Conferencia Xibiao Xian

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Copyrights Xibiao Xian, Universidad de Negocios Internacionales y Economía

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Conferencia Xibiao Xian

  1. 1. Trade & FDI in China Xibiao Xian xxb@uibe.edu.cn
  2. 2. • Outline – Relationship between the 2 Countries – Trade history – Fast growth of international trade – Trade issues China is facing • Trade surplus & large foreign reserves • Anti-dumping cases • RMB appreciation – FDI • Inflow & outflow • New policies
  3. 3. • Relations – Feb. 14, 1972, diplomatic relationship – 5th century, a monk went to Mexico – 16th century, Chinese ships with silk, china to port city Acapulco; brought back corn – Mexican silver coins • 1910, 1.1 billion foreign silver coins in circulation; 1/3 were Mexican
  4. 4. • In 1875, first group of the Chinese brought to Mexico to build the railroad; by 1930, 40,000 Chinese people lived in Mexico• Dec. 2003, establishment of Strategic Partnership• Visits of leaders – All presidents exchanged visits – Foreign Ministers to boost bilateral cooperation in economy
  5. 5. • Trade relations – 1972: $12.9 million – 1991: $ 235 million – 2000 $ 1,823 million – 2005 $ 7,760 m ($18,764 million by Mexican)
  6. 6. – 2009: $34.74 billion(16.18), decreasing by 5.6% (7.8%) • Mexico’s export to China: $2.22 billion (3.88) increasing by 8.2% (5.2%), 1% of total export with an increase of 0.3% • Import from China: $32.53 billion (12.3), decreasing by 6.4% (11.3%), accounting for 13.9% of total import, rising by 2.6% • Trade deficit: $30.31 billion (8.42), decreasing by 7.3%; the largest source country of trade deficit • 7th export destination; 2nd import source country (figures in () are statistics from China’s Customs)
  7. 7. • Jan—May, 2010 – Trade in goods reached $17.25 billion, increasing by 39.8% – Exports to China: $1.42 billion, rising by 64.1%, accounting for 1.2% of total value of exports – Imports from China: $15.83 billion, rising by 38%, accounting for 13.7% of total imports – Trade deficit: $14.42 billion, increasing by 35.9%. The Largest source of trade deficits. – China the 5th export destination and 2nd import source country
  8. 8. • Investment in Mexico – Golden Dragon Precise Copper Tube Group invested $210 million in Coahuila State , largest investment from China • Oct 28, 2009, opening ceremony, Governor attended – Chinas Foton Automobile Co. plans to produce light trucks in the state of Veracruz – Lenovo plans to produce laptops in Mexico, its largest investment outside of China
  9. 9. • Investment in China – Bimbo entered China in 2005 – Acquired Spanish Panrico in Beijing with € 9 million – Biggest investment outside America & Europe – Biggest investment by Latin American countries in China
  10. 10. – It had 48 products at the beginning, but later reduced to 43– They found the Chinese didn’t like the taste of cinnamon in the bread; they took it out and add dried meat, raisins, red beans…– They have products for different groups, low- income, high-income, youngsters, aged people, diabetics– They rely on supermarkets and each time they deliver new products and take away the unsold even they are not expired
  11. 11. – Comments from the Tec students • ―The first days I went to the supermarket and I bought some of Bimbo’s products, I think that was the same product as in México but when I tasted them, it was not the same. Inside of the cake there was something that until today I don’t know what it was.‖ • ―One product that caught my attention was a pancake filled with sweet beans. In Mexico, I have never seen anything like that; it is clear that this is due to the large difference between the two cultures, Mexican and Chinese, yet this particular product caught my attention.‖
  12. 12. • Cooperation in science & technology – Agriculture, fishing, mining, petro-chemistry, communications, rural development, social sciences, Chinese medicine
  13. 13. • Trade in China• Long history – Silk Road • 206 BC to AD 220 – Sea Silk Road • Tang, Song, Yuan, Ming Dynasties (618—1644) – Tea Road • Mid-1500s till 1900s
  14. 14. • Excavation of a Song ship in Dec. 2007 – Archeologists excavated a sunk ship of the Song Dynasty (960—1279) in the South China Sea – The Nanhai One • 26 m long and 10 m wide • Loading capacity: 800 t – The Crystal Museum being built to hold the ship • Opened on Dec. 25, 2009 in Yangjiang, Guangdong
  15. 15. • Increase in import & export since 1978
  16. 16. Increase of Export & Import700600500400 E&I($billion)300200100 0 1978 1985 1990 1995 2000 2001 2002
  17. 17. 18001600140012001000 E & I 800 Export Import 600 400 200 0 2003 2004 2005 2006
  18. 18. 300025002000 Total1500 Export Import1000 500 0 2007 2008 2009 10 1-7
  19. 19. Jan.—July 2010300250200 Total150 Export Import100 50 0 Jan. Feb Mar April May June July
  20. 20. Export in 2007700600500400 East West300 North200100 0 SOE Foreign Private Coop
  21. 21. Import in 2007600500400 East300 West North200100 0 SOE Foreign Private Coop
  22. 22. • Changes in compositions of import & export – Export • 1950: commodities 90.3%, manufacturing 9.7% 1978: 53.5% 46.5% 2009: 5% 95% – Import • 1980: commodities 34.8%; manufacturing 65.2% • 2009: 25.4% vs. 75%
  23. 23. • Trade issues – Trade surplus – Foreign reserves – RMB value – Antidumping charges – Product quality & safety
  24. 24. Trade surplus from 01-09($ billion)300250200150 Years100 50 0 1 2 3 40 5 6 7 8 9
  25. 25. – Surplus • Processing trade • Restrictions on goods to China– Foreign reserves • Worries about losing value– RMB value • Imbalance caused by globalization– Antidumping • From Jan to Aug. 2009, 17 countries launched 79 special safeguard investigations against Chinese exports, worth $10.035 billion • WTO: countries launched 437 anti-dumping investigations, 2.1 times higher than that in 2008
  26. 26. • FDI – Till July, 700,000 projects by foreign companies. FDI inflow $1050 billion – Till 2009, China’s total FDI outflow reached $300 billion, 32 times more than that in 2002 – A revised ―Catalog for the Guidance of Foreign Invested Enterprises‖ adopted on Dec. 1, 2007 – April 2010, State Council issued new regulations on FDI
  27. 27. – New regulations • Support Chinese A-share listed companies in further introducing strategic investors from home and abroad, and standardize foreign companies investment in domestic securities and corporate merger and acquisition moves. • Qualified foreign-funded companies are allowed to go public, issue corporate bonds or medium-term bills in China • Multinationals are encouraged to set up regional headquarters, research and development centers, procurement hubs, financial management and other functional offices in China
  28. 28. • Importing items for scientific and technological development by qualified foreign-funded R&D centers will be exempt from tariffs, importing value added tax and goods and services tax by the end of 2010• Foreign-funded enterprises are also encouraged to increase their investment in Chinas central and western regions, particularly in environment friendly and labor-intensive companies
  29. 29. Thank You Gracias 谢谢(xiexie)

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