The price of gold reduced to $1,225 per ounce last Thursday in Europe. This is largely due to the rise of Euro against the dollar, implying that many consider that it’s highly risky to have a strong appetite for assets at the expense of bullion. The State Administration of Foreign Exchange, or SAFE, located in China, stated in their report that market for gold is not as suitable for allocation of assets because of its innate properties, including volatility, being illiquid and being small.

In New York, last Wednesday, gold was priced at $1,230.35. Now it’s price reduced to $1,223.20. Furthermore, future deliveries for the U.S., particularly in August, are now priced at $1,224.70. The Spanish debt auction in particular caused the rise of Euro, because this returned the confidence on how Spain will deal with its huge debt. The policy decisions of the European Central Bank also contributed.

Previously, when the euro was losing considerably, many investors demanded for gold because they wanted to diversify from the currency, according to many analysts. Now that the euro has increased, this buying of gold has been reduced. There is in fact an interim consolidation, and the future is most likely to be that the euro will fall down again, and that means that the gold will rise, but certainly, the situation can go both ways again in the future.

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Post tags: China, europe, Gold Prices, investors, policy decisions, Spain, state administration of foreign exchange, World Market

Strikes continue to plague the Honda plants in China. This is already the second time in less than one month that strikes caused the plants to stop production. Tomorrow, two China factories will have to stop their car assembly production. These plants, which are located in Guangzhou in the province of Guangdong, will close because their employees are asking for higher pay.

This is according to Natsuno Asanuma, spokeswoman for Honda Tokyo. Also, according to another spokeswoman based in Beijing named Gao Xia, a strike permitted another supplier to halt their production, and this is still in Guangdong. Specifically, the company’s name is Foshan Fengfu Autoparts Corporation, located in Foshan, Guangdong. They started their strike in June 7, and this happened seven days after a parts maker, which also supplies Honda car parts, was given 24 percent increase in salary.

There really is a lot of pressure from the southern part of China to increase wages, and this was all started by the initial strike from the Honda plant. It is highly likely that other workers from other automaker plants will ask for higher salary as well. Despite the continuing strike, Honda stated that they still have partial operation, but this statement was not elaborated further.

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Post tags: assembly production, beijing, China, guangdong, guangzhou, Honda, honda plant, increase in salary

The Chinese government has now changed its mind about the internet. It now likes what it sees. Last Tuesday, they have called the internet, ‘the crystallization of human wisdom, the great scientific invention of the 20th century, an important indicator of advanced productivity’. This statement was published in a white paper they released entitled China’s Internet Situation. This paper says that the Chinese government acknowledges the importance of the internet in improving the lives of the Chinese people and its benefit to the economy.

The paper talks a lot about China’s achievements in internet propagation. The government claims that more than 95% of towns now have broadband access. They also aim to improve the internet penetration to 45% from the current 29% in a frame of five years.

They are also proud to say that citizens have freedom of speech on the internet.

Citizens have full freedom of speech on the internet, the paper claims. An excerpt from the paper says, “China now has millions of forums and 220 million blog users, according to sampling statistics. More than 66 percent of Chinese internet users comment regularly on the internet, discuss various topics, fully express ideas and pursue their interests.”
The paper also advocates Twitter as a very good way for the citizens to practice their online communication. Other social networking and blogging sites are a big help as well.

However, the paper strongly upholds that its aim of protecting and properly educating the citizens still stand. This is the very reason why they have banned several sites and search engines before.

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Post tags: 20th century, China, chinese government, chinese internet users, crystallization, government claims, social networking, Twitter

Suntech Power Holdings Co Ltd is China’s biggest maker of solar panels. They plan to invest the equivalent of $393 million for a 1 GW production capacity that they will set up in Shanghai. This is because of the rising demand for solar panels in the next three years.

It has been reported that the subsidies for German solar power will be reduced, resulting in fewer demands by the third quarter. However, the Chairman of Suntech, Zhengrong Shi, pointed out that this does not affect the overall attractiveness of solar power demand for Germany. Even more than that, the demands from the United States and other countries are growing quickly.

Suntech can no longer keep up with the demand, they are short capacity-wise, and the clients need more than they can give. That’s why they need to respond with huge investments. In fact, they stated that they do not feel effect of subsidies reduction from Germany.

Suntech even predicts that Germany’s market growth for solar cells will reach around 70 percent, while it will double in the United States. The company intends to complete the 1.4 GW production within this year, and by the end of June, the new Shanghai plant’s initial phase will be completed.

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Post tags: China, initial phase, Investments, shanghai plant, solar cells, solar power, subsidies, suntech power holdings

McDonald’s recalled all of its Shrek drinking glasses, after it was discovered to contain cadmium. These glasses were sold to promote the fourth installment of the movie Shrek in the United States.

Cadmium is a very dangerous substance, even for tiny inhalations, as this can cause several complications, the most common of which is severe lung disease. This is according to the Agency for Toxic Substances and Disease Registry. The information is posted in their website.

Cadmium is a substance that is useful for plastic, metal coatings and battery manufacturing. This time, apparently, it was used in the 16-ounce glasses for 2 dollars apiece.

This recall does not include or affect McDonald’s branches in the United Kingdom. This is according to the office of the British press as stated via email. This promotion is also not run in Asia. This is according to the office of McDonald’s in China.

Hopefully, no damage has been done yet among the customers who have bought the product before it was recalled. Many things can be learned here, and hopefully new safety measures will be implemented, as this is not only a drawback in terms of financial and economical concerns, a more important variable with regards to the health of McDonald’s customers is at risk.

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Post tags: Agency for Toxic Substances and Disease Registry, asia, cadmium, China, McDonalds, recalls, safety measures, Shrek glasses, toxic substances, united kingdom, united states

Workers in China protested, and the companies responded by increasing hefty pay. This is good news for China and the world, because it implies that the country is slowly leaning on towards the benefit of the workers. This is a good indication because it will lead to increase in domestic consumption. Aside from this, it is also one step towards global economic balance and would definitely be for the better.

This move also coincides very well with China’s aims of creating a new model for growth, one that is determined by consumption. According to Ting Lu, an economist, this new model demands that the GDP is redistributed more towards the labor force.

Examples of companies that heeded to the concern of the laborers are Honda Motor Company, which increased their pay raise to 24 percent. Another company is Foxconn, whose workers will get 30 percent increase, primarily sparked by incidents of suicide which are speculated to be due to poor working conditions, a speculation which is heavily defended by Apple’s CEO, Mr. Jobs.

The stories of these two companies are quite amazing, since China has been known to cover their ears from the woes of the workers. It has been estimated that China’s blue collar workers will continue to enjoy these benefits until 2012.

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Post tags: apple, blue collar workers, China, domestic consumption, foxconn, honda motor company, labor unrest, working conditions

China’s manufacturing increased slower than expected in May, as the reports indicated property sales drops in three major Chinese cities. This resulted in stock declines all over Asia as they speculate that China’s economy may slow.

The manufacturing index, from which the figures are based on, is announced by China’s National Bureau of Statistics. The study covers over 20 industries which include 730 companies.

According to Brian Jackson, a strategist based in Hong Kong, these signs of potential slow down may be intensified with China’s efforts to exert more control in property markets and with Europe’s crisis.

According to Premier Wen Jiabao, the world should be wary about another potential economic collapse. Similar growth declines in manufacturing are witnessed in other countries, including Australia and the cooling of U.S. manufacturing.

That being said, however, the chief China economist Qu Hongbin that tightening efforts will help ease the situation, and that investments on infrastructure and durable private consumption will only help improve the situation.

Economic momentum continues to be strong and growth will still be relatively fast, but growth rate will slow down. This may also be a sign that China’s economic recoil is becoming stable.

Comparably, urban property prices reached a 12.8 percent jump in April. One company, Wuhan Iron & Steel Group, blames property loans curbs for the decline in steel demand for the month of May.

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Post tags: bureau of statistics, China, economic index, manufacturing industry, property markets, steel group, wen jiabao

A trend is brewing in Chinese society. Workers are now demanding higher wages at a Honda plant. China’s economy is relentlessly moving in favor of their workers. The economy’s growth has favored business owners but it is slowly moving in a new direction. Labor shortages are seen to increase and the law of supply and demand will adjust in the worker’s favor.

This is a good trend especially for China’s export industry. The transition is not that easy though and if various companies’ management aren’t careful, they will most likely face the same problem as Honda.

In a country of over a billion people, labor supply should be far from running out. This is not what is happening though. The very reason for this shortage is China’s one-child policy. Studies have shown that the population of young people, ages 20 to 39, has drastically fallen by 22%.

Another thing aggravating the job market is that the economic program of Beijing has drawn labor away from the east coast. The cost of housing in that region also discourages people from working in that area. With these factors, wages would need to be very high to attract laborers.

Economists think the entire scenario is a good thing as well. Once families get higher incomes, they could spend more and in turn help out the economy thru paying more taxes. The economy really needs this boost to lessen the need to depend on exports. This, in turn, can help them keep their products for their own consumption.

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Post tags: China, export industry, higher wages, Honda, job market

China is now seeking to get even with President Barack Obama’s decision impose tariffs on their exported Chinese tires. What the Chinese government wants is to slash their American chicken imports! American traders are now worrying as they could lose their largest export market for chickens. The biggest number of exports on chicken to China are the wings and feet parts.



However, a Chinese trade expert revealed that the threat from the Chinese should not be taken seriously. He revealed that the Chinese really dig these chewy jumbo chicken feet they get from America. We can only hope that these distasteful exchange of international trade cuts would be resolved as both parties could end up losing in the end. To know more about this news story, please visit New York Times.

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Post tags: Barack Obama, chicken feet, China, US