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CASS Predicts Soft Landing in the Housing Market in 2015

On December 26, 2014, the China Academy of Social Sciences (CASS) published its Housing Green Paper, the China Housing Development Report (2014-2015). The report made a number of predictions: that the restrictions on house purchases will be eliminated in 2015; that, with upcoming government incentives, there is hope that the housing market will have a soft landing; and that half of the developers will no longer be in business. 

The report predicted that, in the next couple of years, the housing market will continue to decline. In the last 5 cities (Beijing, Shanghai, Guangzhou, Shenzhen and Sanya) that currently have restrictions on the number of houses one may be allowed to purchase, these restrictions will be removed within a year. Ni Pengfei from CASS commented that once the restrictions are eliminated, the assumption that it is a seller’s market and the myth of ever increasing housing prices will be completely shattered. 
The report predicted that the central and local governments will promulgate policies to facilitate a soft landing in the housing market. Such policies may include removing any restrictions on how many houses one can buy, loosening the lending requirement for those who own two or more houses, and reducing transfer fees and personal income taxes. 
Ni Pengfei held that, given the low returns on housing investment and the surplus in the housing market, government incentives would not stop the decline of the housing market. The report expressed the belief that, with the surplus of houses on the market and the surplus of developers’ capabilities, more than half of future developers will change their line of business or otherwise disappear from the market. 
Source: China News Service reprinted by Xinhua, December 26, 2014 
http://news.xinhuanet.com/politics/2014-12/26/c_127338644.htm

Briefings | | |   Economy/Resources

Housing Market Continued to Decline in November

According to the latest data released on December 18 by the National Bureau of Statistics, November saw prices for new homes fall, when compared to the prices in October, in 67 of the 70 medium and large cities. There was no change in the remaining three cities. Thus, November is the third consecutive month of overall decline with no price increase across the board. Compared to November 2013, the prices for new homes dropped in 68 of the 70 cities. 

With respect to existing houses, when compared to prices in October, November prices dropped in 58 of the 70 cities and in 67 cities when compared to November 2013. 

Source: National Bureau of Statistics, December 18, 2014 http://www.stats.gov.cn/tjsj/zxfb/201412/t20141218_655220.html

Briefings | | |   Economy/Resources

Chinese University Prohibits Students from Celebrating Christmas

Beijing News reported that, on Christmas Eve, the Modern College of Northwest University, located in Xian, Shaanxi Province, made it mandatory for students to watch propaganda programs and indicated that it would punish those who celebrated Christmas. 

According to Beijing News, several students told its reporters that, on Christmas Eve, school instructors were on site at the propaganda multimedia program with many others standing guard around the building so that they could stop the students from leaving. Any students who left would be counted as being truant three times. 
The Communist Youth League of the college posted on its weibo on December 25, “Last night our college watched the college multimedia program in an organized way only to hope students would not blindly emulate foreigners and would instead pay attention to China’s traditional culture. We hope we can take a rational look and take the glory of the school as our own glory. Do not spread rumors or create rumors. Strive to become a glorious modern person." 
A student disagreed with the school response in his comments to The Beijing News. "The school does not let us celebrate Christmas. We have not said anything, but the school should not respond from the perspective that not letting us celebrate Christmas is to promote Chinese traditional culture. Actually they ‘forced’ us to watch the national propaganda films on that day. We are very unhappy about it." 
Beijing News reported that banners were strung up around the campus reading, "Strive to be outstanding sons and daughters of China, oppose kitschy Western holidays," and "Resist the expansion of Western culture." 

Sources: The Beijing News, December 24 and 25, 2014 http://www.bjnews.com.cn/news/2014/12/24/347168.html http://www.bjnews.com.cn/news/2014/12/25/347351.html

Briefings | | |   Social Stability

Xi Jinping: Will not change one country, two systems for Hong Kong and Macau

Xi Jinping spoke at the ceremony marking the 15th anniversary of Macau’s return to China. He told the audience that China’s confidence and resolve to continue the practice of “one country, two systems” will not waiver. 

Xi said that “one country, two systems” is China’s fundamental State policy. “We must adhere to the one-China principle and we must respect the differences between the two systems. … At no time should we focus only on one side to the neglect of the other. … This is the only way that leads to sound and steady progress." He added that any other way would be "a misguided approach from the beginning." It would be like "putting one’s left foot into the right shoe." 
"No matter what difficulties or challenges we may encounter, our confidence and resolve to uphold the principle of ‘one country, two systems’ will not waiver. Our confidence and resolve to advance the practice of ‘one country, two systems’ will not waiver!” 

Source: Xinhua, December 20. 2014 
http://news.xinhuanet.com/politics/2014-12/20/c_1113717267.htm

Briefings | | |   Government/Politics

In 2014, over 150 Senior Executives at State-owned Enterprises Faced Corruption Charges

According to Legal Daily, from January 1 to December 15, 2014, a total of over 150 senior executives from State-owned Enterprises (SOEs) have been investigated for or charged with conducting criminal activities. This represents a sharp increase compared to less than 100 in previous years. 

January and February of 2014 each saw two fallen executives, the lowest number for the year. The numbers in June, August, and September hit the peak at 22, 39, and 22 respectively. The hardest hit were those SOEs that the central government owns, such as China Resources Group and Sinopec. The energy and financial sectors each had a total of 11 senior executives under investigation, including Postal Savings Bank of China, Beijing Rural Commercial Bank, the Bank of Inner Mongolia, and China Guangfa Bank. According to a state survey, 90 percent of the officials who fled overseas are from State-owned companies or financial companies. 
Source: Legal Daily reprinted by Xinhua, December 20, 2014 
http://news.xinhuanet.com/politics/2014-12/20/c_1113717267.htm
Briefings | | |   Government/Politics

Li Keqiang: China Willing to Provide Financial Support to SCO Countries

On the afternoon of December 15, Chinese Premier Li Keqiang attended the 13th meeting of the Summit of the Shanghai Cooperation Organization (SCO) member countries in Astana, the capital of Kazakhstan. 

According to Russian media, Li announced at the meeting that China is willing to provide financial support to SCO countries to help them overcome the economic crisis.  The media also reported that Li further stated that China is willing to take such measures in bilateral cooperation with Kazakhstan and other SCO countries or partners, and that this effort will help these countries to deal successfully with the economic downturn and to modernize production. 
The SCO was founded in Shanghai in 2001. The SCO members are Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Iran, Afghanistan, Mongolia, Pakistan and India have observer status. Dialogue partners include Belarus, Sri Lanka and Turkey. 
Source: China Enterprises Investment Association, December 16, 
2014 http://www.ceia.cn/show.php?contentid=47887

Briefings | | |   Geo-Strategic Trend

China Cancer Map Shows the Geographic Distribution of Cancer Cases

Life Times, which is under People’s Daily, published a “China Cancer Map” showing the geographic distribution of the cancer cases in China. 

Including all cities in China, the forms of cancer with the highest occurrences are thyroid cancer and breast cancer. Lung cancer ranks the highest in the three provinces in northeast China and Yunnan provinces. Jiangsu Province has the highest number of cases of gastric cancer, colorectal cancer, and liver cancer. 
The map shows that liver cancer cases occur mostly in the coastal provinces of Zhejiang, Guangxi, and Jiangsu, while the provinces of Liaoning, Shandong, Gansu, Jiangsu, and Fujian tend to have more colorectal cancer cases. Gynecological cancer cases appear to be concentrated in Inner Mongolia, and the provinces of Shanxi, Shaanxi, Hubei, Hunan and Jiangxi. 
Sources: Life Times reprinted by Huanqiu, December 17, 2014 
http://mt.huanqiu.com/Html/ahtml/china/2014-12-17/5251565.html
Briefings | | |   Economy/Resources

Sino-Russia Trade Suffers from Ruble Depreciation

On December 17, 2014, China National Radio reported that the Russian Ruble was the worst performing currency with a 49 percent depreciation rate (against the dollar) this year and is damaging Sino-Russian trade. 

One issue is that, along the Chinese border at Heihe, Heilongjiang Province, the number of Russian tourists has significantly declined since the beginning of November. Another is that, according to Tian Chunsheng, the Secretary-General of the China and Russia Eastern Europe and Central Asia Economic Institute, Russian businesses have now resorted to defaulting on their payments for imports from China, thus damaging small and medium exporters in China. 
China National Radio noted that the China-Russia currency swap agreement signed back in October will be tantamount to China “giving money to Russia,” as the Russian Ruble continues to depreciate. It is because the Sino-U.S. agreement allows exchanges of currency based on a fixed exchange rate. 

Source: China National Radio, December 17, 2014 http://finance.cnr.cn/txcj/20141217/t20141217_517131147.shtml

Briefings | | |   Economy/Resources