US-China Trade in the News 11-30-2011 Update: Property Market Slowdowns

Analysis of China's property market slowdown dominated discussions this week.  Chinese housing data may show prices in the nation’s four biggest cities are falling as Premier Wen Jiabao pledges to maintain a one-and-a-half year battle to lower prices to a 'reasonable' level.  According to Nomura Holdings, Inc, China’s property market has reached a “tipping point” and the slowdown in the housing industry will have a spillover effect on demand for steel and other construction materials.  Chinese.  As home prices decreased, the risk of bad loans increased and Europe's debt crisis worsened, China’s stocks fell, capping the benchmark index’s steepest weekly loss in a month.  All this, and more, in today’s US-China trade news update.

Contents
Trade
Global Relations
Economy
Currency

Trade

In the News - U.S. Seeks IP Protection, Exports in Annual China Trade Talks
Bloomberg Businessweek, November 23, 2011
"Annual U.S.-Chinese trade talks opened today, with American officials aiming for China to take concrete action to protect intellectual property rights and buy more U.S. products."  Read more

In the News - Chinese Solar Companies May Move Production to Dodge U.S. Tariff
Bloomberg Businessweek, November 23, 2011
"Chinese solar companies are considering shifting manufacturing to other countries to avoid paying tariffs that may result from a trade complaint."  Read more 

In the News - China Trade Surplus May Be Gone in Two Years, Adviser Says
Bloomberg Businessweek, November 21, 2011
"China’s trade surplus may disappear within two years as domestic demand rises, making the yuan rate less of an issue, an adviser to the nation’s central bank said."  Read more
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Global Relations

In the News - China Plays Down Sea Spats After Obama Challenge at Summit
Bloomberg Businessweek, November 22, 2011
"China played down tensions with the U.S. and proposed funding to enhance maritime cooperation in Southeast Asia after President Barack Obama challenged its actions in the South China Sea at a summit of Asian leaders."  Read more

In the News - U.S., China Agree to Deepen Ties on Intellectual Property Rights
Bloomberg Businessweek, November 21, 2011
"The U.S. and China agreed to strenthen cooperation on addressing intellectual property rights violations after two days of trade negotiations, Deputy Minister of Commerce Wang Chao said."  Read more 

In the News - Zoellick Says Europe May Get Support From China, U.S. Via IMF
Bloomberg Businessweek,  November 21, 2011
"Countries from China to the U.S. may be willing to support Europe through the International Monetary Fund if the region’s policy makers agree on a plan to stem their debt crisis, World Bank President Robert Zoellick said."  Read more 

Analysis - Nicholas Borst: SOEs Are Important, But Let’s Not Exaggerate
Petersen Institute for International Economics, November 21, 2011
"President Obama’s announcement of progress and support for the Trans-Pacific Partnership (TPP) during the recent Asia-Pacific Economic Cooperation (APEC) summit has led to new scrutiny of the role of SOEs in Asia. Many business groups, including the Chamber of Commerce and the Coalition of Service Industries, have argued that any agreement must include provisions that ensure that state-owned enterprises (SOEs) do not receive special advantages from governments when competing with private-sector firms. As a result, the United States has put forward a proposal that seeks to reduce the scope of support and preferences governments can provide to their SOEs."  Read more 

Commentary - Gordon G. Chang: IMF Warns China’s Banks
Forbes, November 20, 2011
"On the surface, there is much to like about Chinese banks… [but] reassuring figures cannot accurately convey the health of the commercial banks."  Read more

 In the News - China Counters U.S. Concerns on Sea Trade as Wen Meets Obama
Bloomberg Businessweek, November 20, 2011
"China proposed a maritime cooperation fund and said it has no interest in impeding trade as it counters moves by the U.S. and the Philippines to address territorial disputes in the South China Sea."  Read more

Commentary - Jayshree Bajoria: How the U.S. Can Stay Relevant in Asia
The Atlantic, November 20, 2011
"Even as President Obama seeks to reassure its allies that its looming defense cuts will not affect its military commitment to the region, some policymakers such as Representative Barney Frank (D-MA), say Washington overstates the threat from China and should draw down its presence in Asia."  Read more

In the News - Obama’s Asia Pivot Puts U.S. Approach to China on New Path
Bloomberg Businessweek, November 20, 2011
"President Barack Obama’s pivot toward Asia is shifting the U.S. approach to China by teaming up with its neighbors to press the world’s second-largest economy to 'play by the rules.'" Read more 

Commentary - Nicholas R. Lardy: Is Obama's Pivot to Asia Aimed at Countering China?
Peterson Institute for International Economics,  November 18, 2011
"Nicholas R. Lardy says that Obama's focus on Asia is not directed at China but rather at correcting American indifference to Asian concerns in recent years."  Read more 

In the News - Mattel Says China Labor Watch Report of Violations ‘Unfounded’
Bloomberg Businessweek, November 18, 2011
"Mattel Inc., the world’s biggest toymaker, is investigating China Labor Watch’s report of legal violations at two suppliers’ factories in China and said an initial review showed 'many of the allegations are unfounded.'"  Read more 

Commentary - George E. Condon Jr: Obama's Message to China: Let's Be Friends, or Else
The Atlantic, November 17, 2011
"In pledging to 'project power and deter threats to peace' in Asia and the Pacific, a region where U.S. allies see China as the primary threat looming, President Obama on Wednesday continued a careful diplomatic balancing act on his current overseas trip that has had him both praising and warning China."  Read more

Commentary - Elizabeth Economy: Obama Refocusing From Middle East to Asia—and China Knows It
The Atlantic, November 17, 2011
"China's economic and military throw-weight is growing and, along with it, its capacity to write its own rules of the game. For the United States to play a long-term leadership role in the region, it needs to get its economic house in order both to maintain a serious military presence and to help drive regional economic growth."  Read more 

In the News - Obama Puts Pressure on China as U.S. Asserts Asia Influence
Bloomberg Businessweek, November 17, 2011
"President Barack Obama used his role as host of the Asia-Pacific Economic Cooperation summit to pressure China on currency and intellectual property rights while telling voters that nations in the region are counting on U.S. leadership."  Read more
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Economy

In the News - China Passes U.S. as Top Smartphone Market on Rising Demand
Bloomberg Businessweek, November 24, 2011
"China passed the U.S. to become the world’s largest smartphone market by volume in the third quarter as the devices became cheaper and more widely available, research firm Strategy Analytics said."  Read more

In the News - China Signals Growth Concern in Rural Credit Boost: Economy
Bloomberg Businessweek, November 24, 2011
"China widened efforts to support cash-strapped companies in Zhejiang and rural areas hit by a credit squeeze that’s slowing the second-largest economy just as Europe’s debt crisis saps export demand."  Read more 

In the News - China Solar Makers Face ‘Suicidal’ Prices on Excess Output
Bloomberg Businessweek, November 23,2011
"Losses for China’s largest solar manufacturers, including Suntech Power Holdings Co. and JA Solar Holdings Co. may continue through next year as declining shipments prompt them to slash prices and liquidate inventory."  Read more

In the News - China Signals Growth Concern in Rural Credit Boost: Economy
Bloomberg Businessweek, November 23 ,2011
"China widened efforts to support cash-strapped companies in Zhejiang and rural areas hit by a credit squeeze that’s slowing the second-largest economy just as Europe’s debt crisis saps export demand."  Learn more

In the News - China E-Commerce May Pass U.S. in 2015, Boston Consulting Says
Bloomberg Businessweek, November 23, 2011
"China’s Internet retailing market may overtake the U.S. as the world’s largest with transactions valued at more than 2 trillion yuan ($314 billion) in 2015, according to Boston Consulting Group Inc."  Read more 

In the News - China Shunning Ships Shows $2.3 Billion Vale Mistake: Freight
Bloomberg Businessweek, November 23, 2011
"The Vale Brasil, the biggest commodity ship ever built, was designed to carry iron ore to China from South America. After six months in operation, it hasn’t done that once."  Read more 

In the News - China to Reduce Government Intervention in Bond Market, Xie Says
Bloomberg Businessweek, November 23, 2011
"China is trying to reduce government intervention in the bond market, increase openess and allow market participants to discipline themselves, Xie Duo, director of the financial market department of the People’s Bank of China, said at a conference in Beijing today."  Read more 

In the News - China’s Manufacturing May Contract By Most Since March 2009
Bloomberg Businessweek, November 23, 2011
"China’s manufacturing may contract this month by the most since March 2009 as home sales slide, adding to evidence the world’s second-biggest economy is slowing, a preliminary purchasing managers’ index shows."  Read more

In the News - China Reserve-Ratio Cut Speculation Fueled By Outflows
Bloomberg Businessweek, November 22, 2011
"A cut to Chinese banks’ reserve requirements may be imminent after data from the central bank suggested capital outflows, Credit Agricole CIB and Guotai Junan Securities Co. said."  Read more

 In the News - China’s Thirst for New Diabetes Drugs Threatens Bayer’s Lead
Bloomberg Businessweek, November 22, 2011
"There isn’t a word for diabetes in traditional Chinese medicine, but Chengzhi Xia knows it when he sees it. And he says he’s seeing much more of it these days."  Read more

In the News - China’s 2012 Passenger-Car Sales Forecast to Rise as Much as 10%
Bloomberg Businessweek, November 22, 2011
"China’s passenger-car sales will rise as much as 10 percent next year, faster than the current pace of deliveries, supported by first-time buyers, according to General Motors Co., Volkswagen AG and Honda Motor Co."  Read more

In the News - China’s Stock Index Drops, Extending Weekly Loss; Gree Declines
Bloomberg Businessweek, November 21, 2011
"China’s benchmark stock index fell, extending its biggest weekly decline in a month, on concern a slowing property market will damp demand for products from cement to household appliances."  Read more

In the News - Soybeans Rebound From Five-Week Low After China Lifts Purchases
Bloomberg Businessweek,  November 21, 2011
"Soybeans rebounded from a five-week low after China, the world’s biggest buyer, boosted purchases to rebuild state inventories. Wheat also climbed."  Read more

In the News - China’s Property Market Reaches ‘Tipping Point,’ Nomura Says
Bloomberg Businessweek, November 21, 2011
"China’s property market has reached a “tipping point” and the slowdown in the housing industry will have a spillover effect on demand for steel and other construction materials, according to Nomura Holdings Inc."  Read more 

 In the News - Ford to Upgrade Engines in China by 2015 to Improve Fuel Economy
Bloomberg Businessweek,  November 21,2011
"Ford Motor Co. will introduce 20 new engines and transmissions in China by 2015 to improve fuel economy and cut emissions, according to the company."  Read more 

In the News - China Sovereign Fund Buys $1.75 Billion Construction Bank Stake
Bloomberg Businessweek, November 20, 2011
"China Investment Corp., the country’s sovereign wealth fund, bought $1.75 billion of shares in China Construction Bank Corp., increasing state control of the second-largest Chinese lender by market capitalization."  Read more

In the News - China Home Prices Post Worst Performance This Year on Curbs
Bloomberg Businessweek, November 19, 2011
"China’s home prices fell in 33 of 70 cities monitored by the government in October, the worst performance since it expanded property curbs and scrapped the reporting of national average housing data this year."  Read more

In the News - China Home Price Drop Has Analysts Betting on Policy Change
Bloomberg Businessweek,  November 18, 2011
"Chinese housing data may show prices in the nation’s four biggest cities are falling as Premier Wen Jiabao pledges to maintain a one-and-a-half year battle to lower prices to a 'reasonable' level."  Read more

In the News - China Stocks Cap Biggest Weekly Decline in Month on Home Prices
Bloomberg Businessweek, November 18, 2011
"China’s stocks fell, capping the benchmark index’s steepest weekly loss in a month, as home prices in some of the nation’s biggest cities slumped, the risk of bad loans increased and Europe’s debt crisis worsened."  Read more

In the News - China Counterfeit Parts in U.S. Military Boeing, L3 Aircraft
Bloomberg Businessweek, November 18 ,2011
"Dozens of suspected counterfeit parts have been installed on U.S. defense equipment from Raytheon Co., L-3 Communications Holdings Inc. and Boeing Co., including aircraft deployed to Afghanistan."  Read more 

In the News - China Leading Indicator Shows Economy Maintaining Momentum
Bloomberg Businessweek, November 17, 2011
"A Chinese leading indicator rose, suggesting the world’s second-biggest economy is weathering moderating export growth and a government campaign to curb consumer and property prices."  Read more

In the News - Hu Pledges More China Imports as IMF’s Zhu Sees ‘Soft Landing’
Bloomberg Businessweek, November 17, 2011
"China’s President Hu Jintao pledged to boost imports as the world’s second-biggest economy heads for what the top Chinese International Monetary Fund official said was a successful downshift from inflationary growth."  Read more

 In the News - China’s Low Occupancy Threatens International Hotels’ Boom
Bloomberg Businessweek, November 17, 2011
"The expansion in China of hotel chains including Hilton Worldwide and Hyatt Hotels Corp. may be undermined by low demand as four in 10 rooms sit empty."  Read more

­­ In the News - China’s Control Over Prices Can’t Be Loosened, PBOC Says
Bloomberg Businessweek,  November 17, 2011
"China can’t loosen control over prices because the country is still facing inflation pressure, the People’s Bank of China said in a statement posted on its website today."  Read more 
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Currency

In the News - China Money Rate Rises Most in 3 Weeks After PBOC Drains Cash
Bloomberg Businessweek, November 21, 2011
"China’s money-market rate rose the most in three weeks after the central bank drained capital from the financial market last week, curbing money supply."  Read more

 Analysis - William Cline and John Williamson : The Current Currency Situation
Peterson Institute for International Economics, November 18, 2011
"Modest appreciation of the renminbi against the dollar, combined with higher inflation in China than in the United States, has narrowed the undervaluation of the Chinese currency from 16 percent in April to 11 percent in late October. However, the bilateral undervaluation of the renminbi against the dollar still amounts to 24 percent."  Read more 

Analysis - Nicholas Borst;: Negative Real Interest Rates and Credit Tightening
Peterson Institute for International Economics, November 17, 2011
"The RMB727 billion drop in deposits in the banking system this past month may further limit the ability of credit-strapped banks to make loans. The fall in deposits is another example of the impact of distorted interest rates."  Read more 

Commentary - William R. Cline: China's Currency: Modest Appreciation but Still Undervalued
Peterson Institute for International Economics, November 17, 2011
"William R. Cline explains the implications of China's undervalued renminbi, the overvalued dollar, and a euro that could face depreciation in the future."  Read more 
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