Economy/Resources - 103. page

On December 3, Deutsche Welle reported that, not only are housing prices in China’s metropolises rising rapidly, but cemetery plots have become increasingly expensive and scarce. The price of a cemetery plot has soared due to the lack of land. This is true not only in Beijing, but also in many other coastal cities in China. Whether it is Shanghai, Shenzhen, or Hong Kong, cemeteries are becoming fewer and fewer. The article stated that in the capital, Beijing, there are only enough available cemetery plots to last for six years. Hong Kong residents have to wait in line to purchase a cemetery plot. In cities like Beijing or Shanghai, the cost per square meter is over 100,000 yuan (US$14,526) which is higher than the price of housing and it is impossible for an average working class family to afford. The Chinese government hopes to achieve nearly a 100 percent cremation rate, but so far not everyone has responded positively to the government’s call because it is against people’s traditional beliefs in Chinese culture.

Source: Deutsche Welle, December 3, 2018
https://www.dw.com/zh/%E4%B8%AD%E5%9B%BD%E5%A2%93%E5%9C%B0%E7%B4%A7%E7%BC%BA-%E6%AD%BB%E4%BA%BA%E5%92%8C%E6%B4%BB%E4%BA%BA%E4%BA%89%E5%9C%B0/a-46554056

China’s Tianqi Lithium acquired a 23.77 percent stake in Chilean lithium giant Chemical & Mining Co. of Chile (SQM) for US$4.0 billion. China is therefore one step closer to having a monopoly position in the lithium mining market. This rare metal has the reputation of being the “oil of the 21st century” because it is indispensable for the batteries that charge virtually every electronic product, computers, cell phones, and electric cars.

SQM is the world’s largest lithium producer, accounting for nearly a quarter of all global production. Tianqi Lithium also has shares in Australia’s Albemarle Corp., the world’s second-largest lithium producer. If added to the production of Tianqi Lithium itself, the Chinese company would control 70 percent of the global market for this precious metal.

For China, it is important to control such an important raw material around the world. Liu Ying, a researcher at the Chongyang Financial Research Institute of Renmin University of China, believes that the demand for lithium in the future can only grow. The world will gradually abandon oil and switch to new energy sources, mainly electricity. Nothing has been found to replace the lithium which is necessary for the production of storage batteries. A monopoly of the lithium market would have a very attractive future.

Sputnik News, December 6, 2018
http://sputniknews.cn/opinion/201812061027037125/

As real estate sales have gradually slowed down, China’s real estate developers have been faced with an increased demand for financing due to people’s heavy upfront investments, interest payments, and the slow return of cash flow. Since the government loosened up the financing policy, there has been an increase in real estate financing activities. According to statistics from the Central Plains Real Estate Research Center, in November (as of November 28), a number of real estate companies across the country were approved for large-scale financing with the total financing amount exceeding 100 billion yuan (US$14 billion). Meanwhile the defaults on debt payments this year has hit a record high. In November, 150 billion yuan in debt was due, which was the second largest amount in 2018. It is expected that the debt repayment will be even larger in December.

Source: Xinhua, November 30, 2018
http://www.xinhuanet.com/house/2018-11-30/c_1123787448.htm

According to Chinese media, the coming winter is also a winter for the job market in mainland China. Second-tier cities and small and medium-sized enterprises are the places seeing the most cuts in new job opportunities.

Phoenix reported at the end of October that China’s Huawei issued internal documents indicating that the company would halt generic job hiring, except for talent in critical areas and special recruitment of professionals with excellent work experience. Subsequently, tech giants such as Alibaba, Baidu, Tencent, and JD.com were also rumored to have suspended or reduced recruitment of fresh graduates.

More than 8.2 million college students are graduating in China, a new historic record.

Both seasonal factors and economic factors are behind the tough job market. Sectors such as trade, furniture and home appliances, and construction engineering have fewer job openings than expected.

Small and medium-sized enterprises and private enterprises with less than 500 employees are the main entities responsible for the reduction in the number of job postings. Weaker demand, lower economic growth, and an increase in financing costs have aggravated the operational difficulties of these companies.

The profitability of large companies is also trending downward. According to the National Bureau of Statistics, the annual growth rate of total profits of large enterprises in October was only 3.6 percent; it is the fourth consecutive month of decline.

Source: Central News Agency, November 27, 2018
https://www.cna.com.tw/news/acn/201811270173.aspx

On November 14, Hong Kong based Economic Rights Institute and Dutch NGO Electronics Watch released a report titled “The Link Between Employment Conditions and Suicide: A Study of the Electronics Sector in China.”

Using original Internet suicide reports, on-site surveys and off-site interviews, the study adopted three methodologies to “show how the employment conditions of some electronics firms in China heighten the risk of employee suicide.”

The report lists the main reasons for suicide, including using the suicide as a form of protest, hostile work environment, pressure from their superiors, withheld income, denied permission to resign or time off, and the fear of losing their jobs. It also pointed to the roles of employers and Chinese government in censoring and minimizing public reports of suicides.

The report suggests the need to:

“End ‘soft’ forms of forced labour, including forced overtime and restrictions of workers’ right to resign from their jobs without forfeiting their wages.

Abolish punitive forms of discipline and intervene effectively to prevent hostility and violence in the workplace.

Empower workers to collectively influence enterprise decisions connected to conditions that heighten risk of employee suicide, including productivity requirements, overtime and the structure of incentives.”

(This briefing serves as a correction of an earlier Chinascope briefing “Survey Shows High Suicide Rate in China’s Electronics Industry” at http://chinascope.org/archives/16748. The earlier briefing, sourced from Radio France International, did not support the statement that “the results showed that the suicide rate is extremely high among Chinese workers in the high-tech electronics industry.” The study also did not discuss a lack of unions or of independent unions as a cause of the suicides.)

Source: Electronics Watch, November 14, 2018
http://electronicswatch.org/en/links-between-working-conditions-and-employee-suicide-study-of-the-electronics-sector-in-china_2550232

Well-known Chinese news site Sina recently reported that the high-ranking Chinese university, People’s University, just released its Report on the Chinese Macro economy for 2018 to 2019. The Report showed that Chinese consumers suffered a major increase in debt over the past year mainly due to their investments in the housing market. For the vast majority of the middle class and mid to lower class, their wealth has been locked into the real estate that they acquired and they have almost emptied their savings. This consequently triggered a significant reduction on regular consumer spending. The Report also concluded that, before the year 2015, most of the spending in the housing market was sourced from the mid-upper class. Now the primary housing buyers are in the lower income category. As of September, Chinese residents’ savings saw a year-over-year decline of 6.7 percent, and a two-year decline of 12.6 percent.

Source: Sina, November 24, 2018
https://finance.sina.com.cn/meeting/2018-11-24/doc-ihpevhck4429400.shtml