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People’s Daily: China Needs More Higher Level “Opening Up”

People’s Daily recently reported that Ning Jizhe, Deputy Director of China’s National Development and Reform Commission, mentioned in a speech that China must raise its level for its “Opening Up” long-term policy. Ning pointed out that the Chinese economic growth is now switching its focus from speed to quality, which calls for more exchange on the technology, capital, talent, management, and information level. Chinese competitiveness must improve to break out of the medium or lower level in the international value chain. China’s sustained growth depends on efficient development of the international market and the strength of innovation. Ning recommended that “Opening Up” on a higher level should include a balance between imports and exports, should encourage and help capable domestic companies to expand their international reach, should connect domestic regional development and international marketing, and should look inland and push more towards the west side of China.

Source: People’s Daily, November 12, 2017
http://finance.people.com.cn/n1/2017/1112/c1004-29640729.html

China News: Chinese Cross-Border E-Commerce Recorded Rapid Growth

China News recently reported that, based on the newly released Ministry of Commerce international trade report, in the first half of this year, Chinese cross-border e-commerce trade volume reached RMB 3.6 trillion (around US$542 billion). This represents a 30.7 percent year-over-year growth. Among the RMB 3.6 trillion, RMB 2.75 trillion was the total for exports. International e-commerce has become the primary growth engine for China’s international trade. The Chinese government has established the strategy to support China’s international e-commerce industry so it will scale up, standardize, enhance industrial clustering, and be structured more properly. The Chinese strategy focuses on technology, logistics, business model innovation, and cooperation with foreign partners. The goal is to participate actively in forming the international standards and to blend into various international retail systems. Analysts expressed their belief that China’s plan can take good advantage of China’s manufacturing power to expand international sales channels.

Source: China News, November 7, 2017
http://www.chinanews.com/cj/2017/11-07/8370579.shtml

Caixin: Property Tax Reform May Take Time to Implement

According to an opinion article that Caixin published, the Ministry of Finance may need time to establish legislation and outline the requirements during property tax reform. The article reported that, currently, the tax rate, the limit of how much is taxable, and the amount collected varies in each region. Property tax reform will directly impact local tax revenue as well as the existing system of the municipal government that uses the land to derive its financial revenue. In a recent article that the Minister of Finance wrote following 19th National Congress, it specified that the property tax should be based on assessed value rather than the trading value, as has currently been adopted in Shanghai and Chongqing. Caixin reported that this is the first time the property tax base has been officially defined.

Source: Caixin, November 9, 2017
http://opinion.caixin.com/2017-11-09/101167863.html

Chinese Professional Test Taker Caught in New Zealand

Weibo reported that a Chinese woman was caught at the Auckland airport in New Zealand for carrying three different passports. She planned to take the SAT test and the test for Chartered Financial Analyst (CFA) for other people (hence the need for the different passports).

China has a “flourishing” underground market for test takers. This woman charged nearly US $100,000 for taking just one test.

Earlier this year, the FBI arrested four Chinese citizens for hiring other people to take the TOEFL {the most widely respected English-language test} for them. They are facing the charge of “conspiracy to cheat the U.S.” and could be sentenced to up to five years in prison.

Source: Weibo, November 4, 2017
https://weibo.com/ttarticle/p/show?id=2309404170487788924371&ssl_rnd=1510093760.2751

Lianhe Zaobao: 27 Countries on “The Belt and Road” Have “Garbage” Level Sovereign Credit Ratings

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that a number of international studies have shown that most of the projects under China’s grand “The Belt and Road” plan do not show sound financial returns. When the top three international rating agencies ranked the 68 partner countries China included in “The Belt and Road” plan, 27 showed they suffered from “Garbage” level sovereign credit. Among the rest of the countries, 14 (including Afghanistan, Iran and Syria) either were not rated, or the respective governments withdrew their rating requests. “The Belt and Road” plan estimates that, over a ten year period, it will achieve a spending level of US$1.2 trillion on such infrastructure projects as railways, roads, ports, and power grids. Financial and banking experts suggested that it would be a better idea to classify the plan as a geopolitical investment rather than a profitable financial program. China has so far spent or committed to spend over US$500 billion, which does not include large commercial bank loans. The source for most of this spending is China-backed investment funds.

Source: Lianhe Zaobao, October 28, 2017
http://www.zaobao.com.sg/finance/china/story20171028-806533

China.com: Zhou Xiaochuan Warns about China’s Minsky Moment

China.com recently reported that, at a recent press conference, Zhou Xiaochuan, the governor of China’s central bank, expressed his views on “systemic financial risks.” He proposed that the bottom line of China’s risk control should be to get prepared for stopping any kind of “severe adjustment” in the economy when China faces its Minsky Moment. A Minsky moment, named after U.S. economist Hyman Minsky, is a sudden major collapse of asset values which is part of the credit cycle or business cycle. Such moments occur because long periods of prosperity and the increasing value of investments lead to increasing speculation using borrowed money. As part of Zhou’s further explanation, he gave examples about China’s debts, especially company bonds and local government debts (channeled through local financial platforms). Zhou emphasized the importance of taking this issue seriously.

Source: China.com, October 20, 2017
http://economy.china.com/domestic/11173294/20171020/31588932.html

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