Yuan on the Rise

After reaching a new high on October 13, the value of the Chinese currency, the yuan, continued to rise against the U.S. dollar the next trading day. The central parity rate of the yuan hit 6.6582 per U.S. dollar on October 14, beating the 6.6693 record the previous day.

The yuan has gained strength against the U.S. dollar and experienced increased volatility since China's central bank announced that it would increase the exchange rate flexibility starting June 19, 2010.

The central parity of the yuan against the U.S. dollar is based on a weighted average of enquired prices from all markets before the opening of the market each business day.

Buoyant Business

China's business climate index, a major measure of macroeconomic outlook, rose by 2 points in the third quarter while the entrepreneur confidence index gained 2.9 points over the previous quarter, the National Bureau of Statistics (NBS) announced on October 14.

The quarterly business climate index, based on a survey of about 20,000 Chinese firms, advanced to 137.9 points from 135.9 points in the second quarter, the NBS said on its website.

The business climate index rose in the construction, transportation and logistics, wholesale and retail, property, social services, and hotels and catering sectors.

The business climate index in information transmission computer services and software remained unchanged from the second quarter.

Banking on the Mainland

China's mainland banking regulator gave the green light on October 13 to two additional Taiwanese banks to set up branches on the mainland.

The China Banking Regulatory Commission said in a statement on its website that it had approved Taiwan's Cathay United Bank to set up a branch in Shanghai, and Hua Nan Commercial Bank to open a branch in Shenzhen in south China's Guangdong Province.

The banking regulator also allowed Taiwan Business Bank to open a representative office in Shanghai.

Four Taiwan banks also received approval to upgrade their mainland representative offices to branches in September 2010.

Soybean Imports Up

Imports of soybeans reached a new high of 40.16 million tons in the first nine months of this year, almost equivalent to the total figure of 42.55 million tons in 2009, according to data from the General Administration of Customs.

Imports of soybeans for the fourth quarter are now estimated at 13.8 million tons, 3.6 million more than the same period last year, according to a report released by Grain.gov.cn, a website operated by the China National Grain and Oils Information Center.

China produces about 15 million tons of soybeans every year, equivalent to about one third of the annual import figure, and not enough to meet domestic demand.

The surge in China's imports of soybeans is expected to continue.

Daimler Auto Recall

German luxury automaker Daimler AG began recalling 9,201 Mercedes-Benz Vito and Viano models in China to fix defective air conditioning systems, noted the General Administration of Quality Supervision, Inspection and Quarantine, China's quality watchdog, on October 12.

The German automaker announced that it would repair the flaws at no charge.

The recalls will be carried out by Daimler Northeast Asia Ltd. and Fujian Daimler Automotive Ltd., a joint venture by Daimler AG, Fujian Motors Group and Taiwan-based China Motors Corp. in Fuzhou, capital of Fujian Province.