China’s outbound investment totalled US$5.65 billion in the first 11 months of this year

China is intensifying its role as a global investor for the second year.

The number was three times the investment made last year from January to November. But due to PC maker Lenovo’s acquisition of IBM last December, the total outbound investment for 2004 leapt to US$5.5 billion, jumping 93 per cent from the year before.

A statement released yesterday by the Ministry of Commerce reported China, long a hot-spot for global investment, is emerging as a global investor itself.

Although the outbound investment is still small compared to the country’s inward foreign direct investment (FDI) of US$53 billion, China is steadily increasing its investment in the world, the official said.

The information and telecoms industries, mining and manufacturing sectors attracted the most investment from Chinese companies, with combined investment totalling 90 per cent of the January to November figure.

Asia remains the largest destination for Chinese investment, accounting for two-thirds of the investment in the first 11 months of 2005.

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China on Tuesday revised its GDP (gross domestic product) for 2004 to 15.9878 trillion yuan (about 2 trillion U.S. dollars), up 2.3 trillion yuan, or 16.8 percent from the preliminary figures.

The country’s top statistician Li Deshui made the announcement at a press conference of the Information Office of the State Council, citing the result of a national economic survey.

The country has overtaken Italy as the world’s 6th biggest economy.

The value-added of the tertiary industry was 6.5018 trillion yuan, 2.1297 trillion more than the annual preliminary estimation announced earlier this year. And the industry’s share in the GDP rose from the earlier estimated 31.9 percent to 40.7 percent, an increase of 8.8 percentage points.

The increase of service sector output accounted for the largest part, or 93 percent, of that of the GDP.

Li said China had long been using the Material Product System (MPS) which was developed under the centrally-planned economic system in its national account statistics until the 1980s, resulting in “very weak” statistics for the service sector.

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• Policymakers are now focusing more on quality of growth, but the key to achieving this lies in transforming the government, even including some political reforms. The authorities’ recognition of the need for slower but better growth is certainly a major step forward. But implementation will be key.
• Government officials are not particularly concerned about either inflation or deflation for next year. Any pickup in inflation will likely be gradual. Monetary policymakers are determined to increase exchange rate flexibility, but they also need to further develop the FX markets and domestic political resistance to such reforms. Resistance to rapid currency appreciation would be strong. Undoing capital inflows through investment overseas by qualified domestic investment institutions and enterprises will be encouraged in order to slow down the accumulation of FX reserves. 
• The pace of banking reforms during the past two years has been very rapid. We expect regulators to further increase the limit for foreign participation in Chinese banks following recent drastic bank reforms. Public sentiment, however, appears to be turning against foreign investors. Some question the financial security for China once foreign banks play greater roles, but this is not really an issue. The likely business innovations include securitization, bank-run mutual fund companies and credit card businesses.
• Latest developments suggest that the days of “unlimited labor supply” are almost over, and the supply curve has become upward sloping, which should have significant implications for labor costs and the industrial structure. At the high end, the existing pool of skilled managers and professionals cannot meet the rapidly growing demand, pushing up compensation rates substantially. At the lower end, there has also been a shortage of unskilled workers with about two years of experience in the coastal area. According to central bank statistics, wage rates have been growing by close to 15% for the past year or so.

China, India are set to keep the trend of rapid growth going in 2006

The world economy achieved a stable growth in 2005 despite impacts from surging oil prices, and judging from the existing factors it appears that global economic growth will continue to be solid in 2006.

Overall global economic growth hit 5.1 percent in 2004, a record high in 30 years, and analysts had predicted a moderate slowdown in the pace of world economic growth for the year 2005.

Nevertheless, the 4.3 percent growth forecast for 2005 and 2006 in September by the International Monetary Fund (IMF) is still healthy by historical standards.

The U.S. economy managed to have gained a relatively rapid growth despite impacts from rocketing oil prices and natural disasters like Hurricane Katrina, while China and India, the two major developing nations, continued the strong momentum of economic growth, which also added a spur to regional economic performance.

On an annualized basis, the U.S. economy increased by 3.8 percent, 3.3 percent and 4.3 percent in the first three quarters of this year, compared with growths of 5.7 percent, 5 percent and 1 percent in Japan and 1.2 percent, 1.2 percent and 1.6 percent in the euro zone.

China, one of the world’s fastest growing economy, has witnessed an increase of 9.4 percent in the first three quarters compared with the same period of last year.

However, most of the world’s major economies has experienced (more…)

Sales increased to US$73 billion in November compared to the same period last year up 12.4% according to the National Bureau of Statistics. Cities accounted for two-thirds of this amount.

The biggest increases occurred in oil and oil products led by the colder weather and the rising number of car owners. Sales of oil and oil products jumped 35.2% year on year. This is a real increase as oil prices are controlled in China.

Vehicle sales incrased 28.8% year on year last month, nearly 10% higher than the growth rate in the middle of the year. Auto dealers launched year end promotions which account for part of this increase.

Mobile phone sales rose 32%, clothing 19.3% and cosmetics were up 19%. Household appliances rose 9.7% from a year earlier.

Analysts predict that consumer and family products sales will continue to increase in December.