Neo

SHANGHAI (updated on: March 28, 2006, 11:27 PST): China has overtaken Japan as the world's largest holder of foreign exchange reserves with 853.7 billion dollars at the end of February, a state-run newspaper reported on Tuesday.

China's reserves rose a sharp 26.3 billion dollars in January to 845.2 billion dollars, then added another 8.5 billion dollars last month, the China Business News said.

Japan's reserves at end of February stood at 850.06 billion dollars, according to the Japanese finance ministry. The China Business News said the central bank had not yet verified the figures and the official report was expected to be released in April.

China's foreign exchange reserves have grown remarkably in recent years -- more than doubling from 403.3 billion dollars in 2003 -- thanks to strong fund inflows and a burgeoning trade surplus.

"The massive forex reserves have brought many advantages and at the same time it also means that the domestic economy continues to be imbalanced," the China Business News said.

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Neo

China 2006 GDP growth forecast at 10 per cent



BEIJING: The Chinese economy is expected to race ahead at around 10 per cent average growth this year, the central bank said on Thursday, as regulators called for a clampdown on credit to the heated real estate sector. The People’s Bank of China forecast represents an average of economic growth rates across most of the country, it said on its website.

The government’s official target for national gross domestic product (GDP) growth in 2006 is a modest eight per cent, but China’s economy posted a 10.3 per cent expansion in the first quarter. The report also warned that overcapacity could impact industries this year, highlighting continued concerns in Beijing about overinvestment and the risk of sector-specific deflationary scenarios.

At the same time banking regulators added their official concerns about the level of surplus credit in the country’s fragile banking system that is still undergoing restructuring. Liu Mingkang, chairman of China Banking Regulatory Commission (CBRC), said China’s macro economy and financial sector were developing at a fast and stable rate, but more needed to be done to reel in the booming property sector.

“We need some strong action to maintain the banking industry’s stable momentum,” Liu said in the report posted on the commission’s website. New measures proposed included strict controls of new loans, curbing financing to property developers and stemming the issuance of credit lines to local governments.

Reducing banks’ non-performing loans, optimising lending structure, while increasing credit to small- and medium- enterprises were also cited. “Banks with capital adequacy ratios under the eight percent requirement should especially control the pace of their lending,” it said.

Premier Wen Jiabao last week called on regulators to use further tax, credit and land polices to bring high city property prices under control and address the “imbalanced” structure of the real estate sector.

The banking commission’s also said that lenders should priorities first-home buyers in their credit decisions and stay away from financing luxury housing projects.

A number of key state agencies last month jointly issued an order to commercial banks to curb their issuance of credit lines to local governments, warning that they could translate into higher and unsustainable rates of fixed-asset investment. China’s banks extended about 1.57 trillion yuan (196 billion dollars) in new loans in the first four months of this year - more than half the 2.5 trillion yuan target set for the year.

http://www.thenews.com.pk/daily_detail.asp?id=7910

Neo

China again urges efforts to close income gap



BEIJING: China again called on all sectors of society and government on Friday to work on closing the widening income gap, stressing the need for a just system of distributing wealth.

“We must place high importance on building a well-rounded and prosperous society,” Xinhua news agency said, quoting from the minutes of a meeting chaired by President Hu Jintao. Closing the widening income gap between the wealthy cities and poor countryside is one of the primary goals of the latest five-year economic plan which was unveiled in March. The report comes a week after a Chinese think-tank called for higher minimum wages to halt the emergence of a new urban underclass, as minimum wage rises did not match average urban income rises from 1994-2004.

China has no nationally prescribed minimum wage. It relies on provincial governments to set their own levels. The country has been relying on rapid urbanisation to lift millions out of poverty but some researchers say the hordes of people flocking from rural areas are becoming an underclass within the cities.

Beijing is alarmed by rising unrest in the countryside as property developers, often in cooperation with local governments, have seized land from poor farmers at cheap prices.

Tronic

I don't think this belongs in the South Asian section...

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