1. Reuters: China loses trade dispute over rare earth exports
China has lost a dispute at the World Trade Organization over limits on rare earth and metals exports, handing Europe and the United States a victory over what they see as Beijing's unfair trade practices. "Today's ruling by the WTO on rare earth shows that no one country can hoard its raw materials from the global market place at the expense of its other WTO partners," said EU Trade Commissioner Karel De Gucht. China produces more than 90 percent of the world's rare earths, key elements in defence industry components and modern technology from iPhones and disk drives to wind turbines. China imposed strict rare earth export quotas in 2010, saying it was trying to curtail pollution and preserve resources.
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2. LAT: WTO: China's export restrictions on rare earths violate trade rules
The World Trade Organization on Wednesday said that China's restrictions on the exports of rare earths -- raw materials commonly used in the manufacturing of electronics -- violate trade rules. China had argued that the restrictions, which included export duties and quotas, were in place to conserve exhaustible natural resources, but other countries disagreed. The United States two years ago complained to the World Trade Organization about the restrictions, arguing that they artificially raised the prices of rare earths for other countries and gave preferrable pricing to Chinese manufacturers; the European Union and Japan also joined the complaint. In its ruling, the WTO said that China's "export quotas were designed to achieve industrial policy goals rather than conservation" and said that the conservation argument made by China does not apply to "measures to control the international market for a natural resource." Rare earths, despite their name, are not especially rare. They are a group of 17 naturally occurring metals that include tungsten and molybdenum. They are used in various manufactured products, including hybrid cars, televisions, cellphones and weapons.
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3. WSJ: China's economy under mounting stress
Bad news is piling up for China's economy, raising fears Beijing's financial power may not be sufficient this time around to keep the economic engine ticking over and stave off market instability. Signs of economic stress are mounting as companies report disappointing profits and state-owned banks take large debt write-offs. On Wednesday, Bank of China reported its second-weakest profit growth since its initial public offering in 2006. Standard & Poor's, also on Wednesday, added to a chorus of concern over China's debt. The ratings firm, in a quarterly Asia credit report, warned that policy makers may have to move sooner than expected to deal with massive lending by the so-called shadow banking sector, which encompasses local government financing vehicles, property developers and trust companies.
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4. FT: Central bank steps in to calm China bank run
Hundreds of depositors have raced to pull their cash from a small rural bank in eastern China, forcing local officials to take emergency measures to calm the panic after the bank run began to spread. Coming weeks after the first true default in the Chinese bond market, the run on Jiangsu Sheyang Rural Commercial Bank is the latest sign of growing stresses in the country’s financial system. But it has also been a localised event, contained to one farming county where lightly regulated credit co-operatives and loan guarantee companies failed this year after mismanaging funds. Worried depositors rushed to Jiangsu Sheyang Rural Commercial Bank after rumours spread that it was on the verge of collapse, according to state media. The panic first hit the bank’s branch in an industrial park on Monday. On Tuesday, big queues of depositors gathered at its branches in at least three other villages in Sheyang county, according to the Xinhua news agency.
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5. WSJ - China Realtime: China’s largest bank declares war on Alibaba
As Alibaba prepares for a listing in the U.S. that could raise as much as $15 billion, it’s also in a full-blown, potentially dangerous conflict with some of China’s most powerful government-backed companies. In recent years, Internet firms such as Alibaba and Tencent have begun to muscle in on territory traditionally occupied by state banks—both through offering mobile payment services as well as online investment products featuring returns superior to those offered by state banks. State banks, meanwhile, are striking back. The latest salvo in the standoff came this week after users of Alibaba’s online investment fund – Yu’E Bao, or “leftover treasure” – reported they were having trouble transferring money into the fund from accounts held with the Industrial & Commercial Bank of China Ltd., China’s largest bank by assets. Following these reports, ICBC informed customers that it was cutting back resources needed to process such transfers.
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6. FT: World Bank urges China to reform urban development
China could save $1.4tn in infrastructure spending over the next 15 years by increasing the population density of its cities, the World Bank said on Tuesday. The bank’s managing director Sri Mulyani Indrawati told a conference on urbanisation in Beijing that according to current trends China’s cities would spend $5.3tn on infrastructure over the next decade and a half but could save roughly a quarter of that by using a series of market reforms that would decrease urban sprawl.
Dreamstime photo
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7. Reuters: Plane, car deals mark Chinese state visit to France
China's President Xi Jinping and French counterpart Francois Hollande oversaw the signing of a series of industrial co-operation deals and multi-billion dollar aircraft sales in Paris on Wednesday, the business highlights of a Chinese state visit. Much of what was signed had only ceremonial significance. However, Hollande's government, bruised by losses in last weekend's municipal elections and deeply unpopular for its failure to tackle record unemployment, hopes to encourage more deals and harness France's patchy economic recovery more tightly to the growth of the world's second-largest economy. "Eighteen billion euros' worth of contracts. That means jobs, growth, and above all the prospect of more to come in the years ahead," Hollande said.
Fabrice Bregier (R), Airbus President and Chief Executive Officer, and Li Hai, President of CASC shake hands at a signing ceremony at the Elysee Palace in Paris March 26, 2014. Reuters
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8. AP: Deal-making ahead as China president visits France
Chinese President Xi Jinping was the toast of France as he embarked on a state visit — and what better time just days after China ended an anti-dumping, anti-subsidy investigation of French wine. Deal-making and commemorations of a half-century of French diplomatic ties with Communist China were the order of business during Xi's three-day visit, part of his European tour. France wants its relations with China to flourish, not least because of a whopping 25.8 billion-euro ($35.6 billion) trade deficit with what is now the world's No. 2 economy. That shortfall represents roughly 40 percent of France's total foreign trade deficit. French officials said the signing of about 50 commercial accords were being lined up. From nuclear energy to aerospace to agribusiness, and even including a possible sausage deal, President Francois Hollande says they will total about 18 billion euros ($24.8 billion). In Paris during the afternoon, Hollande met Xi at a state ceremony and troop review at the Invalides monument, the final resting place of Napoleon. "My visit to France comes at a particular moment, and will allow for work with ... Hollande and other French leaders to take stock of 50 years of Sino-French relations, and plan the future together," Xi said following his arrival.
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9. NYT: On visit to China, Michelle Obama eases in some political messages
Michelle Obama’s weeklong trip to China seemed to start as a spring break holiday with her mother and daughters but has turned out to include far more substance — and politics — than the cheerful advocate of fitness and healthful eating she often displays at home. At a high school here on Tuesday, Mrs. Obama pointedly told students that the United States championed “the right to say what we think and worship as we choose,” even as she conceded that Americans still lived those ideals imperfectly and that minorities had struggled to overcome a legacy of discrimination. “Many decades ago, there were actually laws in America that allowed discrimination against black people like me, who are a minority in the United States,” Mrs. Obama said in a speech at the No. 7 School here. “But over time, ordinary citizens decided that those laws were unfair. So they held peaceful protests and marches.”
Michelle Obama, practicing tai chi with students in Chengdu, has spoken openly about free expression and minority rights. Credit Andy Wong/Associated Press
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10. WP: China woos Michelle Obama with panda diplomacy
On her last day in China, Michelle Obama became the latest in a long line of American government officials to be wooed by this country’s cute and cuddly panda diplomacy. The furry animals are housed on a research base in this city of 7 million in a bamboo-filled wonderland called Chengdu Panda Base. As Obama, her daughters and mother passed through the pink blossom trees to see the giant panda enclosure, birds chirped. The quartet ignored the clicking cameras, pretending the media were not present, and peered over a wooden railing where they saw six pandas playfully eating bamboo.
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11. WP: In China, as Michelle Obama lauds press freedoms, questions arise about media access
First lady Michelle Obama’s trip to China has garnered massive attention in this vast country over the past five days, as an aggressive pack of Chinese journalists has followed her every move and penned hundreds of stories about her visit. But coverage of the trip has been made more difficult by tight restrictions on reporters and photographers, who have been kept far away from many events and were not allowed to accompany the first lady, her mother and her two daughters on their flight last week from the United States. Obama has had only one written question-and-answer session with a Chinese-based independent news outlet. The constraints, including an absence of interviews by U.S. news reporters, have prompted objections from some journalists and conservative commentators, who see a contrast between Obama’s remarks here in favor of a free press and the restrictive nature of her travels.
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12. Xinhua: China regrets WTO rare earth exports ruling
China's Ministry of Commerce (MOC) reacted with regret to a report released on Wednesday by the World Trade Organization (WTO) that judged some Chinese raw materials exports haven't followed rules on export tariffs and quotas. The WTO report was a response to accusations made in March of 2012 by the United States, European Union and Japan that China had broken rules by limiting exports of materials including rare earth, tungsten and molybdenum. The WTO formed a dispute settlement panel in July of 2012. The MOC's legal department replied on Wednesday that the ministry is evaluating the report and adopting measures in accordance with WTO dispute settlement protocols.
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13. Xinhua: Rules on free trade account system coming in June
Rules on implementation of the free trade account system that enables full convertibility of the Chinese currency and allows offshore financing in the Shanghai free trade zone will be rolled out before the end of June, an official said yesterday. The account will help Chinese companies, especially those engaged in foreign trade, secure cheaper yuan-denominated funding from offshore, where financing costs have been lower than that on the Chinese mainland. “We hope to have the account in place by the end of the first half of this year,” said Dai Haibo, deputy director of the Shanghai FTZ administrative committee. China’s central bank previously eased restrictions on overseas investment by individuals by allowing those working in the zone to open an account for overseas investment.
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14. CD: Yuan enters new era with freer float
A more flexible and volatile exchange rate is likely to give riseto more genuine participationand less speculation, reports Gao Changxin from Shanghai The good old days are gone when speculation simply refers to acquisition when it comes to the Chinese yuan. Now that the decade-long expectation of appreciation is in tatters, traders will have to use more brain than brawn if they want to keep themselves in the game. While the central bank has always preached the idea of a free-floating yuan, the People's Bank of China finally practiced it by doubling the currency's daily trading band to 2 percent on either side of the daily reference rate. Zhou Xiaochuan, the central bank governor, has been pushing the idea for years, but traders really started to embrace it this time as their long positions suffered badly from a nosedive in the yuan's exchange rate.
China Daily photo
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15. SD: Lilly builds Suzhou plant
Eli Lilly & Co started building its third manufacturing plant in Suzhou, Jiangsu Province, yesterday, with the United States pharmaceutical giant saying it will continue a robust investment pace in China although it is downsizing its footprint in other regions. Located in the Suzhou Industrial Park, the project involves a total investment of 2 billion yuan (US$322 million), about three times the total that Lilly has invested in Suzhou. “The new project is an evidence that we are going to continue to invest in China in a very robust way even though we’re facing difficulties in other markets,” said John C. Lechleiter, chief executive officer of Lilly. The Indianapolis-based firm has been making cutbacks in the US and Europe as it deals with the loss of patent protection for some of its top drugs.
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16. SD: Cities should be ‘denser, not larger’
China should allow market forces to play a bigger role in its urbanization process, systematically changing the way of allocating land, people and capital to better tackle environmental degradation and other problems, the World Bank said yesterday. “Building denser cities, rather than larger cities, will help China cut down on traffic congestion, air and water pollution, as well as the maintenance costs for infrastructure services,” the bank said in a report produced in conjunction with the Chinese government’s Development Research Center. “With more efficient, denser cities, China can save some US$1.4 trillion in infrastructure spending, or 15 percent of China’s GDP last year. It also will help preserve the amount of farmland still available, currently close to the red line considered the minimum needed to ensure food security,” the report said.
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17. CD: Inland govts' debt 'more risky'
The risk associated with the debt of some inland local governments is significantly higher than for their coastal counterparts, the chairman of Beijing-based Dagong Global Credit Rating Co Ltd said on Tuesday. "With a much smaller fiscal revenue base, the risks of some inland local governments' debts are significantly higher than for coastal provinces," Dagong Chairman Guan Jianzhong said. Dagong is a major domestic ratings firm that has provided credit ratings to many of China's local government financial vehicles. Although Chinese officials have often said that the overall risk associated with the nation's local government debt is "controllable", audit results point to major risks in some specific areas.
Xinhua photo
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18. FT: New York Times boss takes swipe at Bloomberg over China
Mark Thompson, chief executive of the New York Times, has taken a swipe at Bloomberg after the chairman of the financial news and information group suggested recently that investigative articles on China had harmed its commercial prospects in the country. Mr Thompson was speaking days after Peter Grauer said Bloomberg “should have rethought” investigative articles about China because of the potential harm to the company’s business information operation in the country. “To state the obvious, Mr Grauer seems to have a rather different conception of what journalism should consist [than the New York Times],” said Mr Thompson at the FT Digital Media conference in London. “We don’t think you need to rethink investigative journalism,” he added. “There are commercial realities…but it depends on what your priorities are.”
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19. Reuters: China extends Airbus production venture, unblocks A330 deal
China signed a new 10-year accord on Wednesday allowing Airbus to assemble A320 planes on its soil until 2025 and unblocked orders for larger jets worth more than $6 billion, restoring ties after a row with Europe over aircraft emissions. Watched by visiting President Xi Jinping and his French counterpart Francois Hollande, Chinese officials in Paris also signed deals to co-produce 1,000 French EC-175 helicopters over 20 years with Airbus Group's (AIR.PA) helicopter division and to co-operate on turbo-prop engines with France's Safran (SAF.PA). The A330 orders that got the go-ahead on Wednesday had been suspended during a trade row triggered by China's opposition to a European Union scheme forcing airlines to join an emissions mechanism that China feared could harm its carriers. Airbus said China had agreed to buy a total of 70 aircraft including 43 A320-family airplanes and had gone ahead with previously frozen orders for 27 Airbus A330 aircraft - deals worth a combined $10.2 billion at catalogue prices.
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20. BBC: Bank of England agrees Chinese London currency clearing hub
The Bank of England has agreed a deal with the People's Bank of China to make London a hub for Chinese currency dealing. The memorandum of understanding, to be signed on Monday, sets out settlement and clearing arrangements for the renminbi, or yuan, in London. The signing is expected to be followed by the appointment of a London clearing bank for yuan. 62% of yuan payments outside of China already take place in London. Following an agreement with Beijing last year London asset managers are the only ones in the West able to invest directly in Chinese stocks and shares in yuan.
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21. Houston Business Journal: U.S.-China manufacturing dynamic to change, IHS experts say
There is an interesting dynamic brewing between Chinese and American manufacturing companies that could greatly impact Houston-area manufacturers. Now that the U.S. is experiencing what many consider a manufacturing renaissance, there is much discussion about what types of manufacturing will be onshored versus offshored. As intelligence firm IHS Inc. experts discussed March 26 at the World Petrochemical Conference in Houston, the U.S. and China have two very robust manufacturing sectors. As the U.S. energy scene changes with the increased availability of oil and gas from shale plays, the balance of manufacturing power between the two countries may experience some shifting.
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22. WSJ - China Realtime: It’s Captain America vs. Spider-Man at the Chinese box office
Superheroes descended on Beijing this week to take on a new battlefield: China’s box office. Chris Evans, the lead actor in “Captain America: The Winter Soldier,” and Andrew Garfield, the star of “The Amazing Spider-Man 2” were promoting their latest films in China, a destination that is increasingly being added to stars’ promotional tour itineraries. Mr. Evans and co-star Scarlett Johansson visited an upscale shopping center in downtown Beijing on Monday for the film’s only promotional stop in Asia, while Mr. Garfield met local fans and media in a luxury hotel in central Beijing along with co-star Emma Stone on Tuesday. China hasn’t always been a favored stop on celebrities’ world tours. But since the country became the world’s second-largest film market in 2012, Hollywood’s stars are paying it more attention, especially those promoting blockbuster superhero films loaded with 3-D and special effects . Robert Downey Jr. visited Beijing to promote “Iron Man 3” last spring, and Tom Hiddleston stopped by in October ahead of the release of “Thor: The Dark World.”
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23. WSJ - Andrew Browne: Fresh opportunities in a slower, riskier China?
As China's economy slows and financial risks build, investors are fleeing Chinese stocks in droves. But not Nikhil Srinivasan, who manages assets valued at €500 billion ($692 billion) as the chief investment officer of Assicurazioni Generali SpA, the Italian insurance giant. "China is a buy," he says. How's that? Mr. Srinivasan thinks that slowing growth, far from a risk, is an opportunity: It will focus Beijing's attention on overhauling the wasteful and inefficient state enterprises behind a credit blowout that threatens the stability of the world's No. 2 economy. Over two to three years, he says, this will pay dividends. Mr. Srinivasan adds: "I look for turns—and I think we're at a turning point."
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