US-China Trade Update 1-20-2012:China fears food safety

This week China’s trade surplus is narrow and shrinking, possibly to an eight-year low in 2012. As external exports are undetermined, that shift may help the nation’s overseas criticism for maintaining such a low-valued exchange rate.  

Also this week, China fears food safety as milk was tainted from China’s largest dairy company. A crackdown is set for foreign companies such as Nestle SA. All this and more is this week’s US China Trade Update.


Global Relations


In the News - GM Leads U.S. Carmaker Gains in China as Japanese Rivals Falter
Bloomberg Businessweek, January 11, 2012
"General Motors Co. and Ford Motor Co. reported record car sales in China last year, outpacing Japanese rivals hurt by production disruptions from Thailand’s floods and the March 11 earthquake." Read more

In the News - American Auto Market Preferred for Profit as Sales in China Slow
Bloomberg Businessweek, January 11, 2012
"Three years after sales tumbled to the lowest in more than a quarter-century, the U.S. auto market may be emerging as the safest bet for predictable and profitable growth as China, India and Brazil slow." Read more

In the News - Apple Moves Closer to Offering IPhone for China Telecom
Bloomberg Businessweek, January 11, 2012
"Apple Inc. moved a step closer to accessing 33 million potential iPhone customers in China, as regulators approved specifications for a device that would run on the network of China Telecom Corp." Read more

In the News - Solarworld Planning China Anti-Dumping Case in Europe, CEO Says
Bloomberg Businessweek, January 11, 2012
"Solarworld AG, Germany’s largest solar-panel maker, plans to initiate anti-dumping proceedings against Chinese competitors in Europe, Chief Executive Officer Frank Asbeck said." Read more

Commentary - Joshua Foust: Is China Really Moving into Central Asia?
The Atlantic, January 11, 2012
"For all the fears of Chinese expansionism westward, the rising power doesn't actually seem to be doing all that much." Read more

In the News - China Communist Party-Affiliated Website Seeks Shanghai IPO
Bloomberg Businessweek, January 10, 2012
" Co., controlled by the Chinese Communist Party’s newspaper publisher, aims to sell shares in an initial public offering as state media companies seek stock listings to compete with private rivals." Read more

In the News - GM Economist Sees U.S. Leading Auto Sales Growth Ahead of China
Bloomberg Businessweek, January, 09, 2012
"U.S. auto-sales growth this year may surpass that of China, where the government seeks to slow inflation and undergoes a change in political leadership, said Mustafa Mohatarem, chief economist for General Motors Co." Read more

Commentary - Arvind Subramanian: China and India: Right Policy, Wrong Place
Peterson Institute, January 09, 2012
"In the aftermath of the recent financial crises, and apparently oblivious to their lessons, India's policymakers have been energetically dismantling restrictions on capital flows… China too has been selectively increasing foreigners' access to the renminbi. But it remains cautious about fundamental reforms." Read more 

In the News - Nestle Gains With Heinz as China Fears Local Food Safety: Retail
Bloomberg Businessweek, January 09, 2012
"Tainted milk from China’s largest dairy company, discovered amid a state crackdown on food safety, is set to be a windfall for foreign companies such as Nestle SA." Read more

In the News - Asian Stocks Rise for Third Week on China, U.S. Economic Data
Bloomberg Businessweek, January 08, 2012
"Asian stocks rose for a third week, its longest streak of weekly advances since July, as manufacturing growth from China to the U.S. stoked optimism the global economy will withstand Europe’s sovereign-debt crisis." Read more

Commentary - Gordon Chang: East Asian Economies Slump
Forbes, January, 08  2012
Chinese consumption as a percentage of the country's economy has been falling and the rest of Asia looks to be going into a slump. "East Asian export economies are in for a rough 2012." Read more 

Analysis - Bloomberg Businessweek: China May Idle Most Aluminum Capacity Since 2009
Feiwen Rong, January 05, 2012
"Chinese aluminum smelters may idle their annual capacity by one-third, the most in three years, as energy costs soar and prices slump." Read more 

Commentary - Max Fisher: How China Stays Stable Despite 500 Protests Every Day
The Atlantic, January 05, 2012
"An informal practice of within-system dissent has allowed the Communist Party to maintain stability even with thousands of riots and demonstrations, but what happens if the economy falters?" Read more

Commentary - Damien Ma: Beijing's 'Culture War' Isn't About the U.S.—It's About China's Future
The Atlantic, January 05, 2012
"A controversial essay by Chinese President Hu Jintao may be more about the leadership's concerns about their own rule than about clashing with the West." Read more
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In the News - Yuan Drops Most in Three Weeks as Europe Crisis Bolsters Dollar
Bloomberg Businessweek, January 09, 2012
"The yuan fell the most in nearly three weeks as concern Europe’s debt crisis will worsen prompted investors to cut holdings of emerging-market assets, bolstering the U.S. dollar." Read more 

Commentary - Morris Goldstein: Does China Seek a Global Role for Its Currency?
Peterson Institute, January 06, 2012
"Morris Goldstein discusses the China-Japan currency pact signed in December—and why Beijing faces obstacles in its bid to elevate the global role of the yuan." Read more
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In the News - Geithner Presses China on Currency, Seeks Support on Iran
Bloomberg Businessweek, January 11, 2012
"U.S. Treasury Secretary Timothy F. Geithner will urge Asia’s two biggest economies to cut Iranian oil imports and seek to narrow differences with China on trade and currency disputes on a visit to Beijing and Tokyo this week." Read more 

In the News - Shrinking China Trade Surplus May Help Wen Rebuff on Yuan
Bloomberg Businessweek, January 10, 2012
"China’s trade surplus may narrow to an eight-year low in 2012 as slowing external demand undermines exports, a shift that may help the nation rebuff overseas criticism for maintaining an undervalued exchange rate." Read more

In the News - U.S. Wind-Tower Companies Seek Duties Against China, Vietnam
Bloomberg Businessweek, January 09, 2012
"Wind-tower companies petitioned the U.S. Commerce Department and International Trade Commission to place antidumping duties against Chinese and Vietnamese imports, according to an attorney for the American producers." Read more

In the News - Nestle Boosts Milk Production in China After Scandal Hurts Rival
Bloomberg Businessweek, January 11, 2012
"Nestle SA will spend 2.5 billion yuan ($396 million) with a local Chinese government and investors to boost output in its biggest China dairy district after tainted milk from competitor China Mengniu Dairy Co. hurt consumer confidence." Read more
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Global Relations

In the news - Green Transport Helps Build Low-carbon Cities in China
The World Bank, January 12, 2012
The World Bank is assisting some Chinese cities transform their public transportation into systems that are more eco-friendly and allow for low-carbon growth. Read more 

Commentary - Hank Greenberg on Dollar, U.S.-China Ties, Strategy
Bloomberg Businessweek, January 11, 2012
Video - "Maurice 'Hank' Greenberg, chairman and chief executive officer of C.V. Starr & Co. and former CEO of American International Group Inc., talks about investment strategy and outlook for U.S.-China relations. Mario Gabelli, chief executive officer of Gamco Investors Inc., also speaks. Greenberg and Gabelli speak with Betty Liu and Dominic Chu on Bloomberg Television's 'In the Loop.'" Read more

In the News - U.S. Defense Strategy Plan Focuses on Thwarting China, Iran
Bloomberg Businessweek, January 11, 2012
"The U.S. Army, Navy, Air Force and Marines must combine resources to thwart any efforts by countries such as China and Iran to block America’s access to the South China Sea, the Persian Gulf and other strategic regions, according to a draft of a Pentagon review." Read more

In the News - Republicans Criticism of China Goes Against History, Cui Says
Bloomberg Businessweek, January 09, 2012
"China-U.S. relations have been consistent during administrations of both U.S. political parties over four decades, suggesting that Republican presidential candidates’ criticisms of China go against a broader trend, Vice Foreign Minister Cui Tiankai said today." Read more

Commentary - Elizabeth Economy: What the GOP Candidates Get Right and Wrong About China
The Atlantic, January 09, 2012
"As decades of U.S. electoral politics have demonstrated, whatever candidates say about China is likely to bear little resemblance to what they actually do once they are in the Oval Office." Read more

In the News - China to Start U.S. Channel as State Media Takes Culture Abroad
Bloomberg Businessweek, January 06, 2012
"China will start airing a 24-hour television channel to homes in New York in the first quarter, the nation’s latest effort to expand state-controlled media overseas as it seeks to wield greater cultural influence." Read more

Commentary - Robert Kaplan: Why John J. Mearsheimer Is Right (About Some Things)
Atlantic Magazine, January/February
"Mearsheimer’s infamous views on Israel—in the latest case, his endorsement of a book on Jewish identity that many denounced as anti-Semitic—should not distract us from the importance of his life’s work: a bracing argument in favor of the doctrine of 'offensive realism,' which can enable the United States to avert decline and prepare for the unprecedented challenge posed by a rising China." Read more
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