CHINA RULES THE WORLD
CHINA
TAKES OVER THE WORLD
FIRST IN EXPORTS
FIRST IN IMPORTS
FIRST IN CARS
FIRST IN BANKS
CARS
China Ends U.S.’s Reign as Largest Auto Market (Update2)
By Bloomberg News
Jan. 11 (Bloomberg) — China supplanted the U.S. as the world’s largest auto market after its 2009 vehicle sales jumped 46 percent, ending more than a century of American dominance that started with the Model T Ford.
The nation’s sales of passenger cars, buses and trucks rose to 13.6 million, the fastest pace in at least 10 years, according to the China Association of Automobile Manufacturers. In the U.S., sales slumped 21 percent to 10.4 million, the fewest since 1982, according to Autodata Corp.
China’s vehicle sales have surged since 1999 as economic growth averaging more than 9 percent a year has helped automakers including General Motors Co. and Volkswagen AG compensate for slumping demand in the U.S. and Europe. The market will likely remain the world’s largest, even as sales slow this year on a reduction in tax cuts, according to Booz & Co.
“China is becoming the center stage of development for the 21st century global auto industry,†said Bill Russo, a Beijing- based senior adviser at Booz & Co., which advises automakers. “Economic growth has directly translated into growth in automobile sales.â€Â
IMPORTS
Stocks, Commodities Advance as China Imports Soar; Dollar Falls
By David Merritt
Jan. 11 (Bloomberg) — Stocks and commodities gained and the dollar fell after China’s imports rose to a record. The ruble rallied the most in a decade against the dollar as Russian markets opened for the first time this year.
The MSCI World Index of 23 developed nations’ stocks climbed 0.8 percent to its highest level since September 2008 at 12:11 p.m. in London. Futures on the Standard & Poor’s 500 Index advanced 0.3 percent. Copper increased 2.8 percent and aluminum added 3.2 percent. The dollar weakened against all of the 16 most-traded currencies tracked by Bloomberg. The ruble rose as much as 2.7 percent.
China, the engine of recovery from the world’s worst recession since World War II, reported a 55.9 percent increase in December imports and supplanted the U.S. as the world’s biggest auto market. Alcoa Inc. may report a profit later today, starting the fourth-quarter earnings season. Analysts predict S&P 500 companies will snap nine straight quarters of declining profits, easing concern over the loss of 85,000 jobs, while retail sales may have risen in December
EXPORTS
China’s export revive, making it largest
exporter
Ananth Krishnan
AP Cargo sits at a container terminal in the Port of Dalian, China. Chinese state media said on Sunday that the country’s total 2009 exports were $1.2 trillion. Photo: AP
After a 13-month slump, China’s flagging exports have rebounded back to life, recording unexpectedly strong growth in December and likely propelling the country past Germany to become the world’s biggest exporter.
China’s exports were up 17.7 per cent in December from a year ago, exceeding most expectations after a year and a half of steep declines.
Exports were down by more than 20 per cent last year as a result of the economic slowdown. Imports last month recorded an even stronger rebound, growing 56 per cent year-on-year, according to figures released by the General Administration of Customs (GAC) on Sunday.
Sunday’s figures take China’s exports to $1.2 trillion in 2009. This marks a 16 per cent fall from the previous year, but suggests China will still overtake Germany to become the world’s biggest exporter in 2009, with German exports estimated at around $1.1 trillion last year.
BANKS
China banks eclipse US rivals
By Patrick Jenkins in London
Published: January 10 2010 22:32 | Last updated: January 10 2010 22:32
Chinese banks have cemented their position as the most highly valued financial institutions, taking four of the top five slots in a ranking of banks’ share prices as a multiple of their book values.
China Merchants Bank, China Citic, ICBC and China Construction Bank lead the table, followed by Itaú Unibanco of Brazil, all with a price-to-book multiple of more than three.
Over the past six years, the average price-to-book value of the biggest 50 banks has halved from two to one.
This means that investors believe the average bank is worth no more than the value of its balance sheet. Most western banks are trading at well below their book value.
But investors are attaching a growing premium to emerging markets banks, led by China Merchants, the most highly rated of the biggest 50 banks by market capitalisation, on a multiple of 4.3, according to Bloomberg data.
At the start of the last decade, the US dominated the rankings. The top five were Bank of New York Mellon , Lloyds of the UK, Morgan Stanley, Citigroup and Wells Fargo.
Only last year US Bancorp topped the table and Wells Fargo was in the top 10.
The changes, which have seen the top-rated Chinese banks double in valuation over the past year as western rivals have been derated, reflect growing confidence in emerging markets, particularly China and Brazil.
They indicate concerns about the profitability of western institutions stemming from toxic assets and the drive to force banks to increase capital and liquid funds.
Even western investment banks that have thrived over the past year have been left behind in the price-to-book league table. Goldman Sachs is ranked 22nd and JPMorgan 31st.
“Western markets generally are experiencing their worst prospects for 20 years, and that’s in the valuations,†Robert Law, banks analyst at Nomura, said.
“China in particular is a region that is perceived as less vulnerable to global downturn.â€Â
Although Chinese bank valuations were hit by investor nervousness in 2008, the limited fallout they suffered – combined with positively received government stimulus measures – have allowed them to bounce back.
Some fringe developed economies with a reputation for tough regulatory controls and limited direct or indirect exposure to the subprime problem at the root of the crisis have benefited.
Canadian and Australian banks in particular climbed the price-to-book rankings.
Add it all up, China in 2010 is now Number One in the World.
