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Chief Economist: China’s Housing Market Will Always Go Up Unless Supply and Demand Are Balanced

On April 15, Chen Dongqi, Chief Expert and former Vice President of the Macroeconomic Research Institute which is under the National Development and Reform Commission spoke at the 2017 Top Chinese Economists Forum. Chen said that the imbalance between the supply of and demand for land and money is the root cause of housing prices being pushed up.

Chen said, “If you do not solve the supply and demand issue, prices for housing will continue to go up. Of course, they will not go up every day, every month, or even every year, but overall they will steadily go up … stabilizing for some time and then rising again.”

Chen implied that the local government should increase the supply of land to balance the demand for housing. Regarding the supply and demand for money, he said that the money supply has increased by a wide margin since the beginning of the century. Most of the money has gone to the construction business including the housing market.

Chen also dismissed the idea of introducing a real estate property tax to curb the price of housing. He believes that, before the institutional mechanism of the real estate market improves fundamentally, tax increases may lead to a new boost in the price of housing.

Source: Caixin, April 16, 2017
http://economy.caixin.com/2017-04-16/101079053.html

Shen Zhihua: North Korea Has Changed from an Ally to China’s Potential Enemy

On March 19, China’s famous Korean War historian Shen Zhihua gave a lecture at the Dalian Foreign Language University. Shen expressed in the lecture that China has screwed up its North Korean policy. He believes that North Korea is China’s potential enemy.

Shen Zhihua recommended that China should abandon the soured brotherhood myth (with North Korea), give up its support for North Korea, and turn to South Korea.

He believes that, judging from the current situation, North Korea is China’s potential enemy, whereas South Korea may be China’s friend. He also said that China and North Korea are not comrades anymore. Sino-Korean relations cannot be improved in the short term.

Shen stressed that intimate Sino-Korean relations are the product of the Cold War. After several decades of confrontation and the change in the international environment, this relationship has changed. Once the Korean Peninsula war breaks out because of the DPRK nuclear issue, China and South Korea will eventually bear the greatest consequences, although the United States and the DPRK are the responsible parties.

Shen Zhihua’s view sparked the anger of Chinese super-nationalists who accused him of betraying China’s ally with his attitude toward Pyongyang. China’s national news media did not cover his views and the related debates.

Shen said that, so far, his views have been tolerated, indicating that the government may be willing to tolerate greater criticism of North Korea, as well as a debate on Sino-DPRK relations. However, Shen Zhihua also admitted that a change in direction toward the DPRK may harbor risk.

It is noteworthy that, despite China’s implementation of the United Nations sanctions against the DPRK, China’s imports from North Korea in the first quarter increased by 10.8 percent year on year. In response, Chinese Foreign Ministry spokesman Lu Kang said at a regular press conference that, although China will adhere to the sanctions resolution, outside of the sanctions framework, China also maintains a “normal relationship” with North Korea.

Source: Duowei News, April 19, 2017
http://global.dwnews.com/news/2017-04-19/59811385.html

Local Government’s Emergency Notice Regarding North Korea Leaked on Internet

As the tension resulting from North Korea’s nuclear tests intensifies, a local Chinese government posted a recent emergency notice on the Internet.

The Environmental Protection Agency of Dalian City, Liaoning Province, issued the notice on April 14. It stated:

“To all offices in concern,

Amid the possible impact and damage to our country’s environmental security and public health from North Korea’s sudden nuclear or chemical incident, following an order from the top and according to “Liaoning Province’s Preparation Plan for Emergency Response to North Korea’s Nuclear Environment,” from today on, our city is entering an emergency response state; all related offices should organize well the emergency preparation work and start emergency on-duty shifts. All primary leaders of the related offices must maintain high political sensitivity during this emergency work. The number one lead should be on call on a 24 hour basis and keep the communication channel open so that the emergency response work can be started at the first moment when an emergency response order is given.”

Source: Epoch Times, April 16, 2017
http://www.epochtimes.com/gb/17/4/16/n9044054.htm

Chinese Scholar: The U.S. Is Likely to Use Force against North Korea in Three Situations

On April 13, the World Journal published an article citing comments on U.S. action in North Korea. Zhang Liankui, a professor at the Institute of International Strategic Studies of the Central Communist Party School, pointed out that, between now and the end of April, the U.S. is likely to use force to solve the North Korea problem. He listed three situations in which the U.S. might take action: one, North Korea conducts its sixth nuclear test; two, North Korea fires ballistic missiles; three, North Korea has an internal shakeout as a result of the U.S. pressure.

“In the first two situations, since the Carl Vinson aircraft carrier combat group is headed to the Korean peninsula, if North Korea conducts a nuclear test or fires a ballistic missile, Trump will look bad if the U.S. does not take action. The U.S. and South Korea will conduct a joint military exercise with live ammunition until the end of April, so it will be easy to carry out a real military action. After this period, it will not be as easy to re-mobilize the military.”

“Zhang pointed out that the U.S. has long prepared the military. Trump just needs an excuse. If Kim Jong-un misreads the situation and continues taking action, he could trigger a U.S. action to use force.”

April is a “high-risk period” since it has several important dates for North Korea. The next one is April 25th, the Army Day.

Yuan Zongze, Vice President of the China Institute of International Studies, said on April 12, “China does not want to see turmoil in Northeast Asia. Beijing’s bottom line is not to have war or turmoil at its door.”

Source: World Journal, April 13, 2017
http:// www.worldjournal.com/4923019/article-3種情況-美可能對北韓動武/

Adidas Moved More Manufacturing Work from China to Germany

Well-known Chinese news site Sina recently reported that the sports product vendor Adidas decided to move a portion of its Chinese manufacturing work back to its robotic German facility, expecting reduced costs. Adidas entered China in 1997 for its manufacturing needs. However, starting in 2012, Adidas closed its Suzhou factory in Eastern China and began its strategy of leaving China due to increasingly higher labor costs. According to the International Labor Organization, the cost of labor in China has doubled since the year 2006. Compared to previous Adidas move-away directions, typically Southeast Asia countries, this time the manufacturing work moved to its home base in Germany, where automated robotic manufacturing lines only needed 160 people. Adidas is also developing equipment that can manufacture custom shoes right at their retail locations. In recent years, big-ticket brands such as Nike and New Balance have all focused on customization, which is not suitable for traditional labor-intensive factories. Another reason for Adidas to leave China was that German workers have much higher productivity. More and more companies are moving their manufacturing capabilities out of China. Adidas’ archrival Nike started its exit move in 2009. The same thing is occurring not just in the sports product category, but in the apparel industry as well, with brands like Zara and H&M. It seems China’s labor costs no longer matter.

Source: Sina, April 12, 2017
http://finance.sina.com/gb/economy/sinacn/20170412/23051585709.html

Apple Daily: PLA Lifted Readiness Level – Potentially Sending Troops to North Korean Border

One of the primary Hong Kong newspapers, Apple Daily, recently reported that the Chinese People’s Liberation Army’s (PLA) Northern Military Theater lifted its combat readiness level to Level Four. At the same time, part of the troops in the Middle, Eastern, Southern, and Western Theaters also lifted their combat readiness to the same level. The 40th Infantry Brigade from the Southern Theater, the 9th Armored Brigade from the Western Theater, the 3rd, the 196th, and the 77th Motorized Infantry Brigade from the Eastern, Middle, and Northern Theaters, respectively, were required to be prepared to deploy to the North Korean border. If the order is given, they may take four to twelve days to reach their designated positions. The number of troops totaled 25,000. Apple Daily reported based on information that the the China Information Center for Human Rights and Democracy released. A third party has not confirmed the information.

Source: Apple Daily, April 11, 2017
http://hk.apple.nextmedia.com/realtime/china/20170411/56550531

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