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All posts by RWZ - 230. page

Xinhua: Only One China-Concept IPO in U.S. Stock Market

Xinhua recently reported that, in the first half of this year, only one Chinese company had its IPO in the U.S. stock market. That one stock dropped below its issuing price on the first day it was offered. It seems the “IPO window” for Chinese stocks will not be open this year. Given this circumstance, 14 Chinese companies went through the privatization process in order to withdraw from the U.S. stock market. There are two primary reasons for this situation: 1) The poor performance of the global economy has resulted in U.S investors having a conservative attitude; 2) The China-Concept stocks are still suffering from their poor credit background.
Source: Xinhua, July 21, 2012
http://news.xinhuanet.com/finance/2012-07/21/c_123450036.htm
Briefings | | |   US-China Relations

National Bureau of Statistics: Housing Market Still at Key Crossroads

China Review News (CRN) recently reported that the National Bureau of Statistics released its June report on the housing market. The report showed that 25 out of 70 major and mid-sized Chinese cities reported housing price increases. That number is 19 more than the number from May. However, most of the cities have lower prices than last year. For example, for new real estate, Beijing, Shanghai, Guangzhou, and Shenzhen fell 1.3 percent, 1.9 percent, 1.6 percent, and 2.5 percent, respectively. Experts suggested that there are 3 reasons of the recent June price rebound: 1) Lower interest rates (the central bank lowered the interest rate twice in one month); 2) Worries in the market of the possibility of a big price rebound; 3) Some sellers obtained good sales results after lowering prices earlier and are now marking the prices up. It is widely believed that the government imposed market adjustments are still at a critical stage before housing prices return to a reasonable level. 
Source: China Review News, July 18, 2012
http://www.zhgpl.com/doc/1021/7/1/3/102171322.html?coluid=45&kindid=0&docid=102171322&mdate=0718160342
Briefings | | |   Economy/Resources

CRN: China still has Three Policy Tools to Stabilize the Economy

China Review News (CRN) recently published an article that discussed the strategy for dealing with the current decline of the Chinese economy. The author suggested that the Chinese government still has three policy tools that it can use: (1) With the decline of the CPI (Consumer Price Index), China has more room to reduce the interest rate; (2) The government can still increase direct investments into the economy, although this may have a negative effect; (3) The central government can temporarily relax the restrictions on local governments’ borrowing power. The article expressed the belief that the government should determine a minimum risk control line which would serve as an indicator of whether or not to use some of these policy tools.
Source: China Review News, July 14, 2012
http://www.zhgpl.com/doc/1021/6/7/2/102167204.html?coluid=53&kindid=0&docid=102167204&mdate=0714062027
Briefings | | |   Economy/Resources

The U.S. Controls the Energy Card

The International Herald Leader recently published an article that suggested that the United States holds an “energy card” in its hands that it can play against China. Not long ago, the U.S. offered China relief from a sanction applying to any country that buys oil from Iran. However the relief is only effective for 6 months. The article expressed the belief that it is unfair for the U.S. to tell China which country China can buy oil from. However, the author admitted that the U.S. has 3 “energy advantages”: (1) China relies significantly more on Middle East oil than the United States does; (2) The U.S. has many more ways to influence the international oil price than China has; (3) The U.S. has a large degree of energy independence, while China is now the world’s biggest importer of energy. The article concluded by calling for serious consideration of the “worst case scenario,” which is that the U.S. can play the energy card to strategically suppress China.
Source: International Herald Leader, July 10, 2012
http://ihl.cankaoxiaoxi.com/2012/0710/59111.shtml
Briefings | | |   Economy/Resources

People’s Daily: Who is the Troublemaker for East Asian Security?

People’s Daily recently published an article discussing the heated security issues in East Asia. The article started with expressing the belief that, in terms of regional security, a new order is developing in the region. Some “forces outside the region” are interfering in the process of changing the order and have “introduced uncertainty.” The article stated that the status of the East Asian region is rising on a global basis. It is very important to identify the recent troublemaker in this region. The author suggested that, apparently, China has never been a troublemaker and has consistently demonstrated patience and a sense of responsibility at all times. China has large direct investments in nearby countries and has not become a threat. The article also insisted that freedom of navigation (an issue that the United States has raised) has nothing to do with the various recent conflicts in the South China Sea. The author referred to a Philippines’ web article that suggested: it “seems” that the only superpower left in the world, the United States, is trying to contain China.
Source: People’s Daily, July 11, 2012
http://gx.people.com.cn/n/2012/0711/c229266-17231746.html
Briefings | | |   Geo-Strategic Trend

Xinhua: Wen Jiabao Emphasized the Continuation of Price Control for Housing

Xinhua recently reported that Chinese Premier Wen Jiabao spoke about the housing market during his visit to Jiangsu Province. Wen stated that the government initiated housing market adjustment has reached a key stage and that “the task remains difficult.” He emphasized that it is a long term government policy to suppress speculative investments in the housing market. He also suggested that information regarding the housing market is a bit out of control right now and the general public is still worried about a potential rebound in prices. Wen asked the local governments not to implement new policies that would move the market in a different direction. He also asked the suppliers to adjust product strategies to offer more regular lower-priced commercial real estate in the general market. During his visit, Wen also mentioned the planned reform of the real estate tax system, which is considered part of the control system for the future housing market.
Source: Xinhua, July 7, 2012
http://news.xinhuanet.com/politics/2012-07/07/c_112383129.htm
Briefings | | |   Economy/Resources

SecuTimes: HSBC June PMI Number Reached a 7 Months Low

SecuTimes recently reported that the HSBC released the final June PMI (Purchasing Managers Index) number for the Chinese manufacturing sector, showing it to be 48.2, the lowest in the past seven months. Experts suggested that the number indicates that there has been a continuous decline in the Chinese economy. Some also suggested that this could be part of the process of bottoming out and there might be a small rebound in the third quarter. The National Bureau of Statistics released a similar PMI number, showing it to be 50.2, which was also a 7 month low. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: SecuTimes, July 3, 2012
http://kuaixun.stcn.com/content/2012-07/03/content_6119446.htm
Briefings | | |   Economy/Resources

CRN: Nearly 70% of the People Cannot Afford Housing

China Review News (CRN) recently reported on a research survey on the housing market. The nationwide survey covered 23 provinces and 4 municipalities that are directly under the central government. The results were that 66% of the people surveyed said that, given the current market prices, they still could not afford housing. Near 60% said they believed that this year is not the right time to buy real estate. The report also showed that the percentages were highly consistent across different regions. However, there was still a high demand nationwide for commercially available real estate. It seemed, however, that this high demand has not turned into actual purchases. After two years of strict government price control of the housing market, 35% of the people surveyed believe that housing prices are “stabilizing.” Meanwhile 29% of those surveyed still believe that prices are “going up.”
Source: China Review News, July 6, 2012
http://www.zhgpl.com/doc/1021/6/0/9/102160963.html?coluid=10&kindid=258&docid=102160963&mdate=0706173845
Briefings | | |   Economy/Resources