On July 8, 2016, Blog China posted an article analyzing the recent occurrence of massive floods in the Yangtze River basin. After having presented the damage and death toll caused by the floods, the writer of the article asked what happened to the Three Gorges Dam. Didn’t the government claim that the Three Gorges Dam would stop a flood as huge as one that happened once in 100 centuries?
Economy/Resources - 128. page
China’s Air Quality Issue Remains Challenging
Well-known Chinese news site Sina recently reported that the Chinese Academy of Engineering and the Ministry of Environmental Protection jointly released the mid-term evaluation results for the Air Pollution Control Project, which started in 2013. The State Council commissioned the project. The joint report showed the total air pollutant (PM2.5 and PM10) volume is on the decline in most of the provinces, but the general air quality issue remains very challenging, especially during the winter season. The focal points of the pollution reduction effort should be establishing higher industrial standards, adjusting the industrial structure, and enhancing coal burning controls. Scientists from the Chinese Academy of Engineering pointed out that, in the next two years, the country needs to continue strengthening the energy source structural adjustments so it can improve the capability of dealing with heavy air pollution incidents in the future.
Source: Sina, July 5, 2016
http://dailynews.sina.com/gb/chn/chnpolitics/chinanews/20160705/03237405182.html
Xinhua: Low Rate of Recycling Used Automobile Tires Is a Source of Pollution
Xinhua reported that the small and medium size tire manufacturers in Nanning Guangxi Province recently held an environmental conference. During the conference, the participants raised their concerns about the rapid increase in used automobile tires and the potential impact this has had as an environmental hazard. According to statistics that the China Rubber Industry released, in 2013, China produced 299 million used tires which weighed 10.8 million tons. That number has been increasing by 8 to 10 percent each year. By 2015, the total number of used tires reached over 300 million. The environmental concerns include increases in used tire storage space; its impact on the natural environment; and fire sensitivity, which could produce a large amount of smoke and hazardous substances. According to the article, China’s used tire recycling rate is only at 60 percent due to the fact that the manufacturers have a limited recycling and reuse capability, low profitability, and the lack of a market.
Source: Xinhua, July 11, 2016
http://news.xinhuanet.com/politics/2016-07/11/c_129133731.htm
Ministry of Commerce: China Has Been the Main Target for Anti-Dumping for 21 Consecutive Years
According to an article that Guangming Daily published, the spokesperson for the Ministry of Commerce reported that China has always been the biggest target of trade remedy investigations. The spokesperson pointed out that, since the WTO was formed in 1995, the number of investigations against China totaled 1,149. This number accounted for 32 percent of the total. China has been investigated for anti-dumping for 21 consecutive years and under countervailing investigations for 10 consecutive years. The article mentioned that recent reports from the WTO and the EU both cited the rise of trade protectionism, especially among G20 members where one-third of their trade remedy measures directly target China. The spokesperson claimed that trade protectionism does not help the world with the recovery of its economy.
Source: Guangming Daily, July 6, 2016
http://economy.gmw.cn/2016-07/06/content_20848735.htm
Caixin: June Manufacturing PMI Fell to Four-Month Low
Well-known Chinese financial site Caixin recently released its official Chinese Manufacturing PMI index number for June. It reflected the sharpest deterioration in operating conditions in four months amid economic weakness at home and abroad, with the index at 48.6. Caixin PMI was formerly known as HSBC PMI, which was a well-respected economic indicator monitored globally by financial institutions. The PMI report showed that total new orders decreased in June, driven by the seventh straight monthly decline in new export sales. At the same time, companies continued to reduce staffing for the 32nd successive month. Overall, economic conditions in the second quarter were considerably weaker than in the first quarter. Caixin expressed its belief that the government must strengthen its proactive fiscal policy while continuing to follow prudent monetary policy. PMI (Purchasing Managers Index) is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: Caixin, July 1, 2016
http://pmi.caixin.com/2016-07-01/100960907.html
Chinese Rating Agencies Completely Ignore Corporate Debt Risks
Well-known Chinese news site Sina recently reported that, based on a Financial Times analysis, no Chinese rating agency recognizes the credit risks that Chinese domestic corporate debts have caused. According to data that the IMF has published, China has around US$1.3 trillion worth of corporate debt that can turn bad. However, when checking with the top 10 Chinese rating agencies, the Chinese companies were all considered “healthy.” Based on the current ratings, nearly all of the US$2 trillion domestic corporate debt is considered safe. However, in the first six months of this year, the number of corporate debt default cases skyrocketed to three times the number for the entire previous year. The Chinese ratings are also dramatically different from ratings that the well-respected international agencies such as Standard and Poor’s, Moody’s, and Fitch have given. Some of the Chinese AAA-rated corporate bonds were rated “garbage” outside of China. Critics suggested that the Chinese rating agencies are under the pressure from both the government and the large domestic companies. Some Chinese government officials explained that the overseas ratings did not “properly” consider the government support those Chinese companies enjoy.
Source: Sina, July 1, 2016
http://finance.sina.com.cn/stock/usstock/c/2016-07-01/doc-ifxtrwtu9659094.shtml
In China’s First Quarter, Bankruptcy Cases Surged
Well-known Chinese news site Sina recently reported that, based on the numbers that the Chinese People’s Supreme Court released, during the first quarter of 2016, the courts across China saw a 52.5 percent increase in bankruptcy cases, year-over-year. Experts expressed the belief that this was the result of the economic structural adjustments that the Chinese government conducted. The reforms focused on industrial production reduction initiatives. Most of these bankruptcy cases involved medium and small sized companies, which may have a lighter social impact than large enterprises. In recent years, more and more companies have preferred to take the bankruptcy approach. One of the reasons is that the government is leaning towards using the legal system to deal with the issue of “zombie companies.” Another reason is that more and more company owners have realized that, as soon as a bankruptcy case is accepted by the court, the creditors can no longer cease their guaranty and the company can restore its operations.
Source: Sina, June 24, 2016
http://finance.sina.com.cn/china/gncj/2016-06-24/doc-ifxtmwei9222408.shtml
EU Chamber of Commerce: Nearly Half of the Members Reevaluating Investments in China
Radio Free International (RFI) recently reported that the European Union Chamber of Commerce in China just released its 2016 Business Confidence Survey. The survey showed that 41 percent of its members are reevaluating their business in China and are planning to cut costs using such ways as layoffs. The report found the EU companies became pessimist because the Chinese government did not deliver on its promise to establish a more open and more competitive market environment. According to the report, 47 percent of the companies still intend to expand their Chinese operations. However, the same number was 86 percent three years ago. Among the members surveyed, 58 percent said the Chinese censorship of Internet access significantly impacted their ability to do business in China. This is a 17 percent increase from just last year.
Source: Radio Free International, June 7, 2016
http://rfi.my/1Uoopw8