China Headlines: Chinese growth a boon for world

China is taking resolute pro-growth moves including manufacturing and infrastructure investment against economic headwinds.

Their necessity was indicated as the new Caixin purchasing managers' index declined to a two-year low of 47.7 in July from June's 49.4, suggesting weakness in the manufacturing sector.

PRO-GROWTH MEASURES

The National Development and Reform Commission (NDRC), China's top economic planner, released an action plan on Tuesday to improve the core competence of six manufacturing sectors from 2015 to 2017.

The NDRC has several projects planned for railway transportation equipment, ship making and oceaneering equipment, industrial robots, new energy vehicles, modern farm machinery and advanced medical devices and medicine.

The planner counts on the projects to facilitate breakthroughs in key technology, nurture manufacturers with global influence and create brands recognized around the world.

To realize the goals, the NDRC vowed to attract private investment, increase financial support and encourage acquisitions of foreign high-tech manufacturers.

"Manufacturing is key in transforming China into an innovation-driven economy. Breakthroughs in manufacturing technology and equipment can bring positive changes to the industrial structure, layout and development mode of a country," said Zhou Ji, president of the Chinese Academy of Engineering.

Manufacturing output accounted for over one third of China's GDP last year, 63.6 trillion yuan (10.4 trillion U.S. dollars).

The NDRC vowed to invest in more sophisticated manufacturing projects.

In the first six months of 2015, it has approved investment worth of 3.3 trillion yuan in 228 infrastructure projects concerning mainly oil, gas, electricity and Internet facilities.

"Taking railway transportation as an example, investments in this sector will add up to 300 billion yuan this year, exceeding the whole sum of 285.7 billion yuan registered last year," said Li Guoyong, with the NDRC department of basic industries.

As for rising inflation concerns triggered by large liquidity injections, the People's Bank of China said on Tuesday that it will use a variety of policy tools to fine tune the market, keep moderate liquidity and achieve reasonable credit and private financing growth.

The central bank said it will continue to improve the lending structure, lower financing costs, keep the yuan stable, stabilize financial market expectations and boost the real economy.

CONFIDENCE AMONG ENTREPRENEURS

Walmart's purchase of Yhd.com, a Chinese e-commerce platform, sparked applause from the Ministry of Commerce (MOC) on Tuesday.

The world's largest retailer announced on July 23 that it had acquired full ownership of Yhd.com after China lifted a cap on the number of shares that foreign firms are allowed to hold in Chinese e-commerce platforms in March. The company has been buying stakes in Yhd.com, a smaller version of Alibaba, since 2011.

"Walmart's move shows it is upbeat about the economy and market in China and the government's progress in opening up e-commerce," said an MOC spokesperson.

Amid fragile global recovery, China is rolling out measures to spur growth including establishing more pilot free trade zones (FTZs) and the Belt and Road regional trade and infrastructure network.

China opened three new FTZs in April in Guangdong and Fujian provinces and the northern city of Tianjin 18 months after the launch of China's first FTZ in Shanghai.

"We believe the FTZs and the Belt and Road initiative will bring unprecedented business opportunities," said Deng Guojie, chief executive officer of Taikoo (Xiamen) Aircraft Engineering Co. Ltd, a joint venture founded in 1993 that offers airframe and line maintenance services.

The FTZ policies, based on reduced red tape and relaxed rules on foreign investment, have provided more room for Taikoo to expand businesses, especially chances with countries along the Belt and Road as 90 percent of Taikoo customers are from abroad, according to Deng.

Sam Walsh, chief executive officer of mining and metals company Rio Tinto, also expressed confidence in expanding businesses in China.

"We believe the urbanization in China will increase demand for iron ore and its large base means that growth should be substantial," China Daily quoted Walsh as saying.

The London-based global conglomerate, and also the second-largest Australian miner behind BHP, reported that annual sales last year of iron ore, copper and coal to China were more than 19 billion U.S. dollars, nearly four times sales in Europe.

China will be key to the company's fortunes in the years ahead, Walsh said, adding that the Chinese-Australian Free Trade Agreement signed in June will also help fuel supply as will the Belt and Road.

"Iron ore is a long-term business and we made our investment plans many years ago. We are confident about the future, especially in China," he said.

Dave Cote, chairman and CEO of technology and manufacturing multinational Honeywell, said during his visit to China in May that he is still confident of Chinese business prospects despite the economic slowdown.

These prospects will "depend on continuous evolution of the economy and how the government interacts with the economy," Cote told Xinhua.

"The track record in China is very good when it comes to evolution. It is one of the reasons that I am a long-term bull in China," he said.

Accompanying an economic slowdown are lots of adjustments going on in the Chinese system right now, including the anti-corruption campaign, state-owned enterprise reform, and the shadow banking discussion, Cote pointed out. China's evolution has been rapid, and the Chinese government has been evolving with the economy, according to the senior businessman.

The Chinese government has stressed environmental protection, vowing to improve air and water quality, which Cote said is "very consistent with the evolution of the economy" and also meant significant business opportunities for Honeywell.

China alone takes up around 6 percent of Honeywell's annual revenue, a record 2.4 billion U.S. dollars in 2014, making it the largest sales market outside of the United States for Honeywell.

CHINA'S USE OF FDI

Entrepreneurs' confident claims about the Chinese market are backed up by latest data concerning China's use of foreign direct investment (FDI).

In the first half of 2015, a total of 420.52 billion yuan in FDI was used in China, a year-on-year increase of 8 percent, Vice Minister of Commerce Wang Shouwen said on Friday.

"The growth rate expanded a lot from the 2.2 percent registered in the same period last year, thanks to the MOC's expansion of free trade agreements, fewer government restrictions and promotion of opening up in certain industries and inland areas," Wang said.

The service industry absorbed the largest amount of FDI in the first six months, accounting for 63.5 percent of the total in the country, with a year-on-year increase of 23.6 percent, according to the vice minister.

High-end manufacturing industries such as communication equipment, pharmaceuticals and electronic devices led in attracting FDI.

China has obvious advantages in attracting FDI, Wang said, citing the country's large market size, strong industrial support and good infrastructure. "China will see this year's total FDI usage reach 125 billion U.S. dollars, up 4 percent more or less from the previous year."

China became the world's largest recipient of FDI in 2014, with inflows reaching 129 billion U.S. dollars, a 3.7-percent increase compared to 2013, according to the World Investment Report 2015 released by the United Nations Conference on Trade and Development in June.

In contrast, global FDI inflows fell to 1.23 trillion U.S. dollars in 2014, down from 1.47 trillion U.S. dollars in 2013, representing a 16-percent drop, the report said, adding that the fragility of the global economy, policy uncertainty for investors and increased geopolitical risks were the main reasons behind the decline.

Thanks to the government's pro-growth policies and reform measures paving the way for steady improvement, China's GDP posted better-than-expected year-on-year growth of 7 percent in the first half of the year. Endi