Economy

　　Foreign Trade Rebound

　　China’s exports went up 0.9 percent year on year to $188.54 billion in April， customs data showed on May 8.

　　Imports were up 0.8 percent to $170.09 billion and total foreign trade volume increased 0.8 percent to $358.63 billion， the General Administration of Customs (GAC) said.

　　Trade balance realized a surplus of $18.45 billion in April， up 1.8 percent year on year， the GAC said.

　　In light of trade data in April last year being very high， the improvement in trading performances this April is even more impressive， said Xu Gao， chief macro-economy analyst with Everbright Securities. China’s foreign trade condition has substantially improved.

　　During the January to April period， China’s foreign trade volume declined 0.5 percent year on year to $1.32 trillion. During the period， exports decreased 2.3 percent year on year while imports went up 1.4 percent.

　　PMI Pickup

　　China’s manufacturing growth continued to rise in April， fresh evidence of better performance in the manufacturing sector， official data showed on May 1.

　　The purchasing managers’ index (PMI) for the manufacturing sector rose to 50.4 in April， up from 50.3 in March， according to data jointly released by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP).

　　This is the second consecutive monthly uptick of the widely monitored data. The index began to climb in March after three months of declines.

　　A reading below 50 indicates contraction， while above 50 signals expansion.

　　The latest PMI index shows that China’s market demand is improving， but the momentum of the recovery is not strong， said Zhao Qinghe， a senior analyst with the NBS.

　　The PMI for China’s non-manufacturing sector rose to 54.8 in April， up 0.3 percentage points from March.

　　CFLP Vice Chairman Cai Jin attributed the rebound to the warming of the tertiary industry and the recovering market demand against the backdrop of China’s economic growth having shown signs of stabilizing after an array of grim indicators at the beginning of the year.

　　The logistics-related industries have picked up pace， while the wholesale and retail sectors were revitalized， Cai said， noting that the dynamic activity， along with the mild change in price index， will contribute to stable economic growth.

　　Canton Fair Cools

　　The biannual Canton Fair， a barometer of the country’s foreign trade， had fewer overseas buyers and trade deals in comparison to last year， organizers said.

　　The 115th session of the fair， which closed on May 5， attracted 188，119 overseas buyers， down 0.81 percent from the previous session last autumn， and down 7.23 percent from last year’s spring session， said Liu Jianjun， spokesman for the fair.

　　Export volume dropped 12.64 percent year on year to 191.18 billion yuan ($31.05 billion)， said Liu.

　　The decrease in attendance and turnover indicated that overseas market demand remained weak， and that the recovery of the domestic market had a long way to go， Liu said.

　　More Obligations

　　Chinese state-owned enterprises (SOEs) will have to pay 5 percent more of their profits to the government， the Ministry of Finance (MOF) said on May 6.

　　The money will be used to improve social services， said the MOF. SOEs administered by the Central Government will pass on up to 25 percent of their profits depending on their line of business.

　　The change is based on profits made from the beginning of this year， according to the MOF. Tobacco companies will turn in 25 percent of their profits， with petrochemical， electricity， telecom and coal companies paying 20 percent， steel， transportation， electronics， trade and construction companies transferring 15 percent， while military-industrial companies hand in 10 percent.

　　Some companies including China Grain Reserves Corp. and China National Cotton Reserves Corp. can still keep their profits for their own development.

　　The central SOEs are expected to deliver 141.5 billion yuan ($22.7 billion) to the government this year， up 36.1 percent from 2013， according to the MOF.

　　Rising Bad Loans

　　Non-performing loans (NPL) of major Chinese commercial banks edged up in the first quarter， fresh evidence of growing pressure for industry titans to improve the quality of their loans after years of lending sprees.

　　The NPL of China’s four largest state-owned commercial banks all rose in the first quarter according to their quarterly financial reports. Agricultural Bank of China has the highest NPL ratio， which is hovering at 1.22 percent.

　　The NPL ratio of the Industrial and Commercial Bank of China， the country’s largest bank， rose by 0.03 percentage points to 0.97 percent by the end of March.

　　The NPL ratio of Bank of China inched up 0.02 percentage points from three months ago to 0.98 percent by the end of March， and that of China Construction Bank edged up 0.03 percentage points to 1.02 percent during the period.

　　Non-performing loans refer to loans that are in default or close to being in default， while the NPL ratio is the ratio of NPL to a lender’s total loans.

　　Polysilicon Duties

　　China’s Ministry of Commerce (MOFCOM) started to impose two-year anti-dumping and anti-subsidy duties on imports of solar-grade polysilicon from the EU from May 1.

　　A final ruling by the MOFCOM found that the EU products were dumped and subsidized in the Chinese market and caused substantial damage to domestic producers during the period of investigation.

　　The MOFCOM launched the probe on November 1， 2012， in response to requests filed by Chinese polysilicon manufacturers amid an import surge and price decline of the EU products. On October 31， 2013， the MOFCOM announced that it would extend the probe by another six months to May 1， 2014.

　　Solar-grade polysilicon is a key material for making solar cells.

　　Expanding VAT Trial

　　China is to replace turnover tax with value-added tax (VAT) in the telecom sector， following similar changes in transport and some service sectors.

　　The new rules become effective on June 1， the MOF and the State Administration of Taxation announced on April 30.

　　Basic telecom services such as voice calls and bandwidth leasing or sales will be subject to 11-percent VAT while value-added services such as messaging， data transfer and Internet access will be subject to a 6-percent rate. Telecom services for overseas clients will be exempt.

　　China has been pushing VAT reform since the beginning of 2012. The reform started with transportation and some modern service sectors， and expanded to railway transportation and postal service sectors before it was introduced in the telecom industry.

　　Turnover tax refers to a tax on the gross revenue of a business， while a VAT refers to a tax levied on the difference between a commodity’s price before taxes and its cost of production.

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