Business briefs.. Mind You own Business Business briefs July 17th CURRENCY One of the most crucial questions for China and the world markets over the past two years has been whether or not China was planning to devalue the Renminbi in line with the fall of other Asian currencies. Chinese official have consistently stuck to the line that a devaluation of the RMB is not in prospect anytime soon, a position which has caused some discomfort to some export-oriented manufacturers, but overall has helped maintain economic stability both in China and regionally during a very difficult period. The latest comment on the subject came from Dai Xianglong, the governor of the People's Bank of China (central bank) who said that the market should decide the value of the Chinese currency. Pull out the tea leaves and start reading. WTO Australia and Japan have both reached agreement with China on the conditions for China's entry to the World Trade Oranisation (WTO). Still to come are the conclusion of similar discussions with the United States and the European Union. There has been much talk about China gaining entry to the WTO before the end of this year, but there is still no clear indication of timing. WTO talks with the United States have been on hold for some time. ECONOMY The Chinese stock markets appear to have plateaued after stunning upward surge of recent months. Stock analysts seem to feel that while the market is unlikely to fall significantly ahead of October 1, it may have seen its highs for now. They cite the fact the fundamentals of the Chinese economy and the transparency and management of the quoted companies has not changed to any great degree. China's foreign trade was valued at US$158 billion in the first half of the year, a 4.4 percent rise over the same period last year. Exports were down 4.6 per cent to US$83 billion at the end of June, while imports were up a whopping 16.6 percent. But the trade balance is still solidly in China's favor. Some analysts believe the increase in imports strengthens the argument for a devaluation. For Shanghai, the value of total foreign trade, import plus exports, during the period was up 20.5 percent, with imports up 24 percent and exports up 17.8 percent. Shanghai's personal foreign exchange deposits stood at US$7.17 billion at the end of June, up six months from $5.30 billion at the same point last year. The main reason - a widening interest rate spread between hard currencies and the Chinese yuan. The one-year fixed deposit interest rate for the yuan stands at 2.25 percent compared with 4.4375 percent for dollar deposits. The recovery in the foreign currency B-share market has also encouraged people to shift more US dollars into the banking system. The government is apparently considering the issue of domestic hard currency bonds to encourage people to take the cash out of their accounts and put it to work. Sales for the Chinese building materials industry were up 14.4 percent in the first five months of the year thanks to increased government spending on infrastructure, but it still lost money as a whole. Official reports said its net losses for the period were 570 million yuan, which was two billion less than previously. Deflation on the retreat? The retail price index in Shanghai increased in June for the first time in 11 months. BACK TO BUSINESS PAGE