According to an article in Tuesday’s Financial Times:
China will reduce export taxes to zero and give more financial support to exporters as it tries to increase its share of global trade in the current crisis, the country’s commerce minister announced on Monday. China would “use all possible measures to ensure the stable growth of our exports and prevent a large drop in external demand”, Chen Deming said in an interview published by a Communist party newspaper. “We should increase our share of the global market… We must transform ourselves from a big export nation to a strong export nation,” he continued.
According to an article in Bloomberg:
China’s investment spending surged as the nation poured money into roads, railways and power grids to counter a plunge in exports, which a separate report showed fell by a record in February. Urban fixed-asset investment climbed a more-than-estimated 26.5 percent in January and February combined to 1.03 trillion yuan ($150 billion) from a year earlier, the statistics bureau said today in Beijing.
More unambiguously good news involved February car sales, which are up substantially and suggest that some government policies are getting consumers to go back to buying cars, although this was accompanied by bad numbers on car exports.
The mainland’s sales of domestically made vehicles surged 25 per cent in February from a year earlier, as a tax cut for small cars and other measures helped revive the market, an industry group said on Wednesday. February’s sales totalled 827,600 units, up 12 per cent from the 735,000 sold in January, the China Association of Automobile Manufacturers said in a report posted on its website. Production in February totalled 807,900 units, up about 23 per cent from the year before, it said.
…However, despite the apparent rebound in China’s own car market, a slump in demand is crimping sales overseas: exports in January fell 33.5 per cent from a year earlier, to US$2.66 billion, the group said. The impact was most severe for domestic-brand cars, with January exports falling 64 per cent from a year earlier to 16,300 units, it said. Imports of vehicles also took a hit amid the deepening economic downturn, falling 20.3 per cent from a year earlier in January to US$1.73 billion, it said.
Economists said they believe China would be able to keep its growth at about 8 percent this year, a growth rate long believed to be minimum to create enough jobs and maintain social stability. However, they said it is wild wish to count on the country alone to fuel the global recovery, as China’s economy accounted for only five percent of the world’s total.
Price Waterhouse Coopers has a World Steel Forecast out to 2020 made after the credit crisis hit.
Key Barriers to the 2020 Projection on Steel
1. War of mining assets
2. Continuous shortage of funding capital
3. Shortage of Energy Supply in China
4. Tightening regulations (environmental)
Car Production Forecast
International Herald Tribune: Feb, 2009. Nissan pins hopes of growth in China
China’s automotive industry exhibited the first signs of a slowdown from its rapid double-digit growth of earlier years in 2008. According to BMI’s recently published China Automotives Report, the sales milestone of 10 million units, which had initially been forecast for the year, was not met after sales began to feel the full impact of the financial crisis in the latter months of the year. In November overall market sales fell by 16%, led by a 26% contraction in the previously strong commercial vehicle segment and a 10% drop in passenger car sales. BMI estimates that sales finished the year up by just 7% and forecasts a similarly difficult year in 2009 with growth dropping to around 5%. We now expect it will be 2010 before the market reaches the 10million units mark.
In a further blow to the industry, the World Trade Organisation (WTO) upheld a ruling from July that declared China’s tariffs on imported automotive parts a contravention of membership regulations. China currently charges the same import tariff on kits as on completely built units (CBUs), unless 60% or more of the content in a completed vehicle is domestic content.
As developing economies overtake advanced economies, consumer markets in the emerging countries will rise in importance. From tourism to household appliances, consumer goods and services companies are expected to shift their attention to new consumers.