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People’s Daily: 70 Percent of Wetlands in the Yangtze River Middle Reaches Disappeared

People’s Daily recently reported from the Annual Meeting of the Yangtze River Wetland Protection Network. Its report stated that the Yangtze River’s ecological security is currently facing a severe threat. The area of the wetlands has shrunk significantly; biodiversity is on a rapid decline as well. For example, one of the largest lake systems, the Dongting Lakes, shrank from a size of 4,350 sq. kilometers 60 years ago to today’s 2,650 sq. kilometers. Its area during its dry-season is now only 500 sq. kilometers. Compared to the total wetland areas of the Yangtze River Middle Reaches in the 1950s, only 30 percent remain today. Starting in 2014, the State Council strategically decided to further develop the Yangtze River Economic Region, which covers 5,326 kilometers of the Yangtze River, out of the full length of 6,397 kilometers. Experts think that the Yangtze River area is now facing the most severe conflict between economic development and natural resource protection. 
Source: People’s Daily, November 2, 2015
http://sn.people.com.cn/n/2015/1102/c356148-26990665.html
Briefings | | |   Economy/Resources

NPC Report: Forty Percent of the Online Goods Are Counterfeit

BBC Chinese recently reported that the Chinese National People’s Congress (NPC) Standing Committee published an official report that its Law Enforcement Inspection Team had authored. The Inspection Report was the result of an investigation based on the Consumer Protection Law. According to the Report, the Chinese online shopping market is growing rapidly. However, the Report expressed the belief that over forty percent of the products sold online are counterfeit. These counterfeit products have deeply impacted the health of the e-commerce market. They usually violate the rights of the legitimate original owner of the design or the brand. This issue has been causing major headaches for foreign companies that have wanted to enter the Chinese market. The largest Chinese online retailer Alibaba had to put forth a major effort to lobby the U.S. government to avoid having the United States blacklist it. 

Source: BBC Chinese, November 3, 2015
http://www.bbc.com/zhongwen/simp/business/2015/11/151103_china_counterfeit_goods
Briefings | | |   Economy/Resources

Caixin: Chinese Manufacturing PMI Remains Low

Well-known Chinese financial site Caixin recently released its official Chinese Manufacturing PMI index number for October, which was 48.3. 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 eight consecutive months. The sub-indexes under the Caixin Manufacturing PMI show that the overall Chinese manufacturing industry remains weak. However, the number of new export orders saw a rebound in October. Even so, the total number of orders for Chinese exports for October is still expected to suffer a decline of -3.7 percent, year-over-year. The employment level in manufacturing continued to shrink despite the increase in the services industry. 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, November 4, 2015
http://pmi.caixin.com/2015-11-04/100869757.html
Briefings | | |   Economy/Resources

How Money Flees China

On November 4, 2015, Laohucaijing published a report on how money flees China. The article stated that, typically, the newly wealthy Chinese use seven different ways to transfer their assets from China overseas.

To use a Hong Kong underground exchange for the transfer, the mainland Chinese client first visits Hong Kong and opens a bank account. Then he visits a currency exchange that provides him an account in mainland China. Once this mainland China account receives yuan, the bank account in Hong Kong receives the equivalent in foreign exchange. 
Another method is for the mainland Chinese client first to deposit yuan in a Chinese underground bank which then provides a foreign exchange check drawn on a Hong Kong bank. The client will then visit Hong Kong to cash the check. 
Another method involves local currency exchange agents in China. They secure enough people who will use their residence cards to exchange up to $50,000 per residence card and then remit the foreign exchange directly overseas. Some people just carry foreign exchange in cash when travelling overseas. One of the State-owned commercial banks, Construction Bank, now offers a service that allows clients to borrow foreign exchanges against the yuan deposit at the Construction Bank as collateral. For Chinese tourists, many use credit cards or debit cards to “purchase” high dollar items in a designated store overseas, and then immediate ask for refund. The store will then pay the refund in cash rather than to the card used for the purchase. Import and export trading companies often engage in such money laundering as a side business. 
Source: Laohucaijin, November 4, 2015 
http://www.laohucaijing.com/news/111117/
Briefings | | |   Economy/Resources

Study Times: China Should Join the TPP at the Appropriate Time

On October 26, 2015, Study Times, a Communist Party publication close to Chinese President Xi Jinping, stated in a commentary that China should join the Trans-Pacific Partnership (TPP) at the appropriate time. 

The Study Times commentary rebutted the conspiracy theory which is based on the belief that the TPP is a means that the United States uses to isolate and contain China with the intent to drive China out of the Asia-Pacific economic and trade circle. The commentary expressed that the TPP rules are consistent with the direction of China’s reform in terms of establishing fair, open, and transparent market rules; streamlining administrative procedures and increasing public services; and enforcing environmental regulations and accountability. “China should pay close attention to the TPP and, as the domestic reforms move forward, it should join the TPP at the appropriate time and minimize the price to pay to join in.” 
Source: Study Times, October 26, 2015 
http://www.studytimes.cn/shtml/xxsb/20151026/15726.shtml
Briefings | | |   Economy/Resources

China’s Deflationary Spiral Is Worrisome

Yu Yongding, Senior Fellow at China’s Academy of Social Sciences stated that, based on the decreases in the Producer Price Index, China is now in the middle of domestic deflation and that the continued negative growth of PPI is worrisome. Yu made these remarks at a forum held on October 27, 2015. According to Yu, overcapacity is the primary cause of deflation. "On the one hand, we try to reduce overcapacity, which results in decreased effective demand. [On the other hand], the decline in effective demand in turn leads to an increase in excess capacity, forming a vicious cycle." If China cannot reduce overcapacity faster than the rate of the effective decrease in demand, then China’s economy will decline further into an economic recession. Yu Yongding stated, “This is the most serious challenge we currently face."   

Source: China Business News, October 27, 2015 
http://www.yicai.com/news/2015/10/4703058.html
Briefings | | |   Economy/Resources

Chinese Ministry of Finance: Company Profits Suffer a Decline

Well-known Chinese news site Sina recently reported, based on statistics that China’s Ministry of Finance released, that, from January to September, the profits of State-Owned Enterprises (SOEs) suffered a substantial decline of 8.2 percent. Among these companies, those that the central government owned saw a profit decline of 10.2 percent; those the local governments owned ones saw a decline of 2.7 percent. Among the industries that the statistics covered, petrochemical, oil, building materials, iron and steel, coal, and nonferrous metals industries were the ones seeing significant declines in profits. At the same time, China’s Producer Price Index (PPI) has been on the negative side for 43 consecutive months. The same statistics from the Ministry of Finance also showed that, for the same period of January to September, the SOEs had a total income decline of 6.1 percent. 
Source: Sina, October 21, 2015
http://finance.sina.com.cn/money/forex/20151021/194623537407.shtml
Briefings | | |   Economy/Resources

Reuters Chinese: Chinese Exporters Are Pessimistic about the Business Outlook

Reuters Chinese recently reported that, according to a Reuters’ survey, two thirds of the vendors at the on-going 118th Canton Fair reported that they expect the export market to decline. The semi-annual Canton Fair is widely regarded as “China’s International Trade Barometer.” The Reuters’ survey was based on a sample of 103 Chinese vendors who presented at the Fair. Most of them are mid-to-small sized manufacturing companies. The companies surveyed predicted that the cost of manufacturing will increase by 5.6 percent in the next 12 months, while the growth of international orders will significantly slow down. Most of the companies in the survey sample expressed the belief that the export market decline will last at least six months. The survey results were worse than the similar survey conducted in April. China’s official numbers showed that Chinese exports declined by 5.5 percent and 3.7 percent in August and September, respectively. Many companies hope the Chinese currency will continue its depreciation.
Source: Reuters Chinese, October 16, 2015
http://cn.reuters.com/article/2015/10/16/poll-cn-trade-idCNKCS0SA14J20151016
Briefings | | |   Economy/Resources