Trade News: On China; Rare Earth Quotas, Currency, New M&A Rules

From Global Trade Alert: China: Establishment of a ministerial committee to evaluate M&As against the national interest.  The government of China announced the formation of a ministerial committee to evaluate mergers and acquisitions with respect to the national interest. Foreign investment maybe rejected on grounds of national interest or national security reasons in enumerated industries.  Entire PDF Report.

China: Second batch of export quota on rare earth for 2011.  The Chinese Ministry of Commerce (MOFCOM) announced the 2011 second batch of export quota on rare earth. In accordance with the statement on MOFCOM website, 26 companies were accredited as qualified rare earth exporters for 2011.

From ICTSD: US, EU Press for China Currency Revaluation. Pressure is growing from the EU and US for China to loosen its strict control of its currency, particularly amid new reports of slowing Chinese trade growth.  US critics argue that the yuan is highly undervalued, and allege that this acts as an export subsidy that makes Chinese exports cheaper than their foreign counterparts – which, some argue, leads to the loss of American jobs.

Tensions have been building between the US and China over the currency issue since the Senate passed a bill on 11 October that targets countries that undervalue their currencies.  Chinese government officials warn that a “trade war” could result.

Chinese Farm Support Doubles, New Data Shows. China’s agricultural subsidies doubled between 2005 and 2008. While direct payments to farmers also nearly doubled, they still represent less than four percent of total farm support – in contrast to other WTO members such as the EU, where such payments account for a significant share of the subsidies provided to producers.  While in absolute terms China’s farm subsidies are now close to the levels provided by agricultural trading giants such as the US and the EU, on a per capita basis the country’s farmers continue to receive far less than their counterparts elsewhere.

From Global Sources: China exporters anticipate export growth despite challenges. Suppliers in China are optimistic about export sales in coming months even as they contend with pricing pressures.  Almost 40 percent of manufacturers said earnings from overseas shipments will jump by more than 20 percent through 2011 and early-2012. About a similar number placed the rate of increase between 10 and 20 percent. Only 2 percent of the makers contacted said exports will slow down in the months ahead.

From Silk Road International: So what’s China really like? Part 62704. “While China is a completely different place than it was 20 years ago, China isn’t really any different today than it was 16 years ago when I first arrived.  Yes, the infrastructure is MUCH better, but it’s not safer (high-speed rail).  Yes, there is much more money especially in cities, but crime and poverty are still dominant daily issues for most Chinese.  Yes, the standard of living has gone up for many, but the quality of life (food in particular) is horrible.  And connections are still the way the game is played.  Sometimes living in China can be great, sometimes scary and if you’re a buyer—you need to be doing QC 24/7 (eating, sleeping and dreaming about QC).”


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