China to become second largest market for PCs by 2006

China will shoot past Japan to become the world’s second largest market for personal computers (PCs) by 2006, the China Daily reported recently.

Citing projections from CCID Consulting, an official IT body under the Ministry of the Information Industry, the newspaper said Chinese PC imports were expected to reach 10.1 million units by 2003 and 17.4 million units by 2006, up from 7.28 million last year.

The average annual growth rate for the Chinese PC market will remain at 18.8 percent for the next five years, the paper said.

PC sales volumes are additionally expected to seen an almost two-fold increase to 104 billion yuan ($12.6 billion) from last year’s 51.7 billion yuan, the research firm predicted.

The combined boom will see China become the second largest PC market according to the China Daily.

China’s economy to grow 7 percent: ADB

China’s economy will grow robustly in the coming two years clocking up seven percent growth this year and 7.4 percent in 2003 the Asian Development Bank said recently.

Speaking at a press conference in Shanghai, ADB China representative Bruce Murray said domestic consumption and foreign investment would continue to drive expansion, with China’s industrial and service sector logging eight to nine percent annual growth over the next two years.

However agricultural growth will lag far behind, the ADB warned, crawling at a sluggish two to three percent a year.

Creating jobs for what the ADB estimates to be 100-200 million redundant rural workers would continue to be a major headache for policy-markers, Murray said.

Beijing’s proactive fiscal policy, which pushed expenditure up by 18.6 percent in 2001, had been effective in supporting growth but there were risks that if pump-priming continued, the government might run out of viable projects in which to invest.

Fiscal revenues outstripped expenditure in 2001, growing by 22.2 percent and as long as government coffers remained full, China would be able to continue along its current trajectory, the ADB predicted.

The global economic recovery, which would push Asian economic growth to 4.8 percent this year from 3.7 percent in 2000 would give China’s export growth a shot in the arm, the bank added.

Exports would grow by six percent this year and pick up to 10 percent in 2003.

With China’s accession to the World Trade Organisation (WTO) late last year, import growth would outstrip export growth, hitting 10 percent this year and 14 percent in 2003.

Japan and china sign currency swap accord

Japan and China signed a currency swap agreement recently aimed at providing protection against financial crises, the Bank of Japan said. Bank of Japan Governor Masaru Hayami and visiting People’s Bank of China Governor Dai Xianglong concluded the deal at the Japanese central bank’s headquarters.

Tokyo will provide Beijing with yen in exchange for yuan if the Chinese currency faces speculative attacks and the Chinese central bank needs to intervene in markets to support its currency. The ceiling for the swap deal is yen or yuan worth three billion dollars, the Japanese central bank said. The move is part of an expanded currency swap arrangement in Asia to strengthen financial systems after the currency crises that started in Thailand in 1997 and raged through Asia.

Finance ministers from the 10 member Association of Southeast Asian Nations (ASEAN) and China, Japan and South Korea agreed to extend the swap network amongst themselves in Chiang Mai, Thailand, in May 2000.

Japan’s capital investment shrinking further

Capital investment by Japan’s major companies will further shrink in the new fiscal year as they become selective in the face of market slumps and stiffening competition, according to a survey published recently.

The survey showed capital investment, planned by 113 firms for the year to March 2003, will be 12.9 percent lower than their actual investment in the preceding year, the Nihon Keizai Shimbun said. It was the second straight annual decline following a 3.3 percent fall in the year to March 2002.

Their budgets for spending in plants and equipment totalled 10.7 trillion yen (81.1 billion dollars) on a group basis, including 5.2 trillion yen from 83 manufacturing firms and 5.5 trillion yen from 30 non-manufacturing firms, the leading business daily said.

With companies in key sectors, including electronics, autos and steel, slashing their outlays, capital investment by manufacturing firms is estimated to fall 10.7 percent.

Singapore’s jobless rate worsens

Singapore’s unemployment rate deteriorated to 4.5 percent at the end of March from a revised 4.4 percent in December as fallout from the recession continues, the government said recently.

The rate is worse than the 4.4 percent recorded in December 1998 during the Asian financial crisis but lower than the record 6.0 percent posted in March 1986 due to recession.

Preliminary estimates showed the labour market shrank by 16,100 jobs in the first quarter to March, marking the third consecutive quarterly decline, the manpower ministry said in a statement. The goods producing industries are the worst affected with 11,900 jobs lost with the remaining 4,200 coming from the services industries, the ministry said. An estimated 4,300 workers were retrenched at the end of the March quarter, worse than the 3,248 recorded a year ago but an improvement from 8,591 in the fourth quarter. A total of 25,838 workers were retrenched in 2001, more than double the lay off in 2000. The latest unemployment figures come a day after PM Goh Chok Tong warned the recession hit island to prepare for a deterioration in the labour market.

Japan’s trade surplus in November fell 16.3 percent from a year earlier in the 17th straight month of decline as the global technology slump continued to hurt exports, the finance ministry said recently.

Trade deficit narrowed in Asia-pacific region

The Economic and Social Survey of Asia and the Pacific 2002 shows that the trade deficit and the current account deficit both narrowed during 2001 despite the global economic slowdown.

But the budget balance deteriorated due to fall in imports, said the survey released recently.

The GDP growth came down to 6 percent in 2001 from 6.4 the previous year, owing to the slowdown in the industrial sector. The manufacturing sector also suffered because of a decline in the production of ready-made garments , textiles, woolen carpets and construction materials.

"The growth will continue to decline in 2002 because of medium-term global economic outlook, before it recovers."