ELECTRIC TREND: Chinese automaker BYD displays its latest e6 pure electric model at the North American International Auto Show in Detroit from January 11 to 24. BYD plans to start selling the e6 in the United State later this year (ZHANG JUN)

Export Recovery

China's exports in December 2009 soared 17.7 percent year on year to reach $130.73 billion, providing evidence that once fragile exporters are rapidly recouping their strength.

Imports in December hit a record high of $112.29 billion, representing an increase of 55.9 percent from a year ago, according to data from the Ministry of Commerce (MOFCOM). The import surge is widely considered a reflection of buoyant domestic demands and the effect of government stimulus measures.

Total exports in 2009 numbered $1.2 trillion yuan, down 16 percent year on year, according to MOFCOM.

Monetary Adjustment

The People's Bank of China, the central bank, announced on January 12 to raise the deposit reserve requirement ratio by 0.5 percentage points to 16 percent, effective as of January 18.

The ratio at small financial institutions such as the rural credit cooperatives would remain unchanged at 13.5 percent to support the agriculture sector, the bank said in a statement.

This is the first time the bank adjusted the ratio of deposit that lenders are required to set aside since the end of 2008 and the first increase for the ratio since June 2008.

The bank cut the reserve requirement ratio four times in the second half of 2008 to stimulate growth as the global financial crisis started to put pressure on the economy.

House Prices Hike

Housing prices in China's 70 large and medium-sized cities rose 7.8 percent in December 2009 from a year earlier, and were up 1.5 percent compared to the previous month, said the National Bureau of Statistics (NBS) on January 14.

Prices of new houses in December rose 9.1 percent year on year and were up 1.9 percent from November. In December, prices of second-hand houses in the 70 cities rose 6.8 percent from the previous year, and 1.0 percent from the previous month.

The house price surges have prompted policymakers to tighten favorable policies, including down payment requirements and business taxes.

Baosteel Raises Prices

Baoshan Iron & Steel Co (Baosteel), the nation's largest steelmaker, significantly raised its February manufacturing prices, China Daily reported.

Major steel wire product prices went up 300 yuan ($44) per ton on average. Revised prices on major steel sheets are also expected to increase 200 yuan ($30) to 300 yuan per ton.

The price surge on raw materials, such as iron ore and coal, led to the latest price adjustment, the newspaper quoted Hu Kai, an analyst at Umetal.com.

The price of iron ore on spot markets recently hit a 16-month high at $135 per ton, soaring nearly 120 percent from April 2009's low.

Baidu Widens Reach

Baidu Inc., a major Chinese search engine, recently announced plans to establish a new independent online video company to provide copyrighted video content.

The move was intended to tap the growing Internet market and diversify the company's source of revenues.

"We have seen increasing demand for high-quality video content and hope to serve our users with superior content and focused resources," said Ren Xuyang, Vice President of Baidu.

Baidu did not elaborate when the subsidiary will be established, and there were reports that the new company had already received $60 million from a U.S. private equity fund.