China to Cut Import Tariffs to Boost Domestic Consumption

According to the latest news, after the study of the Customs Tariff Commission of the State Council and approved by the State Council, the pilot project for import tariffs cut on consumer goods will be carried out. From June 1, 2015, in an way of provisional tariff, China will reduce the import tariffs on skincare, suits, short boots, diapers and other products, by an average of more than 50%.

These tariff cut products are mainly textile and garment products. Among them, the import tariff on fur clothes will be reduced straight from 23% to 10%; tariffs on cashmere pullovers knitted or crocheted will be reduced from 14% to 7%; tariffs on men's wool coats, capes and similar articles, and women's wool coats, capes and similar articles will be reduced from 16% to 8%; tariffs on men's wool suits and women's wool suits will be reduced from 17.5% linear to 10%.

Meanwhile, the footwear import tariffs will also be reduced, for example, import tariffs on rubber or plastic short boots and other three footwear products will be reduced from 24% to 12%, while tariffs on the footwear of textile materials will be reduced from 22% to 12%. Moreover, the import tariffs on diapers will be reduced from 7.5% to 2%, import tariff on skincare reduced from 5% to 2%.

From the foregoing, this time the import tariffs will be reduced greatly, with an average reduction of 50% in value, even some items’ tariffs decline by more than 50%.

From the announcement of Treasury Secretary tariff policy department, this adjustment is intended to improve consumer goods import and export policies and broaden domestic consumers shopping options, pilots for import tariff cut will be carried out for those daily consumer goods that domestic consumers have great demand for. (www.chinainout.com)

Premier Li Visits to Peru to Promote Railway Construction of Tens of Billions of Dollars

A Chinese scheme to build an east-west railway across South America, cutting across parts of the Amazon rain forest, has moved a step closer after Peru agreed to study theproposal.

The scheme would link Peru's Pacific coast with Brazil's Atlantic shores.

The decision came after talks between the Chinese Prime Minister Li Keqiang, and Peruvian President Ollanta Humala.

If completed, the railway would stretch 5,300km but campaigners fear the impact onindigenous people.

Brazil, China and Peru will now begin feasibility studies into the railway.

Mr Li secured Brazil's consent earlier this week, as part of his tour of Latin America.

The railway would "consolidate Peru's geopolitical position as a natural gateway to South America", President Humala said.

For China, it would reduce the cost of shipping raw materials and farm products.

But campaigners are concerned it might destroy untouched parts of the Amazon rainforest, affecting hundreds of indigenous communities.

Mr Li sought to ease fears, saying "to create the infrastructure, it is necessary to protect the environment" in a declaration with Mr Humala, AFP reported.

It is likely to cost more than $10 billion. The route is still being examined, but would begin in the gigantic Brazilian port of Acu and ending at a Peruvian port.

The Chinese President, Xi Jinping, pledged earlier this year to invest $250 billion in Latin America over the next decade. (www.chinainout.com)

Infrastructure Investment in Latin America Needs China

To many South American leaders, Chinese Premier Li Keqiang’s visit this week couldn’t come at a better time, and from a better country. China has been busy with Latin America, surpassing the United States as South America’s leading export destination outside of the region, according to the China-Latin America Economic Bulletin.

What is more, the ink is barely dry on big loan agreements to Venezuela and Ecuador, or a major China-Latin America cooperation plan signed in January that pledges to increase trade by $500bn and investment by $250bn and to cooperate on science and technology, trade, and environmental protection.

Now it’s the turn of Brazil, Peru, Chile, and Colombia, all destinations on Li’s itinerary. The Chinese are expected start implementing the cooperation plan with new agreements on science, trade, and currency swaps.

Expectations of considerable Chinese investments seem justified by Beijing’s track record of providing more than the World Bank and Inter-American Development Bank combined in loans for Latin American governments, according to the China-Latin America Finance database. There will likely be more of the same for infrastructure projects such as the Twin Ocean Railroad from Peru to Brazil.

According to the International Monetary Fund (IMF), Latin American growth is expected to dip below one per cent this year, after a disappointing 2014 of 1.4 per cent. That stands in stark contrast to the region’s “China Boom” from 2003 to 2013 when the region grew over 3 per cent per year thanks in large part to Chinese demand for Latin America’s commodities and the subsequent uptick in prices that came along with scarcity and speculation.

Those days are gone. China’s demand has slowed as it rebalances its economy, dampening commodity prices worldwide. With growth sliding, Latin Americans are realising that their governments did not invest much of the proceeds from the China boom. Gross fixed capital formation in the region was a paltry 19.6 per cent, far short of the 25 per cent recommended by the Growth Commission and other bodies for nations needing to develop their economies. Ecuador, Colombia, and Peru were above average though still nowher near 25 per cent, while in Argentina, Brazil, and Venezuela the investment rates were anemic.

According to research by the IMF, although the China-led commodity boom was among the longest and most lucrative in the region’s history, most Latin American countries saved less of these windfalls than they have in past booms. This year’s annual report from the Economic Commission for Latin America and the Caribbean adds that Latin American governments also failed to bring in new tax revenue in proportion to the windfalls as well.

It is thus no surprise that the region did little to invest into export competitiveness in sectors other than commodities. Over 78 per cent of Latin American manufacturing exports have lost global market share to their counterparts since 2003.

The China boom also came at significant social and environmental cost that was not properly mitigated. A new study, China in Latin America: Lessons for South-South Cooperation and Sustainable Development, shows how primary commodity exploitation – such as petroleum, copper, iron ore, tin, soybeans and the like – are endemic to environmental degradation.

The recent China-boom thus put increased pressure on the region’s waterways, forests, and other areas that accentuated threats to human health, biodiversity, global climate change, and local livelihoods. According to the report Latin American exports to China – the fastest growing export destination over the past decade – were close to twice as greenhouse gas intensive and ten times as water intensive than overall economic activity in the region.

So currency swaps and trade talks, science and technology agreements, and finance for infrastructure will be very welcome. Indeed, Latin America faces an annualinfrastructure gap of 6.2 per cent of GDP and the IMF says that infrastructure investment has the highest multiplier impact on the rest of the economy.

China and Latin America would also do well to ensure that equal attention go to risks associated with their economic relationship. That means investing the proceeds of the relationship in competitiveness, as well as in social and environmental protections.

If Latin Americans don’t manage their natural resources correctly, however, their very source of comparative advantage will dwindle, translating into lost growth and elections. If China doesn’t also mitigate the negative impacts of its trade and investment in the region, it will lose its positive image in a region they are making long term bets on–and lose a lot of money as well.

Kevin P. Gallagher is a professor of global development policy at Boston University’s Pardee School of Global Studies wher he co-directs the Global Economic Governance Initiative. His forthcoming book is The China Triangle: Latin America’s China Boom and the Fate of the Washington Consensus. (www.chinainout.com)

Backhauls on Sino-european Trains and Economic and Trade Exchanges along Silk Road Increase

In April, at Alashankou railway port, the containers of 68,000 tons are shipped to China, an increase of 39.5%. It’s analyzed that it’s because that backhaul sources gradually go into the normalization of operation and promote the port container imports, besides China Railway Corporation encourages the large-scale development of containers.

On May 18 (the local time at Madrid), loaded with 60 standard containers of Spanish wine, a freight train pulled out, and is expected to arrive at Yiwu West Railway Station in 20 days, and the Spanish specialty will be sold in Zhejiang and other areas of China.

Earlier, in August 2014, "Chongqing-Xinjiang-Europe" train first carried out original automobile and arrived in Chongqing railway port, creating a precedent that Chinese inland railway port imports vehicles. 

It is reported that in 2014, China Railway Construction Corporation accelerated to build the sino-EU railway line, ran 308 Central European trains for the whole year, sent 26070 containers, increasing by 285% a year earlier, and promoted the development of economic and trade exchanges between China and EU. Railway Corporation said, in 2015 they would focus to import cars, machinery and equipment, chemicals, and agricultural products, develop backhaul sources and lower total logistics costs.

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China’s Li Keqiang Seeks Big Deals in Brazil

Chinese Premier Li Keqiang arrives in Brazil on Monday for his first official trip to Latin America bearing tens of billions of dollars worth of trade and investment deals in the latest sign of China’s rising influence in the continent.

During his three-day visit, Mr Li is expected to witness the signing of at least $50bn in Chinese investments in Brazil’s infrastructure, a senior Brazilian official said last week.

Mr Li will then continue his eight-day South American tour with visits to Colombia, Peru and Chile.

The four countries account for 57 per cent of China’s booming trade with Latin America and Beijing is increasingly interested in boosting its direct investment in the region, particularly in the roads, bridges and railways it has already built across its own country.

China’s rising influence in a region once considered America’s “backyard” is seen by some as a challenge to the two-century-old “Monroe Doctrine”, which Washington established to discourage foreign (particularly European) influence in the region.

Some policy makers in Beijing hav

e argued that China should ramp up its involvement in Latin America as a counterbalance to the continued enormous US diplomatic, military and economy presence in Asia.

In January Chinese President Xi Jinping pledged $250bn of investment in Latin America over the next decade, highlighting China’s strong economic interest in the region.

Bilateral trade between China and Brazil increased 13-fold in value terms between 2001 and 2013, according to Brazilian statistics, and China has been Brazil’s biggest trading partner since 2009.

But a pronounced slowdown in China, led by sliding construction and weakening demand for commodities, meant annual trade between China and Latin America as a whole increased by just 0.8 per cent in 2014 from a year earlier.

As a result of the slowdown at home, China’s enormous state-owned construction and infrastructure companies are looking overseas for opportunities to build the roads, ports, railways and airports that are overly ubiquitous in China. (www.chinainout.com)

A Large Group of Entrepreneurs Accompany Chinese Premier to Visit Brazil

Chinese Premier Li Keqiang will arrive in Brazil on an official visit this evening(May 20) and begin his Latin America tour. On Prime Minister Lee's visit to Brazil, a delegation of more than 120 entrepreneur will accompany the visit, in addition to the five senior officials. Brazilian President Rousseff will host Prime Minister Lee and will witness the signing of more than 40 cooperation agreements.

Brazil's Foreign Ministry issued a communique, which disclosed some of the activities arranged for Prime Minister Lee's visit, including meeting the the House and Senate Speakers, visiting Rio de Janeiro and attending several events.

One year later of the Chinese President Xi Jinping's visit to Brazil, the Premier Li Keqiang's visit is another important visit, which indicates the increasingly close political relations between the two countries, and further strengthened cooperation in finance, agriculture, energy and transport.

Since 2009, China has became Brazil's main trading partner, in 2014 the bilateral trade volume reached 77.9 billion US dollars, China maintained a trade surplus of $ 3.3 billion.

After Brazil Prime Minister Lee will also visit Colombia, Peru and Chile. (www.chinainout.com)

China Begins to Strengthen Supervision on Sorghum Imports

The surging US sorghum trade with China could face a clampdown from authorities in Beijing, who are trying to reduce domestic grain inventories, US agricultural officials have warned.

The Chinese government had “begun to pay close attention to the rapid increase in sorghum imports, and some policy makers reportedly believe these imports make it harder for the government to dispose of its large corn stocks”, according to the latest China grains report from the Beijing bureau of the US Department of Agriculture.

China’s sorghum imports jumped in the year to September 2014, increasing more than sixfold to 4.2m tonnes from the previous year and are forecast to double to 8.5m tonnes in the 12 months to 2015, with the bulk of the commodity coming from the US.

The report from Beijing warned that the numbers could change due to stricter testing of sorghum shipments.

“import officials have recently begun to enhance inspections, and traders are voicing concern that the government may be getting ready to take more concerted action to limit imports,” it said.

News of the USDA warning was first reported by Agrimoney.com.

The surge in demand for sorghum comes as the Chinese government’s grain purchases under its agricultural support programme have pushed up domestic prices for corn.

Feed mills have been importing cheaper alternatives, including sorghum and barley, which are also not subject to official import quotas.

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"Internet + Commodity" to Change Industry Rules

"'Internet + commodities' action plan will change the business model and game rules of commodity markets, leading the industry to re-shuffle, to create an upgraded version of the commodity markets, and to boost our ability to fix commodity prices." The head of the securities Futures Institute of Beijing Technology and Business University Hu Yuyue recently said.

"Internet +" represents a new form of economy that fully optimizes and integrates the role of the Internet in the allocation of production factors, puts the Internet innovation into all areas of economic, and improves creativity and productivity of the real economy.

Across the globe, since the financial crisis, the United States resorted to its first-mover advantage of the Internet economy to vigorously promote the "Internet industry" and to accelerate the integration of Internet technology and traditional manufacturing. As a leader in the European economy, Germany, will promote "Industry 4.0" as a national strategy, which in essence is the integration of information technology and the next-generation manufacturing.

Hu Yuyue believes that Internet technology can achieve a virtuous cycle of information and sharing mechanisms to make mutual influence and mutual coordination among spot, forwards, futures prices and forge fair "anchor price", which is the key to our country to compete in commodity pricing.

"Through the form of the Internet, we can effectively integrate the market resources, streamline commodity circulation order and establish organic links among the layers and levels of market, we should extend down the futures market, upward the spot market, cultivate the OTC market, and form futures and spot docking, inside and outside the docking, online and offline docking, commodity and financial docking, domestic and foreign docking multi-level commodity market system. "Hu Yuyue said.

Let’s take the "Internet + steel" for example, in 2013, steel spot trading platform Shanghai Steel silver project was officially launched, it has covered the Bohai Sea, Yangtze River Delta, Pearl River Delta region for just two years, and continues to head to the Central of China.

The vice president of Shanghai Steel unio and the general manager of steel silver Bai Rui recently said, we were designed to provide the whole process solutions for the steel industry chain, to create a "seamless steel trading platform" including the spot trading, logistics, online financing, payment and supporting services, it has been involved throughout the steel products in sectors of the trading of goods consignment model, like payment, delivery, billing and other secondary transactions, the "internet + steel" model has universally been recognized. Until April 2015, the daily settlement amount of silver steel business platform has reached 66,593 tons.

Hu Yuyue pointed out that the electronic commodities trading market was an upgraded version of the spot trading, the next line was now one of three non-standard (on-site, cash, cash) transactions upgraded to relatively standardized online trading. It’s suitable to trade commodities online due to commodities’ features - industrialization, marketization, intensiveness, large scale, and standardization. 

"'Internet + commodities' action plan, is not simply electronic transactions, but the combination with the financial services, logistics as well as upstream and downstream businesses together to form a complete industry ecosystem, to make multi-party enterprises embrace Internet and to integrate the whole industry chain, thus the efficiency of resource allocation will be increased, the existing commodity pricing rules will be changed, which will help us fight for commodity pricing. "Hu Yuyue represented.

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China and India Cooperate in Many Aspects of Economy and Trade

From May 14 to 16, Indian Prime Minister Modi will be his first official visit to China after taking office, which is also an important high-level interaction between the two countries after Chinese President Xi Jinping's visit last September. With "one belt one road" strategy’s further development and India into AIIB, Modi's visit sparked widespread concern of overseas media. Among them, the high-speed rail cooperation and the trade deficit cut has become a hot topic in the field of economy and trade.

Reuters reported that China was conducting a feasibility study on the high-speed rail project, and asked India to start a pilot project in some sections. New Delhi to Chennai high-speed rail project will cost $36 billion. "Both sides also agreed to accelerate to implement the planned Chennai-to-Bengaluru high-speed rail corridor. Since Modi wants to updat India’s crumbling railway system which every day 25 million people used, China may get this opportunity."

Agence France Presse reported that Indian Prime Minister Narendra Modi would visit China next week, aimed at balancing the trade deficit with China. It reported that China is India's largest trading partner, the two-way trade volume approached 70 billion US dollars (about 434.36 billion yuan). However, according to Indian statistics, India's trade deficit with China has soared from $ 1 billion (about 6.21 billion yuan) (2001 to 2002) to over 40 billion US dollars (about 248.2 billion yuan)

The report quoted the expert opinion that Modi must achieve the bilateral trade target towards $100 billion through seeking more Chinese market this year, thus eliminating the trade deficit.

Le Yucheng, Chinese ambassador to India, also said that the two countries would sign an cooperation agreement worth $10 billion.

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China and Belarus Sign Billions-of-dollar Economic Agreements

When Chinese President Xi Jinping paid a state visit to Belarus in Eastern Europe, China and Belarus yesterday signed a series of economic agreements worthy of billions of dollars.

"China Daily" quoted from Zhang Dong, the deputy Eurasian director of the Chinese Ministry of Commerce, during Xi’s visit to Belarus, both countries signed nearly 20 economic cooperation agreements, worth about $15.7 billion.

People's Bank of China and the National Bank of the Republic of Belarus signed a bilateral currency swap agreement - 7 billion yuan / 16 trillion Belarusian rubles, valid for three years. This agreement will facilitate bilateral trade and investment and promote bilateral economic development.

China Development Bank also provided Belarus Development Bank with a 15-year low-interest loans of $ 700 million, and agreed to extend the 300-million-dollar loan period for Belarus ASB Bank. 

When Xi Jinping talked with the President of Belarus Alexander Lukashenko on Sunday, he agreed to take measures to expand bilateral trade scale and confirmed the sino-Belarus industrial park of 80 square kilometers was a strategic project. Xi also encouraged Chinese companies to invest in the park and set up high-tech enterprises.

Sino-Belarus industrial park is near the Ming Gdansk airport, with the planning area 91.5 square kilometers, which is the largest investment project in Belarus, but also the largest economic and technological cooperation project between China and Belarus.

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April’s imports and exports fall

General Administration of Customs released the latest data, in April the import and export is in the negative growth. In this regard, on May 9th, the Ministry of Commerce spokesman Sun Jiwen said that this year, China's foreign trade situation was more complex and challenging, and under downward pressure. It’s estimated that the foreign trade in the second half of year is better than the foreign trade in the first half of year.

In April, import and export value amounted to 1.96 trillion yuan, down by 10.9%. Among this, exports 1.08 trillion yuan, down by 6.2%; imports 873.9 billion yuan, down by 16.1%; trade surplus 210.21 billion yuan, expanding 85.2%.

In April, imports and exports went down again, the industry generally believes that weak external demand and higher real effective exchange rate is the main cause of weakness in exports, while sharply cut in commodity prices led to a continuation of the negative growth in imports.

imports continuously went down for six months due to the sharp cut in imported goods. Sun Jiwen pointed out that in the first four months, China's crude oil and other commodities importing volume increased, but importing value deceased, which made importing growth dro by 8%.

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Xi Jinping Visits Belarus and Signs Bilateral Cooperation Agreements

"I sincerely hope that this visit will sow the seeds of hope for the China-Belarus relations, and benefit both countries’ people." The Chinese president Xi Jinping said when he arrived in Minsk on the morning of 10th May Local time.

This is the first time for China’s head of state to pay a state visit to Belarus in 14 years. In the Independence Palace of winner street, Xi Jinping and Lukashenko held talks, signed a friendly cooperation treaty and joint statement on further development and deepening the comprehensive strategic partnership, witnessing the signature of bilateral cooperation documents regarding cultural, economic, technological, educational, regional cooperation and other areas.　　

There was a white long table and two white chairs on the left side of the head’s table, there were a think pile of agreements with red cover. Concierge staff guided more than twenty Chinese and Belorussian signatories in white, and made them two lines according to the contract order.

It’s the first time to see this scene, even for President Lukashenko.

"In this independent house, we have witnessed many historical events occurred, but it is the first time we see people lined up to sign the document, which is really exciting! ...... Tomorrow we will attend the opening ceremony of the local economic and trade cooperation forum with the Chairman Xi, both sides will sign a series of specific cooperation agreements. There is no doubt that these agreements between our two countries will promote pragmatic cooperation and exchanges and bring tangible benefits to two countries’ people. "

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Global Tourism Competitiveness Report: Spain Ranks First

On the 6th May, the Geneva-based World Economic Forum released 2015 Tourism Competitiveness Report, Spain ranked first in the world for the first time to become the world's most powerful country regarding the tourism competitiveness, China ranked No. 17.

The report made a survey in 141 global economies, it was aimed by index analysis to measure the potential of each country to create economic and social benefits through the development of tourism. In Asian countries, Japan, with a wealth of cultural resources, improved infrastructure and first-class digital economy, ranked ninth in the world rankings. Another eight Asian countries entered the top 50 list, including Singapore (ranking11), China (17), Malaysia (25), Thailand (35) and Indonesia (50).

It was reported that, although the current top ten countries are still traditional popular tourist countries such as Spain, France, Germany, the United States, Britain, Switzerland, Australia, Italy and Canada, tourism competitiveness gap between developed and emerging economies is gradually narrowing. With the growing number of international tourists and the growing the middle class tourist group, East Asia has become the world's most dynamic tourist hot spot. Meanwhile, from 2013 to 2014, Southeast Asia was the world's fastest-growing tourist region.

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