Mr Naveen Srivastava, Consul General of India, Shanghai inaugurating the India Pavilion at Automechanika Shanghai -2012, 11 December 2012

Mr. Dai Haibo, Chairman, SMCEI speaking an Interactive seminar, Shanghai, December 19, 2012

January 2013

India & China India-China trade (Jan-Dec 2012)

Trade Dec 2012, $ bn Jan- Dec 2012, $ bn Change compared to Jan-Dec 2011Total trade 5.591 66.472 -10.1%Imports from China 4.255 47.673 -5.7%Exports to China 1.336 19.799 -19.6%Trade deficit 2.919 28.874 -

http://www.customs.gov.cn/publish/portal0/tab1/info412938.htm

CII & China

Meeting with Chinese delegationCII held an interactive meeting with a six-member delegation from China Council for Promotion of International Trade (CCPIT) led by Mr Wang Jinzhen, Vice Chairman, CCPIT in Delhi on 21 December 2012. The two sides exchanged views on bilateral trade and investment between India and China and agreed to work out a 5-year plan of cooperation to achieve the bilateral trade target of $100 billion by 2015 and enhance cooperation in mutual investments.

India Pavilion at “Automechanika Shanghai 2012”CII organized an India Pavilion at “Automechanika Shanghai " held from 11-14 December 2012 at Shanghai New Exhibition Centre. This was the second time an India Pavilion was set up by CII at this important show for auto component industry. 32 Indian auto parts manufacturers participated in this exhibition to display their products and services at the Pavilion. The main objective of the India Pavilion was to promote Brand India and to provide a platform to Indian auto component companies to showcase their strengths and capabilities in both developed and emerging markets with demand for Indian products and technologies. Mr Naveen Srivastava, Consul General of India, Shanghai inaugurated the India Pavilion.

Interactive Seminar between SMCEI and Indian IT CompaniesConsulate General of India, Shanghai and CII India Business Forum organized an Interactive Seminar for Shanghai Municipal Commission of Economy and Informatisation (SMCEI) and Indian IT Companies on 19 December 2012 in Shanghai. The main objective of the seminar was to highlight the services offered by Indian IT companies and their capabilities in helping the industry to be more competitive and to understand the various e-governance and smart city projects Shanghai Government is proposing in the coming year. Mr. Dai Haibo, Chairman, SMCEI delivered a keynote address on the development of software sector in Shanghai and the potential cooperation with Indian IT companies. More than 12 Indian IT companies based in China attend the program.

India-Jiangsu Business Cooperation Seminar in Auto Component Consulate General of India, Shanghai along with CII and CCPIT Jiangsu organized an “India-Jiangsu Business Cooperation Seminar in Auto Component” on 14 December 2012 in Nanjing during the visit of a 17-member ACMA delegation. Mr. Naveen Srivastava, Consul General of India, Shanghai delivered a keynote speech on overview of India - China trade and investment relations. Representatives from Indian companies who have invested in China and Chinese companies who have invested in India shared their experiences. More than 50 Chinese auto component companies participated in the seminar and had B2B meetings. CII also arranged business meetings and factory visits for the ACMA delegation to Shanghai General Motors and Shanghai Volkswagen.

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China PulseThe Monthly China Journal of Confederation of Indian Industry January 2013- Volume 10 No 1

January 2013

China Economy

PBOC injects more liquidity into market The People's Bank of China (PBOC) added more cash into banks through open market operations in the first week of December after seeing actual liquidity drain for four weeks. An additional 11 billion yuan of capital has flowed in the market this week from the previous week. The bank on December 6 unleashed 117 billion yuan into the market after completing seven-day reverse repurchase agreement (repo) operations worth 45 billion yuan and 28-day reverse repo operations worth 72 billion yuan (More).

China’s foreign trade (Jan-Dec)Trade Dec 2012, $ bn Jan – Dec 2012, $ bn Change compared to Jan-Dec 2011

Total trade 366.840 3886.760 6.2%Exports 199.229 2048.935 7.9%Imports 167.611 1817.825 4.3%Trade surplus 31.618 231.110 -

http://www.customs.gov.cn/publish/portal0/tab1/info412938.htm Economy indicators

GDP (2012) Up 7.8% to $8.28 trillion (51.9 trillion yuan)

Forex (End 2012) $3.31 trillion, up $129 billion from 2012

CPI (Dec) Up 2.5% New yuan loans (Dec) Down 29% YOY to 454 billion yuan ($72.91 billion)

PPI (Dec) Down 1.9% YOY Urban per capita income (2012) Up 9.6%PPI (2012) Down 1.7% Fixed-asset investment (2012) Up 20.6% to 36.48 trillion yuan

($5.81 trillion) PMI (Manufacturing) Dec) 50.6% Industrial output (2012) Up 10%, a decline of 3.9%

percentage points 2011FDI (2012) Down 3.7% YOY to $111.72 billion Non-financial ODI (2012) Up 28.6% YOY to $77.22 billion

China's foreign financial assets hit $5 trillion China's total foreign financial assets reached $5.04 trillion by the end of September, with net foreign financial assets of $1.82 trillion and total foreign financial liabilities of $3.22 trillion. The foreign reserve assets, representing 67% of China's external financial assets, reached $3.37 trillion. Of the total foreign financial assets, outbound direct investment, portfolio investments and other investments accounted for 8%, 5% and 20% of the share, respectively. As for liabilities, FDI in China surpassed $1.95 trillion or 61% of the country's external financial liabilities (More).

Imports may take up 35% of gas suppliesImports may account for 35% of China's natural gas supplies by 2015, up from 15% in 2010, raising pressure to push ahead a pricing reform, according to a five-year plan on the gas sector. China's annual imports will reach 93.5 billion cubic meters in 2015, based on contracts already signed. Domestic output will increase to 176 billion cubic meters in 2015, including 37.5 billion cubic meters of unconventional fuel such as coal-bed methane and gas turned from coal (More). China plans to add 3.5 trillion cubic meters of proved conventional natural gas reserves during the period from 2011 to 2015, according to a latest development plan. Explorable reserves will reach around 1.9 trillion cubic meters.

China's grain output grows for ninth consecutive year China's grain output rose 3.2% YOY to 589.57 million tons in 2012, marking the ninth consecutive year of growth. The corn output amounted to 208.12 million tons, up 8% from a year earlier, while that of rice and wheat gained 1.6% and 2.7%, respectively, to 204.29 million tons and 120.58 million tons. The average per unit area yield rose 2.6% from 2011 to reach 5,299 kg per hectare this year (More).

Cross-Straits trade totals $554 billion Trade between the Chinese mainland and Taiwan grew to $554.27 billion in October from December 2008 when the two sides opened direct mail, transport and trade links. During this period, China’s imports from Taiwan totaled $438.4 billion, while its exports to Taiwan reached $115.87 billion. China approved 87,000 Taiwanese-funded programs and received $56.53 billion in Taiwanese investments from December 2008 to October 2012. During the same period, 133 enterprises from the Chinese mainland set up subsidiaries or offices in Taiwan, with total investment reaching $722 million (More).

China exports account for 11.1% of world trade China's exports accounted for 11.1% of world trade during the first three quarters of 2012, up 0.6 percentage point from the same period last year. Exports grew faster than those of other major economies during the first nine months despite global economic uncertainties (More).

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January 2013

Politics & Government

No stop in reform, opening-up: XiXi Jinping, the newly-elected general secretary of the CPC Central Committee, vowed "no stop in reform or opening-up" when inspecting Guangdong Province from Dec. 7 to 11. He called on the entire party and people from all ethnic groups to unswervingly adhere to the path of reform and opening up and focus more on pursuing reform in a more systematic, whole and coordinated way. During his inspection tour, Xi visited villages, enterprises, communities, offices of the armed forces and research institutions in the cities of Shenzhen, Zhuhai, Foshan and Guangzhou (More).

Foreigners to get key rightsForeigners with permanent residency will have the same rights as Chinese nationals, with the exception of political rights and duties, the Ministry of Human Resources and Social Security said on December 11. Permanent foreign residents will be granted national treatment in terms of employment, investment, house purchase, and gaining professional titles. Foreigners with permanent residency can participate in all aspects of social insurance and avail of the benefits (More).

Shanghai to offer 72-hour visa-free stay in 2013Starting on Jan 1, tourists from 45 countries who have third-country visas and plane tickets can apply for a 72-hour transit without a visa application in Shanghai. Shanghai-based China Eastern Airlines has planned a full package of services for foreign passengers. The package includes hotel reservations, car rentals, and 1-3 day tours. Shanghai already has a program that allows passengers from 32 countries to have 48-hour visa-free stays in the city (More). Beijing has also launched similar new visa plan to boost tourism from January 2013 (More).

China, Russia ink 4 energy deals Following the 9th China-Russia energy negotiators' meeting, China and Russia on December 5 signed four documents that include a memorandum of understanding in cooperation on energy market assessment, a roadmap on cooperation in the coal sector, the minutes of the meeting on coal cooperation and an agreement on electricity supply. These agreements are aimed at further enhancing energy cooperation between China and Russia. The two sides also agreed to start oil and natural gas cooperation following the principle of upstream and downstream integration (More).

China created 12.02 million jobs in urban areas during Jan-Nov About 12.02 million new jobs were created in the first 11 months in 2012, which has already beat the annual target of 9 million. The urban registered unemployment rate stood at 4.1% at the end of September, below the annual target of 4.6% (More).

China encourages family planning reformsChina is encouraging trial reform efforts for the country's population and family planning policy, according to an official meeting held on 19 December. Governments in trial areas will be allowed to explore their own solutions based on local conditions and practices. Reform efforts will include strengthened research on relevant issues and the improvement of the government's ability to coordinate population growth and economic development (More).

Export quota for rare earths to stay the same The export quota for rare earths will remain unchanged in 2013 despite decade-low exports in 2012, according to Liu Yinan, vice-chairman of the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters. China's 2012 quota was fixed at 30,996 tons. China supplies 90% of the world's rare earths (More).

China approves 3rd pilot financial reform zoneThe city of Quanzhou in Fujian province has been approved as the third pilot financial reform zone in China, and will form a diversified and dynamic financial system to support the development of local enterprises over the next five years. According to the plan jointly released by 12 ministries on December 25, the pilot project aims to diversify local financial institutions, explore more innovation in financial products and provide capital backup for small businesses. The other two zones approved earlier by the State Council, are the city of Wenzhou in Zhejiang province and the Pearl River Delta in Guangdong province (More).

China issues white paper on medical, health servicesChina on 26 December 2012, issued a white paper, "Medical and Health Services in China", on the country's medical and health services, covering both urban and rural residents. The paper revealed that the health of the Chinese people is now among the top in developing countries with an overall life expectancy of 74.8 years in 2010, 72.4 years for males and 77.4 years for females (More).

Business & IndustryVehicle sales hit top gear Passenger-vehicle sales in China hit a record in November as a series of positive indicators boosted the market. A total of 1.419 million cars, sports utility vehicles, multi-purpose vehicles and minivans were sold, a 13% YOY increase. The total sales for the first 11 months jumped 6.6% YOY, paving the way for an increase of at least 5% in passenger-vehicle sales for the entire year (More).

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January 2013

Canada approves CNOOC's takeover of Nexen The Canadian government on Friday approved China National Offshore Oil Corp's (CNOOC) $15.1 billion purchase of Calgary-based Nexen Inc, which explores western Canada's oil-rich tar sands and operates production rigs in the North Sea, the Gulf of Mexico and Nigerian waters. This is the biggest acquisition overseas of CNOOC. The deal is still undergoing a regulatory review in the United States, regarding Nexen's assets in the Gulf of Mexico (More).

PetroChina buys into Australia LNG projectPetroChina Co Ltd agreed to buy BHP Billiton Ltd's shares of liquefied natural gas project in Australia at a price of $1.63 billion, the biggest overseas acquisition by the company in 2012, to further expand its foreign assets. BHP announced on December 12 that it will sell its 8.33% interest in the East Browse Joint Venture and 20% interest in the West Browse Joint Venture, located off western Australian, to the Chinese oil and gas company (More).

Jaguar Land Rover China recalls 337 carsJaguar Land Rover (JLR) China will recall 337 cars due to substandard fixings in their rear calipers and steering boxes. The company has decided to recall 190 2012 Evoque and Freelander vehicles produced on June 11 this year, as the fixing bolts in the vehicles' rear calipers are not torqued properly. Another 147 2012 Evoque and 2013 Evoque vehicles made between October 20 and September 18 will also be recalled due to similar fixing problems in their steering boxes (More).

CII India OfficeU. D. Bhatkoti, Advisor

Confederation of Indian Industry

CII China OfficeE B Rajesh, Chief RepresentativeConfederation of Indian Industry

The Mantosh Sondhi Centre23 Institutional Area, Lodi Road, New Delhi-110003

Tel: 91-11-2462 9994-7; Fax: 91-11-24601298Email: u.d.bhatkoti@cii.in; Website: www.cii.in

Room No 11A47/49, Shanghai Mart,2299 Yan'an Road (West), Shanghai 200336, China

Tel: +86 (21) 62360969; Fax: +86 (21) 32283510 Email: e.b.rajesh@cii.in; Website: www.cii.in

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Disclaimer: This document is being shared for information purposes only and is therefore not intended to substitute for formal professional advice. All information in this document has been compiled and/or arrived at from online sources in the public domain.

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