China inflation may hit 6%, no end to tightening

(chinadaily.com.cn)

Updated: 2011-04-06 14:03

BEIJING - Chinese inflation may top an annual rate of 6 percent in the coming months, preventing any relaxation of monetary tightening, the China Securities Journal said on Wednesday, a day after the central bank raised interest rates for the fourth time since October.

"Under severe controls from the central bank, monetary conditions fuelling price rises have clearly been curbed. But inflationary pressure still cannot be overlooked," the newspaper said in a front- page commentary.

"Keeping inflation in check remains the focus of current monetary policy. There is still room for interest rates, the reserve requirement ratio and the exchange rate to move higher," it added.

China increased benchmark one-year deposit and lending rates by 25 basis points on Tuesday, raising suspicions that data next week may show inflation rose more than expected in March.

The newspaper cited market estimates that the consumer price index might have hit a 32-month-high of 5.2 percent in the year to March and that the world's second-largest economy might grow 9.5 percent in the first quarter, relieving any concern that interest rate rises would hurt economic expansion.

"It's unlikely that monetary policy will be loosened in the second quarter or even over a longer period of time," the newspaper said, adding that CPI will probably stay above 5 percent and even hit 6 percent year-on-year in the second quarter.

China might allow the yuan to rise more than 5 percent this year, it said, adding that the country would also need to raise banks' reserve requirements in order to absorb excess cash, partly arising from maturing central bank bills and repos.

Bright Food to renew efforts for overseas asset purchases

SHANGHAI - Bright Food (Group) Co Ltd will continue to explore buying assets overseas, despite several failed attempts last year, Ge Junjie, vice-president of the Chinese food and dairy giant, said.

The Shanghai-based company has identified Australia and New Zealand as the main destinations for its overseas expansion during the next five years.
The company will target the sugar, milk and alcoholic drinks sectors to cater for the Chinese market, Ge said after attending a conference in Shanghai.
"These sectors are strong in those two countries and are also Bright Food's main businesses in China," Ge said. "So acquisitions will help our company to extend the lead in China and to tap overseas markets."
Many companies in the food sector in Australia and New Zealand are controlled by private-equity firms, and following the global financial crisis that status will provide Bright Food with a better chance of striking deals, Ge said.
A special team has been set up to study the countries' social systems, tax policies, industries and laws to facilitate deals, he said.
He said a new deal is already in the pipeline, but declined to provide any details.
Bright Food was in the spotlight last year when it expressed an interest in buying the assets of global giants such as Australia's CSR Ltd and the US nutritional product retailer GNC Holdings Ltd. But it lost out to Singapore's Wilmar International Ltd in July for the sugar and biofuel unit of CSR, and abruptly ended discussions with GNC in January.
Last month, the company also lost in a bid to buy a 50 percent stake in French yogurt maker Yoplait SA. The US food group General Mills Inc bought the stake instead.
"The failed bids won't affect Bright Food's strategy to go overseas," Ge said. "In fact, our overseas expansion has just started. The company's internationalization, as the focus of our business, will achieve fruitful results over the next five years."
In a bid to fund acquisitions, Bright Food may raise as much as 6 billion yuan ($917 million) this year, Bloomberg reported on Saturday, citing Wang Zongnan, the chairman.
A Hong Kong initial public offering of Yunnan Yinmore Sugar Co (Bright Food holds 60 percent of shares in the company) may raise 2.5 to 3 billion yuan, and a bond sale in China may raise a further 3 billion yuan, the report quoted Wang as saying.
The company aims to boost revenue from outside China to as much as 30 percent of sales in five years from 5 percent now, the report added.

China proposes to lift Sino-Australian business ties

(Xinhua) Updated: 2011-04-06 17:48

PERTH, Australia - China's top political advisor Jia Qinglin said on Wednesday efforts should be made to lift China-Australian business ties to a new level.

Jia, chairman of the National Committee of the Chinese People's Political Consultative Conference, said Chinese and Australian economies have a lot to offer to each other. "This is a strong advantage for the two nations to develop business ties," he said in an address during a welcoming luncheon attended by Western Australia Premier Colin Barnett and entrepreneurs from the two countries.

Jia proposed to advance the free trade agreement (FTA) negotiations between the two countries and maintain the good cooperation momentum, saying to reach a comprehensive, balanced, high-quality and mutually- beneficial bilateral free trade agreement serves the fundamental and long-term interests of both China and Australia.

Jia pledged China will not waver its political will and resolve to push the negotiations forward. He said it is China's hope that the two nations will follow the spirit of being proactive, practical, balanced and mutually beneficial, and strive for early conclusion of an agreement acceptable to both sides.

Jia said governments and businesses of the two countries should work hard to strengthen strategic planning, consolidate the achievements already made in such traditional fields as energy, mineral resources and agriculture, and build a long-term and stable supply and demand relationship.

Jia said the two nations should also strengthen and expand trade in competitive products and enhance trade and investment cooperation in energy conservation, emission reduction, environmental protection, and green and low carbon industries.

Jia said the two nations should also encourage entrepreneurs to fully tap the potential for cooperation and consolidate the cooperation foundation with a view to promoting in-depth growth of bilateral business ties.

He said China stands ready to increase consultation and dialogue with Australia on major issues including global governance and climate change, enhance bilateral communication and coordination at multilateral mechanisms and make greater contribution to building a more just and equitable international economic and financial order and promoting world peace and prosperity.