Anti-Trade Protectionist Coalition Begs U.S. Trade Negotiator to Undermine Importer Profits

The so-called China Currency Coalition, a collection of unions, domestic manufacturers, and other anti-trade stakeholders, issued a statement about a letter the group recently sent to United States Trade Representative Robert Zoellick. It appears the protectionists are angry that the administration would not cave to their ridiculous demands that the U.S. pursue a policy of economic isolationism. This powerful lobbying group is one of the biggest thorns in the side of importers who earn a handsome living based on the undervalued Chinese yuan. We'll be watching them closely to see where else they rear their ugly heads.

China to relax policy on exports by foreign Cos

BEIJING, Sept. 25 (Xinhuanet) -- Vice Minister of Commerce Wei Jianguo has announced that China will further relax its export restrictions on foreign companies in the country, China Radio International reported Friday.

Vice Minister of Commerce Wei Jianguo announced this Thursday in central China's Wuhan city.

He says that to promote exports and thereby develop Chinese manufacturing, China will permit foreign investors to set up their own export purchasing centers in some regions on the mainland.

This means foreign investors can develop wholly-owned export businesses and enjoy the same tax refund and other preferential policies as Chinese enterprises. Enditem

Fortune Magazine China Orgy

Fortune Magazine's October 2004 issue contains a huge series of articles on China. It's about 200 pages thick, with every article about a different aspect of Chinese society. There is one on the Chinese auto industry (see below), several about tech (here and here), one on water and plenty of others. Over the next few days I'll share what I find to be signficant developments or stories of interest for importers of Chinese goods. In the mean time, head on over to Fortune's Inside the New China and read for yourself. Fortune scores points, not just for publishing this report, but for making it available free of charge on the net.

Chinese Auto Race

The race to get in on the ground floor of the Chinese automarket is in full swing, with domestic players and multi-nationals vying for an edge. While there figures to be few imports of Chinese cars to North America in the near future, western observers are paying close attention to developments in the Chinese auto industry.

Today there are only 8 cars for every 1000 Chinese old enough to drive, compared to 940 in the U.S. Shanghai Automotive Industry Corp., or SAIC, appears to be the best positioned domestic producer. The firm has joint ventures with each of the largest foreign manufacturers in China, Volkswagen and General Motors.

Other important firms include Great Wall, Chery Automobile Co and Geely Motor. Chery has been accused of stealing design secrets--hardly surprising given the abysmal support for intellectual property rights in the Chinese justice system. The Geely F1 was among dozens of new models unveiled at the Beijing Auto Show back in July 2004. The car looks like a Formula One/Indy car. Obviously this thing will is not even close to being street legal in the U.S. (nor will any of Geely's cars pass emissions standards), but the design demonstrates the firm's desire to generate buzz .

USA Today published an amusing article a while back about an Arizona businessman (scam artist really) who aims to be Geely's main representative in the U.S. automarket. I've dealt with the firm extensively and know that they produce some of the lowest quality motorscooters you'll find. Type "scooter" into eBay and witness all those $500-700 models--most are Geelys. Not one will go 1,000 miles before ending up in the mechanics garage--a place it is likely to reside for some time. Until Geely and other Chinese firms (guilt by association?) improve quality drastically, they will not be able to take over Korea's role as producers of low-end American vehilces that nobody really wants.

Plasma for the masses...

More TVs are the last thing our society actually needs, but probably the consumer product people feel most strongly about (besides the addictive Internet, if you're willing to count it). China's exports of high-end color TV's grew hugely in the first half of 2004. The total value of the sets was 55.38 million US dollars, almost 300 times as much as last year!!! Looks like it might be a little to late to jump onto that train.

China Sells More Cars Than It Makes

This report has to make you wonder about official government statistics. China sold 101 percent of the cars it made last month. Regardless, the Chinese auto industry is a hot sector that we'll be following very closely as it grows. If you are interested in importing Chinese motorcycles, off-road vehicles, go-karts or even tractors, check out KPX Motors. This reliable Arizona distributor has been helping dealerships and individuals around the U.S. to earn huge margins on Chinese products for several years.

Soft Landing Predicted for Overheated Chinese Economy

This is good news for importers of Chinese goods. The Asian Development bank is predicting a soft landing for the overheated Chinese economy. As we've noted previously, no country can continue to grow at China's torrid pace, year-in and year-out. Economists are already baffled at the country's ability to post record numbers almost every year since the 1979 economic opening that started it all. The leaders of the PRC understand that the pace must be gradually slowed to a more sustainable level. This "soft landing" will allow businesses adapt over time, rather than causing massive failures across sectors. Despite a sincere desire to believe its findings, I must question the independence of the Asian Development Bank in producing this optmistic report. Such rosy statements reassure its own investors and keep its financing flowing. Looks like a pretty clear conflict of interest to me...

One Trillion Dollars

China's foreign trade reaches $1 trillion China's imports and exports will reach 1,000 billion US dollars in 2004, said Bo Xilai, China's Minister of Commerce here Sunday.

Rich nations impose will on China

U.S. claims "progress" on chinese currency. The world's rich nations (a.ka. the G7) claim to have made progress in convincing China to change its policy of fixing the yuan at 8.3 per dollar. Such a change would immediately cut into profits for American retail businesses that depend on cheap Chinese imports for their survival. The very idea of asking China to raise the cost of its currency--and hence its goods and services--is completely counter-intuitive. Why undermine this tremendous source of growth for the global economy?