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APEC cautiously supports China-backed free-trade zone
by Staff Writers
Beijing (AFP) Nov 08, 2014

China state media defends 'APEC blue' skies
Beijing (AFP) Nov 07, 2014 - China will learn "precious lessons" from its move to clear up Beijing's notoriously smog-ridden skies ahead of an international summit, state media argued Friday, as Internet users coined the derisive term "APEC blue".

Beijing has pulled out all the stops in its effort to greet visitors with blue skies for the Asia-Pacific Economic Cooperation (APEC) forum, when Chinese President Xi Jinping will host leaders from the United States, Russia and Japan among others.

Authorities in the Chinese capital have imposed tight limits on car use, ordered factories to close, and are giving public sector employees a six-day holiday, with some neighbouring areas also following suit with restrictions.

The move led to dazzling clear skies in Beijing on Thursday, with levels of PM2.5 particulates, the smallest and most dangerous, falling to four micrograms per cubic metre -- down from more than 400 during a stretch of heavy pollution last month.

By Friday, the reading had risen back up to 60, with white skies again clouding the capital.

The government-led effort has triggered an unexpected backlash among the country's social media users, many of whom have taken to the popular platforms Weibo and WeChat to ridicule the all-out push that has abruptly cleared the capital's skies.

A message circulating widely on the Chinese mobile messaging app WeChat this week defined the new phrase "APEC blue" as "something that is beautiful but fleeting and ultimately inauthentic".

On Sina Weibo, a Chinese version of Twitter, one user wrote Friday: "Many plants in polluting industries have halted production without any hesitation in order to save face for Beijing during APEC, when leaders of other countries are visiting."

"What does this mean?" the user asked. "Pollution isn't an uncontrollable problem; the key is that the health of ordinary people isn't as important as saving the government's face!"

State media responded with several commentaries Friday that addressed the issue but seemed to offer conflicting advice regarding China's longer-term pollution problem.

"North China will learn precious lessons from these current smog reduction efforts and the result, which can be used effectively later," the state-run Global Times wrote in an editorial.

But it added: "How China can sustain a blue sky will be one of the tougher challenges it faces in the post-APEC period".

A named commentary in the ruling Communist Party mouthpiece People's Daily acknowledged that "it may be difficult to retain the 'APEC blue'".

It noted, however, that it is "absolutely necessary for us to retain the serious attitude, firm determination and coordinated mechanisms behind it".

A Pacific Rim summit on Saturday voiced cautious support for a vast free-trade zone proposal being pushed by China in the face of reported resistance from the United States, which is promoting its own regional trade pact.

China's promotion of the Free Trade Area of the Asia-Pacific (FTAAP) idea -- and the narrative of Sino-US trade rivalry on the issue -- has loomed as a major agenda item at the diplomatic gathering in Beijing.

A joint statement by foreign ministers of the 21-member Asia-Pacific Economic Cooperation (APEC) forum called for steps to be taken to "translate the FTAAP from a vision to reality".

But it agreed to launch a "strategic study" on FTAAP, avoiding China's calls for a "feasibility study" on the concept.

The wording of next week's final summit communique has been toned down in a compromise by Beijing after the United States objected to use of the term, according to a report by the Hong Kong's South China Morning Post (SCMP).

It quoted a US official saying Washington objected "because when you use the word feasibility study, it's used in trade talks as implying the launch of a negotiation towards a free-trade agreement."

The ministers' statement also made no mention of a 2025 target date for realising the FTAAP, which had been floated earlier.

The same language is expected in the joint communique Tuesday at the end of a two-day summit of top leaders hosted by Chinese host President Xi Jinping and including US President Barack Obama plus his Russian counterpart Vladimir Putin.

The FTAAP will be mentioned only in an annex to the communique, and not the main statement, the SCMP said.

Beijing is hosting APEC -- which accounts for 40 percent of the world's population, almost half its trade, and more than half its GDP -- for the first time since 2001, and is using the gathering to underline its growing global economic clout.

China is now the world's second-largest economy following the United States, and is increasingly pushing for a greater say over the global trade and economic architecture.

- 'Spaghetti bowl' -

In the run-up to the APEC gathering, Chinese media have aggressively pushed for the FTAAP to be accelerated as a solution to the current "spaghetti bowl" of competing regional free-trade proposals, an apparent swipe at the US-backed Trans-Pacific Partnership (TPP).

The US has been trying to secure agreement on the TPP, a grouping of 12 nations including Japan, Australia, Malaysia and Mexico -- but notably excluding China.

All 12 also belong to APEC, and the TPP constitutes the economic component of Washington's much-touted "rebalance" of strategic attention to the Asia-Pacific.

The SCMP quoted an unnamed Chinese official as saying: "The US wants to impede FTAAP, and they want to promote TPP during APEC. This is really annoying for us."

Some Chinese analysts have viewed the US effort as a way to thwart the FTAAP and thus counter Beijing's growing influence in the Pacific Rim -- concerns Washington has dismissed.

The APEC ministers statement endorsed "a step-by-step approach, with the goal of establishing the FTAAP as early as possible by building on ongoing regional undertakings", but also referring to its "eventual realisation" and couching it in cautious and vague diplomatic language.

It instructed that the "strategic study" be completed by end-2016.

The Chinese official quoted by the paper said Washington had insisted on holding TPP talks on the sidelines of APEC but had eventually agreed to keep such efforts low-profile.

Wang Shouwen, an assistant commerce minister, had said in April that China wanted an FTAAP "feasibility study", but added there "will be no conflict" between the proposal and other free-trade initiatives in the region.

China trade surplus expands to $45.41 bn in October
Beijing (AFP) Nov 08, 2014 - China recorded a better-than-expected trade surplus of $45.41 billion in October, customs said Saturday, but weaker export and import growth could be a worrisome sign for the world's second largest economy.

October's trade surplus expanded 46.3 percent from the same month last year, exceeding market expectations for a $42.3 billion surplus, according to a survey of 11 economists polled by The Wall Street Journal.

The surplus also widened from the $31.0 billion recorded in September, though it was off the record $49.8 billion for August, previous figures showed.

Exports jumped 11.6 percent year-on-year to $206.87 billion in October, while imports rose 4.6 percent to $161.46 billion, customs said.

"The trade surplus was driven by the contraction in growth of imports... and export growth was not very strong. So the quality of the surplus was not very high," Liu Xuezhi, a Shanghai-based analyst at Bank of Communications, told AFP.

Growth in exports -- a key engine of China's economy -- slowed in October from a 15.3 percent year-on-year rise in September. Import growth remained weak in October, slowing from a 7.0 gain in September.

"Domestic demand is weak," Liu said. "De-stocking this year has led to consumption of cement, coal, iron ore and other raw materials to decline, making demand for imports weak."

China's economy has faltered this year, hit by a deflating property bubble as well as a government crackdown on corruption and weak external demand from Europe.

The Chinese economy grew an annual 7.3 percent in the third quarter, the slowest in more than five years since the depths of the global financial crisis, dipping below the government's target of around 7.5 percent for all of this year.

Beijing has so far clung to "targeted" measures to spur growth, cutting reserve requirements -- the amount of funds banks must put aside -- for some banks and loosening monetary policy by injecting cash into the banking system.

The central bank confirmed on Thursday that it had injected 769.5 billion yuan ($124 billion) into the banking system over the past two months.

Analysts expect the government to cling to targeted easing, though some say policymakers could still resort to an across-the-board cut in reserve requirements or even interest rates.

"Overall, the easing bias in China's monetary policy will be maintained," ANZ bank said in a research note on Friday. "China's central bank will intensify the effort to lower the cost of funds facing the real economy."


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