China economic growth accelerates

China has said it is on track to hit its growth target of 8% this year, after the economy grew 8.9% from a year ago in the third quarter.

The figure is up from the 7.9% rate seen in the previous quarter and is the country's fastest GDP growth since the third quarter of last year.

Separate reports show that industrial production and retail sales also accelerated in September.

The economy grew by 7.7% in the nine months to September.

Retail sales growth was 15.1% in the first three quarters of the year, the National Statistics Bureau said.

China's car market has become the world's largest, with sales up 34% to 9.66 million vehicles in the first nine months of the year.

US criticises 'inflexible yuan'

The US Treasury has criticised China for what it described as the lack of flexibility of the Chinese currency, the yuan.

It also criticised the rapid build-up of China's foreign exchange reserves in a report to the US Congress.

The Treasury said it had serious concerns about the rigidity of China's exchange rate.

But it stopped short of accusing China of currency manipulation, a politically contentious issue in the past.

"Both the rigidity of the renminbi and the reacceleration of reserve accumulation are serious concerns which should be corrected to help ensure a stronger, more balanced global economy consistent with the G-20 framework," the Treasury report said.

Google China chief leaves company

The man who led Google's expansion into China is leaving the company to start his own business.

Lee Kai-Fu, who joined from Microsoft in 2004, will step down as president of Google in greater China in September, the company said.

When he joined, Microsoft sued Google and Mr Lee, claiming he had violated an agreement that prohibited him from working for a rival for one year.

The two sides later settled out of court, without releasing details.

Mr Lee went on to become the face of Google China.

But during his reign Google China had a difficult relationship with Beijing censors.

In June, access to Google in some parts of China was disrupted, amid a row over what Chinese citizens should be allowed to view over the internet.

A Chinese official also accused Google of spreading pornography and breaking Chinese law.

"Kai-Fu has made an enormous contribution to Google over the last four years, helping dramatically to improve the quality and range of services that we offer in China," said Alan Eustace, Google's senior vice president for engineering.

Mr Lee will be replaced by John Liu, who currently leads its greater China sales team.

Airbus makes first plane in China

Airbus has officially delivered its first Chinese-made plane.

The aircraft, one of the firm's A320 mid-range models, was unveiled at a ceremony at the firm's factory outside the northern Chinese city of Tianjin.

The plane has been delivered to leasing firm Dragon Aviation, and will be used by Chinese carrier Sichuan Airlines.

BBC Beijing correspondent Quentin Sommerville said Airbus hopes its Chinese factory will give it a big advantage over US rival Boeing.

While Boeing makes components in China, Airbus is the first of the world's big-two aircraft-makers to have a full production facility in the country, as it aims to meet fast-growing Chinese demand for commercial aircraft.

World Bank raises China forecast

The World Bank has raised its forecast for growth in China this year from 6.5% to 7.2% amid signs that the economy is doing better than expected.

Bank analysts say the government's four trillion yuan ($585bn, £358bn) stimulus package has helped the economy.

But it says the country's exports are still down, as the rest of the world struggles with the global recession.

The World Bank believes the global economy, excluding China, will shrink by about 3% this year.

"Developments in the real economy [in China] have been somewhat better than expected three months ago," says a report published by the bank.

'No meaningful increase'

It predicted in March that the Chinese economy would grow by 6.5% in 2009, several percentage points down on last year's growth.

But the government stimulus package, and increased bank lending, has protected the economy from the worst effects of the global recession, leading the bank to raise its growth forecast.

"Growth in China should remain respectable this year and next, although it is too early to say a robust, sustained recovery is on the way," said Ardo Hansson, the bank's leading economist in China.

But it is not all good news. China's export sector has been one of the hardest hit parts of the economy and has still not recovered.

This has led to millions of migrant workers - farmers who leave their villages to find work in China's factories - losing their jobs.

"We have not had a meaningful increase in exports since last year's plunge," said World Bank economist Louis Kuijis, speaking at a press briefing to launch the bank's latest China predictions.

Some migrant workers who lost their jobs late last year told the BBC they had still not been able to find new jobs.

GM agrees Saab sale to Koenigsegg

General Motors has reached a tentative agreement to sell Saab to the Swedish sports car manufacturer Koenigsegg.

GM said that as part of the deal there would be $600m (£367m) of funding from the European Investment Bank (EIB), guaranteed by the Swedish government.

It is the latest part of GM's reorganisation, which is also set to see the Opel and Vauxhall brands going to Canada's Magna.

Saab filed for reorganisation under Swedish law on 20 February.

Koenigsegg produces 18 cars a year and employs 45 people, and there has been some doubt as to whether it has the expertise to run Saab, which sold 93,000 cars in 2008.

Saab employs about 3,400 people in Sweden and about 12,000 other jobs in the country are dependent on Saab and its suppliers.

But GM Europe's president Carl-Peter Forster said: "Koenigsegg Group's unique combination of innovation, entrepreneurial spirit and financial strength... made it the right choice for Saab as well as for General Motors

Shares rebound after test shock

Shares in South Korea suffered sharp falls following news of North Korea's nuclear test, before recovering.

South Korea's Kospi index fell as much as 6%, before rebounding strongly to end just 2.85 points lower at 1400.90.

There was little impact elsewhere in the region, with Tokyo's Nikkei index closing up 1.3% and Hong Kong's Hang Seng closing up 0.35%.

European markets opened lower, while the UK and the US markets are closed for a public holiday.

At 1000 BST France's Cac 40 index was less than 1% down at 3198.66 points. In Frankfurt the Dax was 1.2% lower at 4858.16.

GM to close up to 1,100 dealers

General Motors (GM) has announced plans to close up to 1,100 of its dealerships in the US as it desperately tries to cut costs and stave off bankruptcy.

It also plans to cut ties with another 470 Saturn, Hummer and Saab dealers.

Closures announced today represent one quarter of the dealership network. GM plans to cut the total number of dealers by 42% by the end of 2010.

On Thursday, rival Chrysler said it would be closing 789 US dealers as part of a massive restructuring programme. GM is also in negotiations with unions to reduce wage costs.

Prices in China continue to fall

China's consumer prices fell by 1.5% in the year to April, figures show, the third consecutive month of declines.

The drop came after food and energy prices eased from last year's high levels, and followed annual falls of 1.2% in March and 1.6% in February.

Food prices were down 1.3% in April from a year ago.

A key factor was the drop in the price of pork, which was down 28.6% from a year earlier. In 2008, shortages had sent pork prices sharply higher.

Costs for fuel and raw materials were 9.6% lower than the same period a year ago.

The fall in prices had been expected.

"The sharp rise in food prices in early 2008 and subsequent declines explain much of the year-on-year fall in CPI inflation," said Jing Ulrich, chairman of China equities at JP Morgan.

"Deflationary concerns appear to be subsiding as the economy shows signs of recovery."

Weak exports hit China's growth

Annual growth in China's gross domestic product (GDP) slowed in the first quarter of 2009 to 6.1%, the National Bureau of Statistics has announced.

This is the weakest growth since quarterly records began in 1992, but some analysts see signs of a recovery.

Growth was 6.8% in the last quarter of 2008, but the first quarter GDP figure dropped as exports fell 17% in March.

China's government has said it is determined to achieve annual growth of 8%, and to expand its domestic demand.

"There's little the Chinese government can do to help key markets for Chinese products in the US and Europe recover," said the BBC's Chris Hogg in Shanghai.

"That's why it's focussing on trying to stimulate domestic demand."

There has been a recognition among Chinese state officials that too sharp an economic slowdown could lead to growing unemployment and may fuel social unrest.

'Pressure'

Announcing the GDP figure, the National Bureau of Statistics (NBS) said that export demand had dropped sharply, cutting into company profits, reducing government revenues and raising unemployment.

"The national economy is confronted with the pressure of a slowdown," an NBS statement said.

China experienced double-digit growth from 2003 to 2007, and recorded 9% growth in 2008.

Analysts said the first-quarter drop in growth was in line with expectations.

But other data offered by the government suggested a tentative recovery may already be under way.

Industrial output expanded 5.1% in the first quarter. It was up 8.3% year-on-year in March, against 3.8% in January and February.

Fixed asset investment on items such as new factories and equipment was up 28.6% in March from 26.5% in February.

Spending on property development grew by 4.1% in the first quarter, and retail sales remained strong with a 14.7% growth during March.

'Surge in investment'

"Most of the indicators are better than earlier market expectations, although the annual GDP growth in the first quarter is a historical low," said Xing Zhqiang, analyst at China International Capital Corporation in Beijing.

"We expect that the most difficult time for China's economy has passed, as the surge in investment has partly offset the negative impact from declining exports."

China has started to implement a 4 trillion yuan ($585bn, £390bn) stimulus package to counter the impact of the global slowdown, and this package has been seen as helping to spur lending in the first three months of the year.

"The overall national economy showed positive changes, with better performance than expected," the NBS said.

It said that urban per-capita incomes were up 11.2% from a year earlier in real terms and that rural per-capita incomes were up 8.6%.

The consumer price index (CPI), China's main gauge of inflation, fell 0.6% in the first quarter of 2009 from a year earlier, according to the bureau.

China offers funds to boost Asean

China has unveiled plans to establish a $10bn (£6.8bn) investment fund for south-east Asian countries.

It has also offered credit of $15bn to the Association of South-East Asian Nations, or Asean.

Chinese Prime Minister Wen Jiabao had planned to announce the fund at the cancelled Asean summit this weekend.

Asean was set up in 1967 in part to counter influence from communist China but has since become a vehicle for close ties.

The collapse of the Asean summit, scheduled in Pattaya, Thailand, this weekend, delayed the conclusion of a key investment agreement between China and the economic bloc.

That deal is intended to create the world's largest free trade area, covering nearly two-billion people.

China funds

China's Foreign Minister, Yang Jiechi, announced the new funding plans in Beijing to a gathering of envoys from the 10 members of Asean - Indonesia, Singapore, Malaysia, Thailand, the Philippines, Brunei, Burma, Laos, Cambodia and Vietnam.

The $10bn investment fund was designed for cooperation on infrastructure construction, energy and resources, information and communications, China's state news agency Xinhua quoted Mr Yang as saying.

Over the next three to five years, China planned to offer $15bn in credit, including loans with preferential terms of $1.7bn in aid for cooperation projects.

China also planned to offer 270 million yuan ($39.7m) in special aid to Cambodia, Laos and Myanmar to meet urgent needs, inject $5m into the China-Asean Cooperation Fund, and donate $900,000 to the cooperation fund of Asean Plus-3, the side grouping of Asean plus China, Japan and the South Korea.

Price cap hits China oil refiner

Profits at top Asian oil refiner Sinopec nearly halved in 2008 because of caps on how much it could sell fuel for, even as oil prices soared.

Annual net profit fell 47% to 13.3bn yuan ($1.94bn; £1.35bn) from 56.5bn yuan in the same period a year earlier.

It marked the first profit decline at the state-run firm in seven years.

The loss came as the company was obliged to supply fuel at low prices set by the government, even when prices reached a record $147 a barrel.

But analysts expect margins to improve in 2009 as price caps ease and oil prices remain far below the record reached in 2008.

The firm predicts its net profit for the first three months of this year will rise by half compared to the same quarter a year earlier.

But it also warned that demand would slow further.

"The demand growth for refined oil products in the domestic market is expected to slow down," the company said.

"Due to the combined pressure of slower economic growth and a downward cyclical trend, the chemicals business will be facing more challenging situations."

While the firm saw its profits fall sharply in 2008, the government provided annual subsidies worth 50.3bn yuan.

Other firms in the sector have also been hit, with PetroChina recently saying its net profit in 2008 fell 22%.

Australia rejects China takeover

Australia has rejected a Chinese state-run firm's $1.7bn (£1.2bn) takeover bid for Australia's Oz Minerals because of national security concerns.

Australia said one of Oz Minerals' key mines was located near a weapons-testing range in the outback.

It said the bid by China's Minmetals could only be approved if the deal excluded this copper and gold mine.

The surprise move jeopardises Oz's future and clouds other Sino-Australian deals still waiting for approval.

"Oz Minerals' Prominent Hill mining operations are situated in the Woomera Prohibited Area in South Australia," Treasurer Wayne Swan said in a statement.

"The Woomera Prohibited Area weapons testing range makes a unique and sensitive contribution to Australia's national defence," he added.

Oz and Minmetals said they would look to revise the deal.

Prime asset

Prominent Hill mine is considered Oz's prime asset and analysts questioned whether Minmetals would be prepared to go ahead with the acquisition without it.

Increased investment by Chinese firms has raised hackles in Australia, which has typically been open to foreign investment.

Australian authorities have yet to decide on Rio Tinto's $19.5bn tie-up with Chinese aluminium firm Chinalco and Fortescue Metals' plan to sell a $770 stake to China's Hunan Valin Iron and Steel.

Australia extended its review of Chinalco's investment until June. Some Rio shareholders have expressed opposition to the deal.

Australian Foreign Minister Stephen Smith, who held talks with his Chinese counterpart Yang Jiechi in Beijing on Friday, defended the decision.

"We encourage overseas foreign investment, capital investment in Australia that is one of the things that the whole of Australia's economy is built on," Mr Smith said

"But from time to time a difficult context passes and we are faced with having to make a decision in the national interest."

Oz Minerals, the world's second-largest zinc miner, is struggling to meet a Tuesday deadline to repay $1.3bn to creditors.

Mining firms are struggling as the global slowdown hits demand for raw materials.

China 'can boost stimulus plan'

China is ready to introduce new economic stimulus measures "at any time", Premier Wen Jiabao has said.

He said there was enough "ammunition" to add to the 4tn yuan ($586bn; £421bn) package already announced.

He was speaking at the end of China's annual parliamentary session - the only time he takes questions from reporters.

Although Mr Wen said he expected China and the rest of the world to be better off in 2010, he said the government was ready to face tougher times.

"We have prepared contingency plans to handle greater difficulties," he said.

"We have prepared enough ammunition and we can launch new economic stimulus policies at any time."

Opening the annual session of the National People's Congress nine days ago, Mr Wen had said that this year would be the most difficult China has faced this century.

Confidence needed

He said confidence was "more important than gold or money" in overcoming the world's financial troubles.

"Only when we have confidence can we have courage and strength, and only when we have courage and strength can we overcome difficulties."
But Mr Wen said he was worried about the safety of the huge amount of China's foreign-exchange reserves invested in US government bonds.

"I'd like to take this opportunity here to implore the United States... to honour its words, stay a credible nation and ensure the safety of Chinese assets," he said.

Almost half of China's $2tn in currency reserves is thought to be invested in US treasury bills and other government-affiliated notes.

"We are extremely interested in developments in the US economy," Mr Wen said.

Chinese prices record rare fall

Chinese consumer prices showed an annual fall in February for the first time since 2002, figures have shown.

The consumer price index fell 1.6% from a year earlier, dragged down by falls in food prices but officials downplayed the threat of a deflationary spiral.

Consumers welcome falling prices, but a prolonged drop undermines company profits as people put off purchases.

Growth in China has slowed sharply as its exports have been hit hard by the global economic downturn.

"Deflation is a symptom of a weak real economy and industrial capacity, which has left companies with little pricing power," said Jing Ulrich, an analyst at JP Morgan.

She added that China's bout of deflation was likely to be temporary as government measures to kick-start spending take effect.

Slowdown

China's inflation rate hit a 12-year high of 8.7% in February 2008 because of shortages of grain and pork.

Officials said this high base for comparison partly explained February's fall.

In the first two months of 2009, prices were down just 0.3% from a year earlier.

In the final three months of last year, China's economy expanded by 6.8% from a year earlier - below the 8% that officials view as the level needed to keep unemployment in check and avoid social unrest.

Overall growth in 2008 stood at 9% - the first time since 2002 that the economy has expanded at a single-digit pace.

Asian stocks rattled by US falls

Asian stocks fell sharply on Tuesday amid renewed fears over the health of the global financial sector and after US stocks hit a near 12-year low.

Japan's Nikkei index closed down 1.46%, the Hong Kong index closed down 2.9% and the Shanghai index fell 4.3%.

South Korean Kospi share index dropped 3.2%, while indexes in Singapore and Taiwan shed more than 1%.

Most Asian indexes had risen on Monday on hopes the US government was to increase its stake in Citigroup.

However, no formal move was made. US regulators said they were considering boosting government ownership in financial institutions, but without going all the way and nationalising them.

On Monday in the US, the Dow Jones Industrial Average closed down 250.9 points, or 3.4%, at 7,114.8, its lowest level since October 1997.

The tech-heavy Nasdaq index closed down 3.7%, while the Standard & Poor's 500 index fell 3.5% to 743.33, its lowest finish since 11 April, 1997.

No end in sight?

"Investors are just selling out in disgust across the board - disgust with the market, disgust with the financial problems," said Lorraine Tan, director of equities research at Standard & Poor's in Singapore.

"The government seems to keep throwing in money, but there doesn't seem to be any end to the declines or solutions to the problems," she said.

The Shanghai benchmark index fell as China's central bank said the country's economic downturn could worsen.

Meanwhile the index of Asia-Pacific stocks outside Japan, the MSCI, also fell, by 2.3%. And Australia's stock market was also down, by 0.6%. The Indian Sensex was down slightly, by 0.24%.

Among Asian financial shares, Nomura Holdings, Japan's biggest broker, lost 9.3% after announcing plans to raise $3.3bn.

Also in Japan, finance minister Kaoru Yosano said the government would consider a call to buy shares directly to support the stock market, which fell to near 26-year lows on Tuesday.

Slump hits China multinationals

Nearly 70% of multinational companies in China plan to cut recruitment this year, and more than a quarter have laid off staff already, a survey suggests.

Of the more than 350 companies questioned in different sectors across the country, finance, communications and IT firms were the hardest hit.

Two years ago the multinationals were competing to hire the brightest talent from China's universities.

But since the financial crisis, jobs there no longer look so secure.

Jobs in multinational companies are highly prized in China especially white collar jobs.

For a start the pay is often better than you might get as a public servant or the employee of a state-owned enterprise.

The jobs tend to be concentrated at the moment in the larger cities like Beijing or Shanghai, or in the areas where there are many factories making goods for export.

'Safer' alternatives

Since the financial crisis, jobs are less secure in multinational firms whose parent companies have run into trouble overseas like CitiGroup or Motorola.

This year there was a record number of applications for the civil service. More than 750,000 people applied for just 13,500 places.

The surveys of the multinationals reported in the state media suggest that those applicants were wise to seek safer alternatives.

Almost seven out of 10 of the firms polled made clear they planned to recruit fewer staff in the year ahead - that will make life even harder for this year's graduates.

There are fewer jobs available than before and they will be competing with other unemployed graduates from previous years and with newly laid-off workers who already have experience.

The graduate employment market has always been tough in China but this year it is looking like it will be tougher than ever.

ILO suspects unemployment in Asia to surge by 23 million

The number of people out of work in Asia could surge by 23.3 million in 2009 as the global financial crisis continues to batter the region's economies, says an ILO study.

The crisis could also force rural-to-urban migration to slow down, with many facing the prospect of returning to low paying agricultural sector as factories and firms slash jobs, the International Labour Organization (ILO) report said.

"A dramatic increase in working poverty of more than 140 million people by 2009 is projected under this scenario, representing regression of the Asia and Pacific region to a working poverty rate of 2004," the study said.

"These projections are not just numbers, they carry with them a real risk that children may be forced to withdraw from school in order to work and support their families," it said.

It said the region's robust growth in the past was not matched by "broad-based gains in real wages," leading to sharp inequalities in many countries.

"The substantial growth slowdown taking place is likely to lead to stagnant or falling real wages, with the potential for increased incidences of wage related disputes," the study said.

As Asia moves to spend about 3.9 percent of its gross domestic product (GDP) on stimulus packages, there is also a need to protect employment and support household purchasing power, it said.

China's exports see sharp decline

China's exports fell more than expected in January, down 17.5% from a year earlier, marking the biggest drop in more than 10 years, figures have shown.

Imports were down 43.1% in the month compared with a year ago, as China's economy continued to be hit by the global economic slowdown.

Analysts say the slowdown could prompt more factory closures and job losses.

China's global trade surplus widened to $39.1bn last month, after recording a surplus of $39bn in December.

Jobs pressure

"The numbers are terrible. The environment is awful," said Ken Peng, an economist at Citigroup.

"The pressure on unemployment will be huge," he added.

Some analysts argue that this worsening trend will continue, as the world economy contracts.

Last month, China's crude oil imports fell to their lowest level for 15 months - down 8% year-on-year.

The country shipped in 12.82 million tonnes of crude oil, nearly 11% lower than in December.

Chinese migrant job losses mount

In China, an estimated 20 million workers from rural areas who had been working in cities have lost their jobs, according to a senior official.

A survey carried out in 15 provinces suggests about 15% of the total migrant labour pool is now unemployed.

There are fears that if large numbers of workers cannot find jobs, that could lead to social unrest.

The Chinese government researchers visited 165 villages across the country to try to build an accurate picture.

They were looking at how the economic malaise here is spreading.

The data they collected suggests the number of migrant workers now unemployed is 20 million - far higher than had been announced previously.

With last week's Spring Festival now over, millions of workers who had spent the week at home with their families were due to return to the cities.

But many have no jobs to come back to.

Unhappy unemployed

The government has said the economic downturn in China first started to be felt in the provinces where many exporters were based in the east and south of the country.

But now the effects are being felt further west as migrant workers see their wages cut or lose their jobs and are forced to return home.

A new document setting out rural policy for the year ahead warns that "shocks to agricultural and rural development are constantly emerging".

This year it will be hard to improve the incomes and the lives of farmers it says.

The fear of course is that large numbers of unhappy unemployed workers in rural areas could cause trouble.

The government says maintaining stable and fast economic development is the main task for the year ahead, according to reports.

Officials have been told to do what they can to "nip problems in the bud" - to try to resolve them before they can provoke protests.