China major export market for Philippines products

 

China is now a major export market for Philippine products

China’s rise as an economic powerhouse is one of the Key factors that propelled the Philippine export sector.
Philippine export revenues in Y 2010 soared to a better than expected 33.7% growth rate. With receipts hitting US$51.39B, the 1st time since Y 2007 that annual revenues breached the US$50B mark.

The Global recovery has resulted to sharp growth spurts between the Philippines and its trading partners. But Philippine export to China stood out, posting a 94.32% growth in export receipts in Y 2010.

Victor Abola, economics professor at the University of Asia and the Pacific, attributed this to the fast growing Chinese economy.

“Increasing domestic demand as well as the need of China to increase infrastructure to import more products,” Abola said.

This include increased demand for minerals and metals like iron one, copper and nickel. He added the stronger purchasing power of consumers boosted demand for processed Philippine food products and fresh fruits like bananas

China has been increasing its global clout for the past few years thanks to its spectacular growth. With its economy valued at US$5.8T, China passed Japan as the World’s 2nd largest economy behind the US.

The manufacturing boom fueled China’s growth and its expanding domestic industries and infrastructure boosted demand for metals, farm produce and electronics. China has imported materials from Southeast Asian countries like the Philippines.

In Y 2008, trade between China and the Association of Southeast Asian Nations (ASEAN) trade peaked at US$231B.

The establishment of the China-ASEAN Free Trade Area in Y 2010 has expanded bi-lateral trade. According to China’s General Administration of Customs, China’s imports from ASEAN increased 44.8% to US$154.56B last year. Bi-lateral trade rose 37.5% on year to US$292.78B.

Philippine Exporters Confederation, Inc. President Sergio Ortiz- Luis said at the height of the global recession in Y 2009, the major markets for Philippine products like Europe, the US and Japan had to slash their imports. China’s economy, on the other hand, was resilient and still managed to import from the Philippines.

Japan and the US are now the 2 biggest markets for Philippine exports. China stands as the Philippines 3rd largest export market. But not for long, according to Ortiz-Luis.

He said only China, which, continues to grow strongly, has the potential to expand as an export market for Philippine products.

“We project that in 5 yrs’ time, it’s possible that China will become the top destination for our products,” Ortiz-Luis said.—Paul A. Ebeling, Jnr. www.livetradingnews.com

Shanghai sees 70% growth in Tourism

Shanghai sees 70% growth in Tourism revenues by Y 2015

Shanghai has set a growth target of 70% in tourism revenues over the next 5 yrs to Y 2015, local authorities said Wednesday.
The target is in line with the goal of China’s financial and business center, turning itself into a World-famous tourist destination, according to a seminar Wednesday, which discussed the development of Shanghai’s tourism industry.

Shanghai is looking to earn 520B Yuan (US$78.9B) in tourism revenues by Y 2015. Last year, the industry generated 305.3B Yuan, rising 30% Y-Y.

Shanghai wants to develop tourism into a strategic “Pillar” industry, which is expected to create 300,000 jobs while contributing 8.5% to the City’s gross development product by Y 2015, said Yu Zhengsheng, head of the Shanghai Municipal Committee of the Communist Party of China.

By Y 2015, the city plans to attract 240 million visits by domestic tourists, which would require an annual increase of 2.3%. The city is also looking to attract 10 million overseas tourists, which would be a of 4.6% annual rise.

Last year, Shanghai received 215 million domestic tourists and 7.3 million overseas visitors.—Paul A. Ebeling, Jnr.

Qinzhou Free Trade Port

Qinzhou Free Trade Port Area begins operation in Southwest China

The Guangxi Qinzhou Free Trade Port Area in south China, the only “Bonded Zone” on the western coast of China, began operation Wednesday, a Port official said.
The free trade port area, China’s 6th bonded port, is located in the coastal city of Qinzhou in the Guangxi Zhuang Autonomous Region. It is the closest bonded port to ASEAN countries.

The Port covers a planned area of 10 sq km and is located in the core region of Guangxi’s Beibu Gulf Economic Zone. The area covers 42,500 sq km in Nanning, Beihai, Qinzhou and Fangchenggang.

“We strive to build the bonded port as the core platform for the development of the Beibu Gulf Economic Region, as well as the regional international shipping center, logistics center and the import and export processing base,” said Zhang Xiaoqin, chief of the Qinzhou City Committee of the Communist Party of China.—Paul A. Ebeling, Jnr. www.livetradingnews.com

Business Highlights

Rising wholesale prices spur inflation concerns

WASHINGTON (AP) _ Steady improvement in the economy may soon come at a price _ faster inflation.

Shoes, clothes, tires, plastics and other products all cost more at the wholesale level last month, putting pressure on businesses to pass the increases along to their customers.

The hikes also give ammunition to critics who fear that the Federal Reserve's bold steps to strengthen the economy have started to feed inflation and need to be reined in. Those critics include some Fed officials.

A widely watched measure of wholesale inflation, the core Producer Price Index, rose 0.5 percent last month, the largest monthly increase since October 2008. The entire index, which includes volatile gas and food prices, rose 0.8 percent.

Drug prices rose 1.4 percent, the most in almost three years. Prices rose for products throughout the economy.

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Some Fed members talked about cutting bond program

WASHINGTON (AP) _ Some Federal Reserve officials last month raised the possibility of scaling back the Fed's $600 billion Treasury bond purchase program out of fear that a strengthening economy could spur high inflation.

The minutes from the Fed's Jan. 25-26 meeting were released on the same day that the government reported that a measure of wholesale inflation rose in January at its fastest pace in more than two years.

Still, Fed officials unanimously concluded at the policy meeting that inflation wasn't a problem yet, and decided to stick with the pace and size of the bond-buying program. The bond purchases are intended to invigorate the economy by getting Americans to spend more.

The central bank also raised its forecast for economic growth for this year. The fear among some critics of the bond-buying program is that as consumers and businesses spend more, prices will rise at an unhealthy pace.

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Apartments pushed home construction up in January

WASHINGTON (AP) _ Home construction rose at the fastest rate in 20 months, pushed up by a spike in apartment building. But construction of single-family homes declined, a sign that demand for housing remains weak.

Builders broke ground on new homes and apartments at a seasonally adjusted annual rate of 596,000 units, a 14.6 percent jump from December.

Single-family homes, which make up nearly 70 percent of new construction, fell 1 percent to an annual rate of 417,000 units. Multifamily construction, a more volatile category, skyrocketed 80 percent to an annual rate of 171,000 units.

Last year, builders worked on 587,600 new homes, just barely better than the 554,000 started in 2009. In a healthy economy, builders start about 1 million homes a year. The housing industry is coming off the worst two years for home construction dating back to 1959.

Snowstorms that fell in most parts of the country likely slowed some construction last month. But Michael Gapen, senior U.S. economist with Barclays Capital, said home building is unlikely to see a turnaround until builders can sell off most of the homes sitting idle on the market and there are fewer foreclosures to compete with.

Economists are watching the pace of multifamily construction, which includes housing with five or more units, to see if it continues to rise throughout 2011.

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Asia's poor suffer as food prices drive inflation

Surging food prices in India are forcing families to cut back on meat and vegetables. In Indonesia, they prompted the president to urge people to grow their own chili peppers. And in China, restaurant owners are feeling the squeeze.

Inflation is climbing across Asia as the cost of food jumps, echoing the previous global food crisis that peaked in 2008. While people in the U.S. and other wealthy Western nations will barely feel the effects of higher prices, getting enough to eat is a big challenge for tens of millions in Asia. Poor families typically spend more than half their household income on food and are bearing the brunt.

Wary of potential unrest, governments are trying to keep food price inflation from spilling into the rest of the economy. Officials face a tough dilemma as they raise interest rates to dampen inflation. Too fast and it will choke off economic growth, too slow and the problem could spiral out of control.

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Sanofi-Aventis to buy Genzyme for $20 billion

Sanofi-Aventis is buying specialty drugmaker Genzyme for $20.1 billion, the latest example of a beleaguered pharmaceutical company snapping up high-priced biotech drugs to offset dwindling sales of older, simpler medications facing generic competition.

Sanofi, the world's fourth-largest drug maker, overcame Genzyme's reluctance to a takeover by raising its previous offer to $74 per share and agreeing to make additional cash payments pending the success of several drugs.

Wednesday's announcement comes after nearly nine months of back-and-forth between the two companies, with Sanofi-Aventis finally deciding Genzyme's portfolio of rare disease treatments was worth adding an extra $5 a share to its original $69 per share offer.

The combination seems odd at first: a huge French company best known for vaccines used by millions of patients each year, buying a Cambridge, Mass.-based biotech company whose drugs are taken by only a handful of patients around the world.

But experts say the merger reflects the landscape of the pharmaceutical industry, as companies seek to replace older medications that have lost their patent protection.

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Williams to split pipeline, exploration businesses

TULSA, Okla. (AP) _ Williams Cos. plans to split into separate companies _ one for oil exploration and production, and the other to operate pipelines. Its shares jumped in aftermarket trading.

Williams said its board has approved the sale of up to 20 percent of its stake in the exploration business through an initial public offering in the third quarter. Next year, it will spin off the remaining interest to Williams shareholders.

The company also said it would raise its quarterly dividend to 20 cents per Williams share beginning in June. That's up from 12.5 cents per share in recent quarters.

Williams shares rose $2.44, or almost 9 percent, to $30.20 in aftermarket trading.

Last month Marathon Oil said it will split its refining operation from its oil exploration and production business.

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Cable companies strike back at cord-cutting idea

LOS ANGELES (AP) _ Cable TV and other companies that provide subscription services are striking back at the notion that people are dropping their TV packages en masse to watch video over the Internet. Industry gains in the fourth quarter returned to normal following a spate of cancellations spurred by the end of discounted pricing.

Subscriber losses from top-ranked Comcast Corp. and No. 8 Cablevision Systems Corp. reflected one-time items, such as the defection of customers angry over a two-week blackout of Fox programs on Cablevision in October.

Comcast's loss of 135,000 video subscribers was about a third less than expected as it held onto more customers with better programming, and fewer people dropped service with the expiration of promotional prices offered during the 2009 transition to digital over-the-air broadcasts. Comcast ended with 22.8 million video customers, and Cablevision had 3.3 million.

Those losses were more than erased by gains at such rivals as AT& T Inc. and Verizon Communications Inc., which offer video services over phone lines. The phone companies reported fourth-quarter results last month, while Comcast and Cablevision announced them Wednesday.

Along with an expected gain of about 100,000 video subscribers combined at satellite operators DirecTV and Dish Network Corp., which report next week, the established pay TV industry is on track to add 200,000 to 250,000 TV subscribers in the final three months of 2010, according to Nomura Securities.

Cord-cutting refers to the phenomenon of people dropping pay TV packages with the growth of online video offerings through Hulu, Netflix and other services.

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Bank of England says inflation worsening

LONDON (AP) _ The Bank of England warned Wednesday that inflation is surging faster than anticipated, but Governor Mervyn King dampened expectations of an early interest rate hike to counter rising prices as the bank also lowered its growth forecast for the British economy.

Speaking to reporters after the release of the bank's closely-watched Quarterly Inflation Report, King robustly defended the nine-member Monetary Policy Committee against a raft of questions challenging the bank's credibility and the validity of its 2 percent inflation target.

Official figures out Tuesday showed that consumer prices rose to 4 percent in January, from 3.7 percent in December _ double the bank's target and prompting a public explanation from King to Treasury chief George Osborne.

The bank's central forecast is for inflation to peak at about 4.4 percent this year amid higher commodity prices and domestic inflationary expectations and remain above target until around the middle of 2012. King added that the timing and extent of the fall are uncertain.

The bank added that the growth outlook has worsened after surprise figures last month showing gross domestic product shrank by 0.5 percent in the fourth quarter.

The forecasts assume key interest rates rise to 1 percent by the end of this year and 2 percent by the end of 2012, but King cautioned against predicting a rise too soon and highlighting differences of view among the MPC about the inflation outlook.

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Bankruptcy: Borders' penalty for being a step slow

NEW YORK (AP) _ Borders was slow to get the message as the big-box retailer lost book, music and video sales to the Internet and other competition. The result: It filed for Chapter 11 bankruptcy Wednesday, and will close nearly a third of its stores.

Less nimble than rival Barnes & Noble, Borders now begins what analysts expect will be a quickly resolved struggle for the survival of its remaining stores. It's the latest cautionary tale about the dangers retailers face when they fail to keep up with swiftly changing technology and consumer habits.

Borders plans to close about 200 of its 642 stores over the next few weeks, from San Francisco to Fort Lauderdale, Fla., costing about 6,000 of the company's 19,500 employees their jobs. The closures are also a blow to publishers already owed tens of millions of dollars by the company, which stopped paying them in December.

Borders said it is losing about $2 million a day at the stores it plans to close, all of them superstores. The company also operates smaller Waldenbooks and Borders Express stores.

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By The Associated Press

The Dow Jones industrial average rose 61.53, or 0.5 percent, to close at 12,288.17, its highest close since June 13, 2008.

The S& P 500 rose 8.31, or 0.6 percent, to 1,336.32. That was double its intraday low of 666.79 reached on March 6, 2009 at the height of the financial crisis.

The Nasdaq composite index rose 21.21, or 0.8 percent, to 2,825.56

On the Nymex benchmark West Texas Intermediate crude for March delivery rose 67 cents to settle at $84.99 per barrel. Brent crude rose $2.14 to settle at $103.78 per barrel on the ICE Futures exchange.

In other Nymex trading, heating oil rose 4.58 cents to settle at $2.7748 a gallon and gasoline gained 5.59 cents to settle at $2.5447 a gallon. Natural gas lost 5.5 cents to settle at $3.921 per 1,000 cubic feet.

A Chinese Village Has Nearly Completed The World's 15th-Tallest Skyscraper

Remember the rich dystopian Chinese village of Huaxi where everyone has a luxury car?

The suburb at the apex of the economic boom is also building the world's 15th-largest skyscraper, expected to be completed later this year.

Het Financieele Dagblad reporter Bert van Dikj snapped this photo of the 1,076-ft skyscraper: