China, U.S. Spar on Trade; Stocks Decline

Chandrasekhar Atreya
16 Sep, 2010
New York City

Stocks in China region fell on loan curb concerns. U.S. asks WTO to probe into unfair trade practices by China. Anshan Iron & Steel, first Chinese company to build a steel mill in the U.S. China Mobile plans to introduce a 4G service that will increase data speed by a factor of ten.

[R]5:00 PM Hong Kong, China – Stocks in China region fell on loan curb concerns. U.S. asks WTO to probe into unfair trade practices by China. Anshan Iron & Steel, first Chinese company to build a steel mill in the U.S. China Mobile plans to introduce a 4G service that will increase data speed by a factor of ten.[/R]

Stocks in Shanghai fell for the second day in a row, sending the benchmark index to its largest drop in three weeks, while Hong Kong stocks also fell on the persistent worries that China may curb loan growth.

An index tracking financial companies retreated 1.7% and was the largest contributor to losses on the CSI 300 among the 10 industry groups.

The CSI 300 Index in China dropped 1.9% or 55.41 to close at 2,857.79. The Hang Seng Index in Hong Kong also fell by 0.16% or 34.19 to close at 21,691.45.

Foreign direct investment in China climbed for the 13th month in a row in August but at a much slower pace than in the previous few months. August FDI edged up only 1.38% from a year earlier after surging at 29.2% in July and 39.6% in June.

Anshan Iron and Steel Group, the first Chinese steel mill, plans to build a plant in the U.S. despite the opposition of lawmakers.

Anshan said it will own a 14% stake in Steel Development Company under the agreement signed Wednesday in Beijing along with partners from Italy, Japan, Germany and Canada. The $168 million reinforcing bar plant will come up in Amory, Mississippi and will start production in 2012.

China Mobile, the world’s No 1 mobile phone maker, said Wednesday it will be introducing soon a 4G data card to be used in notebooks, which allows users to download at speeds 10 to 20 times faster than the existing 3G wireless networks.

Shanghai-based Spring Airlines will launch its second overseas route in two months when it flies daily between Shanghai and Hong Kong from September 28.

Spring will use a 180-seater Airbus A320 jet on the route linking Pudong International Airport with Hong Kong.

Luxury real estate developers in Shanghai selling residential units at more than 30,000 yuan per square meter may not be able to commence pre-sales of these units unless city grants permits for construction as local government looks to control the growth of high end housings.

Previously the real estate developers needed to have only district or county level approvals, according to a local newspaper.

Trade tensions between the United States and China ratcheted up another notch Wednesday, as Washington called on the WTO to probe unfair Chinese trade practices.

The United States asked the World Trade Organization to investigate China’s allegedly unfair treatment of U.S. steel and electronic payment providers, in a first step towards sanctions.

“We are concerned that China is breaking its trade commitments to the United States and other WTO partners,” U.S. trade representative Ron Kirk said in a statement Wednesday.

The U.S. steel industry, Ohio lawmakers, and two veteran U.S. trade policy experts urged Congress Wednesday to pass legislation to push against China’s undervalued currency by slapping duties on Chinese imports.

“The legislation being discussed Wednesday is not the best way forward and the bill might violate WTO rules, draw legal retaliation against American firms and shut down trade inputs from China that are needed for the American industry,” said Republican representative on the U.S. House of Representatives Ways and Means Committee, Dave Camp in his prepared remarks.

China does not seek a trade surplus deliberately and will continue to seek a balanced trade, Vice Minister Yi Xiaozhun said Wednesday in Shanghai.

“China seeks a balanced trade and we no longer put emphasis on scale and speed of growth but more on quality and profitability of our trade,” said Yi at the opening forum for the 2010 International Sourcing Fair in Shanghai.

Trade between China and Taiwan totaled $81.91 billion in the first seven months of 2010, up 55.9% over last year, said a mainland official of Taiwan affairs, Wednesday.

Bank of Dalian opened its Shanghai branch Wednesday marking it as the first commercial bank from China’s northeast to open a branch in the city. The lender also plans to file an application for an IPO by the end of this year, said Wang Jinping, the Bank’s President.

China National Petroleum and Chevron are expected to partner in $25 billion Wheatstone LPG project in Western Australia as part of a wider agreement between the two companies.

The second-largest U.S. energy producer and CNPC intend to collaborate on the development of gas fields in the Carnarvon Basin off northwest Australia and exploration in China, said Gareth Johnstone, a spokesman for Chevron from Singapore. The companies signed an agreement in Beijing late Wednesday.