Read the latest interims.......just make sure that you are sitting down.

Wonder how this will effect sentiment, and also performance of some Chinese companies ?


http://news.bbc.co.uk/2/hi/business/7119518.stm

Thursday, 29 November 2007, 17:13 GMT

China 'ends illegal tax breaks'

The US has been complaining about the power of Chinese exporters

China has agreed to end tax breaks for local manufacturers, which the US said gave them an unfair advantage over rivals, US trade officials have said.

Under the deal, China will remove the subsidies, which the US called "market distorting" by the end of the year.

The move is a major breakthrough for US-China trade relations, which have been strained recently, analysts said.

It ends a spat that began when the US took the matter to the World Trade Organization (WTO) in February.

US trade representative Susan Schwab said that China had agreed to remove the subsidies granted to Chinese exporters that encouraged them to sell products abroad more than they would otherwise.

The deal also would remove tax-breaks given to Chinese companies that used locally-made goods instead of imported ones.

"This outcome represents a victory for US manufacturers and their workers," said Ms Schwab.

"The agreement also demonstrates that two great trading nations can work together to settle disputes to their mutual benefit."

Playing with Fib Levels at the moment; during this latest dip the SP initially found support at 38% before falling through, then found support for a week or so at 50% and currently sits just below. Next level (spooky old thing) is 300p (68%), funny old world!

pth

Tax rate changes and this mindset is going to alleviate the need for the Yuan to be revalued. Might dash a few peoples hopes, those who were expecting a fast change in the value of the Yuan (to boost sterling EPS levels). Could be the start of the change to China, and it might prove to be those buying into China were in fact (as many thought) buying the top, instead of buying the bottom some 15 years ago. The increase in tax rates is going to have some major changes to Chinese companies going forward, but, it had to be done, and so to see a start of it happening is good news for the rest of the world, and long may it continue. Now....on to Africa, the place of rapid growth in the decade ahead.




http://www.dailytimes.com.pk/default.asp?page=2007%5C12%5C02%5Cstory_2-12-2007_pg5_17

Scrapping China subsidies may ease pressure on yuan

* By agreeing at US behest to scrap a dozen tax breaks and other subsidies, China is increasing exporters cost of production to force prices higher

BEIJING: Its presumably not what Washington had in mind, but the resolution of a trade dispute with China over industrial subsidies might make a more rapid rise in the yuan a little less likely.

By agreeing at US behest to scrap a dozen tax breaks and other subsidies, China is increasing exporters cost of production to force prices higher; as such the yuans real, or inflation-adjusted, exchange rate will rise, which should eventually trim Chinas trade surplus and hence the need for faster appreciation of the yuans nominal rate.

Li Xiangyang, vice-head of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences (CASS), the governments top think-tank, said settling the row was a very smart move by Beijing.

On the nominal exchange rate, China might face less pressure from the U.S. as a result of the subsidy withdrawal, he told a forum in Beijing on Friday.

The authorities have been steadily nudging up prices for industrial users of everything from natural gas to land and wastewater treatment. Fast-rising factory wages and complying with a new labour law will also add to costs.

Beijing has taken particular aim at low-end export industries that consume huge amounts of energy to transform expensive raw materials, creating more pollution than added-value in the process.

All these measures will increase the cost of Chinese products and make exports more expensive, Li said. If all those policies are implemented well, the pressure on China to speed up the yuans appreciation will be much smaller.

Twin-track approach: Deliberately allowing prices to rise to achieve a real appreciation is not without its risks, especially when consumer price inflation is already at a decade high of 6.5 percent.

But there is no political consensus in Beijing to permit the sharp rise in the currency needed to cut the trade surplus to a level that would defuse international pressure and restore a modicum of monetary policy autonomy. The central banks hands are largely tied for now because, in order to hold down the value of the yuan, it buys most of the dollars flowing into China.

Thered be a lot of support in China for having most of the appreciation happen, over a period of time, through an adjustment of prices rather than through the exchange rate at all, said Paul Cavey, an economist at Macquarie Securities in Hong Kong. If all resources in China were properly priced, the renminbi probably wouldnt be undervalued at the moment because the trade surplus would be less, Cavey said. reuters


****************************

http://www.elpasotimes.com/ci_7594549


U.S. says China to end disruptive tax subsidies

By Martin Crutsinger / Associated Press
Article Launched: 11/30/2007 12:00:00 AM MST

WASHINGTON -- The Bush administration announced Thursday that it had settled a major trade dispute with an agreement in which the Chinese government has pledged to end several trade-distorting tax subsidies.
The deal is a breakthrough in tense economic relations between the nations by resolving one of four cases the United States has brought before the World Trade Organization attacking Chinese trade practices.

U.S. Trade Representative Susan Schwab said China had agreed to eliminate WTO-illegal tax breaks that supported Chinese exports to the United States and other countries. China also agreed to scrap tax breaks that had penalized U.S. and other foreign countries in trying to sell their goods in China.

Schwab said the economic boost for U.S. companies would be "very substantial" because the tax breaks have been so pervasive. While she did not provide any concrete estimates on the value of the subsidies, she said a range of U.S. industries would benefit, including steel, wood products and information technology.

"This outcome represents a victory for U.S. manufacturers and their workers," she told reporters. "The agreement also demonstrates that two great trading nations can work together to settle disputes to their mutual benefit."

However, administration critics said President Bush would have to produce much bigger results to have an effect on America's record trade deficit with China, which hit $233 billion last year and will be even larger this year.

They singled out areas where they contend that unfair Chinese practices are driving the deficit higher and have contributed to the loss of 3 million U.S. manufacturing jobs since 2000.
"China's currency doesn't float freely, certain U.S. industries with competitive advantages can't operate freely in China's economy, and some of the products it exports are faulty and dangerous," said Sen. Charles Schumer, D-N.Y. "It seems that China has taken a small step on the long road toward playing more fairly in global trade, but only time will tell."

The agreement was well-timed for the administration, coming less than two weeks before Treasury Secretary Henry Paulson and other Cabinet officials go to China for the third round of high-level economic talks. Paulson launched the talks, called the Strategic Economic Dialogue.

"This will strengthen the administration's hand in saying that diplomacy works and will allow them to counter the argument of critics that the new dialogue is just a big talk fest," said Gary Hufbauer, a trade expert at the Peterson Institute, a think tank in Washington.

there is more than one way to skin a cat, so while the Chinese may appear to have conceded to certain demands, there will certainly be Plan B ...... while waiting to see how that will hatch out, my immediate interest will be to see whether SOLA takes a tumble.

I think all Chinese stocks could be in for a rough ride come monday.

Will they not be exporting inflation to the rest of the world after these measures?.

i don't know .... all i do know, is that what often seems to be the case is actually not so

Ive gone in short again.

I have given an undertaking to Kitos to bury our differences on this stock so Ill keep to facts.

Surely solas margins which were under presure are more likely to fall even further now due to the new taxes and labour laws.

Cynic I know they have made provision in the accounts for a 12% tax charge but what rate of tax under the new law will they and other Chinese companys be paying?.

Any help appreciated.

the Chinese may have agreed to withdraw tax benefits, but you can bet your bottom dollar they will evade the issue through a different route ...... they're not going to give away market share and volumes just because Uncle Sam says so!

meanwhile, i am happy to stay short for the mo

Itl be difficult.

what will?

what you said.

just needs a bit of imagination and oriental guile

True.

Staying long here for the time being - if there's any growth left in the world, it's in China and India.

Fact not fiction (kitos) neutral item aswell....

TA expert Zak Mir as just posted this over the road at SC.....

Pages: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | (show all)
Zak Mir



Reged: 28/06/07
Posts: 95
Re: Renesola (SOLA)
#408989 - 04/12/07 11:42 AM Edit Reply Quote



having been a fan of the shares, it is good that there is a line of support running through 330p from August. This provides a buy point, but if that line goes we risk testing the lows under 250p again.

Cynic, looks like SOLA is going to defy gravity again. My short is losing now.

Renewables back in favour.

shut mine yesterday at 377.5, also for a loss ..... but that is the level i determined and made money elsewhere, primarily on indices yesterday

Yep I got out yesterday for a few grand loss. (fact kitos)

Still well up though on this one.

Looking to see if we get an xmas bounce as per the norm, but cant see these holding up come january, or the market in general.

Ive assembled a large war chest for a lot of shorts.

Facts are OK by me GF. You'll get it back. Always a fall-back on the cards.