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Chinese Researcher: 70 Percent of Housing Price Goes to Local Government

Fu Guangjun, a Researcher at the State Administration of Taxation, reported that the local government takes away the majority of the proceeds from housing sales.

In Beijing, the land cost is 60 percent of the housing price. The business taxes on the real estate developers along with the house transaction fees account for another 10 percent. The Beijing government claims 70 percent of the housing price. Thus the developer’s is left with a profit of only 10 percent. Therefore, the key to reducing the housing price is to reduce the cost of the land.

Fu also pointed out a problem with the deed. In China, the deed has two parts: the certificate of ownership of the property and the certificate of the right to use the land. The land belongs to the state and the property owner only has a right to use the land for 70 years. This has created a conflict: the property ownership is a permanent ownership, but in reality the property can’t be used in perpetuity as the land right is fixed at 70 years, even though, in reality the land lasts forever.

Source:, May 10, 2017

Tianjin Forces Non-Public Companies and Social Organizations to Create Political Commissar Position

Tianjin’s Working Committee on Non-Public Economic Organizations and Social Organizations recently held a meeting to launch an effort to set up the (Communist Party’s) Political Commissar position in all non-public organizations and social organizations.

“The meeting emphasized that creating the Political Commissar position is a political task designed to enhance the Communist Party’s presence in social organizations. It requested that organizations that are real business entities complete this task by the end of June and all other organizations complete it by the end of this year.”

Tianjin Attorney offices plan to complete it by May 20. In 2016, there were 5,918 attorneys and 678 attorney offices in Tianjin. 2,038 attorneys were Communist Party members.

Many people expressed disapproval of this news. Beijing human rights attorney Cheng Hai said, “It cannot last. What will the Political Commissar manage? People’s minds? Attorneys are supposed to follow the law and be responsible to the law (but not to the Political Commissar).”

A citizen in Guizhou Province commented, “The law obeys the Party. (This move) clarifies the relationship between the law and the Party.”

1. Peoples’ Daily, May 13, 2017
2., May 19, 2017
3. Epoch Times, May 19, 2017

U.S. Scholars: Xi Jinping Is Likely to Take on Zeng Qinghong

Two U.S. China experts, Bill Bishop {author of the Sinocism Newsletter (} and Joseph Fewsmith {author or editor of eight books on China}, have predicted that Xi Jinping is likely to target Zeng Qinghong in his anti-corruption campaign.

They were also asked about their views on Guo Weigui, a Chinese tycoon who moved to the U.S. and has kept releasing information about the corruption of top officials. Guo has repeatedly mentioned that he has a good connection with “old cadres.”

Bill Bishop said that he thought Beijing felt there was someone behind Guo Wengui. “Very likely they believe (in my view) that it is Zeng Qinghong.”

Joseph Fewsmith stated that if there will be another top-ranking tiger to fall in China, Zeng Qinghong is the most likely candidate.

Zeng Qinghong was the right-hand of former Communist Party leader Jiang Zemin. He served as Vice President of China and, previously, as a Politburo Standing Committee member.

Source: Radio Free Asia, May 18, 2017

Chinese Economist: China’s Economy Loses Steam

In a speech he gave on May 5, Chinese economist Xu Xiaonian stated that the growth of China’s economy had reached its peak.

Xu pointed out that there are two ways to generate economic growth. One is by increasing the amount of input and the other is by a more efficient use of inputs. China’s model is based on the former one and has reached its limit. However much stimulation the government puts into the market, there will not be much result.

Statistics show that, a decade ago, an investment of one dollar in China could generate forty to fifty cents of return. Now it only generates seven cents. The marginal return is approaching zero.

Since 2012 and through 2016, China’s Producer Price Index (PPI) has been decreasing. The price of a product out of the factory continues to drop. This shows that China has an over-capacity problem. Companies keep lowering their prices to keep their sales and market share. It means that any new investment will only generate a negative return.

Xu suggested switching to an innovation based economy. He gave four ways to encourage innovation: protect private property rights, reduce (the size of) the state-owned economy, loosen and remove controls, and reduce taxes.

Source: Sohu, May 8, 2017

Xinhua: China-Russia Oil Pipeline Reached Oil Delivery of 100 Million Tons

Xinhua recently reported that, as of May 19, the volume of oil China acquired from Russia via the China-Russia pipeline had reached 100 million tons. The Pipeline started running on January 1, 2011. The China-Russia pipeline originated at Russia’s Far East Pipeline Skovorodino Distribution Station and entered China at the Xing’an First Station in Muohe, Heilongjiang Province. The Pipeline ends in Daqing, Heilongjiang Province, with a total length of 1,000 kilometers. This pipeline completely changed the history of importing Russian oil via railway. Chinese Customs is responsible for monitoring and managing the acceptance of the imported oil, checking the personnel involved in the maintenance work, as well as coordinating communications with the importing companies. The China-Russia pipeline has so far generated an import trade volume worth of US$62.5 billion. It has also garnered import tariffs of RMB 65.7 billion (around US$9.54 billion).

Source: Xinhua, May 20, 2017

China News: For Three Years, China Has Had the Largest Number of Investment Projects in Germany

China News recently announced that, according to the latest report that Germany Trade and Invest (GTAI) released, in 2016, China had 281 investment projects in Germany. This number made China the country with the largest number of investment projects in Germany. China has held that title for three years in a row. The 2016 projects were expected to create 3,900 jobs in Germany, which was the highest number of jobs China has created in Germany. Chinese investments mainly concentrate in the field of business services and financial services, which took 27 percent of the projects. Machinery and equipment manufacturing held 11 percent. Electronics and the semiconductor industry held 10 percent, and the automobile industry also took 10 percent. Most of the Chinese investments were spent on sales and market support, which consumed 44 percent of the investments. According to the GTAI report, in 2016, a total of 1,944 foreign investment projects landed in Germany. The statistics do not include mergers. In 2016, Chinese investors were followed by investors from the United States (242 projects), Switzerland (194 projects), Great Britain (125 projects) and the Netherlands (105 projects).

Source: China News, May 19, 2017

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