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All posts by RWZ - 213. page

Beijing News: Stock Market Landslide Results in 1.3 Trillion Loss in One Day

On June 25, Beijing News reported that, on June 24, the Chinese domestic stock market suffered a major landslide, losing RMB 1.34 trillion (around US$194 billion) in one day. The Shanghai Stock Exchange Index dropped below 2,000, which was the biggest single-day decline in 46 months. Over 200 stocks were suspended from trading. The banking stocks suffered the biggest loss. In the weeks before this landslide, a number of Chinese banks had been running very low on liquidity. The Shanghai Inter Bank Offered Rate (SHIBOR) reached over 13 percent, which was much higher than the normal level of less than 4 percent. The central bank did not immediately inject money into the market this time like it had in previous years. Sectors related to banking, such as insurance and brokerage, all suffered major losses in this round of crisis. Experts expressed the belief that mid-sized banks were the biggest losers in this wave and that this market landslide was a clear signal calling for better risk management in the Chinese banking industry. Some also blamed the QE exit strategy that the U.S. Federal Reserve had announced as being responsible for triggering the event. Since 2009, there have been four other Chinese domestic stock market landslides at this level.
Source: Beijing News, June 25, 2013
http://www.bjnews.com.cn/finance/2013/06/25/269993.html
Briefings | | |   Economy/Resources

Global Times: Chinese Central Bank Requires Enhanced Liquidity Management

On June 24, Global Times reported that the Chinese central bank issued a regulatory requirement that all financial institutions, including commercial banks, must apply more control over liquidity management. The central bank statement suggested that the purpose of the new requirement is to stabilize the currency environment and to improve the handling of an increasingly volatile financial market, especially at the mid-year time point. The central bank also asked all banks to “pay careful attention” to the market trend and to maintain an adequate reserve level. Large commercial banks were asked to maintain good control over risks as well as to cooperate with the central bank in the effort to stabilize the market. The central bank statement mentioned that banks should set reasonable profit goals and loans should be used mainly to support the growth of the real economy.
Source: Global Times, June 24, 2013
http://china.huanqiu.com/politics/2013-06/4057189.html
Briefings | | |   Economy/Resources

Beijing News: State Council Considers Allowing Private Banks

Beijing News recently reported that the State Council announced a series of new policies at its latest executive meeting. One decision was the policy that the central government will no longer require approval for 32 counts of earlier restricted activities such as non-stop direct railway passenger and cargo transportation plans, or a change in the registration of publishing businesses. The goal is to promote fewer government regulations in market-based operations. One key focal point of the discussion at the meeting was the intent to allow the creation of private banks. The meeting recognized that the Chinese market has a significant lack of competition in the banking sector. Meanwhile, small businesses, private companies, as well as agricultural areas suffer a serious lack of lenders. The large state-owned banks are typically not interested in lending money to the businesses other than state-owned companies, which often enjoy fewer risks and a higher profit margin due to government endorsement. 
Source: Beijing News, June 20, 2013
http://epaper.bjnews.com.cn/html/2013-06/20/content_441918.htm?div=-1
Briefings | | |   Economy/Resources

Xi Jinping: The South China Sea Issue Should not Interfere with China-Vietnam Relations

On June 19, 2013, China News reported that Chinese President Xi Jinping recently met with Vietnamese President Zhang Jin in Beijing. Xi suggested that the two nations should prevent the issues of the South China Sea from interfering in the relationship between the two neighbors. Xi said China is determined to solve the issues in a political manner such as bilateral negotiations and friendly discussions. China called for stopping any activity that would further complicate the situation and for avoiding the internationalization of the issues. President Zhang agreed to the friendly negotiation approach and suggested that Vietnam is willing to participate actively in the joint delimitation effort as well as the peaceful joint development plan. Vietnam also does not want the issues to be a threat to the relationship between the two countries. The China News report described the meeting as “friendly and frank.”
Source: China News, June 19, 2013
http://www.chinanews.com/gn/2013/06-19/4947354.shtml
Briefings | | |   Geo-Strategic Trend

Global Times: Russia Signed Long-Term Oil Supply Deal with China

Global Times recently reported that, on June 21, Russia’s largest oil company, Rosneft Oil, signed a long-term oil supply contract with China National Petroleum Corporation (CNPC). Russian President Vladimir Putin and Chinese Deputy Premier Zhang Gaoli were both present at the ceremony. The contract is for Russia to supply 365 million tons of crude oil to China over the next 25 years. The total contract value is around US$270 billion. The contract was based on a framework agreement between the two governments which signed in March 2013. 
Source: Global Times, June 21, 2013
http://world.huanqiu.com/exclusive/2013-06/4051963.html
Briefings | | |   Geo-Strategic Trend

Global Times: China Accused of Having a Political Motivation for Helping Nicaragua Build Canal

Global Times recently reported that the Congress of Nicaragua passed a proposal to allow the government to award an exclusive commercial contract to the Hong Kong headquartered HKND Group to construct the Nicaragua Canal. The Nicaragua Canal Project is to build the world’s largest and deepest inter-oceanic canal. It will compete head to head against the Panama Canal. Western media, such as Time Magazine, questioned whether China’s motivation behind the bid had geo-political considerations. The US$40 billion agreement with the Chinese company included fifty years of special operational rights which can be extended for another fifty years. Spanish media also suggested that the lack of transparency in the congressional vote as well as the impact of environmental damage are all issues that may require further discussion. The chairman of the 10-month-old HKND Group claimed the company had "rich experience" in developing and managing large infrastructure-building projects. Reuters suggested that China has a "strong enough economy" to invest into modernized ocean based transportation opportunities and that it’s about time. Time Magazine also commented that China has been expanding its influence in the U.S. backyard for some time now. However, Nicaragua is still one of the very few countries that maintains an official relationship with Taiwan. 
Source: Global Times, June 15, 2013
http://world.huanqiu.com/exclusive/2013-06/4028674.html
Briefings | | |   Geo-Strategic Trend

Xinhua: Ministry of Foreign Affairs Established Office of Internet Affairs

Xinhua reported that the Chinese Ministry of Foreign Affairs officially announced at a recent press conference that the Ministry had created a new organizational unit called the Office of Internet Affairs. The new unit will be responsible for Internet-related foreign relations developments. At the press conference, the spokeswoman was asked about the latest evidence that demonstrated that the U.S. has been attacking the Chinese networks for many years. She suggested that China was one of the most attacked countries in the world and the Internet space does not need war and hegemony. The Ministry set up the new office to work with various parties to cooperate under the UN international framework and rules for Internet related matters. The spokeswoman also suggested that there is a working group under the China-U.S. Strategic Security Dialog Framework. China will continue to use that channel to work with the United States. 

Source: Xinhua, June 15, 2013
http://news.xinhuanet.com/politics/2013-06/15/c_116153301.htm
Briefings | | |   Government/Politics

People’s Daily: Employment Rate for 2013-Graduated Students Dropped 12 Percent

People’s Daily recently reported that the employment rate for college students who graduated in 2013 (at the undergraduate-level) was 35 percent. This is a 12 percent decrease from last year. The report was based on the latest numbers from the newly released 2013 Chinese College Graduates Employment Report, published by the China Social Sciences Academic Press. The same report also indicated that, for the same period, post-graduate level students suffered an 11 percent year-to-year decrease in their employment rate, which is 26 percent. The report also listed several of the majors that have the lowest employment rates: animation, law, biotechnology, and English, all of which were the least popular areas for at least the past three consecutive years. The report showed that the average monthly income of the new college graduates is RMB 3,048 yuan (around US$450). The highest six-months-after-graduation income is for the engineering students, and the lowest is in the education area.
Source: People’s Daily, June 10, 2013
http://bj.people.com.cn/n/2013/0610/c82841-18844667.html
Briefings | | |   Social Stability