China Economic Scan - Your daily update on the Chinese economy.
In this edition: China and Japan pledge to boost global economic recovery, Russia says yuan could be reserve currency in a decade, China may improve fuel pricing, China Green Agriculture to boost sales on demand, Bain Capital agrees to buy into China's GOME.
Top 5 headlines
China, Japan pledge to boost global economic recovery
- China and Japan on Sunday vowed to jointly promote world economic recovery during a meeting of top ministers and senior officials in Tokyo, Japanese Foreign Minister Hirofumi Nakasone said.
- Nakasone also said both countries would "cooperate in domestic economic measures, in actively supporting developing countries in Asia through international financial institutions, and in preventing protectionism."
- Nakasone was speaking after a day of talks with a Chinese delegation led by Vice Premier Wang Qishan that aimed to boost trade and cooperation between Japan and China, the world's second and third biggest economies respectively.
Russia says yuan could be reserve currency in decade
- China's yuan could become a world reserve currency in the next decade, Russia's finance minister said on Saturday, as Moscow seeks to whittle away at the U.S. dollar's dominance.
- "I think the shortest route would be if China liberalised its economy and allowed the convertibility of the yuan," said Finance Minister Alexei Kudrin, a close ally of Prime Minister Vladimir Putin.
- "This could take 10 years but after that the yuan would be in demand and it is the shortest route to the creation of a new world reserve currency and I think China needs to think about this," Kudrin said at a panel discussion at the St Petersburg International Economic Forum.
China May Improve Fuel Price-Setting Mechanism, Observer Says
- China’s planning agency is considering improving the mechanism under which fuel prices are adjusted, the Economic Observer reported, citing an unidentified government official.
- The move is aimed at curbing hoarding and speculating on gasoline, the report said, without providing more details.
- Under a mechanism introduced in December, China may adjust fuel prices when crude-oil costs change more than 4% over 22 straight working days, the NDRC said in May.
China Green Agriculture to Boost Sales on Demand
- China Green Agriculture Inc., a producer of organic fertilizer, plans to boost sales by up to 40% in each of the next 4 years through acquisitions and increased domestic demand, its chief financial officer said.
- “Chinese consumers, because of safety issues, are willing to pay a higher premium for organic food,” Ying Yang said in a phone interview from Denver. “We’ve been actively looking for opportunities domestically to acquire.”
- China Green Agriculture, which is based in Xian, China, fell -2.5% to $7.80. The shares have more than doubled since March 9, when they started trading on the American Stock Exchange.
Bain Capital agrees to buy into China's GOME: source
- U.S. private equity giant Bain Capital has agreed to buy a major stake in China's top home appliance retailer GOME, a source with direct knowledge of the deal said on Sunday.
- The 2 parties were still finalizing financial details at the weekend and an official announcement is expected as early as next week.
- On Wednesday, Bain entered into exclusive talks to buy a major stake in GOME, dubbed as China's Best Buy, after months of competition with other potential investors including Kohlberg Kravis Roberts and Warburg Pincus.
Source: China Economic Scan
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