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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (8292)	3/14/1999 9:25:00 AM
From: Ramsey Su	Read Replies (1) \| Respond to of 9980

Mike, interesting article in SCMP which covers a number of issues at the same time, including a form of devaluation that had already happened. Ramsey Saturday March 13 1999 Beijing urges US to reverse ban on US$450m satellite MARK O'NEILL in Beijing The mainland's foreign trade minister has asked the United States to reverse its ban on the export of a US$450 million communications satellite and said the only victims of such measures were US firms. Shi Guangsheng was speaking at a news conference during the annual session of the National People's Congress, at which he reviewed export prospects for the year. He was asked for his reaction to President Bill Clinton's decision this month to ban the export of the satellite, manufactured by Hughes Corp, because of suspicions it might have military uses. "I was shocked and deeply dissatisfied when I heard the news," he said. "It is wrong for the US to use security as an excuse to stop normal trade. This satellite was to be used for mobile telecommunications for China and Asia. The US should prudently reconsider this wrong decision." Such restrictions by the US of hi-tech exports appeared to hurt the mainland but in fact hurt US companies, because the mainland could purchase them from other countries, he said. Mr Shi was asked about the mainland's export prospects for this year. In the first two months, foreign trade was US$41.02 billion, down 4.2 per cent on the same period last year, with exports at $22.39 billion, down 10 per cent, and imports at $18.63 billion, up 5 per cent. "The outlook is very serious. With the Asian financial crisis continuing, growth in the world economy slowing down, protectionism getting worse and trade disputes increasing," he said. To boost exports, Beijing would raise by an average of 2.5 percentage points the tax rebate it pays to exporters of several major categories of goods, Mr Shi said. The money is given to companies who export goods as a rebate for the 17 per cent they have already paid in value-added tax. Unwilling to devalue its currency, the mainland uses the higher rebates as a form of export subsidy. Mr Shi's ministry increased the rebate on a wide range of goods last year to try to offset a slowdown in exports. The measures he announced yesterday would extend the increase further. The mainland would increase the supply of credit for exporters, encourage those with the right conditions to set up factories in foreign markets, upgrade the variety and quality of goods and diversify into different markets, he said. The rapid increase of the mainland's exports over the past 10 years has led to a surge in anti-dumping suits against it. Mr Shi said the mainland faced 327 anti-dumping investigations, including 72 in the European Union. "The Chinese Government does not allow Chinese firms to dump their goods overseas," he said. "Our firms do not have the ability to do this. Our prices are low because we have cheap labour and raw materials."