Numbers of the Week

2.2%

China's tax revenue rose 2.2 percent year on year to 4.51 trillion yuan ($662.61 billion) in the first nine months this year, said the Ministry of Finance.

771km

The oil giant PetroChina Co. Ltd. has recently announced plans to kick off construction on a 771-km-long oil transportation pipeline that connects Myanmar and China.

TO THE POINT: The World Bank points to bright prospects for the Chinese economy, citing vibrant domestic demand that is helping to maintain growth. Also, increases are giving vitality to the export front. The growing momentum was felt at the latest Canton Fair, an effective gauge of foreign trade, which witnessed much higher export volumes than the last session in April. The newly launched ChiNext, China's NASDAQ-style stock market, staged a roller-coaster ride on its first few trading days, raising worries over rampant speculation. The manufacturing sector gathers force as evidenced in the increasing purchasing managers' index. Airbus plans to build its first Asian logistics center in Tianjin early next year. Brazil's Petrobras inked a

$10-billion line of credit contract with the China Development Bank on November 3.

By HU YUE

World Bank Optimistic

Will the Chinese economy be able to keep its growth engine humming in the long run? The World Bank says yes.

Strong domestic demand has buoyed import volumes and the current account surplus are narrowing. The downturn has clearly affected the labor market, but the impact has been smaller than expected and the worst may have been over, according to the World Bank's latest China Quarterly Update released on November 4.

"On the back of a larger-than-expected monetary stimulus, China is on track to meet the target of 8-percent GDP growth this year," said Ardo Hansson, Lead Economist of the World Bank China Office. "China is likely to remain robust in 2010, but the composition will change."

The growth impact of the government stimulus is set to decline sharply next year and investment in parts of the manufacturing sector is likely to remain under pressure from spare capacity in China and abroad. This spare capacity is also expected to keep inflation pressures low. With exports and imports projected to grow at roughly the same pace next year, the current account surplus may edge down further, said the report.

"The costs and risks of sustaining the current expansionary policy stance will increase over time," said Louis Kuijs, a senior economist with the World Bank. "In our view, macroeconomic conditions in the real economy do not yet call for a major tightening. However, risks of asset price bubbles and misallocations of resources in the face of abundant liquidity are real and the overall monetary stance will have to be tightened eventually."

Oil-Credit Deal

Petroleo Brasilerio SA (Petrobras), the largest oil company in Brazil, inked a $10-billion line of credit contract with the China Development Bank on November 3.

Under the agreement, the Chinese bank will extend loans of $10 billion to the Brazilian company for purchases of advanced equipment and technological updates. In return, the company will supply a total of 97.5 million barrels of crude oil over the next 10 years to the Petroleum and Chemical Corp. (Sinopec), the country's top oil refiner, according to a report by Xinhua News Agency.

Analysts believe the deal will help secure oil supplies for Sinopec and meet the country's rising demand for energy. It also marks a significant stride in economic cooperation between the two countries.

Established in March 1994, the Chinese bank is a policy bank aimed at funding the country's infrastructure construction and energy projects. Founded in October 1953, Petrobras is an oil group headquartered in Rio De Janeiro.

Turnaround on the Way

While a hangover of uncertainties cloud the export hopes of China, a deeper look at the latest session of the Canton Fair (also known as China Import and Export Fair), a barometer of foreign trade, could provide an insight into where the sector is going.

With more foreign buyers roaming its vast halls, the bustling trade fair is sending out a strong signal that the crisis-stricken Chinese exporters have left the worst behind.

The biannual 106th Canton Fair witnessed an export volume of around $30.47 billion, up by a robust 16.2 percent over the last session held in April, according to Chen Chaoren, spokesman of the fair held in Guangzhou.

"A mood of buoyancy is returning as Western buyers jump off the sidelines," said Liu Guizhong, a spokesman of the Galanz Group Co. Ltd., a Guangdong Province-based appliance maker. "We have received 40-percent more orders at this session than the one in April."

With many manufacturers scrambling to confirm orders for next year, many have been looking to the emerging markets for confidence. "Our orders from the Middle East, Africa and Latin America are bouncing back quickly," said Sun Shumin, a sales manager with the Triangle Tire Co. Ltd., a Shandong Province-based tire maker. "This effectively made up for a slump in demand in the United States."

But Yi Xiaozhun, Vice Minister of Commerce, believes Chinese manufacturers will continue to bask in the glow of cheap labor and solid infrastructure, as well as improving research and development.

By tackling rising trade protectionist barriers, the government will also create a favorable business environment for the manufacturers, Yi added.