Market Information

Picture of Beijing’s urban development: Photo by Joe

China has rewritten both the theory and history of economic development. In just 30 years, it has gone from the brink of economic collapse to the cusp of a newfound prosperity.

The current economic crises is only part of the economic cycle and is sceen as a new phase in China’s economic growth.

“The world is hardly coming to an end. At work are the time-honored forces of the business cycle - driven in this case by the US recession that should inevitably be followed by recovery.”

However painful, cyclical adjustments are also an opportunity. For China, it underscores the imperative of shifting its growth impetus to private consumption.” Stephen Roach, Chairman of Morgan Stanley Asia.

taken from: China to Deal With Global Slowdown

New Zealand exporters are facing a challenging year as global economic conditions deteriorate, says credit reporting agency Dun & Bradstreet (D&B).The impact of global inflationary pressures, declining US consumer demand and the re-pricing of credit were eroding business profit margins and making it more difficult to sell products to key trading nations.

Smaller organisations - which made up the majority of the New Zealand exporting community - were most likely to feel the pressure of deteriorating economic conditions as they were less able to withstand economic headwinds than their larger counterparts, D&B said.

D&B data indicated that more than 80 per cent of this country’s exporters sold less than $10 million worth of goods and services a year and the vast majority employed a small number of staff.

Via: NZ Herald: Challenging year for NZ exporters - Dun & Bradstreet

The meat industry is targeting China as an emerging market for lamb.

Alliance Group chief executive Grant Cuff told a meeting of shareholders last week that the industry had also looked at the potential of Russia and India but found China to be the most promising.

High import tariffs ruled out India.

The industry would look at Russia once China had been assessed to identify consumers, product forms, brands and logistics.

“We will look at Russia, but all the stars lined up better for China.”

Cuff said the industry intended targeting high-worth Chinese consumers with high-value products.

It could take six to 12 months of further research to find and work out how to target those consumers.

New Zealand’s recent free trade agreement with China offered little assistance in removing already low red meat tariffs, but Cuff said its real benefit was helping to deal with bureaucratic red tape and establishing distribution networks.

 Via: NZ Herald  China targeted for lamb exports

Getting goods and people into Beijing from now until the end of the Olympics is going to get more and more difficult as security tightens. I Had the most strengent security checks on my way into Beijing last week, they almost didn’t let me in because they thought I looked different to my passport picture!

We also we have a shipment that has been “held up” due to the extra security checks so expect delays in getting things in and out of Beijing!

Joe

Photo from: NZ Herald.

BEIJING - Guards with machine guns began patrolling the Beijing airport as the city tightens security for the Olympics, news reports said Saturday.

Also this weekend, police will start checking Beijing subway passengers for guns and explosives, the reports said.

The measures reflect the fears of Chinese leaders, who worry the Olympics might be tarnished by security threats. They also hope to stop activists who want to use the August games to air grievances against the communist government.

At the airport, two-member teams of guards with machine guns began work Thursday and will patrol all three terminals through the end of the Olympics, the Xinhua News Agency and newspapers reported. Chinese police usually are unarmed, while some airport guards carry pistols.

“I think they look cool, and you rarely get to see such big guns,” the China Daily newspaper quoted a female traveler at the airport as saying.

On subways, police with dogs will start checking passengers for guns, knives, explosives and flammable, poisonous or radioactive material on Sunday, Xinhua said.

Story via: NZ Herald    Security tightens in Beijing for the Olympics

Details on tariff cut programme in trade deal with China.

The deal eliminates tariffs on 96 percent of New Zealand’s current exports to China by 2019.

For other than specified “sensitive” goods - kiwifruit, some meat, sheepskins and dairy products - the following programme will apply:

* When the deal comes into force - probably October 1 - 35 percent of imports from New Zealand which currently face tariffs of up to 5 percent will be duty free;

* Duties in the 6 to 20 percent range will be phased out over five years until 2012; and

* Tariffs greater than 20 percent will be reduced to 20 percent on day one and then phased out by 2013.

Dairy

* Some dairy products - infant milk formula, casein, yoghurt and whey - will be phased out over 5 years;

* China’s tariffs on butter, liquid milk and cheese will be phased out over the 10 years to 2017;

* Skim and whole milk powder will be removed over 12 years; and

* There are mechanisms to delay the tariff reductions if exports exceed certain quantities.

Meat

* Tariffs on beef and sheep meat, and edible offal will be removed over 9 years.

Fruit

* Apple tariffs will be removed by 2012 and kiwifruit over 9 years.

Wool

* A duty free quota of 25,000 tonnes of wool and 450 tonnes of wool tops will be set increasing by 5 percent a year for 8 years. The initial quota is 75 percent of current exports or $122 million a year in tariffs.

Wood and paper products

* China will be bound on the zero tariff on logs and sawn timber and a limited number of pine products will also be given preferential status.

* Some processed wood and paper products accounting for 4 percent of New Zealand’s exports to China will not be covered by the trade deal. This is because under WTO rules is China gives preferential status on the products, they must be applied to all WTO members.

What China Gets from New Zealand.

* All tariffs will be removed by 2016;

* Currently 37 percent of China’s exports to New Zealand are tariff free;

* An additional 2 percent of exports with a tariff of five percent or less will be duty free from October 1;

* Tariffs on most textile, apparel, footwear and carpet products will be phased to zero over seven years or nine years. Tariffs on heavily exported goods in clothing and footwear will be phased out by 2016, lesser traded goods by 2014; and

* Tariffs on all other goods (including steel, whiteware, plastics and furniture) will be mostly phased out by 2012 with the remainder by 2013.

* Ian Llewellyn is in Beijing with the assistance of the Asia New Zealand Foundation.

via:  Details on tariff cuts in China trade deal

3:30PM Monday April 07, 2008

Winners China will lower tariffs on most imported NZ agriculture and manufactured products to zero (over time), saving our exporters a total of at least $100 million annually.

With Chinese tariffs running at about 10 per cent for milk powder (yoghurts and cheese top 15 per cent); 12-20 per cent on sheep meat and 15-20 per cent for kiwifruit, the upside is considerable. But there will a lengthy phase-in period for dairy as China fears its own fledgling dairy farming industry would be squashed.

Manufacturing exports ranging from machinery through to light industry, whiteware, automotive parts, steel and aluminium products will benefit to varying degrees. But reciprocal liberalisation will ultimately make the local scene more competitive.

Losers Wool: China is NZ’s biggest market for wool products which enter at very low-duty rates (1 per cent under a tariff rate quota system).

But out-of-quota exports face a 38 per cent duty. China strenuously argued going to zero would wipe out the livelihoods of its sheep farmers in frontier regions. A special quota arrangement is expected.

Forestry: China is one of the world’s largest forest product importers. But complications under a provision in China’s WTO accession deal with the US proved a sticking point. Some co-operative element may emerge.

Textiles and apparel manufacturers: Will have to up their game when NZ speeds up remaining tariff reduction in these areas, opening the way to stiffer competition from Chinese imports.

Electronics: A separate agreement will be signed to ensure co-operation on conformance assessment for electrical and electronic equipment. Some retailers are nervous NZ’s safety standards may become compromised.

Movement of people
Working-holiday programme for young professional Kiwis to go to China.

NZ business people will find it easier to get short-term visas; an advance record system will ultimately be promoted to ensure important enterprises and organisations on both sides get timely entry visas.

More exchanges of experts, scholars, students and technicians and intra-corporate transferees.

Chinese traditional medicine experts, acupuncturists, Mandarin teachers and chefs will be allowed into NZ under a constrained quota.

No invasion of unskilled Chinese workers into NZ. Trade Minister Phil Goff strenuously opposed a push for Chinese labourers to work on NZ construction sites; Chinese workers must be paid NZ rates while here.

Trade liberalisation services

Winners
Tourism and education ex-China are major money-spinners for NZ. An agreement to facilitate two-way tourism traffic is expected. Education earnings fell away after the collapse of English language schools and the appreciation of the NZ dollar. Look for more NZ educational institutions running schools in China in co-operation with Chinese authorities in areas like biotech, management and telecommunications. NZ students may also be encouraged to study in China.

Forestry: China is one of the world’s largest forest product importers. But complications under a provision in China’s WTO accession deal with the US proved a sticking point. Some co-operative element may emerge.

Textiles and apparel manufacturers: Will have to up their game when NZ speeds up remaining tariff reduction in these areas, opening the way to stiffer competition from Chinese imports.

Electronics: A separate agreement will be signed to ensure co-operation on conformance assessment for electrical and electronic equipment. Some retailers are nervous NZ’s safety standards may become compromised.

via: So what’s in it for us   

NZ Herald

China food safety agreement
Following a number of cases of contamination involving Chinese products imported from China, the United States and China have now signed an agreement designed to improve the safety of food exports.

Essentially, the document covers registration, certification and verification. It requires Chinese food and ingredient producers to register with local authorities, who are themselves required to share data with the Department of Health and Human Service (HHS), and it also requires the authorities to notify their counterparts of events affecting the food chain. It is also understood that the Chinese authorities are to develop an electronic tracking system to follow products from production to export.

Source:  www.functionalingredientsmag.com

China’s economic growth for the first quarter will be 10.4 percent to 10.5 percent, a group of 14 research institutions jointly predicted over the weekend. They also predict that the consumer price index will be between 6.8 percent and 7.1 percent.

Source: Growth forecast

via Shanghai Daily: Business by on 2/26/08

Macau saw its value of retail sales in 2007 grow 33 percent compared with 2006, according to official statistics released on Wednesday. With notable increases in the sales of watches, clocks and jewelry (up 54 percent), adults’ clothing (up 39 percent), goods in department stores (up 30 percent), and motor vehicles (up 30 percent), the total value of retail sales for the whole year of 2007 reached 14.2 billion patacas (US$1.8 billion), said the Statistics and Census Service of the Special Administrative Region.

Source: Macau boom

via Shanghai Daily: Business by on 2/22/08

International Business Convention (IBC) China Market Focus: Outdo Your Rivals: Branding & Competing in the China Market (24/01/2008)

View webcast