Economy/Resources - 102. page

China, as the world’s most populous country, has nearly 1.4 billion people. For decades, in order to control population growth, it implemented a one-child policy. However, in response to concerns about an aging society and a shrinking labor force, in 2016, the Chinese government allowed couples to have a second child.

Yi Fuxian, a researcher at the University of Wisconsin in Madison, pointed out that despite the second child policy, the number of safely born infants in China in 2018 was 2.5 million less than the previous year, compared with the forecast of an increase of 790,000.

Based on the publicly available birth information of villages and towns across China, Yi believes that last year was a “historical turning point for the Chinese population” and its negative growth may have become an irreversible trend. The causes include the decline of women of reproductive age, as well as the high expenses of education, health care, and housing, making newly married couples reluctant to raise children.

Year 2018 was the first year of negative population growth since the establishment of People’s Republic of China in 1949. Yi’s observation is that the aging of the population has accelerated while China’s economic vitality has declined.

Source: Central News Agency, January 3, 2019
https://www.cna.com.tw/news/acn/201901030410.aspx

Although African swine fever continues to spread in China, the authorities emphasized that the epidemic is “overall controllable.” However, according to a local government website, 223 people in Liaoning and other places have been held accountable for deliberately hiding the epidemic information and have been slack in performing their duties of monitoring and investigation.

On December 30, 2018, Inner Mongolia’s Chinese Communist Party’s website published a release from the Information Office of the Ministry of Agriculture and Rural Affairs, titled, “The General Office of the State Council seeks accountability for the prevention and control of African swine fever in Liaoning, Anhui, and Hunan.”

The above news was not widely picked up by mainland Chinese media. According to the release, the General Office of the State Council issued letters to Liaoning, Anhui, and Hunan, demanding serious investigation for responsibilities. These three provinces have seen intensive outbreaks of cases and even a small-scale epidemic.

According to the report, some county and township government officials in Liaoning Province passed the buck around, some deliberately hid the outbreak information and failed to implement the monitoring and investigation. In some cities and counties in Anhui and Hunan Provinces, the prevention and control work was not in place and there was a lack of efficacy in performing their duties. A total of 223 officials in the three provinces were punished.

The report also reminded the government officials that they must understand the difficulty and complexity of the prevention and control of the epidemic.

Source: Central News Agency, January 2, 2019
https://www.cna.com.tw/news/acn/201901020056.aspx

On December 21, China’s Southwestern University of Finance and Economics (SWUFE) released a “2017 China Urban Home Vacancy Analysis” report. The report sampled over 40,000 households in 364 districts or county-level cities in 29 provinces.

The report shows that the home vacancy rates in China’s urban areas were 18.4 percent, 19.5 percent, 20.6 percent and 21.4 percent in 2011, 2013, 2015 and 2017 respectively. Its current vacancy rate is only behind Spain (28.3 percent) and Italy (22.7 percent). It is higher than the U.S. and most European countries.

Gan Li, SWUFE’s director of the Center for Chinese Family Finance Research, said that, in recent years, China’s home vacancy rate has received a lot of attention and is considered to be a key factor in judging the trend of the housing market. Yan Yuejin, a researcher at a housing think tank, said that a vacancy rate of over 20 percent indicates that the speculative investment in housing is high and that housing idleness is high.

Buying a house is considered an important means of property ownership. However, the report shows that families with vacant houses face higher financial risks. In 2017, 32.2 percent of households with vacant homes had housing liabilities, compared with 17.3 percent of households with no vacant homes.

Source: Central News Agency, December 22, 2018
https://www.cna.com.tw/news/acn/201812220223.aspx

Duowei, A pro-Beijing news media based in North America, published an article stating that a series of reports on China’s recent economic data have been flashing some worrisome signs.

According to the latest data from the National Bureau of Statistics, China’s rate of consumption and of industrial growth have fallen sharply. Both were lower than expected, even lower than the growth rate during the 2008 financial crisis.

The import and export data for November was far less than expected and the growth rate was less than half of the growth rate for the previous month.

It was a foregone conclusion that China’s auto sales experienced their first recession in the past three decades.

The Caixin (Financial News) survey showed that new export orders from Chinese factories have fallen to their lowest level since February 2016.

The China Manufacturing Purchasing Managers Index (PMI) ended its 15-month expansion in August, showing a four-month losing streak and hitting a two-year low.

Along with this economic situation, the continued deterioration of the employment market is even more worrisome.

At the beginning of this year, the media reported that the giant companies such as Alibaba, Tencent, and Baidu have begun to reduce the number of their recruits significantly.

With the advancement of China’s financial sector reform, China has experienced serious debt defaults of P2P companies. Statistics indicate more than 20,000 people will be forced to lose their jobs in this round of company downturns.

In recent years, traditional industries that supply-side reforms have affected directly have become more and more distressed in the area of employment. The media reported that about 1.8 million people in the coal and steel sectors will face unemployment.

Recently, the State Council of China issued a document, “Several Opinions on How to Improve Employment Effectively in the Current and Near Future.” The most striking item in the document was that “companies participating in unemployment insurance can get 50 percent of their insurance premiums contributed in the previous year reimbursed if they do not lay off or only lay off very few employees.”

However, in the face of these Chinese government measures, some companies do not seem to feel the help was in time. The phenomenon of layoffs has become more and more intense.

Source: Duowei, December 16, 2018
http://blog.dwnews.com/post-1080491.html

Well-known Chinese news site Sina recently reported that the China Association of Automobile Manufacturers (CAAM) just released its November sales numbers for the Chinese domestic automobile market. The report showed that 2.17 million automobiles were sold in November, which is the largest decline in six years (since January 2012), representing a 16.1 percent drop. However, the January 2012 decline was merely a reflection of the Chinese New Year’s impact that year. Looking back a few months, the Chinese automobile market has been declining in each of the past consecutive months. Since September, the decline has been around 12 percent per month. This is indicative of the worst market shrinkage since 1990. Unless December data shows a miracle, CAAM is projecting the first annual decline in over 20 years. The Deputy Director of CAAM explained that the decreasing income of middle and low class consumers was the main cause of the sharp decline. Government policy changes also played a role. International auto manufacturers will also see challenges in the Chinese market.

Source: Sina, December 11, 2018
http://auto.sina.com.cn/news/hy/2018-12-11/detail-ihmutuec8177963.shtml

For at least three to five years, South Korea has been considered to be leading China in the semiconductor industry. In order to reduce this gap and even catch up with South Korea, China has not only invested heavily in facilities, but has also used high pay to hire tech talent from Korea.

Many Koreans are surprised by the amount of money China is willing to pay. The Chinese side usually proposes a salary three times higher than the current job, with a three-year guarantee period. A Korean semiconductor professional said, “If you are over 50 years old and you don’t have an ideal position in the company, the high salary will naturally tempt you. If you continue to work in Korea, you can still work for up to 3 years. However, a three-fold salary plus a three-year guarantee is the same as an additional 7-8 years of salary.”

People said that three times the current pay is a general case. For those who have important technology at hand, the salary that the Chinese propose is even as high as eight times. China has reportedly hired more than 1,000 scientific and technical personnel from the Korean semiconductor industry, offering a high salary.

Semiconductors are South Korea’s most important export to China. For China, the domestically produced semiconductors account for only 15 percent of total demand and the remaining 85 percent need to be purchased from South Korea, Taiwan, and the United States.

After China has overtaken Korea in mobile phones, display panels, shipbuilding, automobiles, and other industries, the semiconductor has become the only industry in which Korea is leading China. In the first 10 months of this year, Korea’s semiconductor exports to China were about US$60 billion. This figure exactly equals Korea’s trade surplus with China from January to October. If China overtakes the semiconductor, the bilateral balance of trade could reverse.

Source: Radio Free Asia, December 12, 2018
https://www.rfa.org/mandarin/yataibaodao/jingmao/ko-12122018101604.html

China’s National Business Daily reported that a study that the China Social Science Publishing House and the Inner Mongolia University issued on December 10 showed that it was quite common in 2017 for Chinese workers to work overtime (net working hours greater than 8 hours a day), with an overtime rate of 42.2 percent. Working overtime is particularly serious among low-income, low-education, and manufacturing workers. The overtime rate among manufacturing workers can be as high as 58.8 percent. The study was based on an analysis of the time utilization information from 12,471 households (30,591 household members) in 29 provinces in China, not including Xinjiang and Tibet.

According to the analysis of urban traffic data, Huawei topped Chinese companies with an average daily overtime of 3.96 hours per person.

Many Chinese are still working even though they are on vacation. The traveler bloggers website (www.mafengwo.cn) released The “Chinese White-collar Workers Travel Research Report 2017,” which showed that 88 percent of white-collar workers need to handle work even during travel. Ten percent of respondents said they would like to take a low-key vacation and never tell their colleagues. Forty-six percent of people would proceed cautiously, sharing the vacation information only with close colleagues.

Source: Central News Agency, December 11, 2018
https://www.cna.com.tw/news/acn/201812110215.aspx