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All posts by TGS - 28. page

Railway Cargo Volume Continues to Slide

On August 18, 2015, the China National Development and Reform Commission released statistics on railway cargo volume. Railway cargo volume is one of the three major economic indicators reportedly used by Li Keqiang, current Premier, to measure China’s economy. The other two indicators are electricity consumption and the loans that banks disburse.

According to the statistics, from January to July, railway cargo volume was down by 10.2 percent, year on year, with a total of 1.98 billion metric tons. The Railway Freight Ton-Kilometers (RFTK) decreased by 11.8 percent, totaling 1,396.5 billion ton-kilometers. In July alone, railway cargo volume declined by 10.9 percent and RFTK dropped by 14.4 percent, year on year. The China National Development and Reform Commission attributed the continued slide to the weak transport demand for coal, metallurgy, mine construction materials, and other major bulk materials. 

Similarly, the statistics released in July showed that, in the first six months of 2015, railway cargo volume was down 10.1 percent, year on year, totaling 1.7 billion metric tons. The RFTK was down to 1,205 billion ton-kilometers, a reduction of 11.4 percent year on year. 
Sources: China National Development and Reform Commission, August 18, 2015 and July 24, 2015 http://www.ndrc.gov.cn/jjxsfx/201508/t20150818_745402.html http://www.ndrc.gov.cn/jjxsfx/201507/t20150724_742728.html

Briefings | | |   Economy/Resources

Behind the Tianjin Explosions

China Business News reported that, at around 11:30 pm on August 13, two consecutive explosions occurred in warehouses containing hazardous chemical materials in Tianjin City, about a 30 minute train ride from Beijing. The explosions originated at a warehouse site owned by Tianjin Dongjiang Port Rui Hai International Logistics Co., a company that stores and transports dangerous chemicals. 

Xinhua said that, as of 6:00 pm on August 13, 50 people had been confirmed dead among whom 17 were firefighters. More than 701 people have been hospitalized, 71 in critical condition and the death toll is expected to rise. 
The cause of explosions remains unknown. The authorities cannot identify the source of the fire because the fire has not yet been completely put out. The fire continues due to the calcium carbide in the inflammable materials in the warehouses. Calcium carbide reacts violently with water and reactive chemicals, with a risk of explosion. When the first group of over 100 firefighters arrived at the scene, there had not yet been any explosions. They were not informed that there were hazardous materials that might explode if they came in contact with water. Firefighters then used water to put out the fire. 
Source: China Business News, August 14, 2015 
http://www.yicai.com/news/2015/08/4669810.html
Briefings | | |   Social Stability

Impact of the Yuan’s Depreciation on the Housing Market

Daily Economic News published an article that discussed the impact of the yuan’s depreciation on the housing market. Continued depreciation of the yuan will increase the cost real estate developers have to pay in order to obtain overseas financing. They may be forced to reduce housing prices to ease their financial difficulties. 

According to the article, depreciation will increase the cost of corporate finance overseas. Considering the small amount of such overseas financing, the impact may be limited. However, the depreciation will push real estate developers to return to the Chinese domestic market for financing. For money-hungry real estate developers, if the devaluation continues, it will definitely increase the cost of overall financing abroad. When such costs increase by over five percent, the downstream housing market will be affected. 
Source: Daily Economic News, August 12, 2015 
http://www.nbd.com.cn/articles/2015-08-12/937543.html
Briefings | | |   Economy/Resources

Competition Might Save the Chinese Stock Market

On August 3, 2015, Chen Peixiong, a researcher at the Guangdong Industry Development Institute, published a commentary in Hexun stating that few understood the reason for the failure of the Chinese stock market. He proposed that competition among multiple stock markets might save the Chinese stock market. 

In the commentary, Chen held that the Chinese stock market is not a stock market. Therefore, any attempts to analyze, administer, and rescue the Chinese stock market by applying economics and stock market theories would be doomed. 
Chen said that one should go beyond the stock trades and should see whether the stock market moves with the economic trends. A stock market serves as an economic barometer of a country and its existence is conditioned upon whether it is consistent with the economic trends. It is totally nonsensical to say the Chinese style stock market is irrelevant to the Chinese economic trends. The problem with the Chinese stock market lies in the design of the rules or mechanisms. As a planned economy, China can regulate and monitor the stock market to the maximum extent, but it will have no effect. 
Chen recommended either allowing multiple stock markets to compete or to design a stock market outside the constraints of the current system. 
Source: Hexun, August 3, 2015 
http://opinion.hexun.com/2015-08-03/178026529.html
Briefings | | |   Economy/Resources

Anti-corruption Campaign Has Recovered 38.7 Billion Yuan

On July 29, 2015, the Communist Party’s Central Commission for Discipline Inspection (CCDI) announced that from November 2012 to June 2015, it had recovered 38.7 billion yuan (US$16.1 billion) from corrupt officials. 

As part of its investigation of corruption, CCDI determines the amount of funds the corrupt official has obtained in violation of the Party’s discipline. CCDI then collects and returns such funds to the State coffers through confiscation, recovery, and restitution. CCDI has been confiscating gifts, rebates, and remunerations; it has recovered public property and gifts to the State that had been misappropriated; it has also ordered the restitution of spendthrift State-owned assets and unauthorized fines and fees. 
Of the 38.7 billion yuan collected from corrupt officials, CCDI returned 20.7 billion yuan (US$3.26 billion) to the State coffers and the remainder to the courts for judicial proceedings. 
Source: Xinhua, July 29, 2015 http://news.xinhuanet.com/politics/2015-07/29/c_1116075349.htm

Briefings | | |   Government/Politics

Xinhua: Japanese Media Are Turning Right

Xinhua published a commentary stating that, since the beginning of this century, Japanese media have been turning right, following the political right-wing development. They exaggerate the “China Threat” and advocate populism, thus providing excuses for Abe to amend the Constitution to allow military expansion. 

The commentary alleged that the Japanese media make misrepresentations when reporting on China related events. It cited the September 2010 incident in which a Chinese fishing boat collided with a Japan Coast Guard patrol boat near the Diaoyu Islands and also the news reporting on the South China Seas dispute. 
The commentary further alleged that, since 2013, books that criticize China and South Korea have been selling fast. It has become a fashion in the publishing business to publish such books. 
Lastly, the commentary stated that new online media have also been following suit and are increasingly vocal about their dislike of China. In particular, the online media dedicated to China news are keen on picking negative news about China to demonstrate “their superiority over China or their hatred of China.” These reports are often reproduced on Yahoo in Japan, further amplifying the adverse effect. 
Source: Xinhua, July 31, 2015 
 http://news.xinhuanet.com/world/2015-07/31/c_128076805.htm
Briefings | | |   Geo-Strategic Trend

70 Percent of Investors Suffered Losses in the Stock Market Crash

Southern Metropolis Daily published the results of a survey in which individual investors in the stock market in Huizhou City, Guangdong Province were asked to respond. The survey closed on July 21, 2015. Of the 1,006 participants, about 70 percent suffered losses, 20 percent had gains, and 10 percent had neither gains nor losses. As to the extent of losses, over 40 percent of respondents said they lost over 30 percent of their investment. 

Of those responding, male investors accounted for 87 percent and female 13 percent. As for the level of experience, those with less than two years of experience in the market accounted for 40 percent of the participants in the survey. Over 40 percent indicated they had invested over 50 percent of their savings in the market. 
Source: Southern Metropolis Daily, July 23, 2015 
http://hz.southcn.com/content/2015-07/23/content_129102070.htm

Briefings | | |   Economy/Resources

The Party Has Not Won a Landslide Victory over Corruption in the Military

In a Qiushi article, Du Jincai, Secretary of the Central Commission for Discipline Inspection of the Communist Party of China, stated that corruption in the Chinese military is "grave and complex." He stated that the Party has not yet won "a landslide victory" over corruption.  

“To be honest, the situation of the government’s anti-corruption campaign remains severe and complicated. [We] have not won a landslide victory to ensure that people dare not, cannot, and will not become corrupt. Some problems are long-standing and so deeply rooted that we urgently need a major massive investigation and ideological clean up.” 
Du warned that without such a major effort to remedy the situation, corruption “will spread like an epidemic” and “will seriously undermine the Party’s absolute leadership over the military.” 
Du further explained that the external environment cannot be ignored. “The so-called Western democracy, freedom, human rights, and other erroneous ideas” have greatly influenced military personnel. 
Source: Qiushi reprinted by Huanqiu, July 22, 2015 
http://mil.huanqiu.com/china/2015-07/7065368.html
Briefings | | |   Government/Politics