China posts record $12b trade surplus
Bureau Report

BEIJING--China reported a record trade surplus yesterday, but affirmed its policy of keeping the yuan steady despite President George W Bush's call for more currency flexibility to help cut the "bothersome" US deficit with the Asian nation.
The central bank also sought to head off pressure for a stronger yuan by saying currency changes alone would not put the balance of payments on an even keel. The customs office said the surplus swelled to $12 billion (R81.36 billion) last month, up from $7.1 billion a year earlier and rebounding much more strongly than expected from a swoon in September.
The figures came out a day after Bush described the big US trade deficit with China as bothersome and said he would urge China to make more progress towards a market-driven exchange rate. Bush will visit Beijing at the end of next week. Qu Hongbin, an economist with HSBC in Hong Kong, said the surplus was likely to increase pressure for a further rise in the yuan, also called the renminbi, following July's landmark 2.1 percent revaluation.
"How Chinese exports perform is largely driven by external demand rather than the exchange rate. But if you have a big trade surplus it will give western politicians an excuse or tool for them to put pressure on the currency." The surplus dwarfed expectations of a $9 billion figure and took the accumulated total for the first 10 months to $80.4 billion, compared with $32 billion for the whole of 2004.
The US accounts for about a quarter of the surplus, which had unexpectedly dropped in September to $7.6 billion from $10 billion in August. China shares Bush's goal of currency flexibility but, craving stability, says it will take its time about getting there so the economy has time to adjust.
"The People's Bank of China will adjust the renminbi's floating band when the time is appropriate, based on its consideration of the markets as well as the economic and financial situation," deputy central bank chief Xiang Junbo said yesterday. Xiang, ruling out another administered adjustment like July's, said supply and demand would mainly drive the yuan's value in future, but said a higher yuan was no cure-all for the billowing trade and capital account surpluses.
"Relying on the exchange rate alone to maintain the balance of payments is not enough." The answer, he added, was for China to pursue policies that spurred domestic consumption. China also reported annual producer price inflation slowed to 4 percent in October from 4.5 percent in September. The consumer price figures are due to be released today.

China reports new Bird Flu outbreak

BEIJING—China has confirmed a fresh outbreak of the deadly H5N1 bird flu virus in poultry in its central Hubei province, the Hong Kong government said on Saturday.
“The Health, Welfare and Food Bureau received notification from the Ministry of Agriculture of the Mainland last night, of an H5N1 avian influenza outbreak among poultry in Jingshan country in Hubei province” the Hong Kong government said in a statement. This latest outbreak comes as China is battling to control seven other outbreaks since the beginning October. Liaoning rules out six suspected bird flu outbreaks The Liaoning Provincial Control Office of Highly Pathogenic Avian Flu on Saturday ruled out six suspected highly pathogenic bird flu outbreaks in this northeast China’s province. Zhou Liyuan, spokesman for the office, told a press conference that the judgement was concluded as the quarantine tests conducted by the provincial animal epidemic prevention station lab turned out negative of highly pathogenic avian flu virus. The office has erased Nanwa Village in Xinmin City of Shenyang, Jintun Village of Jinzhou City, Bajiazi Village of Jinzhou, Guojia Village of Jinzhou, the Beizhen Street of Beining City in Jinzhou and Yujiatun Village of Heishan County from the bird flu blacklist.
In bird flu-hit Heishan County, no new cases have been reported for recent two days. In bird flu-hit Beining City, no new cases have been reported for recent four days. In Nanzhan New District of Jinzhou, no new cases have been reported since November 6. In New Mongolia Autonomous County of Fuxin City, no new cases have been reported since November 8, as listed by the spokesman. He said that the provincial government has allocated 15.5 million yuan (1.9 million US dollars) to compensate the farmers for their loss of poultry culling. A total of 265.8 million yuan (33 million US dollars) have been put in the epidemic prevention in the province. According to the province’s compensation standard, farmers are compensated with 10 yuan (1.25 dollars) for each of their chickens and duck slaughtered in quarantine, 15 yuan (1.87 dollars) for a goose and 5 yuan (0.65 dollar) for every young fowl. The spokesman said that hospitals in bird flu-hit areas in Liaoning have been ordered to accept flu patients regardless of medical charges, which will be later drawn from the provincial finance. (The Daily Mail-China Daily news exchange item)

China knocks down US missile initiative

BUSAN (South Korea)—China on Saturday vetoed a US proposal aimed at reducing the vulnerability of commercial aircraft to heat-seeking surface-to-air missiles, an official said.
The proposal asking members of the Asia Pacific Economic Cooperation (APEC) group to assess the vulnerability of their airports to Man-Portable Air Defence Systems (MANPADS) was tabled at a meeting of APEC officials here.
“China objected to it so there was no consensus. It’s a political and touchy issue,” said an Asian foreign ministry official who attended the session, asking to remain anonymous.
APEC, a loose grouping of 21 countries and territories bordering the Pacific Ocean, arrives at decisions by consensus and any disagreement from one member can veto an initiative.—APP

Bush to visit China on 19th
From Max Lee

BEIJING—The Chinese Foreign Ministry has announced that US President George W. Bush will visit China from November 19 to 21 at the invitation of Chinese President Hu Jintao.
Foreign Ministry spokesperson Liu Jianchao made the statement in Beijing on Friday.
The US President's upcoming visit will be his third to China. His Asian trip will also take him to Japan, South Korea and Mongolia. He will also attend the 13th APEC Economic Leaders Meeting in Busan, South Korea.
During a recent round-table interview with Asian reporters at the White House, President Bush said he is looking forward to visiting China once again. He also reiterated that the United States will continue to adhere to its one-China policy and does not support "Taiwan independence”.