China cuts off Kim's accounts

The outlook just got a little worse for Kim Jong-un as a major Chinese bank has refused to do business with one of his financial institutions. Picture: AFP Source: AFP

ONE of China's biggest banks has halted business with a North Korean bank accused by the US of financing Pyongyang's missile and nuclear programs in the latest sign of Beijing's displeasure with its estranged ally.

The state-run Bank of China Ltd has notified the Foreign Trade Bank of North Korea that its account or accounts were being closed and all financial transactions suspended, said a bank spokeswoman, reading a brief statement.

The spokeswoman for the Beijing-based bank did not identify the number of accounts closed or provide further details.

The move comes after the Chinese leadership, installed last year, has shown growing frustration with North Korea's young leader, Kim Jong-un, and the nuclear and missile tests his government has conducted, aggravating regional tensions.

In recent months, Beijing has displayed willingness to work with Washington to apply pressure, from signing on to UN sanctions to issuing a statement with US Secretary of State John Kerry last month urging North Korea to abandon its nuclear programs.

China is North Korea's economic lifeline, providing nearly all of its fuel and most of its trade. North Korea's economic dependence on China is rising, following a standoff with South Korea that effectively shut an industrial park that was an important source of hard currency.

As North Korea warns foreign residents to leave South Korea for safety -- a mixed reaction in Seoul and China. Deborah Lutterbeck reports.

The Bank of China's suspension of business further complicates the ability of the Foreign Trade Bank, North Korea's main foreign exchange bank, to access a key financial market.

In March, the US Treasury Department imposed sanctions against the Foreign Trade Bank, effectively cutting it off from the US financial system and urged Beijing to do the same.

The department called the bank a "key financial node" in North Korea's programs to develop weapons of mass destruction.

It said the Foreign Trade Bank had financed other banks and companies already targeted by sanctions, including assisting in millions of dollars in transactions for the Korean Mining Development Corp., a major arms dealer.
 

View the original article here

China bumps Australia for NZ exports

A flag of China Source: Supplied

CHINA became New Zealand's number one export destination in the March quarter, official data showed Friday, displacing Australia from a position it has held for decades.

Statistics New Zealand (SNZ) said the export of goods to China was worth NZ$2.3 billion ($2.0 billion) over the three-month period, up 34 percent on the same quarter last year, consisting largely of dairy products, timber and wool.

In contrast, exports to Australia slipped 7.3 percent to NZ$2.2 billion over the same period.

"China became New Zealand's top export destination in the March 2013 quarter, overtaking Australia for the first time," SNZ said.

"Twenty percent of goods exported went to China, compared with 15 percent in the same quarter of the previous year."

Exports to China have ballooned since New Zealand became the world's first developed country to sign a free trade agreement with the Asian giant in 2008.

However, the data released Friday related to goods only. Australia remains New Zealand's top trading partner if both goods and services are taken into account.

Two-way trade between New Zealand and Australia was NZ$17.7 billion in the year to June 2012, compared to NZ$13.8 billion for trade with China, according to official figures.

Wellington and Beijing have agreed to try to lift two-way trade between the two nations to NZ$20 billion by 2020.

ns/mp/ami

View the original article here

China and Iceland ink free trade agreement

Source: AFP

ICELAND has become the first European country to sign a free trade agreement with China, as Beijing looks to gain a foothold in the strategic Arctic region.

The deal is expected to expand trade between the world's second-largest economy and the north Atlantic state, which suffered an economic meltdown in 2008.

The agreement was signed during a visit to Beijing by Icelandic Prime Minister Johanna Sigurdardottir, and follows six years of talks between Reykjavik and Beijing.

"This is a major event in China-Iceland relations," Chinese Premier Li Keqiang said.

"It also signals the deepening of our relationship, especially our economic relationship, which has been lifted to a new height."

A proposal by a Chinese property tycoon to buy 300 square kilometres of land in Iceland became embroiled in controversy and was blocked by Reykjavik in 2011.

China has said it would like to play a larger role in the Arctic.

It has applied for permanent observer status on the Arctic Council, an eight-member body including Iceland that meets to discuss matters concerning the area.

View the original article here

China inflation data boosts dollar

THE Australian dollar has pushed about half a US cent higher, helped along by softer Chinese inflation dollar and gains in the value of gold and the euro.

At 12pm AEST today, the Australian dollar was at 104.37 US cents, up from 103.79 US cents yesterday afternoon.

CMC Markets foreign exchange dealer Tim Waterer said strong demand for the euro currency and a rise in the gold price had helped lift the Australian dollar early today.

He said the currency received a further boost from Chinese figures, which showed inflation slowed to an annual rate of 2.1 per cent in March, down from 3.2 per cent in February.

Mr Waterer said the figures reduced the likelihood the People's Bank of China would need to tighten monetary policy in order to rein in price rises, which was good news for the Australian economy.

"That would suggest there is no further tightening measures needed at this stage, so that played into the hands of the Australian dollar," he said.

Mr Waterer said the Australian dollar could rally above 104.50 US cents during today's local session, but only if the inflation figures prompt a strong rally on the Shanghai share market.

Meanwhile, Australian bond futures were weaker at noon. At 12pm AEST, the June 10-year bond futures contract was trading at 96.765 (implying a yield of 3.235 per cent), down from yesterday's local close of 96.775 (3.225 per cent). The June three-year bond futures contract was at 97.200 (2.800 per cent), down from 97.230 (2.770 per cent) previously.

View the original article here

China eyes off Aussie mining

PwC mining leader Jock O'Callaghan says China needs to find ways to meets its urbanisation targets. Picture: AFP Source: PerthNow

PwC mining leader Jock O'Callaghan says China needs to find ways to meets its urbanisation targets. Picture: AFP Source: PerthNow

CASHED-UP Chinese state owned companies are tipped to be the big winners in a year of consolidation within the mining industry after last year's disastrous procession of billion dollar write-downs by some of the mining giants, a new report warns.

The PricewaterhouseCoopers mining report said there will be no repeat of last year's mega-mergers as the mining giants instead focus on delivering shareholder value by developing existing assets.

Commodity prices are expected to stabilise in 2013 but with Chinese demand strengthening as its economy continues to urbanise and meet its 7.5 per cent growth targets iron-ore, copper, coal and nickel are tipped to be among the big winners over the coming years.

PwC mining leader Jock O'Callaghan said commodity prices will continue to be volatile over the short term but remain on an upward trajectory over the medium to long term.

"China still needs the raw materials to meet its urbanisation targets of putting 12 million people a year into new cities that haven't even been built," he said.

"As a result there will be no slowdown in the in the appetite from off-shore to buy-up Australian mining companies or even take minority stakes. This is driven from China but Indian and Japanese companies are also looking for deals."

Almost $US110 billion was spent on mergers and acquisitions last year, but excluding the $54 billion blockbuster merger of Glencore and Xstrata this was the lowest value since 2009 and the volume of deals was down to its lowest level in eight years.

Chinese companies were responsible for only 9 per cent of the deals in 2012 but a greater risk appetite and the countries relentless drive for urbanisation is expected to see Chinese M&A activity rise sharply in the coming five years.

Mr O'Callaghan said the next 12 months will also likely see the majors such Rio Tinto and BHP Billiton sell-out of some of their non-core assets following a series of billion dollar writedowns last year.

"The main game will continue to be the need to reduce transaction risk, boost shareholder value and demonstrate discipline about where and how capital is allocated," he said.

"Miners across the world are operating in a global market where risk factors such as cost and resource nationalism are on the rise and where buying and selling specific assets have political consequences. But good deals find a way to get done."

View the original article here

Shares hammered by China data

THE Australian share market has closed lower, pulled back by large stocks, as investors fear a China slowdown.

The All Ords closed down 72.4pts or 1.4 per cent 5028.5

Earlier:
At 12.00 AEDT on Monday, the benchmark S&P/ASX200 index had fallen 24.3 points, or 0.48 per cent, to 5,061.8 points, while the broader All Ordinaries index was down 23.9 points, or 0.47 per cent, at 5,077.0 points.

On the ASX 24, the March share price index futures contract was 14 points weaker at 5,060 points, with 11,789 contracts traded.

"Today (the market fall) is largely reflected by some large stocks going ex-dividend, so that is having a negative impact overall," OptionsXpress market analyst Ben Le Brun said.

"Obviously, BHP being so heavily weighted, their ex-dividend factor is affecting the market overall."

Mr Le Brun said most sectors of the market were in negative territory, except for healthcare stocks, telcos and utilities.

When stocks go ex-dividend, the person who owns the security on the ex-dividend date will be awarded the payment.

Stocks usually drop in price by the amount of the dividend.

In the resources sector at 1204 AEDT, BHP Billiton was $1.05 lower at $35.79 while Rio Tinto sagged $1.40 to $64.68.

Miner Lynas was 0.5 cents higher at 59.5 cents after it announced it will have a new chief executive from April as it ramps up its production of rare earths products.

Southern Cross Austereo Media added 4.75 cents to $1.5725 after it said it was looking at its options, following reports it was considering a merger with Nine if changes to media laws are approved.

News Corporation lifted 27 cents to $28.79 as it said it was selling its 44 per cent stake in New Zealand pay television business SKY Network Television.

Fairfax Media improved 0.25 cents to 57.25 cents as its broadsheets moved to tabloid size, with editors insisting the historic change would not affect content.

Boral slipped two cents to $5.11 after it said it would merge its construction materials and cement divisions into one business, resulting in the departure of long-serving manager Murray Read.

National turnover at 1211 AEDT was 745.68 million securities worth $1.99 billion, with 438 stocks down, 312 up and 322 unchanged.

On Wall Street in the United States on Friday, stocks reached a five-year high but the rest of the world is watching how the US economy deals with impending federal spending cuts through its 'sequester' bill.

View the original article here