Market Information

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

SHANGHAI’S consumer prices continued to accelerate by posting a 5.9-percent increase in January, fueled mainly by food costs, said the Shanghai Statistics Bureau yesterday. The growth was slower than the national average of 7.1 percent, but 0.5 percentage point faster than the city’s figure in December which settled at 5.4 percent. “The rise of food prices remains the main driver of the city’s CPI growth,” said Liu Hui, an official with the bureau. Last month, food prices in Shanghai jumped 14.9 percent from a year earlier, contributing 4.9 percentage points to the overall index growth. In sub-categories, the cost of edible oil climbed 34.1 percent year on year, growing for the ninth straight month, while vegetable prices rose 12.9 percent from a year earlier. “Oil prices were boosted by increased demand during the Spring Festival and higher prices on the international market,” said Liu. “Vegetable price increases were mainly due to the unexpected snowstorms,” Liu added. To stabilize food prices, the city’s government has helped farmers to replant vegetables after the snowstorms and offer them more subsidies to cover the losses. Unlike previous analysis which said inflationary pressure was confined to food sectors, more products saw their costs rise last month except for traffic and telecommunications, entertainment and education. “It is worthy of attention that inflation is spreading into other parts of the economy than food,” said Li Maoyu, an analyst with Changjiang Securities Co. The costs of clothes grew 1.4 percent year on year in January, household appliances jumped 6.6 percent while house rentals increased 6.2 percent, the bureau said.

Source: Increase in food costs raises city CPI to 5.9%

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

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

China is an increasingly important player in the world economy. However, nearly 40 percent of executives in Asia say their companies do no business in China today, according to a McKinsey survey, and a third say that even if the country’s growth rate fell to zero their company’s revenue would not be affected.

Executives also see significant threats to China’s continued growth; these include a shortage of talent and weak enforcement of commercial laws and regulations. But many respondents say that the country can address its challenges sufficiently.¹

Assessing and addressing the threats

When respondents are asked to consider how quickly China should respond to the threats to its continued growth, more than 80 percent say China must address those threats within five years. The majority (60 percent) say China is likely to be able to do so, although only 12 percent see it as “very likely” (Exhibit 5). Respondents in China are the least likely to be optimistic; less than half say the country is very or somewhat likely to be able to address the problems sufficiently. Executives whose companies are currently generating revenue in China but whose offices are located elsewhere are somewhat more optimistic: 69 percent see it as very or somewhat likely that China will sufficiently address the threats it faces.

Notes

¹ The McKinsey Quarterly conducted the online survey in January 2007 and received 253 responses from C-level executives in Asia.

Source: Doing business in China: A McKinsey Survey of executives in Asia

Chinese factories feeling the pressures of rising energy costs and raw material costs may soon be relaying that increase to American consumers. After years of dominating the production scene for inexpensive goods, Chinese suppliers are now raising prices amidst a weakening dollar and new regulatory policies, further threatening inflation.

Source: Rising Costs in China to Fuel US Inflation

via Biz China Update - News, Reports on 2/13/08