By Thomas Clouse
China imported $144 billion in goods in January, an increase of 51% over January 2010. The country’s exports also rose rapidly, growing 38% year-on-year to $151 billion.
Drought: Farmers suffer
The resulting trade surplus of $6.5 billion was the lowest since April and less than half of the December 2010 figure. The strong import and export numbers, combined with a lower-than-expected inflation rate, boosted capital markets around the world. China’s CPI came in at 4.9% in January, up from 4.6% in December. Despite the increase, the figure was below most analysts’ estimates and may relieve some pressure on policymakers to continue tightening monetary conditions. The central bank has increased interest rates three times since October.
China will create a panel to examine foreign-funded mergers and acquisitions, according to a statement from the state council. The National Development and Reform Commission (NDRC) will supervise the panel, which will review proposed deals in defense, energy, infrastructure and other strategic industries. The announcement came shortly after a group of lawmakers in the US expressed concerns over the purchase last year of computer firm 3Leaf Systems by Chinese telecom equipment maker Huawei.
Chinese energy companies are devoting more time and capital to developing shale-gas resources abroad and at home. China National Offshore Oil Company (CNOOC) on January 31 agreed to pay $1.3 billion to US-based Chesapeake Energy for stakes in leasehold fields in the US. Less than two weeks later, PetroChina said it would pay $5.46 billion for stakes in some properties of Canadian company Encana. With the deals, the Chinese companies will gain not only resource deposits in North America but shale-gas expertise and technology for developing domestic reserves as well.
China will spend more than $1 billion to drill new wells and improve irrigation in response to a severe drought affecting northern China. The United Nations issued a warning in February that the drought had led to water shortages for more than 2.5 million people and could push up grain prices in China and around the globe. According to the UN report, the most severely affected provinces account for more than two thirds of the country’s wheat production.