Skip to content

Economy/Resources - 136. page

China News: Chinese Government Encourages Reasonably Lowering Housing Prices

China News recently reported that one of the key 2016 goals set by the Central Economic Work Conference is to absorb the housing market inventory. The Conference clearly pointed out that real estate developers are encouraged to “reasonably” reduce the prices of commercially available assets. In the meantime, the government will discontinue “some outdated” policy constraints. The pricing recommendations are also to allow mergers to happen among real estate developers to improve “industrial concentration” in that market segment. In order to build up a new buyer’s base in the housing market, the central government is relaxing the restrictions that traditionally barred the agricultural population from gaining city resident status. However, the Conference warned that farmers working in industrial sectors in cities may have limited buying power – and they should not be pushed too hard into taking out loans for real estate purchases.
Source: China News, December 21, 2015
http://www.chinanews.com/cj/2015/12-21/7681286.shtml
Briefings | | |   Economy/Resources

The Economic Observer: Do Online Stores Drive Retailers Out of Business?

The Economic Observer, a weekly, Beijing-based national paper that features economic developments, published a commentary on its website which discussed a government commission’s concern that online e-commerce stores are driving retail stores out of business. 

While the Central Economic Work Conference, which started on December 18, 2015, was underway, the National Development and Reform Commission (NDRC), directly affiliated with the State Council, submitted a report to the central government. The NDRC report noted, "Despite the fact that online stores, courier delivery services, and associated new lines of business have created some jobs, one must not ignore their impact on physical retail stores, which are being replaced." 

While people have been cheering the record setting one-day sale of RMB 91 billion (US$14.05 billion) on November 11 at the Tmall online website, which the Alibaba Group owns, retail outlets for books, clothing, and household appliances have been hit very hard. There are even cases in which retail stores have closed en masse. Some traditional department stores have also lost their appeal. This trend has negatively impacted the employment outlook in areas where it has occurred. 

On the one hand, the commentary did not challenge the claim that Ma Yun (Jack Ma), chairman of the board of the Alibaba Group, made. Ma claimed that Alibaba’s online e-commerce platform has 8.5 million active vendors, who directly created 10 million employment positions and indirectly created 3.5 million more. Ma categorized this group as "online merchants." They include merchants with well-known brands; vendors specializing in channel marketing and logistics; and indirect participants doing outsourcing work in communications, design, and sales. 

On the other hand, the commentary focused on the retail sector, spanning urban communities as well as rural areas. It raised the question about whether those who the e-commerce platform, such as Tmall, has displaced are in any position to get into logistics, manufacturing, or name branding due to such barriers as technology and intellectual property. 

The commentary looked to the government to offer assistance to people losing their retail jobs.

Source: The Economic Observer website, December 21, 2015 
http://www.eeo.com.cn/2015/1221/281974.shtml
Briefings | | |   Economy/Resources

The Economic Observer: Do Online Stores Drive Retailers Out of Business?

The Economic Observer, a weekly, Beijing-based national paper featuring economic developments, published a commentary on its website, discussing a government commission’s concern that online e-commerce stores have driven retail stores out of business.  The Central Economic Work Conference brgan December 18, 2015, the National Development and Reform Commission (NDRC), directly affiliated with the State Council, submitted a report to the central government. The NDRC report noted: "Despite some jobs have been created by online stores, courier delivery services, and associated new lines of business, one must not ignore the impact on physical retail store, which are being replaced." While people are cheering the record setting one-day sale of RMB 91 billion (around USD 14 billion) on November 11 at the Tmall online website, owned by Alibaba Group, retail outlets for books, clothes, and household appliance are hit the worst. There are even cases that retail stores are being closed en masse. Some traditional department stores have also lost their appeal. All negatively impacted employment outlook in these areas. While the commentary did not challenge the claim by Ma Yun (Jack Ma), chairman of the board of the Alibaba Group, that Alibaba’s online e-commerce platform has 8.5 million active vendors, which created directly 10 million employment positions, and indirectly 3.5 million more. Ma categorized this group as "online merchants," which include merchants with well-known brands, vendors specializing in channel marketing, logistics, and indirect participants doing outsourcing work in communications, design, and sales. However, the commentary focused on the retail sector, spanning urban communities as well as rural areas. It raised the question that those who have been displaced by e-commerce platform, such as Tmall, are not in the position to get into logicstics, or manufacturing, or name branding due to technology and intellectual property barriers. The commentary looks up to the government to offer assistance to people losing their retail jobs. Source: The Economic Observer website, December 21, 2015 http://www.eeo.com.cn/2015/1221/281974.shtml

Briefings | | |   Economy/Resources

Who Will the Chinese Yuan Depreciation Hit the Hardest?

Caijing.com published an article on the ramifications of the recent depreciation in the Chinese yuan. The article discussed six groups of people who may be the hardest hit. The first group includes those who invested in the housing market and will see their real estate shrink in value. The second group is those who study overseas and will see less of the foreign currency when they are exchanging the yuan. The third group is those who buy at overseas online stores. They will have to pay more. The fourth group includes those who travel overseas. They too will have to pay more. The fifth group is the Chinese companies that have borrowed large amounts of yuan in anticipation of its appreciation. The sixth group is the currency speculators who, in recent years, have bought and held the yuan. 

Source: Caijing.com reprinted by powerapple.com, December 15, 2015 
https://www.powerapple.com/news/chan-jing-ke-ji/2015/12/15/2536910.html
Briefings | | |   Economy/Resources

Chinese Steel Industry Reported Massive Losses

Economic Information Daily, a branch of Xinhua, recently reported, based on information that reliable sources from the China Iron and Steel Industry Association (CISA) provided, that large and mid-sized Chinese steel companies saw a month-over-month profit decline of 25 percent in October. From January to October, the loss in primary steel business totaled RMB 72 billion yuan (around US$11 billion). Around 47.5 percent of the steel companies reported losses. The total loss from January to September was only RMB 28 billion. Most of the publicly traded steel companies have already predicted a difficult next year. Analysts suggested that the primary causes of a landslide of the steel industry are major market declines seen in the housing, the railway, the car and the shipbuilding industries. Studies also showed that, by the year 2018, the Chinese steel industry will be able to produce 1.2 billion tons of steel. By then, China will be able to consume 0.7 billion tons while exporting 0.1 billion tons. Many industry experts called for a major industry-wide structural adjustment. 
Source: Economic Information Daily, December 4, 2015
http://dz.jjckb.cn/www/pages/webpage2009/html/2015-12/04/content_12977.htm
Briefings | | |   Economy/Resources

Caixin: Chinese Manufacturing PMI Remains Below 50

Well-known Chinese financial site Caixin recently released its official Chinese Manufacturing PMI index number for November, which was 48.6. Caixin PMI was formerly known as HSBC PMI, which was a well-respected economic indicator monitored globally by financial institutions. The Caixin PMI has been below 50 for nine consecutive months. According to Caixin Think Tank Chief Economist He Fan, the index saw a slight increase from last month, but the total new business sub-index under the Caixin Manufacturing PMI is still showing a continued decline. Further analysis demonstrated that a weak domestic demand was the primary cause of the shrinking new business number. In November, the employment level in manufacturing continued to decrease. Manufacturers are reducing their procurement activities as well. In the meantime, the National Bureau of Statistics released the government’s official Manufacturing PMI number: 49.6. This number is typically higher than its Caixin counterpart. 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, December 1, 2015
http://pmi.caixin.com/2015-12-01/100880027.html
Briefings | | |   Economy/Resources

21 Percent of Listed State-Owned Enterprises Are in the Red

This year’s statistics show that, for the first three quarters of this year, 67 out of the 306 or just over 21 percent of listed state-owned enterprises (SOEs) were in the red. The top 10 of these SOEs showed losses totaling 13.524 billion yuan ($US2.11 billion). Some expect that, in order to reduce their losses in the fourth quarter, these SOEs may sell their assets or obtain government subsidies. 

The top loser for the first three quarters was Sinopec Oilfield Service Corporation, with a loss of 2 billion yuan (US$.31 billion), followed by SGIS Songshan Co. Ltd. which was 1.783 billion yuan (US$.28 billion) in the red. 
As for the sectors of industry affected, nonferrous metal companies constituted one-third of the losers while coal mining companies accounted for about 20 percent of those in the red. 
Most listed SOEs receive government subsidies. If such subsidies were excluded from the net profit, 74 SOEs (or about 24 percent) would be in the red for the first three quarters this year instead of 67. 

Source: Beijing Youth Daily reprinted by People’s Daily, December 2, 2015 http://finance.people.com.cn/n/2015/1202/c1004-27879158.html

Briefings | | |   Economy/Resources

China News: Large Scale Industrial Enterprises Suffered Profit Decline in October

China News recently reported that, according to the numbers that the National Bureau of Statistics just released, the total profit of all large scale industrial enterprises suffered a year-over-year decline of 4.6 percent. The same decline that was reported for September was only 0.1 percent. Also for October (year-over-year), these enterprises reported a debt increase of 5.6 percent and an inventory level increase of 4.5 percent. For the period of January to October, key industrial sectors that suffered declines were coal mining (62.1 percent), oil and natural gas (68.6 percent), non-metallic mineral products (8.2 percent), ferrous metal smelting (68.3 percent), non-ferrous metal smelting (4.8 percent), special equipment manufacturing (3.4 percent), and automobile manufacturing (3.1 percent). During the period of January to October, among all large scale industrial enterprises, the state-owned category saw the largest decline in profits (25 percent), and only the foreign-investment-owned category and the domestic privately-owned category saw profit growth (0.3 percent and 6.2 percent, respectively). 
Source: China News, November 27, 2015
http://www.chinanews.com/cj/2015/11-27/7644264.shtml
Briefings | | |   Economy/Resources