China's yuan strengthens after US anger
China's yuan strengthens after US anger
AFP - Saturday, September 18
http://sg.news.yahoo.com/afp/2010091...n-ec2362a.html
BEIJING (AFP) - – China's yuan rose slightly against the dollar on Friday after a blunt call from US Treasury Secretary Timothy Geithner for Beijing to attack trade distortions by letting the currency strengthen.
The yuan reversed earlier losses to close at 6.7235 to the dollar, marginally higher than its close on Thursday of 6.7248, Dow Jones Newswires reported.
"The central parity was certainly higher than expected and so demand for the dollar rose this morning," said a Shanghai-based trader at an Asian bank.
"Our take is that the dollar-yuan may be nearing a significant rebound. The US Congressional hearing is over and we don't think the yuan will continue to appreciate sharply in the near term."
Gains in the currency came after the People's Bank of China set the central parity rate -- the middle of the unit's allowed trading band -- at 6.7172.
It was the strongest level since Beijing pledged in June to loosen its grip on the yuan.
"The central parity today extended the recent trend of yuan appreciation," a Shenzhen-based trader with a Chinese bank told AFP.
"The yuan weakened a bit during trade, which indicated the yuan is inclined to take a breath following the recent fast rise."
In the run-up to crucial midterm elections in November, US lawmakers are weighing bills that would slap sanctions on Chinese goods amid accusations that Beijing keeps its currency -- and thereby its exports -- artificially cheap.
Geithner, testifying in Congress on Thursday, abandoned his previous restraint on the issue, saying it was "past time for China to move" on the yuan and lift trade barriers.
Despite June's "important" pledge by Beijing, Geithner said the Chinese currency's value was "essentially" unchanged in the past two years because of "very substantial" intervention by the authorities.
Since June the yuan has appreciated about 1.6 percent against the greenback and gained about 0.7 percent this week ahead of Geithner's testimony.
But Geithner also tried to put the currency dispute in the context of a wider, mutually beneficial trade relationship between the United States and Asia's rising power.
There was no immediate response from Beijing to Geithner's remarks.
On Thursday, China's foreign ministry spokeswoman Jiang Yu warned that outside pressure on Beijing to change its currency regime would not work.
"The appreciation of the renminbi cannot solve the US trade deficit against China and it cannot solve the US domestic unemployment issue," Jiang told reporters.
"The issues in China and US economic relations and trade should be properly solved through consultations on an equal footing. Exerting pressure cannot solve the issue. Rather, it may lead to the contrary."
Standard Chartered 'may move HQ to Far East'
Standard Chartered 'may move HQ to Far East'
AFP - Saturday, September 18
http://sg.news.yahoo.com/afp/2010091...y-e65dddb.html
LONDON (AFP) - – Standard Chartered bank has stepped up plans for possible relocation to the Far East where it does most of its business, as it bids to escape tighter regulations in Britain, a report said on Friday.
The Times wrote that the Britain-based bank had "discussed the issue in depth at several meetings and has a team working on the feasibility of a move to the Far East or elsewhere."
Standard's chief executive Peter Sands recently said the bank's "preferred solution" was to stay in London but added that it would seriously consider moving if it was "hopelessly disadvantaged," the paper added.
Britain's coalition government is looking at toughtening banking regulations in the wake of the financial crisis but has been warned by the sector that such moves could hike lenders' costs, forcing them to relocate abroad.
A spokesman for Standard Chartered downplayed the report in The Times.
Relocation "is something we do look at but we have no plans to move," he told AFP.
Dell's Expansion Into China
Dell's Expansion Into China
http://www.cnbc.com/id/15840232?video=1592507863&play=1
Airtime: Wed. Sept. 15 2010 | light e) ET
As Dell continues its expansion into China's Western region, Amit Midha, president of Dell, China, tells CNBC's Chloe Cho how it is dealing with rising wages and a strengthening yuan.
China Sets Yuan Daily Reference Rate Stronger Than 6.7 to Dollar
China Sets Yuan Daily Reference Rate Stronger Than 6.7 to Dollar
http://www.businessweek.com/news/201...to-dollar.html
Sept. 21 (Bloomberg) -- China’s central bank set the yuan’s daily reference rate stronger than 6.7 per dollar for the first time since July 2005 after President Barack Obama criticized China for its currency policy.
The reference rate was set at 6.6997 per dollar. The currency is allowed to trade up to 0.5 percent either side of the fixing rate.
China’s leaders haven’t done “everything they said would be done” to allow the nation’s currency to rise in value, Obama said, echoing the views expressed by administration officials and lawmakers at congressional hearings last week. “What we’ve said to them is you need to let your currency rise,” he said in an hour-long town hall discussion in Washington.
To contact the reporter on this story: Judy Chen in Shanghai at [email protected]
China Is Blocking Minerals, Executives Say
China Is Blocking Minerals, Executives Say
http://www.cnbc.com/id/39342211
China’s Commerce Ministry denied on Thursday that it had halted exports to Japan of a crucial category of minerals, but industry executives said that factories in China were still not shipping to Japan after Chinese customs agents blocked shipments earlier this week.
http://media.cnbc.com/i/CNBC/Section...mining_200.jpg
The minerals are so-called rare earths, which are used in products like wind turbines and hybrid cars.
Eight executives, analysts and traders in the Chinese, Japanese and North American rare earths industries said that China had suspended the shipments on Tuesday in response to a diplomatic dispute over Japan’s detention of a Chinese fishing trawler captain. Some theorized that the action might have been taken by Chinese customs agents, rather than as a formal trade embargo imposed by commerce ministry regulations, to give Beijing more negotiating room with Japan.
Akihiro Ohata, Japan’s trade minister, said on Friday that China’s commerce ministry had informed Japan that it had not issued a ban on rare earths exports. But Mr. Ohata also said the ministry was aware that Japanese traders were complaining of a halt in rare earth shipments from China, and that the government was investigating the matter further.
Gary L. Billingsley, executive chairman of the Great Western Minerals Group, a Canadian company with rare earth processing factories in Michigan and Britain, said China appeared to have stopped shipping rare earths to Japan on Tuesday.
Japanese traders “confirm that there has been a disruption in the supply of rare earths,” Mr. Billingsley said. Shipments loaded before Tuesday have continued to arrive at Japanese ports, he said, adding that Great Western had not experienced any disruption because it bought supplies directly from China.
China mines 93 percent of the world’s rare earth minerals and more than 99 percent of the world’s supply of some of the most prized rare earths, which sell for several hundred dollars a pound.
A Toyota [TM 73.06 2.09 (+2.94%) ] supplier in Japan, who spoke on condition of anonymity, said that the automaker had alerted his company on Monday of a possible halt in rare earth shipments. “Toyota is already seeing shipments being stopped,” the supplier said.
A Toyota spokesman, Paul Nolasco, had no immediate comment.
Industry executives, analysts and two Japanese traders confirmed that rare earths bound for Japan stopped leaving Chinese ports on Tuesday. China has export quotas for rare earths, but even factories with ample quotas for further exports had been dissuaded from making shipments, they said.
“People are mystified why the Chinese don’t acknowledge it,” said Dudley Kingsnorth, the executive director of the Industrial Minerals Company of Australia, a rare earth consulting company.
An official at one of Japan’s top traders in rare earths, who spoke on condition of anonymity, said Chinese customs officials had blocked the rare earth shipments on Tuesday. But because Beijing offices, including customs headquarters, closed Wednesday through Friday for the Chinese Autumn Equinox holiday, and will reopen on Saturday, industry players were still unsure whether the halt in exports was the start of a longer embargo.
Trucking, ports and local customs offices continue to operate during weekends and holidays. But Chinese rare earths operations have halted shipments to Japan for the last three days anyway in response to strong warnings on Tuesday from Beijing officials against selling to Japan, industry executives said.
A person answering the phones at the customs headquarters in Beijing said no one would be available for comment until Saturday.
If China continued to halt shipments, it would be extremely difficult to switch to other sources, the Japanese trader said.
Rare earths are used in a wide variety of industrial applications, including the manufacture of glass, batteries, catalytic converters, compact fluorescent bulbs and computer display screens. Demand has surged in the last decade for clean energy applications, like generators for large wind turbines and lightweight electric motors for cars.
Japanese automakers in particular have been turning to rare earths for the electric motors used in power steering in gasoline-powered cars, as well as the more powerful electric motors that help propel gasoline-electric hybrids like the Prius.
Some industry analysts predicted on Thursday that the Chinese government would relent soon and allow a resumption of rare earth exports to Japan, having made the point that China had considerable economic leverage over Japan these days.
“This is politics. In my view, it won’t last,” said Judith Chegwidden, a managing director of the Roskill Consulting Group in London.
Ms. Chegwidden said that the way China had selectively blocked the rare earths was significant. The halted shipments involved rare earth oxides, rare earth salts and pure rare earth metals — all of which are carefully tracked by customs officials for compliance with government export quotas.
But shipments of various alloys that include rare earth metals to Japan have continued. . These alloys are not subject to export quotas, so they do not receive special attention from Chinese customs officials, and would be hard to stop even if the Chinese government decided to do so.
“They picked on things for which it’s relatively easy because they’ve got a quota,” Ms. Chegwidden said.
Others in the industry said that having China’s customs agency halt exports of rare earths, without calling it an export ban, carried political and legal advantages. Imposing an unannounced embargo, they said, would allow China to ratchet up the pressure gradually on Japan to release the detained boat captain.
And a halt in exports carried out through administrative measures, rather than as an act of official policy, would be much harder for Japan to challenge at the World Trade Organization, which bans most unilateral export restrictions. Under W.T.O. rules, countries may formally suspend exports of natural resources only for environmental conservation.