US challenges China at WTO, alleges that it unfairly subsidizes exporters

The United States is challenging China at the World Trade Organization, alleging that the Chinese government unfairly subsidizes exports in seven industries.

The Office of the U.S. Trade Representative says that China designates certain export companies as “demonstration bases” that receive free or discounted services from suppliers. The U.S. says China paid the suppliers almost $1 billion over three years to provide those services.

Getting help are textile and clothing makers, advanced materials and metals companies, light industrial firms, specialty chemical manufacturers, medical product makers and agricultural firms.

The U.S. says the subsidies violate WTO rules.

“This unfair Chinese program is harmful to American workers and American businesses,” USTR says.

The challenge arose from an earlier investigation into Chinese subsidies of auto and auto parts exporters.

 http://www.foxnews.com/us/2015/02/11/us-challenges-china-at-wto-alleges-that-it-unfairly-subsidizes-exporters/

Listed firms caught in anti-corruption net

As many as 70 listed companies were involved in China’s anti-corruption investigations last year, with the energy, real estate and finance sectors attracting most scrutiny, the Beijing News reported on Monday.

Around a quarter were in the oil, nonferrous metals and coal industries and both state-owned enterprises and non-state companies were included.

The newspaper said companies were often involved in illegal activities in capital markets, IPOs and reform of SOEs. Sectors most hit by the campaign were characterized by high profits.

Some senior executives were taken away by anti-corruption watchdogs to assist with investigations while others were accused of directly accepting bribes and other illegal activities.

One of the biggest cases was the state-owned China National Petroleum Corporation, in which 45 of its executives and employees were investigated, the report said.

In the financial sector, the most recent case is China Minsheng Banking Corp, the country’s biggest private lender. The bank’s president, Mao Xiaofeng, resigned for personal reasons after reportedly being implicated in the corruption case of Ling Jihua, a former senior political adviser.

Mao was said to have offered Ling’s wife a job for three years at Minsheng Financial Leasing.

Chen Zhuolin, chairman and CEO of Hong Kong-listed real estate developer Agile Property, was put under investigation by Kunming People’s Procuratorate and was allegedly involved in an anti-corruption investigation against officials in Yunnan province, according to Chinese financial media Caixin.

http://www.chinadaily.com.cn/china/2015-02/09/content_19531499.htm

UP taps Fritz as CEO

Union Pacific Railroad’s has promoted its president and chief operating officer to CEO.

Lance Fritz, who will continue to service as president, was elected on Thursday by the U.S. western railroad’s board of directors to succeed John Koraleski. Before joining UP, Fritz worked for Fiskars, a tool retailer; an electrical product manufacturer and distributor; and General Electric. Koraleski will stay on with the company as executive chairman.

“The board regularly reviews and updates its robust management succession plan, and we are confident Union Pacific will continue to deliver industry-leading customer service and strong shareholder returns under Lance’s guidance, Steven Rogel, UP’s lead independent director, said in a statement.

UP saw fourth-quarter profit rose 22 percent year-over-year to $1.4 billion, as revenue expanded 9 percent to $5.8 billion in the same period. A 6 percent intermodal volume jump, fueling a 11 percent increase in intermodal revenue, helped the railroad hit record profit in the quarter.

http://www.joc.com/rail-intermodal/class-i-railroads/union-pacific-railroad/taps-fritz-ceo_20150205.html

Chinese New Year fails to stimulate factory output, official data shows

HONG KONG — An expected spike in China’s factory production in January in the buildup to a late Chinese New Year failed to materialize, with the official purchasing manager’s index (PMI) falling to a level not seen since 2012.

China’s National Bureau of Statistics released the factory output data that showed manufacturing activity in the country had fallen to 49.8 in January, edging below the 50-point level that separates growth from contraction.

The PMI fell from 50.1 in December, but was expected to improve as shippers get their orders in early to beat factory shutdowns during Chinese New Year, the country’s biggest holiday, that falls on Feb. 19 this year. Although the holiday is only three days, many factories are closed for three weeks as migrant laborers head back to their home provinces.

HSBC released its own flash PMI that also delivered a reading of 49.8, compared with 49.6 in December.

China’s manufacturing slowdown can be seen in its exports that grew only 6.1 percent in 2014, the slowest growth rate since it joined the WTO in 2001, with the exception of 2009 (the global financial crisis), according to a note to customers by Barclays.

The bank said China’s slowing growth compared with manufactured goods export growth of more 11-18 percent year-over-year for Vietnam, Myanmar, the Philippines, and Sri Lanka in 2014.

“The dispersion of low-end manufacturing out of China is re-shaping trade routes in Asia and is driven by Chinese manufacturing wage rates that are nearly double that of other emerging Asia countries, given the renminbi’s average 10 percent appreciation against competing Asian exporters in the past two years,” the Barclays note said.

Shipping line executives told JOC.com recently that China’s slowdown was not expected to hurt their container volumes, a position supported by analyst predictions of throughput growth on important routes, such as Asia-U.S and Asia-Europe.

JOC Economist Mario Moreno expects total U.S. import volume in 2015 to increase 6.8 percent to 20.2 million TEUs compared to 2014. Drewry Maritime Research is predicting container shipping volumes will grow 5.5 percent across major trade lanes in 2015, except Asia-Europe that will see growth of 3.5 percent, while Clarkson Research Services expects global container trade to increase 6.7 percent this year, with a 7 percent year-over-year growth in Asia-Europe.

The consensus is that exports from China will continue to post increases, but its future will increasingly be tied to other emerging Asian economies, Barclays noted.

“In our view, export-led economic development in emerging Asian economies is a necessary step for China to maintain even modest 5-10 percent export growth for the rest of the decade. Furthermore, the collapses in oil and other commodity prices are likely to impair demand for Chinese exports to commodity-centric economies, which accounted for 21 percent of total Chinese exports in 2014,” the bank report stated.

“If we exclude the more developed North Asian economies, China’s exports to the rest of Asia grew from 14 percent of total exports in 2007 to 26 percent in 2014, on our estimates, and will be critical demand drivers in 2015.”

Barclays said the changing regional trade patterns posed a key risk to Chinese port operators, while ASEAN ports were well placed to capture the structural shift as Chinese manufacturers relocated factories to Southeast Asia.

Contact Greg Knowler at gknowler@joc.com and follow him on Twitter: @greg_knowler.

http://www.joc.com/rail-intermodal/class-i-railroads/union-pacific-railroad/taps-fritz-ceo_20150205.html

Top 10 Chinese companies to look out for in global market in 2015

No 1 Lenovo

Lenovo Group got known worldwide for its acquisition of IBM’s ThinkPad division in 2005. The year 2014 also saw the company’s two major acquisitions in the US: Motorola Mobility and IBM’s x86 enterprise server division.Lenovo chairman Yang Yuanqing said the company can become a global information technology giant if it uses its global resources in an optimal manner.

No 2 Dalian Wanda

China’s real estate developer Wanda acquired US cinema chain AMC Entertainment at $2.6 billion in 2012, drawing worldwide attention.

The company announced an investment of 45 million euros ($52 million) for a 20 percent of stake in the Spanish football Club Atletico Madrid, marking the first time that a Chinese company has invested in a top flight European football club, chinadaily.com.cn reported on Jan 21.

No 3 Fosun

Chinese conglomerate Fosun International Ltd is moving into the US property and casualty insurance market by acquiring Meadowbrook Insurance Group for about $433 million, China Daily reported on Jan 1, citing chairman Guo Guangchang.

No 4 Huawei

The company exhibited over 100 products at the 2015 International Consumer Electronics Show (CES) held early this month in Las Vegas.

The showcased products include Huawei’s latest flagship smartphones, wearable devices, tablets, mobile access devices, home access devices, smart home devices, OTT and vehicle-mounted modules.

No 5 Wanxiang

The Chinese auto parts producer has acquired more than two dozen companies in North America since opening its overseas headquarters there in 1994, according to Joel Backaler.

Wanxiang acquired the assets of stylish electric car pioneer Fisker Automotive for $149.2 million in a US bankruptcy auction in February, 2014.

No 6 Alibaba No 7 Xiaomi No 8 Baidu No 9 Tencent No 10 Bright Food

http://en.people.cn/business/n/2015/0123/c90778-8839915.html

China’s port project in Greece not affected by privatization reversal

ATHENS — Chinese shipping conglomerate COSCO Group will continue to run two container terminals of Piraeus port in Greece under a 35-year concession agreement, after Greece’s newly elected government has decided to halt its privatization, an official with the COSCO subsidiary in Greece said on Wednesday.

On Monday, left-wing SYRIZA party leader Alexis Tsipras was sworn in as Greece’s newprime minister after winning Sunday’s national elections.

One of the first decisions announced by the new government was to stop the planned sale ofa 67-percent stake in the Piraeus Port Authority (PPA). COSCO is among one of the suitorsfor the privatization of PPA.

“The public character of Piraeus port will be maintained. The privatization stops right here,right now,” Greek Alternate Shipping Minister Theodoros Dritsas told media on Tuesday.

A senior official of the Piraeus Container Terminal (PCT), a subsidiary of the COSCO, whospoke on condition of anonymity, said Dritsas was referring to Pier I and other facilities ownedby the PPA, not including Pier II and Pier III operated by PCT.

Regarding further information about the suspension, the PCT official said the company hadnot been notified on this matter and refused to comment.

Dritsas said on Wednesday the government will not proceed with PPA’s privatization,because the “entire local community opposes this plan.”

Dritsas also said that “Greek people are connected with relations of friendship and solidaritywith the Chinese people.”

China is seeking confirmation of Greece’s new government about the privatization of Piraeusport, Greece’s biggest port.

“We have noticed the reports, and are checking with Greece about the issue,” ForeignMinistry spokesperson Hua Chunying told a daily press briefing on Wednesday.

Piraeus port has been run by the PCT after the financial crisis in 2008.

Commercial traffic through the port has increased eight-fold since COSCO’s takeover,attracting international giants such as ZTE and Hewlett-Packard to use the cargo terminals aslogistics centers for their products.

See full article here:

http://www.chinadaily.com.cn/business/2015-01/29/content_19434701.htm

Chinese mainland investors by far get most EB-5 visas for US residency

People from the Chinese mainland were again the largest recipients of fast-track EB-5 visas last year, which provide wealthy foreigners access to permanent US residency. Chinese mainlanders received 8,308 visas, followed by 162 for South Koreans and 99 for people from Taiwan, according to the National Law Review.

The EB-5 program grants permanent residence in exchange for investments of at least $1 million for an ongoing project or a new business in the US that creates at least 10 or more jobs.

If the visa is granted, the investor and his immediate family, including children under the age of 21, are granted conditional permanent residence. After two years, if the investor can show that his investments have created the required number of jobs, he is granted permanent residence.

The program grants 10,000 foreign residents investor visas every year. Every country is allotted 7 percent of the 10,000, but if a country’s quota is not reached, then the remaining visas are given to applicants from other countries.

People from the Chinese mainland now account for more than 80 percent of EB-5 visas issued, compared to just 13 percent a decade ago, according to the US State Department. Last year, they received 6,895 EB-5 visas. In 2004, only 16 were granted to them.

The program is administered by an agency within the Department of Homeland Security. It is scheduled for an annual renewal by Congress in September, but is now undergoing an audit by the US Government Accountability Office (GAO), an independent watchdog for Congress.

The GAO said last year that the audit had been requested by three Republican senators: Chuck Grassley of Iowa, Bob Corker of Tennessee and Tom Coburn of Oklahoma.

Grassley replaced Democrat Patrick Leahy, a US Senator from Vermont, who was the previous chairman of the Senate Judiciary Committee and a supporter of the EB-5 program.

When the audit was announced in December, Grassley said, “I’ve had too many whistle-blowers come forward expressing concerns with the EB-5 program, to not have some trepidations with it.”

Federal agencies have raised national-security concerns, he said, and efforts have been made at the request of politically influential people to expedite visa requests. “There are a number of flaws in the program itself and in how the program is run,” he said. “The GAO can help Congress sort through the vulnerabilities as we look at reauthorizing the program.”

EB-5 visas have become a critical source of capital for high-profile urban-development projects in several cities. In New York, the development of the Hudson Yards in Manhattan and projects near the entertainment and sports arena Barclays Center in Brooklyn have raised money through the EB-5 program.

“The results of the Government Accountability Office audit will impact the debate on the future viability of the program and its reauthorization,” said Jennifer Magalhaes, associate at Reed Smith law firm.

“As we approach September, any uncertainty surrounding extension of the program, coupled with a strengthening US dollar, may prove to be a disincentive to foreign investors, frustrating EB-5 financing opportunities for real estate developers,” Magalhaes wrote on Lexology, a law intelligence database.

In New York City, the development of the Hudson Yards in Manhattan and projects near entertainment and sports arena Barclays Center in Brooklyn have raised money through the EB-5 program.

amyhe@chinadailyusa.com

http://www.chinadaily.com.cn/world/2015-01/23/content_19390100.htm

US retains status as Japan’s largest export market

In a sea change in Asia-Pacific trade among the world’s three largest economies, the United States retained its status as Japan’s biggest export market for the second year in a row in 2014, edging out China.

http://www.joc.com/international-trade-news/trade-data/us-retains-status-japans-largest-export-market_20150127.html

Upcoming Senate and House Hearings on 2015 U.S. Trade Policy Agenda

Upcoming Senate and House Hearings on 2015 U.S. Trade Policy Agenda

 

Both the Senate Finance Committee and the House Ways and Means Committee announced hearings on the 2015 U.S. trade policy agenda with United States Trade Representative (USTR) Michael Froman.

 

Senate Finance Committee Hearing

Tuesday, January 27, 2015

10:00 AM

215 Dirksen Senate Office Building

 

House Ways and Means Committee Hearing

Tuesday, January 27, 2015

2:00 PM

HVC 210

http://nftc.org/default.asp?id=1

U.S. Customs and Border Protection’s Centers of Excellence and Expertise Becoming Fully Operational

WASHINGTON—U.S. Customs and Border Protection (CBP) Centers of Excellence and Expertise (Centers) for Electronics; Petroleum, Natural Gas & Minerals; and Pharmaceuticals, Health & Chemicals will transition beyond the test phase and into a fully operational status beginning Jan. 28.

“The Centers for Excellence and Expertise are transforming the way CBP processes trade and works with the international trade community,” said R. Gil Kerlikowske. “All trade processing will now be performed under the authority of the respective industry center instead of at one of the hundreds of CBP ports of entry resulting in a more efficient process that will increase U.S. economic security.”

To assume all trade functions within their respective industry, the Centers will use an internal legal order to execute an incremental expansion in three phases over the next six months.  Each phase will consist of assuming trade functionality from key ports of entry while also bringing on the trade staff in a full time capacity at those locations to support the transition of work.

Expanding these Centers beyond the test program will allow CBP to fully implement the Centers by transitioning all post-release trade work within their respective industries.  These changes, beginning with the three Centers and in due course for the remaining seven, will have major positive impacts on trade and customs revenue functions by reducing costs to the trade, enhancing governmental efficiencies, and promoting uniformity of treatment.

The Center integrates management-by-account principles and allows CBP trade personnel to specialize in a key industry, building advanced knowledge in the intricacies of particular products and processes.  Transforming how CBP processes trade will provide for a more effective use of trade resources, reduction in transactional costs for the trade and CBP, increased uniformity methods at the industry level, and enhanced ability to identify high-risk commercial importations.

CBP has designated the following 10 Centers of Excellence and Expertise, each covering an entire industry spectrum and managed out of the corresponding CBP field office:

  • Agriculture & Prepared Products, Miami;
  • Apparel, Footwear & Textiles, San Francisco;
  • Automotive & Aerospace; Detroit;
  • Base Metals, Chicago;
  • Consumer Products & Mass Merchandising, Atlanta;
  • Electronics, Los Angeles;
  • Industrial & Manufacturing Materials, Buffalo;
  • Machinery, Laredo;
  • Petroleum, Natural Gas & Minerals, Houston; and
  • Pharmaceuticals, Health & Chemicals, New York.

For more information on the Centers, please visit cbp.gov.