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Top 10 Economic News Stories
Special> 2012 in Retrospect> Top 10 Economic News Stories
UPDATED: December 24, 2012 NO. 52 DECEMBER 27, 2012
Top 10 Economic News Stories in 2012

Wang Jianlin, Board Chairman of Dalian Wanda Group, shakes hands with Gerry Lopez, CEO and President of AMC Entertainment (ZHAO HANRONG)

Overseas Expansion

The year of 2012 witnessed an array of overseas takeovers by Chinese companies.

In January, Sany Heavy Industry Co. and Citic PE Advisors paid 360 million euros ($470.46 million) for Putzmeister Holding GmbH, the German concrete-pump maker.

In May, Dalian Wanda Group Corp. Ltd., a private firm based in Dalian, northeast China's Liaoning Province, announced that it would purchase U.S. movie theater chain AMC Entertainment Holdings Inc., the second largest chain in North America. The deal, the largest overseas cultural investment from a domestic private enterprise, is worth $2.6 billion.

Chinese oil conglomerate China National Offshore Oil Corp. (CNOOC) Ltd. is preparing to move ahead with the country's biggest ever overseas acquisition. On December 8, the Canadian government approved CNOOC's $15.1-billion bid to buy Calgary-based oil and gas producer Nexen Inc.

However, Chinese companies also faced many roadblocks on the path to overseas expansion.

On October 8, the U.S. House of Representatives Intelligence Committee issued a report alleging that Huawei and ZTE, both Chinese hi-tech companies, posed a possible threat to U.S. state security, suggesting the American government not use equipment manufactured by the two companies. On October 14, the U.S. Congress launched second-round investigations against the two Chinese firms.

On September 28, U.S. President Barack Obama ordered Ralls Corp., an associated company of China's Sany Group that has invested in a series of wind power projects in the United States, to divest its interests from a wind farm project, causing more than $20 million losses for the company.

Workers assemble solar cell components in a PV company in Zhejiang (WANG DINGCHANG)

Growing Trade Frictions

2012 appeared to be a particularly disquieting year for China's foreign trade relations.

On January 18, the U.S. Department of Commerce officially announced it would launch an anti-dumping and anti-subsidy investigation on wind tower equipment from China. In a preliminary ruling in July, the U.S. Department of Commerce imposed provisional anti-dumping duties from 20.85 percent to 72.69 percent on utility-scale wind towers from China. The anti-dumping tariffs are an addition to the countervailing duties of between 13.74 percent to 26 percent the department announced in May.

On November 7, a ruling by the Commerce Department's International Trade Commission said that U.S. solar-panel makers had been hurt by Chinese competitors that engaged in illegal dumping and received illegal government subsidies. The ruling clears the way for implementing tariffs as high as 36 percent.

Following on the heels of the United States, the European Union (EU) launched a similar but more extensive investigation into China's PV products.

Facing intensified trade protectionism amid a global economic downturn, China fought back.

On November 5, the Chinese Ministry of Commerce (MOFCOM) announced that it had filed a complaint to the WTO against photovoltaic subsidies in the EU.

On November 26, the MOFCOM announced the beginning of anti-dumping and countervailing investigations into imports of solar-grade polysilicon, a material used in solar equipment manufacturing, from the United States, South Korea and the EU. The investigation into imports from the EU will be finished before November 1, 2013.

The case follows an anti-dumping probe into imports of solar-grade polysilicon from the United States and South Korea launched on July 20. The statement said the ministry would combine the two cases and make a cumulative evaluation.

An investor relaxes in a securities business hall in Jiangxi Province (HU GUOLIN)

New Market Policies

A series of new policies took effect in 2012 with the aim of improving the country's capital markets.

The China Securities Regulatory Commission (CSRC), the country's capital market supervisor, issued guiding opinions on deepening reform of the new stock issuance mechanism on April 28. The top priority is to require listed companies to disclose all relevant information, fully indicating the resolution of the CSRC to solve the problems existing in the A-share market.

On April 29, both Shenzhen and Shanghai stock exchanges publicized drafts to delist under-performing stocks. This will end the widespread belief that Chinese stocks never die.

On April 30 the two bourses and the China Securities Depository and Clearing Corp. Ltd. cut fees on A-share transactions by 25 percent on average. It is estimated that a total of 3 billion yuan ($475.44 million) in transaction fees had been exempted until the end of 2012.

A reaping machine is harvesting grain in northeast China's Heilongjiang Province in December (WANG JIANWEI)

Bountiful Grain Harvest

Grain production in China will increase for nine consecutive years with output set to rise in 2012, guaranteeing grain security and supplies of important agricultural products with the further expansion of urban areas.

China is up to its neck in a bumper harvest once again. According to figures from the Ministry of Agriculture, China's 2012 summer grain output reached 129.95 billion kg, up 35.5 billion kg year on year. This is the ninth consecutive year that China has reaped such a bountiful harvest.

China has always emphasized the need for grain security. During the process of urbanization and industrialization, the Central Government set a minimum cultivated land area of 120 million hectares and adopted increasingly strict approval measures of land use for industrial and commercial purposes. In the meantime, benefiting from the progress made in agricultural science and technology, grain output per hectare continues to increase.

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