All posts by RWZ - 209. page

Xinhua recently reported on the results of a housing market survey that the Chinese central bank conducted during the third quarter of 2013. 67.6 percent of the people surveyed suggested that the current housing prices are “too high” and are “unacceptable.” Only 2.1 percent of the sample population found them to be “satisfactory.” Around 77 percent of the residents of the “top tier cities” (such as Beijing and Shanghai) expressed the belief that prices were “too high.” Regarding the future, 35.8 percent of those who responded expected a trend toward increased growth and 45.2 percent expected the level of prices to remain steady. Only 6.5 percent of the sample expected a drop in prices. The survey also covered spending plans. 45.2 percent of the people surveyed plan to “increase their savings,” and 17.5 percent expect to spend more. 36.3 percent of those surveyed plan to do more “investing.” The top three investment channels are: investment funds, real estate, and bonds. 

Source: Xinhua, September 21, 2013

http://news.xinhuanet.com/house/bj/2013-09-21/c_125419261.htm

China.com recently reported that Li Rongrong, former director of the State-owned Assets Supervision and Administration Commission of the State Council (SAC), spoke at the World Economic Forum on the issues that Chinese state-owned companies face. Li suggested that the key cause of the Chinese state-owned companies’ failures is that there are too many government interventions. He also expressed the belief that the biggest crisis these companies suffer is a trust crisis, which is reflected in the areas of poor quality control, untruthful advertising, and an unwillingness to serve the customers. Li called for providing full freedom to the state-owned companies to compete in the global market and to learn the lessons they need to learn.

Source: China.com, September 11, 2013

http://finance.china.com.cn/news/special/2013dws/20130911/1805761.shtml

China Review News (CRN) recently published a commentary analyzing the “better than expected” economic numbers from August. In the week of September 9, China officially released statistics on the economy (as of the end of August). On nearly all fronts the Chinese economy showed better than expected numbers. Key indexes such as industrial growth, consumer spending, investments, and international trade all demonstrated higher growth rates. Goldman Sachs, Bank of America, and Merrill Lynch all adjusted their forecasts higher for the third quarter. However the commentary did a deeper analysis and suggested that the two primary drivers of the high growth were banknote based financing and real estate investments. A large number of companies and banks took advantage of operational holes in various types of banknotes to finance short-term cash flow needs. This introduced high risks into to the financial market while boosting the illusion of an actively growing market. The housing market improved recently due to further borrowing into the existing bubble, making the bubble even bigger. The author concluded that the optimistic economic data proves that the structural problems in the economy have only gotten worse.

Source: China Review News, September 13, 2013

http://www.zhgpl.com/doc/1027/3/9/3/102739352.html?coluid=53&kindid=0&docid=102739352&mdate=0914075030

According to Xinhua, at a recent G20 press conference, Zhou Xiaochuan, Governor of the Chinese central bank, discussed the BRICS countries establishing a shared reserve fund. He expressed the belief that such a reserve arrangement represents a major milestone that would also contribute to global financial stability. Zhou suggested that the reserve is an important development in terms of “tangible” cooperation between the BRICS countries as it offers a much better capability to defend against “external shocks.” Zhou revealed that the new reserve arrangement involves a multi-nation currency cooperation based on the currency exchange mechanism. The initial scale of the reserve is US$100 billion with China holding the largest share. Zhou also discussed the negative impact of the U.S. exit strategy from its Quantitative Easing (QE) program. The BRICS countries are Brazil, Russia, India, China, and South Africa. Goldman Sachs was first to use the term.

Source: Xinhua, September 6, 2013

http://news.xinhuanet.com/world/2013-09/06/c_117253284.htm