Economy

　　PMI Data

　　China’s purchasing managers’ index (PMI) for the manufacturing sector dropped to 50.2 percent in February， down from 50.5 percent for January， according to data released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP) on March 1.

　　The index shows the manufacturing sector is expanding， but the rate of growth is slowing down， said Zhao Qinghe， a senior analyst with the NBS. A reading below 50 indicates contraction， while that above 50 signals expansion.

　　Zhao attributed the decline to the Spring Festival holiday， when most enterprises suspended production and workers went back home for the holiday.

　　The PMI for China’s non-manufacturing sector rebounded in February after dropping for three consecutive months. The index reached 55 percent in February， up 1.6 percentage points from January.

　　CFLP Vice Chairman Cai Jin attributed the rebound mainly to robust business activities after the Spring Festival holiday (January 31-February 6).

　　FTA Talks

　　China， South Korea and Japan started the fourth round of negotiations on a trilateral free trade agreement (FTA) in Seoul on March 4.

　　The fresh round of negotiations， lasting from March 4 to 7， focused on modalities of tariff reduction， ways of opening service trade between the three countries and investment as well as certain areas and fields of the agreement， according to the Chinese delegation.

　　South Korea’s Trade Minister Yoon Sang-jick said although these talks may not always go smoothly， the negotiations are “moving toward an end.”

　　South Korean farmers previously opposed such an agreement， fearing that a free trade pact would flood the market with cheap produce.

　　The three Asian countries talked about the trilateral FTA’s modality such as how to make a draft of liberalization for goods at the third round of negotiation held in Tokyo in 2013.

　　China， South Korea and Japan have seen increasingly close economic and trade relations and have become important partners and markets to each other.

　　The FTA is expected to create one of the world’s largest markets， as combined gross domestic product of the three countries will account for 20 percent of world total and the combined imports and exports volume will account for 17.5 percent of global trade.

　　Coal Demand

　　China’s coal consumption will peak in 2020 at about 4.7 billion tons， forecast Li Ruifeng， General Manager of the Coal Industry Planning and Design Research Institute on March 4.

　　Coal demand will grow by an average of 3.9 percent annually before 2020 and then decrease by about 0.43 percent annually， Li said.

　　He predicted that annual coal demand would drop to 4.56 billion tons in 2030.

　　Li advised coal producers to adjust investment strategies to cope with decreases in coal demand after 2020.

　　China’s coal consumption witnessed a slower growth of 2.6 percent year on year to 3.61 billion tons in 2013， according to the China National Coal Association.

　　Walmart Backing Off

　　The world’s largest retailer， Walmart Stores， closed an outlet in southwest China’s Chongqing Municipality on March 4.

　　A staff member， who declined to be named， said the closure was decided by Walmart China because the store had been losing money for a long time. Poor site selection has been given as a major reason for the store’s slow trade.

　　Walmart entered Chongqing 10 years ago， and this was its first closure in the city.

　　Walmart China closed 10 stores nationwide in November and December last year.

　　The emergence of online shopping has been seen as an increasing challenge for firms like Walmart. Walmart’s stores also face competition from local retailers. Chinese grocery retailer Yonghui Superstores has been in talks to rent the site that Walmart has vacated in Chongqing.

　　New Trading Model

　　No timetable has been set for the launch of the T+0 trading model， a tool to increase the vitality and liquidity of the capital market， according to a securities watchdog official.

　　T+0 means financial products can be bought and sold on the same day. “T” stands for the first letter of the word “trade.”

　　There are no legal barriers， but the trading model needs smooth coordination， said Wang Xian， deputy head of the China Securities Regulatory Commission’s market department.

　　The model can stimulate the market and add fluidity， but can also cause frequent trading， market fluctuation， speculation and manipulation， Wang said.

　　Currently， T+1 is adopted for share trading on the Shanghai and Shenzhen bourses. T+1 means shares bought on one day can only be sold the next trading day at the earliest.

　　The Shanghai bourse in 1992 and the Shenzhen bourse in 1993 introduced T+0 models， but they shifted to T+1 in 1995 to guard against market risks.

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