Economy/Resources - 105. page

Jiemian News, the online news site under the Shanghai United Media Group, recently reported that, for the upcoming winter and spring, China is expecting a natural gas supply gap of 22.8 billion cubic meters. Shanghai United Media Group was established in 2013 through the merger of two large government owned newspaper groups, Jiefang Daily and Wenhui–Xinmin United Press. Just the market share that China National Petroleum Corporation (CNPC) controls will see a year-over-year demand increase of 32.4 percent. The 5 billion cubic meters of gas supply gap China suffered last winter and spring already has created a major “gas shortage.” To ease the situation, the three largest Chinese natural gas suppliers (CNPC, SINOPEC and CNOOC) expanded their total capacity by 10 billion cubic meters. Among those with the highest increase in demand are industrial fuel gas, city consumer gas, and electricity power generation gas. Some analysts, however, are not very much concerned because the Chinese government has since drastically changed the policy of switching from coal to natural gas.

Source: Jiemian News, October 23, 2018
https://www.jiemian.com/article/2560174.html

On October 23, Zhang Weiying, a professor at Peking University, who is also regarded as a liberal scholar, published an article entitled “Understanding the World and the Chinese Economy” on the official website of the National Development Research Institute of Peking University. The article criticized the touted theory of the “China Model,” which believes that China’s 40-year economic rise has benefited from the unique “China model,” namely, a strong government, a large body of state-owned enterprises, and a smart industrial policy.

Citing the marketization data from the Beijing National Economic Research Institute and the economic growth data from the China Statistical Yearbook, Zhang points out that the changes in the marketization index are always positively correlated to the growth rate of the gross national product. Statistics such as the proportion of the urban state versus the private sector employment, the proportion of state-owned versus foreign and private capital, and their relationship to the per capita GDP growth rate, show that the larger the state sector, the slower the economic growth rate. Regions where “the state retreats while the private advances” show better growth performance.

Zhang concluded that China’s rapid economic growth over the past 40 years has come from marketization and the opportunities offered by the second-mover advantage rather than the so-called “China model.” Second-mover advantage refers to the advantage a nation receives from following others or mimicking an existing model.

Zhang warned that if one blindly uses the “China model” to explain China’s economic development one will “mislead oneself and destroy one’s own future. Moving toward a bigger state sector, expanding the government’s power, and relying on industrial policies will led to the reversal of the reform process, waste all previous efforts, and lead the economy into stagnation.

Externally, the “China model” has set China apart from the common sense market economy that the West has acclaimed, and has led to conflicts between China and the West. According to Zhang the unfriendly international environment China is currently facing is not unrelated to some economists’ misinterpretations of China’s achievements over the past 40 years.

Source: Radio France International, October 25, 2018
http://rfi.my/3FzJ.T

On October 23, Wang Yiming, the deputy director of China’s Development Research Center of the State Council, the government think tank for policy research and consulting, met with business investors. Wang told them that the impact of the Sino – US trade war is evolving from a psychological expectation to the real economy. In particular, it is affecting trade, investments, the supply chain, and employment. In the future, once the U.S. imposes the 25 percent tariff on all Chinese exports, China’s GDP growth rate will fall by 1.5 percentage points. He predicts that this will be the worst case scenario of the trade war.

Wang Yiming said that 15 manufacturing sectors will be affected greatly and negative growth will occur. The sector that will receive the most severe hit will be that of radio, television equipment, and radar facilities. This sector is expected to fall by 7.8 percentage points.

According to Wang, some enterprises have already taken the upcoming tariff factors into consideration, especially those whose production is oriented toward exporting to the U.S. Some are even considering the cancellation of new investment plans or a delay in hiring. On the technical level, Sino – US cooperation in science and technology and personnel exchanges face growing restrictions.

Source: Radio France International, October 25, 2018
http://rfi.my/3FzJ.T

BBC Chinese recently reported that, according to the Chinese National Bureau of Statistics, China’s third quarter GDP year-over-year growth rate fell to 6.5 percent. This rate is lower than the 6.6 percent Reuters estimated and is the lowest rate since 2008. China’s first quarter growth rate was 6.8 percent and the second quarter number was 6.7 percent. In the past few months, China has been taking action to improve liquidity and infrastructure investments. However, with its high debt level, the market did not turn optimistic. The Chinese stock market has been free-falling, which does not reflect the still “rapid” growth rate. Many experts now tend to agree that China’s best bet should be giving up some economic benefits to arrive at an agreement with the United States, and quickly declare success. This way, China can immediately focus on fixing some of the deeper issues in the economy. The Chinese leadership has been making positive comments to boost the market. Vice Premier Liu He recently just told the press that China and the U.S. are “in talks.”

Source: BBC Chinese, October 19, 2018
https://www.bbc.com/zhongwen/simp/chinese-news-45915821