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All posts by RWZ - 231. page

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

CRN: After Making a Big Contribution, China Should have More Rights in the IMF

China Review News (CRN) recently published a commentary on the fact that China made a US$43 billion contribution to the International Monetary Fund (IMF) as a way of helping Europe. The announcement was made at the G20 meeting that was recently held in Mexico. The commentary emphasized that the size of the Chinese contribution is the third largest, after Japan and Germany. However, the country controlling the largest voting share in the IMF, the United States, did not offer a single penny. The author expressed the belief that this is one important means China is using to have more say in the IMF, where the United States has veto power and Europe has chaired the organization for over 60 years. The commentator suggested that some cost may be involved on the side of the emerging countries in the process of changing the “unfair” situation and obtaining more control.
Source: China Review News, June 28, 2012
http://www.chinareviewnews.com/doc/1021/4/9/0/102149081.html?coluid=136&kindid=4710&docid=102149081&mdate=0628001505
Briefings | | |   Economy/Resources

Xinhua: Ceremony to Sign the Military Agreement between Japan and South Korea Cancelled

On June 29, 2012, Xinhua reported that the Japanese government approved an intelligence-sharing agreement with South Korea. This is the first military agreement between these two countries since World War II. However, the South Korean government cancelled the ceremony scheduled for the same afternoon due to high pressure from both the ruling party and the opposition parties. Pressure also came from the United States, who already had a similar agreement with Japan. Earlier, the word “military” in the name of the agreement had been removed to ease the pressure. Apparently the wording change was not enough to alleviate the doubts in the minds of South Korean voters who have a strong opinion about territorial disputes with Japan. Also, a large number of South Korean citizens still remember Japan’s past occupation of Korea.
Source: Xinhua, June 29, 2012
http://news.xinhuanet.com/2012-06/30/c_123351185.htm
Briefings | | |   Geo-Strategic Trend

Xinhua: Guangzhou Limits the Number of New Car Registrations

On June 30, 2012, Xinhua reported that the government of the city of Guangzhou (the capital of Guangdong Province) initiated new limits on the number of cars that could be registered. The city government announced at around 9:00 pm that the new policy would become effective in just 3 hours. The policy imposed a monthly quota on new car registrations. The purpose of the new policy is to control the city’s growing problems of traffic jams and air pollution. The quota is expected to have a significant impact on car sales in the local market. That same night, people formed long lines outside of many car dealerships waiting to buy cars before the new policy took effect. The government has not yet decided on the actual numbers for the quotas for the coming months. All car dealers immediately cancelled all promotions and discounts. Many local residents expressed concern about how the city government implemented this new policy. Most people who the media interviewed said hearings should be held before important decisions like this are made. Other large cities in China such as Beijing and Shanghai already have similar government imposed limitations for car registrations.
Source: Xinhua, June 30, 2012
http://news.xinhuanet.com/politics/2012-07/02/c_123355140.htm
Briefings | | |   Government/Politics

CRN: State Owned Companies’ Profits Are Declining

China Review News (CRN) recently published a report on the Ministry of Finance’s newly released numbers. The numbers showed that, during the period from January to May, the total profit of all state-owned companies declined 10.4% compared to the same period last year. The monthly decline from April to May was 11.8%. The Ministry expected a continuation of the decline in the near future. The report expressed the belief that the main cause of the decline was the combination of a weakened international market and low domestic demand. The domestic consumer market is very weak due to higher living costs. Another reason for the profit decline mentioned in the report was the disappearing benefits that resulted from the earlier large stimulation package that the government initiated after the global financial crisis started in the U.S. The report also identified three operational issues: (1) state-owned companies actually had a total income increase while suffering a total profit decline; (2) internal costs such as wages increased rapidly; (3) only companies with monopoly power saw their profits increase.
Source: China Review News, June 19, 2012
http://www.zhgpl.com/doc/1021/4/4/9/102144962.html?coluid=53&kindid=0&docid=102144962&mdate=0619075811
Briefings | | |   Economy/Resources

Outlook Weekly: How to Reform China’s Financial Safety System

Outlook Weekly, a weekly magazine under Xinhua, recently published an article on the way to establish a new system to ensure China’s financial safety. The article identified four major relationships to focus on: (1) the relationship between financial risks and economic development; (2) the relationship between financial openness and financial protection; (3) the relationship between financial freedom and government monitoring and administration; (4) the relationship between speed versus profit, and scale versus quality. 
The article discussed six strategic components of financial safety: (1) controlling the risk in international capital flows; (2) enhancing financial monitoring and administration; (3) coordinating currency policies; (4) examining the goal of currency exchange rate policies; (5) reforming foreign currency management; (6) adjusting international payment balances. 
The article called for four operational actions: (1) adjusting the government’s role; (2) developing a new financial theory to handle the new situation; (3) ensuring financial stability; (4) deploying new risk control measures.
Source: Outlook Weekly, June 4, 2012
http://news.sohu.com/20120604/n344722898.shtml
Briefings | | |   Economy/Resources