scale national projects, went into the stock markets instead. When the capital was forecast to drain out in the second half of the year, the market almost immediately started to tumble.

In fact, the increase of credit funds during H2 so far isn\’t any different from that of previous years, and market liquidity is not expected to stagnate. With rumors of both, however, many investors have chosen to bail out of the wavering market, scared off by last year\’s turbulence. On the flipside, the financial hurricane has also instilled a sense of caution into numerous Chinese investors, who otherwise would have continued with a starry-eyed view of the stock market and eventually burst the market bubble. That\’s why last year\’s economic turmoil was still a positive thing for the stock market\’s long-term prosperity, despite the losses incurred.

The second factor is the government\’s excessive eagerness for instant success. Once there\’s a boom in the stock market, like during the first half this year, the authorities think it\’s time to have numerous state-owned companies go public.

Although basic improvements have been made to the Chinese stock market over recent years, the focus of \”going public\” has never shifted from \”the enclosure movement\” – getting fast funds, or as the tool to becoming rich overnight. Therefore, among the swarm of companies wishing to be listed, companies like the Chinese State Construction Engineering Corporation and Metallurgical Corporation of China, accompanied by the so-called Growth Enterprise Market, have been able to solicit as many as 10 companies to raise capital by floating shares in a single trading day. Not only are acts like this never a reflection of the market\’s prosperity, but they also cause panic, as market investors will inevitably perceive that domestic enterprises are once again rounding up their money, resulting in their subsequent escape. Financing giants like Vanke is just a case in point.

The current economy, both at home and abroad, are in the healing process. The US stock market has already seen steady climbing, while the Chinese economy is recovering at a better-than-expected rate. Meanwhile, listed companies report improved performance, and the domestic financial market has regained liquidity – all pointing to mounting momentum in the Chinese stock market during the second half of this year.

In light of the current state of the stock market, the authorities should pay close attention to drastic trends and institute the appropriate policies to guard the market against excessive risks, rather than purposefully upsetting the fragile market with harsh policies. And only by these means can the stock market resume its development, safeguarded by a well-meaning authority.

This blog was first published in Chinese on September 22, and translated by Maverick Chen.

(China.org.cn September 25, 2009)

Apple’s iPhone is scheduled to debut in China’s mainland, the world’s biggest mobile phone market, in three weeks in a partnership with China Unicom, the telecommunications carrier said yesterday.

The iPhone’s official entry has been keenly anticipated and expected to increase competition in the smart phone market with rivals such as Nokia and Dopod, said Wu Wenzhao, a telecommunications analyst at Beijing-based IT research firm Analysys International.

China Unicom and Apple initially will kick off with two models: the iPhone 3G and the latest iPhone 3GS. The price will be lower than models bought on the black market, which cost 3,000 yuan (US$441) or more, according to a China Unicom source.

“The cooperation will open the door for Apple to enter the huge China market,” said Sherrie Huang, an analyst at Ovum. “It also gives China Unicom a competitive weapon in the high-value subscriber segment.”

An estimated 10 million mainland users already have iPhones, according to Ovum, a UK-based consultant.

China Unicom will start commercial use of 3G phones next month, its Shanghai branch said. Users will be able to buy iPhones through various packages from a starting price of about 100 yuan, Shanghai Unicom said.

(Shanghai Daily September 25, 2009)

A nationwide questionnaire of bankers released Thursday by China’s central bank showed that the bankers’ confidence index for macro economy and bank performance in the third quarter had continued rising, and expectations for bank performance in the fourth quarter had been improved.

Bankers’ confidence index for macro economy stood at 55.4 percent in the third quarter, up 15.4 percentage points than that in the second quarter. The macro economic expectation index rose 6.8 percentage points to reach 45.9 percent, according to the survey.

The survey showed 39.3 percent of the bankers believed the current monetary policy was “relatively loose”, 9.7 percentage points lower than in the second quarter. Around 55.9 percent bankers predicted monetary policy would stay unchanged in the fourth quarter.

The loan demand index was 68 percent, slightly down 0.2 percentage points from the previous quarter. By sector, loan demand by agriculture and non-manufacturing industry dropped 1.2 and 0.7 percentage points from those in the second quarter.

The performance index of the banking industry added 2 percentage points from the previous quarter to 66.5 percent. The banking industry expectation index was 67.9 percent, 1.8 percentage points higher than that of the second quarter.

The questionnaire was a systematic quarterly statistical investigation sent to the country’s 2,900 banking institutions. It was jointly conducted by the People’s Bank of China and the National Bureau of Statistics.

(Xinhua News Agency September 25, 2009)

Nobel laureate in economics Robert Mundell said Thursday that China should not make the Renminbi convertible too rapidly.

“I tend to be … conservative. Don’t do it too rapidly,” the “Father of Euro” told the audience of a lecture on the campus of the Chinese University of Hong Kong, saying that the gains from making the RMB convertible should be weighed against the losses.

The peg of the RMB has brought a lot of gains to China, he said.

China was once pushed on the convertibility issue some nine years ago. Had China made its currency convertible at that time, the gains would have been much less, he said.

Mundell became the fifth distinguished professor-at-large at the Chinese University of Hong Kong after the university created the post to attract renowned scholars to teach and provide leadership for the benefit of general academic advancement.

Mundell said one of the major implications of the recent economic crisis had been the harm done by the big swings in the exchange rates between the world’s major currencies, and thereby, the need for a global monetary system.

Mundell said an Asian currency area that include China, Japan and other economies might still be possible by 2015 as the world moves toward larger currency areas.

He also said the United States might be repeating its mistakes of late 1960s and early 1970s in the policy pursuit of monetary expansion and tax increases. Instead, it should cut taxes to get as much production as possible out of the monetary expansion, which should be limited to a lesser extent, he insisted.

(Xinhua News Agency September 25, 2009)

China’s banking regulator told Xinhua Thursday night it does not place limits on the pay of the country’s commercial banks’ top executives.

The China Banking Regulatory Commission (CBRC) said it noted that some of the country’s media reported the CBRC was drafting a document to regulate the pay of bankers from commercial banks.

Every country was trying to correct the improper incentive mechanism to curb excessive risk-taking which sparked the current financial crisis, said the CBRC.

“The CBRC has been working with other relative departments on improving the wage incentive mechanism for the country’s banking industry since last year,” an official from the CBRC, who declined to be named, said in response to the media reports.

“The aim was to introduce scientific guidelines on incentive mechanism by integrating executives’ pay and operation risks,” said the spokesman, adding the CBRC is not directly responsible for regulating bankers’ remuneration.

Detailed pay setting should be determined by individual financial institutions, according to the official.

(Xinhua News Agency September 25, 2009)

China plans to progressively carry out next year a zero-tariff policy on 95 percent of imports from least developed countries, the Ministry of Commerce said Wednesday.

The ministry said this move aimed to increase exports to China from these countries. But it did not elaborate which imports would enjoy the favorable policy.

The ministry also presented an outline summary of the efforts China has made or is making to assist developing countries in fields such as agriculture, food donations, education, training, clean energy, and loan reductions or exemptions for impoverished nations.

(Xinhua News Agency September 24, 2009)