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Category: Asia

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Wal-Mart executives resign in China labeling scandal


Wal-Mart said Monday it was replacing the head of its operations in China, the giant U.S. retailer's latest setback in the country after employees were arrested and detained last week in the western city of Chongqing in connection with a labeling scandal.

The company said in a statement posted on its website that Ed Chan, its chief executive in China since 2007, was leaving the company for personal reasons. Clara Wong, a senior executive for human resources, was also stepping down, the statement said.

Though Wal-Mart did not link the personnel moves to the controversy in Chongqing, the company continues to deal with fallout from charges that it sold about 140,000 pounds of pork over the last two years that was mislabeled as a more expensive organic variety. The added cost to consumers amounted to about $115,000, according to the city government's website.

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Chinese inflation remains high amid signs of economic slowdown

Inflation in China moderated in September for the second consecutive month, but still remained stubbornly high amid growing signs of a global slowdown.

China’s consumer price index, the main gauge of inflation, grew 6.1% from a year earlier, down slightly from a 6.2% rise in August.

The index remains far above the 4% annual target set by the central government, making it difficult to loosen monetary policy if China’s economy is pulled into a global decline.

There’s evidence that the world’s second-largest economy may be slowing down.

Trade data released Thursday showed Chinese exports decreased in September over slackening European demand and a strengthening yuan, the country’s currency.

Prices for crude oil and copper fell on news of the data, reflecting jitteriness in China’s ability to import commodities as voraciously as it has in the past.

Meanwhile, thousands of small businesses in China’s coastal provinces are reportedly being squeezed by the country’s credit crunch. China’s State Council said it would support the small firms by increasing loans and offering tax breaks.

But central leaders say reining in inflation remains an overall priority –- dulling expectations that policymakers will loosen credit, drop interest rates or lift buying restrictions in China’s stagnant residential property market.

“For the moment, we remain in policy stasis -– no more tightening, but no real loosening -– while Chinese authorities nervously eye developments in the Eurozone,” said Alistair Thornton, an analyst for IHS Global Insight in Beijing. “It is the Eurozone and U.S. that form the greatest downside risk for China’s outlook.”


China’s trade surplus narrows in September

China calls on U.S. to oppose currency legislation

Senate OKs sanctions for nations holding down currency values

-- David Pierson

Photo: Customers look at prices for vegetables at a supermarket in Hefei, China. Credit: Reuters

California winemakers hail South Korean trade agreement


California grape growers and vintners are excited about ratification by Congress of a free-trade agreement with South Korea.

The treaty calls for the immediate removal of a 15% Korean tariff on California wine and 45% import duty on grape juice concentrate. Korean excise, value-added and other taxes on California wines also will be lowered, making the products more attractive and affordable to Korean consumers.

California accounts for 90% of all U.S. wine exports to South Korea, which totaled 500,000 cases worth $11.2 million last year.

Korea has a significant wine-drinking culture, with import consumption growing 177% in the last decade, said Robert P. "Bobby" Koch, president of the Wine Institute, a trade group based in San Francisco.

California long had been the second biggest exporter of wine to Korea, behind France. However, Chile surpassed the Golden State in 2005 after the South American nation signed a trade agreement with Korea that sharply lowered import duties. The European Union signed its own treaty with Korea, which became effective on July 1, boosting the likelihood of increased wine sales.

The U.S. action Wednesday is expected to make California wines more competitive in the growing Korean market.


Redwoods versus red wine

Farm brings every muscat imaginable

New law bans self-service alcohol sales

-- Marc Lifsher

Photo: Foley Winery in Santa Ynez Valley. Credit: David Langford / Associated Press

China's trade surplus shrinks on weakened global demand

China's trade surplus narrowed in September
For the second consecutive month, China's trade surplus narrowed in September on slower growth in imports and exports, reflecting a weakening global economy.

Trade data released Thursday showed Chinese exports rose 17.1% last month from a year ago, down from 24.5% growth in August. Meanwhile, imports grew 20.9% from a year ago, compared with 30.2% in August.

Demand for Chinese exports was hit especially hard in financially troubled Europe. Exports to the continent grew 9.8% in September from a year ago, compared with 22.3% in August.

Exports to the U.S. grew 11.6% year-on-year in September, tapering slighting from a 12.5% gain in August.

"China's export growth is feeling the chill from the intensifying crisis and weakening demand from the West," economists at HSBC said in a research note.

China’s trade surplus shrank to $14.5 billion in September, compared with $17.8 billion in August and $31.5 billion in July.

That could ease some of the international pressure on Beijing to quickly raise the value of its currency, known as the yuan and renminbi.

A U.S. bill that passed the Senate and is now before the House would slap import tariffs on countries such as China if they're found to have weakened their currency to create an unfair trade advantage. 

The yuan was set at an all-time high against the dollar on Tuesday before the Senate vote on the tariff bill, at 6.348. It has crawled down slightly Thursday to 6.373.

Brian Jackson, a senior strategist for the Royal Bank of Canada, said the focus on the yuan exchange rate against the dollar ignores China's loss of trade competitiveness with other countries besides the U.S.

"Although the yuan has stalled against the dollar since mid-August, it has appreciated considerably against the euro and other Asian currencies over this period, so in trade-weighted terms China's currency has strengthened significantly over the last two months," Jackson wrote in a note to clients.

He added: "So although Washington is ramping up the pressure on Beijing to move faster on the currency, Chinese officials will be able to cite today's data as evidence that exporters are already feeling the pinch from the recent appreciation of the yuan in trade-weighted terms."

Currency appreciation aside, Chinese exporters have been under intense inflationary pressure and worsening credit shortages. Hundreds of companies in coastal provinces are reportedly closing. 

Speaking to reporters after releasing the trade data, Vice Customs Minister Lu Peijun said several uncertainties threatened the stability of exports for the rest of the year, chiefly demand from the West and yuan fluctuations. 


China calls on U.S. to oppose currency legislation

Visiting the U.S. from China means a long visa wait

Senate OKs sanctions for nations holding down currency values

-- David Pierson

Photo: Trucks are driven into a shipping container area at Qingdao port, Shandong province. Credit: Reuters

Stocks fall in eurozone as U.S. jobs report adds to investor worries


On Monday, Asia's stock market took a tumble, and markets in the European Union followed suit with falls of their own.

The reason for the beating taken by the foreign markets centered largely on fears that the U.S. is sliding back into a recession after a Friday report that the nation added no new jobs in August and kept its unemployment steady 9.1%. Another factor is worry over the ongoing European debt crisis, according to a report from the Associated Press.

Reactionary market declines could be seen across Europe on Labor Day as the U.S. stock market was closed. Germany's DAX index fell 5.28%, France's CAC 40 fell 4.73%, the FTSE 100 in London fell 3.58%, and the Euro Stoxx 50 fell 5.11%.

Retail sales across the 17-nation eurozone saw a surprise increase in July, but a report on the E.U.'s services sector released Monday revealed a slowdown across Europe for the fifth consecutive month, the AP said.

"The purchasing managers' index for the eurozone showed the services sector was still growing -- unlike the manufacturing sector -- but only barely," the AP said. "That will add pressure on the European Central Bank to keep interest rates on hold when it meets this week."

The souring economic situations in Asia, Europe and the U.S. are leaving investors with "so much uncertainty, so much fear, that investors don't know what to do," David Kotok, chairman and chief investment officer at Cumberland Advisors, told the AP. "I don't remember the last time stocks were so cheap and nobody wanted them."

More evidence of investor worries were evident as well.

"The difference in interest rates between the Greek and benchmark German 10-year bonds, known as the spread, spiraled to new records on Monday, topping 17.3 percentage points," the AP said. "Yields on the Greek bonds were above 18%."

President Obama is set to give a major speech Thursday night in which he is expected to lay out proposals seeking to spark job creation. Obama previewed his speech in Detroit on Monday, saying the Republican Party will be publicly held accountable if its members don't support his job-creation plans.

From Monday's slumps in Asia and Europe, it's clear that investors on those continents will be watching to see whether Obama and U.S. lawmakers can turn the tide and stave off another recession.


U.S. job growth ground to a halt in August

Asian shares tumble on grim U.S. jobs report

World stock market tally for August: 2 up, 43 down

-- Nathan Olivarez-Giles

Photo: Traders in Frankfurt, Germany. Credit: Michael Probst / Associated Press

Asian shares tumble on grim U.S. jobs report

South Korean currency trader; Asian shares tumble

Asian shares suffered heavy losses Monday, the first day of trading after last week's bleak U.S. jobs report intensified fears of a global recession.

Japan's Nikkei 225 index was down 1.8%, Hong Kong's Hang Seng index lost about 3% and South Korea's Kospi nosedived 4.4%.

China's benchmark stock index slumped 2% to close at a 13-month low on fears the government would continue to tighten monetary policy.

Chinese Premier Wen Jiabao said last week that stabilizing consumer prices is the government's chief priority.

At a news conference in Beijing on Monday, World Bank President Robert Zoellick said inflation remains China's biggest short-term risk.

The former U.S. deputy secretary of State was meeting Chinese leaders in preparation of a joint report to be released later this year outlining steps China needs to take to rebalance its economy away from exports and investment and toward domestic consumption.


Job growth grinds to a halt

World stock market tally for August: 2 up, 43 down

2011 shaping up to be worst year ever for new home sales

-- David Pierson

Photo: A South Korean currency trader covers his face with his hands in front of screens Monday. Credit: Ahn Young-joon / Associated Press

Asian shares join global slide in early trading

Asian Stocks
Asian stocks fell in early trading Friday after steep losses in European and U.S. markets over intensifying debt concerns and poor economic data.

Japan's Nikkei 225 index fell 2.1% shortly after opening, South Korea's Kospi was off 4% and Australia's SP/ASX 200 dropped 2.6%.

Analysts said Asian investors were concerned about U.S. data that showed declining home resales and business activity.

"Investors have been spooked by these data. They are now focusing on next week's data such as U.S. GDP," Yumi Nishimura, a senior market analyst at Daiwa Securities, told Reuters. "Retail investors may buy defensive stocks on dips, but such buying may not have an impact on the overall index."  

-- David Pierson

Photo: Foreign currency dealers talk at the Korea Exchange Bank in Seoul on Monday. Credit: Truth Leem / Reuters

Asian markets close day of mixed trading

Asia Stocks
Trading was mixed in Asian markets Thursday as investors remained jittery over the European debt crisis and faltering global economy.

Japan's Nikkei 225 stock average fell 0.6% to 8,981.84 on a day of wild swings for the yen. Hong Kong's Hang Seng index declined 1% to 19,595.14, Taiwan's Taiex lost 0.2% to 7,719.09 and Australia's S&P/ASX 200 index ended down 0.5% to 4,140.8.

Advancing were China's Shanghai Composite Index, which gained 1.3% to 2,581.51, and South Korea's Kospi, which rose 0.6% to 1,817.44, the second day of gains after the country's Financial Services Commission banned short selling.

The regulating agency's chairman said on a radio program Thursday that South Korea would fare better than it did in the 2008 financial crisis if another global recession were to arise, Reuters reported.

-- David Pierson

Photo: Pedestrians are reflected on a display board showing the current Nikkei share average in Tokyo. Credit: Kim Kyung-Hoon / Reuters


Asian stocks dive in early trading

Asian Stocks
Asian stocks joined the global sell-off in early trading Thursday, mirroring the renewed panic on Wall Street a day earlier.

Within about 20 minutes of opening, Japan's Nikkei 225 stock average sank 1.6%, South Korea's Kospi index fell 2% and New Zealand's NZX-50 was down 0.7%.

Asian shares saw major gains Tuesday but appear just as concerned about Europe's debt crisis that rattled U.S. markets hours earlier.  

Photo: Foreign currency dealers talk at the Korea Exchange Bank in Seoul on Monday. Credit: Truth Leem / Reuters

China's trade surplus surges

China trade surplus
China's trade surplus in July swelled to its highest level in more than two years on the strength of European demand and Asian emerging markets, but could decline if the global economy continues to weaken.

The country's trade surplus rose to $31.5 billion in July, the biggest gap since January 2009, and up from the $22.3-billion surplus registered in June, China reported Wednesday.

Chinese exports grew 20.4% from a year ago, to $175.1 billion, the strongest performance since April. Meanwhile, imports rose 22.9% from a year ago, to $143.6 billion. 

Growth in shipments to Europe doubled between July and June, and exports to Japan saw solid recovery. Sales of Chinese goods to developing countries in Asia, such as Vietnam and Indonesia, continued to strengthen.

Economists warned that the trade numbers could sour with this week's battering of financial markets possibly triggering another global recession.

"The better export and import growth from China may offer some [temporary] relief to the jittery market, though their outlooks look more uncertain as global market turmoil and expected weaker global growth prospects also point to downside risks to China's trade and economic growth," wrote Jian Chang of Barclays Capital Research in a note to clients Wednesday.

The unexpectedly high trade surplus could worsen trade tension and bolster calls for China to appreciate its currency.

The yuan rose a 17-year high against the dollar Wednesday morning at 6.4170. Analysts say China may be compelled to strengthen the yuan further to help tackle the country's highest inflation in 37 months.

-- David Pierson


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Photo: Container vessels are loaded with cargo at the port of Qingdao in eastern China's Shandong province. Credit: Wu Hong / EPA

Asian markets recover after early losses

Asian stock markets

Asian stocks rebounded after a volatile day of trading Tuesday that sent markets nosediving in the morning before clawing back to more stable territory.

Japan's Nikkei 225 stock average closed down 1.7%,to 8,944.48, after losing more then 4% earlier in the day and briefly reaching its lowest level since March 15, the aftermath of the nation's devastating earthquake and tsunami.

Mitsubishi UFJ Financial Group fell 3.2% and Canon, the world's largest camera maker, slid 1.9%. Inpex Corp., Japan's biggest oil-exploration company lost 5.5% in response to falling oil prices, which dropped to $78 a barrel amid a dumping of commodities.

Trading swung even more wildly on Australia's S&P/ASX 200 which hit a two-year low in the morning before turning around at noon to end the day with a gain of 1.2%, to 4,034.80.

Analysts told the Australian Associated Press that investors returned to buying after China's consumer price index data showed non-food inflation declining, delaying the prospects of another interest rate hike in Beijing. Australia is a major supplier of commodities to China.

South Korea's Kospi fell by as much as 10% only to recover for a loss of 3.6%, to 1,801.35, at its closing. The index, which was battered by fleeing foreign investors, was being bolstered later in the day by public institutions and pension funds, the Wall Street Journal reported.

Hong Kong's Hang Seng was trading down 1.9% by late afternoon, a significant improvement from the morning when investors were spooked by China's inflation report showing year-on-year consumer price growth at a 37-month high.

-- David Pierson


Dow tumbles 634 points on recession fears

Treasury bond yields plunge as panicked buyers ignore downgrade

Oil reaches a 2011 low; gasoline prices should fall

Photo: A woman is reflected on an electronic stock indicator in Tokyo. Credit: Shizuo Kambayashi / Associated Press


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