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January 10, 2012, 6:38 AM EST

By Andres R. Martinez

(Updates with passenger-car and export sales in fifth and sixth paragraphs.)

Jan. 10 (Bloomberg) — South African vehicle sales expanded for a second year as borrowing costs at a 30-year low helped to spur consumer spending, strengthening the recovery in Africa?s biggest economy.

Sales climbed 16 percent to 570,012 last year, the Pretoria-based National Association of Automobile Manufacturers of South Africa said in an e-mailed statement today. In December, the number of units sold rose 11 percent.

Last year ?turned out to be a year of relatively solid growth,? the association said. ?The positive underlying momentum should continue into 2012 with demand supported by historic low interest rates.?

The Reserve Bank kept the benchmark repurchase rate at 5.5 percent all last year as policy makers sought to blunt the impact of a growing debt crisis in Europe. Rising consumer spending helped to boost business confidence to a six-month high in December, the South African Chamber of Commerce and Industry said in a statement today.

Passenger-car sales jumped 12 percent to 29,787 in December, while purchases of light commercial vehicles, such as pick-up trucks and minivans, gained 13 percent to 12,788, Naamsa said.

Exports Miss Estimate

Exports declined 38 percent to 13,665 vehicles in December from a year earlier, it said. Total exports for the year were 267,963, below the group?s forecast of 280,000.

Vehicle sales will probably increase 7.2 percent to 611,500 in 2012, based on the assumption that the economy will expand between 3 percent and 3.5 percent, Naamsa said.

?New vehicle sales over the short to medium term will remain a function of the performance of the domestic economy and, in the case of export sales, the sustainability of recovery in the global economy,? the group said.

The December data doesn?t include any of the vehicles sold by Daimler AG?s local unit, the association said yesterday. Daimler, based in Stuttgart, Germany, ordered the unit to stop providing figures as a commission in Europe investigates allegations of anti-competitive behavior in Europe, it said.

–With assistance from Franz Wild in Johannesburg. Editors: Nasreen Seria, Karl Maier, Ben Holland.

To contact the reporter on this story: Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

Source: http://c.moreover.com/click/here.pl?r5727092583&f=378

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TAIPEI, Taiwan ? When President Barack Obama arrives in Australia on Wednesday to kick off a four-day Asia-Pacific visit, he should receive a warm reception from America’s longtime allies in the region.

The U.S. has deepened military ties with Asia in the past year, at once reassuring its partners of its commitment and capitalizing on mutual fears about China’s rise. Both sides face a simple truth: They need each other, possibly more than ever.

In Australia, Obama is expected to announce an agreement to allow an expanded U.S. military presence in the country. Earlier this year, the U.S. disclosed plans to deploy military ships to Singapore. And Malaysia has joined two multination military exercises with the U.S. for the first time.

Such moves, together with frequent visits by senior American officials ? Obama will be the first president to join an annual East Asian leaders meeting later this week ? have defused fears that America’s defense presence might wane. They also show the region’s growing concern about China’s more aggressive stance in recent years.

“China is becoming an 800-pound gorilla,” said Ralph Cossa, president of Pacific Forum CSIS, a Hawaii-based think tank. “The U.S. is still the 1,600-pound gorilla, so which one would you rather have? And we’re housebroken; we’re a lot more fun to invite into your living room than the one who isn’t.”

Since 2009, China has confronted Southeast Asian countries over rival territorial claims in the South China Sea, refused to condemn North Korea’s apparent sinking of a South Korean naval vessel, and squared off with Japan over claims to a long disputed island group between Okinawa and Taiwan.

“Before this time there was extreme reluctance to anger Beijing by explicitly deepening ties with Washington,” University of Sydney security specialist John Lee said. “After 2010 there was little choice for other regional capitals but to seek closer relations with the U.S. in order to balance and hedge against future Chinese intentions and behavior.”

China’s defense spending has increased threefold since the 1990s to about $160 billion last year, and its military has recently tested a new stealth jet fighter and launched its first aircraft carrier.

The core of America’s Asian security presence remains South Korea and Japan, which between them host some 80,000 U.S. troops and several U.S. Air Force and Navy bases. Japan is headquarters for the 7th fleet, America’s naval force in the Pacific.

Encouraged by clear signs of U.S. resolve, the Northeast Asian allies have remained firmly on America’s side.

Cossa says South Korea was particularly impressed by the Obama administration’s decision to send the nuclear-powered supercarrier USS George Washington to the Yellow Sea as a show of force in the days following North Korea’s shelling of a South Korean island a year ago, and then send American troops to the island to observe military drills.

The Japanese Cabinet adopted guidelines late last year calling for an intensifying of the alliance, which the Japanese government says is “indispensable” to its security.

Even America’s rejection of Taiwan’s request for new F-16s this year was tempered by an agreement to upgrade its existing F-16 fleet, keeping the democratic island that China claims as its own at least nominally within the American security perimeter.

In Southeast Asia, Vietnam, the Philippines and Malaysia have all been at loggerheads with China over a number of tiny islands in the South China Sea. China believes the Spratly and Paracel islands may sit astride large deposits of oil and gas ? though others are doubtful ? and has moved assertively to underscore its claims in the area since 2009.

The United States began to push back following U.S. Secretary of State Hillary Rodham Clinton’s implicit criticism of China’s behavior at a regional security forum in Vietnam in July 2010. It stepped up cooperation with regional allies and even began building a new security relationship with old enemy Vietnam.

In June of this year, then U.S. Defense Secretary Robert Gates said littoral combat ships, small vessels designed to operate close to shore, would be deployed to Singapore. The prosperous city-state sits astride the Straits of Malacca, the strategic waterway through which the majority of Asia’s oil imports pass, including those to China and Japan.

In the longer term, America’s soaring government budget deficits could influence its deployments in the region, with Pentagon cutbacks expected to total some $450 billion over the next decade ? roughly the size of annual U.S. defense expenditures not including Afghanistan and Iraq.

But U.S. Defense Secretary Leon Panetta, visiting Japan and Indonesia last month, dismissed speculation that the cuts would force America to trim its Asian profile. “We will … not only maintain but strengthen our presence in this part of the world,” he said. “We are a Pacific nation, we’ll have a Pacific presence.”

China could also face limits on its defense spending. If it can’t sustain its high economic growth rates, that could undermine its ability to compete with the U.S. militarily.

“Of course if China keeps growing rapidly for two decades and America does not, then the balance of economic and military power will eventually shift,” said Lee, the University of Sydney specialist But “there are strong reasons to believe that China cannot keep growing at this rate with its current model.”

___

Associated Press writers Foster Klug and Hyung-jin Kim in Seoul, South Korea; Eric Talmadge in Tokyo and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.

Source: http://us.rd.yahoo.com/dailynews/rss/asia/*http%3A//news.yahoo.com/s/ap/20111115/ap_on_re_as/as_china_us_security_showdown

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