All posts by RWZ - 226. page

Xinhua recently reported that the just finished “Golden Week” holiday season (the eight day Mid-Autumn holiday) did not give the housing market a boost. Golden Week used to be the time when a large number of real estate transactions closed. According to statistics based on numbers from fifty-four major cities across the country, the housing market suffered a seventy percent decline in real estate sales compared to the same period last year. A national survey showed that only 12.5 percent of the 9,000 people questioned were considering buying real estate during the holidays. At the same time, housing developers are not seriously planning on lowering prices either. The government is still insisting on maintaining the current tight policies regulating the housing market. It is expected that the housing market will remain flat. No major fluctuations are expected in the near future.

Source: Xinhua, October 13, 2012

http://news.xinhuanet.com/house/2012-10/13/c_123818299.htm

China Review News (CRN) recently published a commentary that discussed the action plan developed to fight the apparent global exchange rate war. After the United States announced its QE3 plan, Japan, Britain, European Union, India, and Australia all followed suit and announced more liberal currency policies. The commentary offered a five-point plan on how China should handle the situation: (1) Speed up the process of internationalizing the Chinese currency (RMB) in order to establish a better position in the world economy; (2) Improve the reliability of the supply of strategic energy and resource materials, which will help build up the national reserve and lower the pressure of currency appreciation; (3) Construct China’s own new financial marketplace to improve financial risk management; (4) Sell a certain amount of U.S. bonds, which will suffer devaluation after QE3; (5) Expand the scale of importing U.S. high-tech goods, including intellectual property.  

Source: China Review News, October 10, 2012

http://www.zhgpl.com/doc/1022/6/2/7/102262784.html?coluid=53&kindid=0&docid=102262784&mdate=1010070949

China Review News (CRN) recently reported that U.S. 10-year and 30-year bond prices are dropping. The price drop occurred just at the time when the Federal Reserve announced its QE3 policies, which caused a lot of concern about inflation. The Federal Reserve is scheduled to release its September meeting minutes. The difference between the yields of the inflation-indexed bonds and the regular 10-year bonds is commonly used to measure expected consumer prices. That difference is 2.48 percent, which is higher than the same number collected at the end of last year (1.95 percent). Some experts expressed the belief that the U.S. economy may slow a little bit but won’t fall. The Federal Reserve is to ensure growth and it should monitor inflation. However this may weaken the demand for long term bonds.

Source: China Review News, October 5, 2012

http://www.zhgpl.com/doc/1022/5/8/1/102258102.html?coluid=148&kindid=7551&docid=102258102&mdate=1005174237

Xinhua reported that the recent Mid-Autumn Holidays delivered an unexpected test result on the newly implemented no-fee freeway policy for vehicles with seven seats or less. Stimulated by this new policy, a large number of car owners took the opportunity to travel. As a result, surprisingly strong consumer spending took place at tourist attractions during China’s Golden Week. The holiday, which started on National Day on October 1, commemorates the anniversary of the founding of the PRC on October 1, 1949. National statistics showed that 119 famous tourist attractions reported an average sales increase of 19.47 percent as compared to the same period last year. Freeway traffic volume in Beijing, Shanghai, and Nanjing increased 30 percent to 70 percent. The number of domestic tourists was estimated to reach 345 million for the holiday week alone. However, the extremely high traffic volume in some areas caused major congestion, which also made news. Economists took notes and are studying the value of this phenomenon as a strategic base for stimulating domestic consumer spending so as to give a boost to the falling economy.

Source: Xinhua, October 7, 2012

http://news.xinhuanet.com/fortune/2012-10/07/c_113289037.htm

Xinhua reported in Hong Kong that HSBC released the latest PMI (Purchasing Managers Index) number for China’s manufacturing industry. The September PMI reached 47.9. This indicates that China has had a month-by-month manufacturing decline for 11 months in a row. The Manufacturing Output Index showed a 10-month low of 47.3. The New Export Orders Index dropped to 44.9, which meant a further decline from August’s figure. The inventory Index reached a 5-month low, which reflected the continuation of the inventory clean-up process. These numbers demonstrated a consistent decline in manufacturing activities. With the biggest decline of new orders in 42 months, the inventory level naturally dropped. HSBC’s Chief Economist of the Chinese Economy expected higher pressure from quantitative easing for the Chinese central government. PMI is an indicator of financial activity reflecting the purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.

Source: Xinhua, September 29, 2012

http://news.xinhuanet.com/gangao/2012-09/29/c_113258732.htm

China Review News (CRN) recently published a commentary on the decline in the quality of China’s economic growth. In the year 1980, an investment of RMB 1 yuan could result in RMB 4.1 yuan worth of return in GDP. However in year 2011, an RMB 1 yuan investment brought only RMB 1.8 yuan worth of GDP return. China’s model of high government investment in economic growth results in a weakness in the promotion of quality domestic consumption. The lowered quality is reflected in the inability to match supply with the decreased international demand. Meanwhile, China’s government run financial market suffers from very low efficiency in capital utilization. The private sector has much higher productivity but cannot access sufficient credit to obtain loans. The situation is made even worse when higher inflation and asset bubbles are added to the mix. The commentator called for tax cuts, breaking up monopolies, and improving financial support to the private sector.

Source: China Review News, September 25, 2012

http://www.zhgpl.com/doc/1022/4/6/3/102246367.html?coluid=53&kindid=0&docid=102246367&mdate=0925065247