Asia This Day:Markets Rally On Cyprus Deal;World Trade Challenges

A tentative resolution of the Cyprus problem has been agreed,and the prospect of a bailout for the tiny yet significant nation has sent Asian shares higher in early Monday trading.India's Nifty Fifty index was up 0.86%,and the Sensex index rose 0.82%.US stock index futures were also higher,along with oil futures,while gold futures fell,as did Treasury bond  futures.
At a China development conference this weekend,World Trade Organisation Director General Pascal Lamy said the full globalisation of China's trade won't be without challenges.The new Chinese leadership under President Xi Jinping seems to be headed in the right direction on improving market access to China.I heard them saying we want to keep China opening its market,we want to keep internationalising the Chinese economy.
This will be challenging,however,as it faces resistance from domestic players who will not always welcome foreign competition.We want to grow our exports,but we also know we have to grow our imports.This obligates the domestic players to increase their quality and productivity.
Overall,this opening up has worked for China,but that doesn't mean it will happen in a painless way.What is painless is often inefficient,but what is efficient is sometimes painful.
The WTO's influence waned when the Doha Round of trade talks that began in 2001 floundered over the next 10 years.They failed to resolve a rift between developed and developing countries,but new WTO talks have begun.This time,instead of negotiating a big bundle of 20 topics,it is being done slice by slice,bit by bit.
The stumbling blocks in the old talks were US-China differences.No WTO Director General can push the US and China to agree on something if they don't agree,and this is what happened.
A very important negotiation is going on regarding customs standardisation,which would reduce the cost of cross-border trade.We have a problem moving the rule book forward so another layer of trade liberalisation happens,Mr.Lamy observed.
In other regional developments:
The HSBC flash China Purchasing Managers Index for March came in at 51.7,indicating a rebound in Chinese manufacturing.
Luxury retailer Tiffany saw a 13% increase in jewelry sales in the Asia Pacific region ex-Japan.
Goldman Sachs has raised its growth forecasts for the US and Japan.
Tiffany(TIF)

Chinese Trade Suffers From Euro Crisis-and how this could affect you

Chinese exports are slowing down and its trade surplus is shrinking,newly released figures show.China's export growth fell to 13.8% in November-the least growth since December 2009.Its trade surplus dropped to 14.5 billion dollars,down from 17 billion in October and below the estimate. This is a result of slowing demand from China's European trading partners because of the current debt crisis,as well as a hesitant U.S. consumer from the weak employment picture.
China is observing its 10th anniversary of joining the World Trade Organisation.President Hu Jintao said China will not deliberately pursue a trade surplus.China has fulfilled its promises to the World Trade Organisation.We will work hard for a balance of payments.China has some unbalanced and unsustainable elements that have to be improved,Mr.Hu admitted,responding to European and U.S. criticism.
As for the slowdown in export growth,Chinese officials said China may continue cutting bank reserve requirements in order to stimulate growth by encouraging lending.China must keep growing at a robust pace to provide jobs for its rapidly urbanising population.
A slowdown in China could have negative implications for the many large U.S. multinational corporations,such as Ford Motor,General Motors,General Electric and Wal-Mart,who rely on China for a portion of their own growth now.A deterioration in business conditions in China may hinder the U.S. economy in consequence of globalism.
iShares Trust FTSE/Xinhua China 25 index(FXI)