Highlights from the last week of China business news: China comes off smelling like roses at the APEC summit in Sydney, much to Bush’s chagrin; the latest macro numbers are out, and inflation isn’t getting any lower. China steals the show at APEC
The recently concluded Asia-Pacific Economic Cooperation summit in Sydney revealed some new angles to the US-China relationship. One was captured by the FT, when it noted that President George W. Bush “bristled” at suggestions that the meeting was dominated by China. “Is this a China summit? The answer is absolutely not,” Bush said.
Bush had reason to feel overshadowed. Just before the summit, PetroChina signed a record US$37.3 deal to buy liquefied natural gas from Australia’s Woodside Petroleum. Then, President Hu Jintao agreed to an APEC climate-change pact, which was hailed as an “enormous diplomatic breakthrough.” Hu also held what he described as “candid and friendly” talks with Bush about product safety, North Korea and so on.
In contrast to China’s dynamism, Bush appeared to be banging on the same old drum. He preached the virtues of democracy during a speech attended by Hu, and en route to Sydney, remarked that a free-floating yuan would help iron out the US-China trade surplus. Australia, meanwhile, rolled out the red carpet for China, announcing new security talks (opposition leader Kevin Rudd even welcomed in Mandarin). Hu must have left the summit in better spirits than his American counterpart.
Last month’s macro numbers
Inflation keeps rising, hitting a 10-year high of 6.5% in August. Food prices continue to drive the consumer price index up. The news today that droughts have drastically reduced corn yields means that food prices aren’t going to get cheaper any time soon. Meanwhile, China’s trade surplus for August was still high at US$24.97 although lower than June’s record US$26.91 billion. Exports to the US grew at a slower rate, up 16.7% for the year ending August compared to 18% for the first seven months of the year. The US credit crunch has been fingered as one cause for the drop, although surely the high-profile product recalls can’t have helped either.
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