Economy/Resources - 120. page

Epoch Times published an article stating that the EU will impose an anti-dumping tariff on China’s steel products. The article said that, on June 9, the EU announced that it will impose a high tariff on Hot Rolled Steel Flat Bars. On June 2, one week earlier, EU leaders had a summit meeting with Chinese Premier Li Keqiang in Brussels. The summit happened to take place when the U.S. decided to withdraw from the Paris Agreement. It was expected, under the circumstances, that cooperation between China and the EU would improve and both sides would be willing to work with each other. However the outcome of the meeting did not turn out that way. The EU maintains it has strong grounds for its anti-dumping policy and demands changes from China, which has made China quite unhappy. According to an article in Politico, European Commission President Jean-Claude Juncker stated that “Chinese steel overcapacity is now more than double the EU’s total capacity. If we fail to make progress … the only winners will be political forces that oppose the progress we seek.” Section 15 of the Protocol on the Accession of the PRC expired last December. According to the policy, China would have been granted Market Economy Status by then. It would have meant that Western countries should not impose anti-dumping tariffs on China. However, China has faced resistance from the U.S. and from European countries. So far, it has not been granted this status.

According to Asahi Shimbun, a Japanese media, China was denied qualification for Market Economy Status during the EU and China Summit on June 2. China has expressed strong discontent about it. Li Keqiang even refused to publicize the joint announcement both parties made on the Paris Agreement.

Meanwhile Deutsche Welle published an article that stated that the EU will impose a 35.9 percent tariff on Hot Rolled Steel Flat Bars made in China. Currently the EU has trade protection measures on over 100 products. Of those, 40 of them are on steel products and among those 15 of them come from China. Hot Rolled Steel Flat Bars can be used to build ships, gas containers, and energy pipes. According to the EU, the 35.9 percent temporary tariff will be in effect for five years starting on June 10.

Source:
Epoch Times, June 11, 2017
http://www.epochtimes.com/gb/17/6/11/n9250440.htm
Deutsche Welle, June 9, 2017
http://www.dw.com/zh/盟亮红牌-中国钢产品再遇反倾销/a-39189121?&zhongwen=simp
Politico, “EU-China trade tensions undermine climate unity, June 2, 2017
http://www.politico.eu/article/eu-china-trade-tensions-undermine-climate-unity-summit-steel-dumping/

Xi Jinping and Wang Qishan expanded the anti-corruption campaign into the financial sector this year.  The Communist Party’s Central Commission on Discipline Inspection (CCDI) listed 53 officials in the financial sector who have been taken down since 2012. Among them, ten were from the four top financial oversight offices: the Central Bank (People’s Bank of China), China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), and the China Insurance Regulatory Commission (CIRC).

Among those ten, five were from the CSRC, four from CBRC, and one from CIRC. However, the CIRC official held the highest rank: Xiang Junbo (项俊波), Chairman of the CIRC. No one from the Central Bank was taken down.

Source: Phoenix New Media, May 7, 2017
http://news.ifeng.com/a/20170507/51055004_0.shtml?wratingModule=1_9_1

On June 8, Duowei News reported that South Korean media revealed how Chinese companies are “systematically” luring industrial talent away from South Korea. The losses has reached a very serious level. South Korea seems helpless in the face of such a situation.

According to a report from South Korea’s Asian Economy, many Koreans with technical talent, from the cosmetics, the food and other basic necessities field, to information and communications, semiconductors, biotechnology and other cutting-edge areas, are jumping ship voluntarily and succumbing to the temptation of Chinese enterprises’ high salaries.

In particular, many Koreans with talent are helping China’s semiconductor industry to rise. It has made the Korean government and the industry very nervous. Although the Korean government has deployed investigative teams to prevent the domestic semiconductor cutting-edge technology from leaking, it has not yet found an effective way.

It is reported that China’s semiconductor companies attract South Korean talent with 3 to 10 times the annual salaries that Korean companies offer, in addition to housing and cars as well as a commitment to solve their children’s education related issues.

Source: Duowei News, June 8, 2017
http://global.dwnews.com/news/2017-06-08/59819030.html

Well-known Chinese news site Sina recently reported that, based on the latest SWIFT (Society for Worldwide Interbank Financial Telecommunication) numbers, China’s currency was used in 1.6 percent of all of the world’s payment settlements. This is the lowest point since October 2014 and China’s rank slid to number seven (from number five). The Chinese currency peaked at 2.79 percent in 2015, with a rank of number four. SWIFT data showed that the Chinese currency internationalization went well until the first half of 2015. However, the trend slowed significantly after that; some indicators actually reversed. Experts expressed their belief that the obvious slowdown was the result of the slowdown pressure of the Chinese economy, the currency exchange rate fluctuations, as well as the atrophy of cross-border arbitrage activities.

Source: Sina, May 25, 2017
http://cj.sina.com.cn/article/detail/5839878256/262684?cre=financepagepc&mod=f&loc=3&r=9&doct=0&rfunc=100

Fu Guangjun, a Researcher at the State Administration of Taxation, reported that the local government takes away the majority of the proceeds from housing sales.

In Beijing, the land cost is 60 percent of the housing price. The business taxes on the real estate developers along with the house transaction fees account for another 10 percent. The Beijing government claims 70 percent of the housing price. Thus the developer’s is left with a profit of only 10 percent. Therefore, the key to reducing the housing price is to reduce the cost of the land.

Fu also pointed out a problem with the deed. In China, the deed has two parts: the certificate of ownership of the property and the certificate of the right to use the land. The land belongs to the state and the property owner only has a right to use the land for 70 years. This has created a conflict: the property ownership is a permanent ownership, but in reality the property can’t be used in perpetuity as the land right is fixed at 70 years, even though, in reality the land lasts forever.

Source: China.com, May 10, 2017
http://house.china.com.cn/newscenter/view/918289.htm

In a speech he gave on May 5, Chinese economist Xu Xiaonian stated that the growth of China’s economy had reached its peak.

Xu pointed out that there are two ways to generate economic growth. One is by increasing the amount of input and the other is by a more efficient use of inputs. China’s model is based on the former one and has reached its limit. However much stimulation the government puts into the market, there will not be much result.

Statistics show that, a decade ago, an investment of one dollar in China could generate forty to fifty cents of return. Now it only generates seven cents. The marginal return is approaching zero.

Since 2012 and through 2016, China’s Producer Price Index (PPI) has been decreasing. The price of a product out of the factory continues to drop. This shows that China has an over-capacity problem. Companies keep lowering their prices to keep their sales and market share. It means that any new investment will only generate a negative return.

Xu suggested switching to an innovation based economy. He gave four ways to encourage innovation: protect private property rights, reduce (the size of) the state-owned economy, loosen and remove controls, and reduce taxes.

Source: Sohu, May 8, 2017
http://www.sohu.com/a/139138493_313480