News & Reports News Year 2010 July , 2010 Third of July 2010

Third of July 2010

Strong rise of yuan could be temporary: Analysts   2010-07-03 08:10:56
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BEIJING, July 3 (Xinhuanet) --China's central bank set the yuan's reference central parity rate on Friday to its highest level against the dollar since 2005's revaluation, despite growing concerns about the economic slow-down in China and the rest of the world.
But analysts said the strong rise of the yuan could be temporary because it is a result of the recent weakening of the dollar and strengthening of the euro.
"Once the dollar weakening stops, the yuan could weaken again," said Liu Dongliang, chief currency analyst at China Merchants Bank.
The People's Bank of China set the yuan's reference rate at 6.772, up more than 0.8 percent compared to the 6.83 it was two weeks ago when the authorities announced the yuan would be made more flexible.
In market trading, the yuan rose as far as 6.7808 against the dollar on Thursday, a whisker from Wednesday's peak of 6.7801, the highest since its July 2005 revaluation.
Yuan forwards completed a fourth weekly gain as the euro rallied against the dollar following Spain's successful sale of bonds at auction on Thursday.
Twelve-month non-deliverable forwards jumped 0.2 percent to 6.6690 per dollar as of 5:37 pm in Hong Kong and strengthened 0.14 percent during the week. The performance reflects bets that the yuan will appreciate 1.5 percent in one year.
"The rise of the yuan against the dollar is not surprising," said Liu.
He explained that it was a "technical" appreciation because of the weakening dollar and rising euro.
"It's not strong enough to invite the central bank's intervention."
According to analysts, fluctuations in the yuan are closely related to major currencies, such as the dollar and euro, and China's currency can move because of the volatile international economy.
He Liping, dean of the financial department at Beijing Normal University, predicted the yuan will not rise significantly because economic conditions will become stable.
"There will not be drastic changes in the value of the yuan," he said, explaining that both the Chinese and global economy will stabilize in the second half of the year.
Overall, the global economic situation will not change much, with some countries recording more solid recoveries and others recovering slowly, he said.
The global stock markets have fared poorly during the past week, which reflected concern about the economic slow-down in China and the rest of the world, with China's benchmark Shanghai Composite Index dropping to a 15-month intraday low in afternoon trading on Friday.
The index shed 6.7 percent during the week, its biggest weekly loss since March 2009.
"The stock markets sometimes simply over-react," said He.
Wang Tao, head of China Economic Research at UBS Securities, was confident the Chinese economy will not suffer a "hard-landing".
"The short answer is no," she said in a research note.
UBS Securities maintained its GDP growth forecast for China for 2010 and 2011 at 10 percent and 8.7 percent, respectively.
Reuters and Bloomberg contributed to the story.
(Source: China Daily)

Editor: Pliny

China will not target huge forex reserves or long-term payment surplus, says official   2010-07-02 21:52:04
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BEIJING, July 2 (Xinhua) -- China will not pursue hefty foreign exchange reserves nor, in the long run, will it target running an international payment surplus, China's currency regulator said Friday.
The composition of China's foreign exchange reserves is adjusted and optimized according to changes in economic development and market trends, and currently includes other currencies, such as the Yen, the Euro and currencies of some emerging economies, the State Administration of Foreign Exchange (SAFE) said in an online statement.
SAFE further said it should be prudent regarding how much information it would disclose since improper disclosures would trigger waves in the global markets, given that the nation's foreign exchange reserves are huge.
Data from the People's Bank of China showed China's foreign exchange reserves totaled 2.45 trillion U.S. dollars at the end of March.
Editor: Liu

Chinese investment intentions weakened in second quarter: index   2010-07-02 18:49:32
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BEIJING, July 2 (Xinhua) -- Chinese investors turned cautious in the second quarter of 2010 amid equity market fluctuations and government tightening measures designed to cool property market speculation, an index indicated Friday.
The ICBC Investment & Wealth Management Index fell 7 points to 109 in the second quarter, with urban residents' investment intentions swinging to "neutral" from "relatively strong."
The index is compiled by the Industrial and Commercial Bank of China (ICBC), China's largest lender, and consultancy firm The Gallup Organization.
The index's "Macro Environment Confidence" sub-index lost ground for the second straight quarter with a drop to 112, indicating city residents' increased concern about the overall economy and diminished confidence in investing compared with the first quarter.
The "Living Expectations" sub-index fell 6 points to 121 in the April-June period.
The "Investment Wish" sub-index slipped to 97 from 102 in the first quarter, implying that urban residents are putting less time and money into investing.
China's benchmark stock index, the Shanghai Composite Index, plunged 26.8 percent in the first half of the year while the Shenzhen Component index slumped 31.48 percent.
Only 8.2 percent of Chinese investors profited from equity markets in the first half the year, according to a online poll conducted Thursday.
Editor: Bi Mingxin

China's 2009 GDP growth revised up to 9.1 pct from previous 8.7 pct   2010-07-02 15:33:18
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BEIJING, July 2 (Xinhua) -- China's gross domestic product (GDP) growth in 2009 was modified up to 9.1 percent from previous 8.7 percent, the National Bureau of Statistics (NBS) announced Friday.
The country's GDP hit 34.0507 trillion yuan(5.296 trillion U.S. dollars), up 515.4 billion yuan(76 billion U.S. dollars) from the previous figure, according to the NBS.
After the GDP adjustment, the added-value of the primary industry was 3.522 trillion yuan(520 billion U.S. dollars), down 25.1 billion yuan(3.7 billion U.S. dollars) from the earlier calculation.
The added-value of the second industry reached 15.7639 trillion yuan(2.33 trillion U.S. dollars), up 9.9 percent from a year earlier. That growth was 0.4 percentage point higher than the previous figure.
The added-value of the tertiary industry grew to 14.7642 trillion yuan(2.18 trillion U.S. dollars) by 9.3 percent, 0.4 percentage point higher than the earlier report.
Editor: Bi Mingxin

Baidu to explore Silicon Valley   2010-07-02 10:06:54
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BEIJING, July 2 (Xinhuanet) --Baidu, the largest Chinese Internet search engine, plans to recruit at least 30 engineers from the Silicon Valley at a job fair in the United States on July 10, the first step of their global recruitment plan.
All the positions, including R&D engineers, software architects, technical architects, database administration and management engineers, and business analysts, are based in China.
Zheng Bin, director of Baidu's human resources department, said the company is expecting as many talents as possible, and the job fair is only a beginning of their global recruitment.
"Silicon Valley has gathered the most high-tech talents, which meet our requirement of building Baidu into a world-class Internet enterprise," Zheng told China Daily on Thursday.
Baidu's president Li Yanhong used to work in the Silicon Valley before he returned to China and created the company in 2000. Around 10,000 people are working for Baidu at the moment, with no more than 10 foreign passport employees.
Three basic qualifications for all positions are enthusiasm, hard work and comprehensive capabilities, including communicating, cooperating and organizing abilities, Zheng said.
"We welcome talents from different backgrounds, but people who speak Chinese are preferred since they are going to work in China," he said.
Baidu was named one of the "top 100 Chinese employers" in 2009 by the World Economist Group.
"Our employees get competitive salaries, comparable with other leading IT companies, such as Microsoft and IBM," Zheng said.
Li Youlin, a senior software engineer who has worked in Silicon Valley for more than 10 years, told China Daily that Chinese companies are very attractive for IT talents there.
"Many software engineers are interested in China because of the rapid economic growth," he said.
The basic salary in Chinese companies might not be as high as in other leading companies, such as Microsoft, Yahoo, and Google, but they are good at offering other benefits, for instance stock shares and big bonuses, he said.
"I think Baidu will be popular at the job fair, but some American software engineers do not quite accept their self-censorship," he added.
According to Iresearch, a company specializing in studies of customer behavior in new economic fields, Baidu's operating income took almost 68 percent of the search engine business in China during the first three month this year, which was about 4 percent more than the previous quarter.
The company also shared more than three quarters online search requests, while its only rival only operated less than 20 percent in the same period.
Baidu is the first Chinese company to be included in the NASDAQ-100 index back in December 2007, and their stock price just broke US$700 per share this April.
Tang Jun, former president of Microsoft China, said the Chinese IT industry needs more talents with international background.
"We have plenty of native IT elites, but they lack leadership capabilities and a creative mind," said Tang, the current president of the New Huadu Industrial Group.
"But in order to become a China-based world-class company, Baidu also needs local staff with work experience at domestic enterprises."
Editor: Pliny