China Central Bank Raises Growth Forecast for '07 to 10%
- From: periodistalibre@xxxxxxx
- Date: 31 Mar 2007 10:19:37 -0700
Nothing about Cuba, just good news for Cuba's Number Two trading
partner. Below that, a report on how the United States, which claims
it support something it calls "free trade", which it is determined to
impose on both Cuba and the rest of the world, is imposing trade
sanctions against China. And note this little item as well:
("The dollar slipped in the foreign-exchange market following the
late-morning announcement, as currency traders showed nervousness
about rising trade tensions -- particularly since China happens to
hold a large quantity of U.S. currency, stocks and bonds.")
===========================================================================
By ZHENG JIN and TERENCE POON
March 31, 2007; Page A4
SHANGHAI -- The research bureau of China's central bank has raised its
forecast for economic growth this year, predicting that the domestic
economy
will expand 10%.
The predicted growth would be only a slight slowdown from a 10.7% rise
last
year, which was the fastest growth since 10.9% in 1995.
The People's Bank of China's research bureau had said in December that
it
expected China's gross domestic product to rise 9.8% in 2007.
The bureau said in its latest research report, published Friday in the
official China Securities Journal, that it also raised its forecast
for the
increase in the consumer-price index this year to 2.3%, from its
December
forecast of 2%.
The revised forecasts, which follow strong data for the first two
months of
this year, could strengthen the case for Beijing to take further
measures to
tighten economic growth.
In its latest efforts to prevent the economy from overheating, the
central
bank raised the benchmark one-year lending rate in March by 0.27
percentage
point to 6.39% and the one-year deposit rate by the same amount to
2.79%.
The central bank's research bureau said growth in consumption and
investment
will likely remain robust this year, though the government's
macroeconomic
controls may put some pressure on investment growth in the first half.
It
said it expects fixed-asset investment to rise 22% in 2007, slightly
slower
than a growth rate of 24% last year.
It predicted that China's gross domestic product would rise 10.2% in
the
first quarter, 9.85% in the second quarter, 9.80% in the third quarter
and
10.05% in the fourth quarter.
The increases in the CPI for the four quarters will likely be 2.35%,
2.25%,
2.50% and 1.90%, according to the report.
International oil, metal and grain prices will likely keep rising this
year
and put pressure on the CPI by pushing up domestic commodity prices,
the
report said, while expectations for strong economic growth this year
will
also boost property investment and demand.
March 31, 2007
U.S. Sets New China Duties
Move Opens Door
For a Wide Array
Of Trade Complaints
By GREG HITT
March 31, 2007; Page A3
WASHINGTON -- The Bush administration imposed new economic sanctions
against China, a vivid reflection of the increasingly tough climate
in the U.S. toward free trade -- particularly with Beijing.
The new duties apply narrowly to complaints that Chinese producers of
glossy, high-quality paper used in books and magazines are unfairly
subsidized by their government -- just $224 million of annual
imports, or less than 1% of the total goods and services Americans
buy each year from China.
Commerce Secretary Carlos Gutierrez2 announces that the Commerce
Department will apply anti-subsidy laws to China.
But the action is likely to have much wider ramifications. It opens
the door to a potential rush of similar complaints by American
manufacturers, from steel to plastics producers, that face stiff
competition from the Chinese. And it signals, more broadly, an
increasingly harder line on trade emerging both at the White House
and in Congress.
John Engler, president of the National Association of Manufacturers,
has long called on the Bush administration to take a tougher stance
on trade and praised the decision for giving U.S. companies new
"recourse" to blunt "China's distortions of trade."
The dollar slipped in the foreign-exchange market following the
late-morning announcement, as currency traders showed nervousness
about rising trade tensions -- particularly since China happens to
hold a large quantity of U.S. currency, stocks and bonds.
The Chinese government sharply criticized the move in a rare public
statement released by the Chinese Embassy in Washington. "The Chinese
side will watch closely over the development and reserve all rights
to safeguard its lawful rights and interests," it said. The statement
added that the U.S. action was "unacceptable to the relevant industry
in China" and had "hurt their feelings."
The Bush administration has sought curbs on Chinese imports before,
slapping quotas on textiles when global limits expired a few years
ago. In February, the administration filed a complaint at the World
Trade Organization, alleging that Beijing's subsidies to Chinese
companies is harmful to U.S. makers of a wide range of items, from
computer products to steel.
But the new Commerce Department decision marks a significant new
phase because it opens a way for a wide range of industries to file
complaints against Chinese exporters.
The Commerce decision reverses a two-decade-old policy that prevented
U.S. companies from seeking protection against unfair government
subsidies of goods exported from "nonmarket" -- usually communist --
economies. The logic was that it was too difficult to calculate what
was considered a government subsidy from a government-owned company's
regular operating budget.
But in announcing the imposition of so-called countervailing duties,
Commerce Secretary Carlos Gutierrez suggested Friday that China's
rapidly changing economy justifies the shift. The secretary said the
decision "does not signal any retreat from economic engagement" with
Beijing but does underscore a new determination to ensure China plays
fairly in the global market. "We will use every tool at our disposal
to guarantee our workers and our companies have a level playing
field," he said.
The action comes as the Bush administration and Congress -- now
controlled by Democrats -- engage in a broader reassessment of free
trade. A number of trade measures are stalled on Capitol Hill. Bush
aides are currently negotiating with House Democratic leaders on ways
to elevate the importance of environmental protections and labor
rights, among other things, in U.S. trade policy.
China is a particular source of the unease, as America's bilateral
trade deficit with the Asian giant reached $233 billion last year.
Critics say U.S. companies are at a disadvantage against China over a
range of issues including piracy of American intellectual property,
an artificially low value of the yuan and government subsidies to
export-minded Chinese companies.
Earlier this week, Senate Finance Committee Chairman Max Baucus (D.,
Mont.) held hearings intended to lay the groundwork for major
legislation addressing complaints about China's currency and other
matters. "The persistent inflexibility of China's exchange-rate
regime has gone on too long," Mr. Baucus is expected to say in a
high-profile speech this coming week on China. "That should change."
The Commerce action was triggered by a complaint filed in October by
an Ohio-based company, NewPage Corp. The company alleged several
Chinese competitors in the glossy-paper market benefited from
government-backed tax breaks, debt forgiveness and low-cost loans.
The company contended the subsidies fueled a wave of low-priced
exports to the U.S. From 2005 to 2006, the Commerce Department said,
imports of cheaply-priced paper from China increased more than 170%.
Commerce announced a preliminary determination to impose duties
ranging from 10.9% to 20.35% on the paper products at issue in the
case. The department also applied duties to imports from Indonesia
and South Korea.
The U.S. will begin immediately collecting cash deposits from the
importers. But the case still isn't over. Several procedural hurdles
must still be cleared. The Commerce Department now enters a new stage
of "investigation" and must make a "final determination" on duties.
After that, the case goes to the independent International Trade
Commission. If the ITC decides for the domestic industry, the case
goes back to Commerce, which then issues formal orders imposing the
duties. That action is expected to be concluded late this year.
.
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