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China Voice: BRICS a stabilizer of global economy

07/16/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 8 (Xinhua) — A BRICS group with deepened cooperation will not only serve its five member countries and other developing nations, but also stabilize and even boost the world economy.

In upcoming days, leaders of the BRICS countries — Brazil, Russia, India, China and South Africa — will meet in Ufa of Russia for the seventh BRICS leaders meeting.

They met for the first time in 2009, launching the bloc’s cooperation mechanism. Since then, the BRICS have shown vitality and innovation through cooperation, with deepened participation in global governance.

Now these countries will set up the New Development Bank (NDB). The institution’s board of governors will hold its first meeting in Moscow to appoint members of the board of directors and the management.

The NDB shows that the BRICS bloc has transformed from a political concept to a real force for reform in the international community.

With the bank’s funding, developing countries, especially the African states, can improve their infrastructure, rather than struggling with the limited funds the current international agencies provide them.

The new development bank will cover the shortcomings of the global financial system. It is not intended to overturn the current system, but to encourage investment from developed countries and other developing countries with an open and inclusive mind.

The BRICS has become an importance platform for exchanges and cooperation among the world’s major emerging economies. It has brought real benefits for the member states, and also earned a good reputation among the international community.

This new cooperation mechanism pointed to an important trend: emerging economies are playing bigger roles in global issues.

Global economic recovery remains slow. While trade globalization agreements are still being negotiated, the Western countries and Russia are introducing sanctions against each other, and the developed and developing countries have not yet reached agreement on how to balance economic development and climate change.

Under such circumstances, the BRICS leaders’ meeting in Ufa has critical significance as cooperation among them will not benefit not only themselves but also the world economy.

Although the five countries are at very different stages of their development, they will still become new growth poles for the world economy.The five have contributed half the world’s economic growth in the past 10 years.

They have complementary industrial structures. Sufficient labor, abundant resources and large markets give them great opportunities for development.

The five countries are also important players in both their continents and international affairs. In multilateral platforms such as the UN and the G20, they are playing bigger roles than ever before, thus their booming economies can drive the whole global economy through their deepened cooperation with other countries and international organizations. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

Business, China, Indepth, News, World News

AIIB agreement signed, China-led bank takes key step forward

07/16/2015 北欧绿色邮报网 Leave a comment

BEIJING, June 29 (Xinhua) — A China-initiated multilateral bank that has dominated media headlines for months took a key step forward on Monday, with the signing of an agreement that outlines the framework and management structure for the institution.

Representatives of the 57 prospective founding countries of the Asian Infrastructure Investment Bank (AIIB) gathered in Beijing for the signing ceremony in the Great Hall of the People. Australia was the first country to sign the document.

The 60-article agreement specified each member’s share as well as the governance structure and policy-making mechanism of the bank, which is designed to finance infrastructure in Asia.

Seventy-five percent of the bank’s share is distributed among Asian and Oceanian countries while the remaining 25 percent is assigned to countries outside the region. As the bank expands its membership, countries outside of the region can expand their stake, but the portion cannot exceed 30 percent. Each member will be allocated a share of the quota based on the size of their economy.

China, India and Russia are the three largest shareholders, taking a 30.34 percent, 8.52 percent, 6.66 percent stake, respectively. Their voting shares are calculated at 26.06 percent, 7.5 percent and 5.92 percent.

China’s stake and voting share in the initial stage are a “natural outcome” of current rules, and may be diluted as more members join, China’s Vice Finance Minister Shi Yaobin said in an interview with Xinhua.

“China is not deliberately seeking a veto power,” Shi stressed.

Being the largest shareholder does not mean China will have veto power over major issues. Instead, China will closely watch and balance other members’ interests, said Tang Min, with Counselors’ Office of the State Council, who previously worked for the Asian Development Bank (ADB).

Speaking at Monday’s ceremony, Finance Minister Lou Jiwei said the new bank will uphold high standards and follow international rules in its operation, policies and management to ensure efficiency and transparency.

The bank, headquartered in Beijing, will possibly set up regional offices in other countries. It will be led by a president with a five-year term that can be extended once.

The articles do not say who will be the president, but said the president will be chosen from Asian member countries using an “open, transparent and excellent” selection process.

Jin Liqun, former vice finance minister of China, is secretary-general of the interim multilateral secretariat for establishing the AIIB.

After signing the agreement, representatives from prospective founding countries will return home with the document for legal adoption.

The AIIB was proposed by President Xi Jinping in October 2013. A year later, 21 Asian nations, including China, India, Malaysia, Pakistan and Singapore, signed an agreement to establish the bank.

After the new bank garnered support from countries like Britain and Germany, much focus has been trained on whether the U.S. and Japan, the world’s largest and third largest economies, will join.

While stating that the U.S. will not join the AIIB at present, U.S. President Barack Obama said the country looked forward to collaborating with the new development bank “just like we do with the Asia Development Bank and with the World Bank”in April.

Despite outside worries that a new investment bank will challenge the established order of multilateral lenders, the IMF, World Bank and other leading global lenders have welcomed collaboration with the new bank to fill Asia’s infrastructure gap.

Statistics from the ADB show that between 2010 and 2020, around 8 trillion U.S. dollars in investment will be needed in the Asia-Pacific region to improve infrastructure.

“We view the AIIB as an important new partner that shares a common goal: ending extreme poverty. With strong environment, labor and procurement standards, the AIIB will join us and other development banks in addressing the huge infrastructure needs that are critical to ending poverty, reducing inequalities, and boosting shared prosperity,” World Bank Group President Jim Yong Kim said in a statement after the signing ceremony.

Chinese officials have reiterated that rather than being a competitor, the new bank will complement the current international economic order and enable China to take more global responsibility.

The bank will start operation at the end of the year under two preconditions: At least 10 prospective members sign the agreement and the initial subscribed capital is no less than 50 percent of the authorized capital.

“We are confident of working with related parties to accelerate legal procedures and push for the official set up of the AIIB before the year end,” Lou said.

TIMELINE

October 2013, Chinese President Xi Jinping proposed the bank.

October 2014, 21 Asian nations, including China, India, Malaysia, Pakistan and Singapore signed an agreement to establish the bank.

March 12, 2015, Britain applied to join the AIIB as a prospective founding member, the first major western country to do so. France, Italy and Germany quickly followed suit.

March 31, 2015, China announced that 57 countries joined or applied to join the AIIB as prospective founding members before the deadline.

Until May, five rounds of talks were held and consensus was reached on all key elements, such as the bank’s purpose, membership, capital subscription, voting powers and decision-making structures.

June 29, 2015, delegates of the 57 prospective founding countries of the AIIB gathered in Beijing for the signing ceremony of an agreement to lay the legal framework and management structure for the bank. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

Business, China, News, World News

Interview: Europe should recognize China as market economy to further bilateral relationship: former Italian PM

07/16/2015 北欧绿色邮报网 Leave a comment

by Matt Burgess

SYDNEY, July 9 (Xinhua) — Maybe it is time for Europe to change policy and officially recognize China as a market economy to further the China-EU trade relationship, said former Italian Prime Minister Enrico Letta.

The key issue to creating links in the China-EU relationship is China’s market economy status, Letta told Xinhua in an exclusive interview here.

Analysts believe this status could be approved in 2016, a year Letta predicts will be a major turning point for the China-EU relationship.

“It could be recognizing by the EU of the market economy status, it could be the year we can launch the free trade agreement (FTA) negotiations,” Letta said.

Chinese Premier Li Keqiang made a strong appeal for the early conclusion of a bilateral trade agreement with the EU at the recent China-EU summit in Brussels at the end of June.

However, establishing a China-EU FTA will be a very complicated process, Letta said.

“There are many fields from agriculture to protection of intellectual property and so on and we need to solve all together, ” Letta said.

Engagements in the China-led Asian Infrastructure Investment Bank (AIIB) as well as the “Belt and Road” strategy are important steps in strengthening Europe’s economic ties with Asia, Letta said.

The Silk Road Economic Belt, together with the 21st-Century Maritime Silk Road, commonly known as the “Belt and Road” initiatives, were proposed by Chinese President Xi Jinping in 2013.

“I think (the AIIB) was an important and decisive step on behalf of the Chinese leadership,” Letta said. “It was important

for EU countries to follow this step, to react in a positive mode. This is why Italy as well as the main EU countries decided to apply for the membership.”

Letta, who is a visiting scholar at the University of Technology, Sydney, said Europe is too focused on domestic political issues, such as the Greek debt crisis, which is taking up too much of the member states’ energy.

“I think the EU must focus the great opportunities we have around the world,” Letta said.

In an on-stage conversation with former Australian Foreign Affairs minister and Director of the Australia-China Relations Institute (ACRI) Bob Carr at the University of Technology, Sydney on Tuesday night, Letta said “I exactly think that the future of the world will be Asian-driven,” noting that was why he is in Australia.

Letta said Australia was not susceptible to the “virus,” the global financial crisis, because of the links with the Asian region.

“We need, as all western countries, change our mind, change our way to do business and to try to create permanent links,” Letta said. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

News

China Focus: Consumer inflation picks up, producer deflation stays stubborn

07/16/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 9 (Greenpost) — China’s consumer inflation ticked slightly higher in June while at wholesale level, deflation remained a problem for a 40th month in a row, official data showed on Thursday.

China’s consumer price index (CPI), a main gauge of inflation, edged up 1.4 percent in June, slightly above market forecasts of 1.3 percent and a 1.2-percent rise in May, according to the National Bureau of Statistics (NBS).

On a monthly basis, consumer prices in June remained unchanged, compared with a dip of 0.2 percent posted in May.

NBS statistician Yu Qiumei attributed the pick-up to a lower comparative base from June last year and higher prices of food, including vegetables and pork.

For the first half of the year, CPI edged up 1.3 percent year on year.

Minsheng Securities forecast that China’s CPI growth will continue accelerate in the second half, to around 2 percent in the last quarter, but remain under the government’s annual target of 3 percent set for the year.

The producer price index (PPI), a measure of costs for goods at the factory gate, fell 4.8 percent year on year in June, widening from the 4.6-percent drop seen a month earlier.

The reading also marked the 40th straight month of decline.

“This showed industrial demand is worsening, and China continues to face prominent deflationary risks,” noted Qu Hongbin, chief China economist at HSBC.

Wen Bin, chief researcher with China Minsheng Bank, said the data pointed to continuously weak domestic demand in the economy, adding there is still room for the central bank to ease its monetary policy.

China’s economy grew at its lowest rate in six years in the first quarter, expanding 7 percent, weighed down by a housing market downturn, weak domestic and external demand and overcapacity.

To bolster growth, the Chinese government has unveiled measures including four interest rate cuts since November, accelerated fiscal spending and industrial reforms.

However, analysts predict growth will slip further in the second quarter to below 7 percent as the impact of these pro-growth measures has yet to spread. Second-quarter GDP data is due on July 15.

Given the weak growth, Qu predicted an interest rate cut by 25 basis points and 100-basis-point reductions in banks’ reserve requirement ratio in the third quarter.

Recent stock market volatility has cast a further shadow on the world’s second-largest economy, with its key Shanghai index shedding nearly one third since a June peak.

A batch of supportive policies has been rolled out in the past week to revive investor confidence, including asking 21 major securities brokers to spend 128 billion yuan (about 21 billion U.S. dollars) on exchange traded funds that track the performance of blue chip stocks.

The benchmark Shanghai Composite Index opened 2.13 percent lower on Thursday, but turned positive to close the morning trading session by rising 1.3 percent. The market staged a strong rally minutes after the afternoon trade started.

As of 13:30, the benchmark Shanghai Composite Index surged nearly 5 percent while the Shenzhen Component Index gained 4 percent. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

Interview: Europe should recognize China as market economy to further bilateral relationship: former Italian PM