The valve is closing...
get your beach towel
BEIJING (Nikkei)--China's suspension of its long-standing
exports of Daqing crude oil to Japan is a sign that the Beijing
government's priorities have shifted to domestic interests,
analysts say.
Last fall, Beijing stunned the international financial community
with its announcement that it would liquidate the ailing
Guangdong International Trust and Investment Corp., a major
nonbank financial institution saddled with nonperforming debts.
Behind Beijing's firm stance of protecting domestic interests is a
tough economic environment, including a worsening balance of
trade and delays in reforming state-run companies.
If China further strengthens its emphasis on the domestic
economy, however, it could alienate foreign capital that has
sustained China's rapid economic growth, exacerbating
economic uncertainty.
Beijing's major concern is a deteriorating trade balance, which
could erode its vast foreign-currency reserves totaling 145 billion
dollars as of the end of 1998.
China's exports have slowed significantly, posting a year-on-year
increase of a mere 0.5% for 1998. Last October, the country
banned spot imports of crude oil and also restricted imports of
raw materials, including flat glass and steel products.
In the case of Daqing crude oil, Beijing apparently concluded
that its economy will benefit more from using the crude oil at
home than from exporting it to Japan for hard currency, analysts
say.
(The Nihon Keizai Shimbun Saturday morning edition) |
