Exploring and keeping readers up to date with the growing economic and political ties between China and South America. Including all the good stuff: Commodities, Energy, International Finance, South-South Cooperation, Microfinance and more
SAN JOSE — China and Costa Rica concluded the fourth round of negotiations in Beijing aimed at reaching a free trade agreement, according to the foreign trade ministry.
Costa Rica -- which gave up six decades of ties with Taiwan in favor of China two years ago -- is the third Latin American country to negotiate a free trade deal with China, after Chile and Peru.
In the round of talks that ended Thursday agreements were reached for more than 90 percent of each country's exports, the trade ministry said.
Costa Rican exports include coffee, bananas, fruit juices, cigars, pork, beef and chicken, said Costa Rican chief negotiator Fernando Ocampo...
On the road today updating from my handheld again and feeling incredibly cool and sophisticated, all while reinforcing the popular belief that we are indeed way too dependent on technology these days.
Here are two short excerpts from different Bloomberg articles which shed some light on the true health and capacity of the Chinese economy. What should you take away if you decide to click through to Bloomberg and read the entire articles? Basically that China is a economic powerhouse and still has room to grow. Likewise, it is not a cure all to the woes of the global economy.
This is important to realize because the government in China will do all it can to produce good economic news, sometimes misleading the international investment community. But hey! Most countries do too. ChinaSouthAmerica, as it always does encourages readers to form own opinions and always try to read in between the lines.
China failed to complete a 28 billion yuan ($4.1 billion) government bond sale for the first time, as the central bank withdrew cash from the financial system to reduce inflation pressures.
The Ministry of Finance sold 27.5 billion yuan of one-year notes at a yield of 1.06 percent, compared with 0.89 percent at the last auction of similar-maturity debt in May, according to Chinabond, the nation's biggest debt-clearing house. Later, the People's Bank of China it said will resume the sale of one-year bills tomorrow after an eight-month suspension.
"The failure to sell all government bonds in an auction is quite rare," said Nie Shuguang, a fixed-income analyst at Industrial Bank Co. in Shanghai. "Investors are worried the central bank will fine-tune its monetary policy and drain capital from the financial market."
Chinese stocks may be headed for a "sizable correction" after a so-called momentum indicator for the Shanghai Composite Index advanced to the highest in at least five months.
The 14-day relative strength index, or RSI, for the Shanghai Composite climbed to 83 this week, above the 70 threshold that signals to technical analysts an asset or market is poised to fall. The indicator compares the magnitude of recent gains to losses. The last time the Shanghai gauge's RSI breached the 80 level, in February, the stock measure sank as much as 13 percent in following two weeks.
"The RSI shows that the market is in a pretty overbought situation," said Barole Shiu, a Hong Kong-based technical analyst at UOB-Kay Hian Ltd. "If history repeats itself, there's a very strong chance we'll see a sizable correction."
Financial regulators in Hong Kong and Taiwan agreed to allow cross-listing of exchange-traded funds in the two markets, Hong Kong’s Securities and Futures Commission said on its Web site yesterday.
Taiwan’s closer ties with China may help its economy recover more quickly from a record slump, boosting confidence, investment and its ability to benefit from growth in the mainland...
“Taiwan is well-positioned to benefit from the improving cross-strait ties, especially with China expected to come back robustly from this economic crisis,” said Prakash Sakpal, an economist at ING Bank NV in Singapore. “Demand from China will be a good buffer.”
Just when the world is beginning to appreciate China’s biggest banks, unencumbered by Wall Street assets of no discernible value and fortified by record first- quarter lending, some analysts say it’s too good to be true.
While Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Bank of China Ltd., three of the world’s four largest banks by market value, led an increase in lending focused on investments in railways, roads and ports, similar state-directed loans caused bad debts to snowball in the 1990s. The resulting rescue cost $650 billion and took 10 years.
“We suspect some of the banks may have compromised their risk-management and risk-aversion attitude to meet targets and government expectations,” said Wen Chunling, a Beijing-based analyst at Fitch Ratings. “That will lead to a rebound in non- performing loans in the next few years.”
Southeast Asian finance ministers and their counterparts from Japan, China and South Korea may complete discussions on a currency pool agreement this weekend amid signs the worst of the region’s economic crisis may be over.
Officials from 13 countries are gathering in Bali on May 3 to finalize each nation’s contribution to the $120 billion pool of foreign-exchange reserves that can be used to defend their currencies in times of financial turmoil. They will meet at the sidelines of the Asian Development Bank’s annual meeting on the Indonesian resort island.
“As recent as a few months ago, there were expectations that at least one country will need to tap the reserve pool for funds before this crisis is over,” said Vishnu Varathan, a regional economist at Forecast Singapore Pte. “With signs that the slowdown is easing and of stability in the financial arena, that seems unlikely now.”
AUSTRALIA will register a revenue write-down in the Federal Budget of more than $115 billion due to the global financial crisis, Treasurer Wayne Swan says.
"Certainly, there's been a revenue write-down because of the global recession between the last Budget and February of about $115 billion,'' Mr Swan told reporters in Sydney.
Because of slowing growth, the global recession had become worse and there would be further revenue write-downs in next month's Budget, he said.
The election of left-leaning Mauricio Funes in El Salvador is not about to cause the country to dismantle private property laws, retreat on free trade or any of the other major fears associated with left-wing politics.
Funes will however finally move El Salvador from Taiwan's speed-dial to that of the People's Republic of China (the Mainland).
Taiwan maintains official diplomatic relations with roughly 23 countries around the world, a good handful of which are in Central and South America. Taiwan has typically been able to maintain these relations thanks to "money diplomacy."
China may be a huge economy, but by and large it is still relatively poor and filling the void of billions of Taiwanese aid $'s hasn't been on the top of China's agenda, especially for the countries that have bananas to offer in terms of commodities (instead of metals or energy).
Experts seem to think Taiwan's best bet is to attempt to achieve some type of "dual recognition," meaning acknowledging the coexistence of both the PRC and the Republic of China on Taiwan. Making for "two Chinas" or "one China, one Taiwan" stance.
Hey Taiwan! I love you and think your country is a wonderful place and you have all the right to fight for what you believe... but common' get real.
As you can see in this previous post, when the PRC visits leaders in Africa and Latin America one of the first courteous gestures is to emphasize the given countries dedication to support the the PRC's "one China" policy.
SINGAPORE: Singapore’s financial institutions are well capitalised and regulated by the Monetary Authority of Singapore (MAS), says Finance Minister Tharman Shanmugaratnam.
He was speaking to reporters on Sunday at a community event where he joined Muslims to break fast.
Mr Tharman said: "We are glad that overall, if you look at what is happening in Singapore compared to other financial centres, confidence in the market has been retained."
But Mr Tharman said a technical recession — defined by two consecutive quarters of economic contraction — is possible in Singapore.
Nonetheless, he cautioned that it is important for Singapore not to have any knee—jerk reactions, and to continue to monitor the global financial situation closely before announcing any plans.
Singapore’s non—oil domestic exports in August fell 13.8 per cent from the same month in 2007, the largest drop in the last year.
And with the current financial crisis, economists expect this figure to fall even further as global demand slows...
HONG KONG (AP) -- Asian markets rose Monday after the U.S. government proposed a US$700 billion plan to solve the world financial crisis by rescuing banks from billions of dollars in risky mortgage debt.
In Japan, the Nikkei 225 index climbed 1.4 percent to close at 12,090.59 points , while Hong Kong's Hang Seng index rose 1.2 percent.
In China, the Shanghai Composite Index soared 7.8 percent on hopes of a turnaround after government steps to stabilize the country's beaten down shares.
Markets in Australia and Taiwan advanced strongly after regulators in both countries issued curbs on short selling, following similar moves in the U.S, Britain and other countries. The practice, which bets on a stock's decline, has been partly blamed for driving down share prices.
Global markets had rallied Friday on news Washington was likely to announce a bailout plan, calming investors worried that losses from bad bets on mortgages could bring about the collapse of more companies, straining an already weakened financial system and global economy...
With the U.S. economy continuing to show weak results, Latin America is increasingly betting on Asia. Latin American exporters have found eager markets in countries like China, Japan and India, while Asian companies, in turn, are boosting their exports to Latin America.
"The growth of Asia will drive the business with Latin America," says R. Viswanathan, India's ambassador to Argentina, Uruguay and Paraguay and widely considered India's leading expert on Latin America. “Both governments and business have started looking at the potential for complementary cooperation between the two regions....
"Trade will grow despite short-term commodity price fluctuations because demand in Asia remains high for Latin America’s resources," says Michael Diaz, managing partner at U.S.-based law firm Diaz Reus, which serves many clients involved in Asian-Latin American business....
*** You must be a full member of the Latin Business Chronicle to access the full article. Click here for the free expert
The three companies will develop the project in the southeast of Bolivia, where Total is already producing natural gas from six wells, the spokesperson said.
Production from the project could reach 26Mm3/d.
Click here to access the full article from Business News Americas
Sao Paulo, Sep. 18 (ANDINA).- President Alan García held Thursday evening a meeting with his Brazilian counterpart, Luiz Inácio Lula da Silva, to discuss about bilateral relations and the possibility to attract more investments to Peru....
President Alan Garcia and his Brazilian counterpart Luiz Inacio da Silva in San Paulo. Photo Sepres
García said Thursday morning that during the meeting he will propose to his Brazilian counterpart “a reinforced bilateral agreement”, a kind of Free Trade Agreement (FTA), which will include speeding up a tariff exemption process.... Click here to access the full story in english from Andina News
SAN JOSE — China and Costa Rica concluded the fourth round of negotiations in Beijing aimed at reaching a free trade agreement, according to the foreign trade ministry.
