Economy/Resources - 138. page

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. 

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

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. 

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. 

On Thursday, November 26, and Friday, November 27, three brokerage firms that were major players in this summer’s market bailout announced that the China Securities Regulatory Commission (CSRC) had placed them under investigation.

Beijing Youth Daily noted, in a report widely cited by other state media and web portals, that China’s A-share market booked the steepest single day drop in three months on Friday, with shares of many financial firms triggering their daily limit.

The three leading brokerages, Citic, Guosen, and Haitong, all rank among China’s top 10 securities firms. It was the national regulator CSRC that initiated this most recent round of investigations.

Earlier in August, local regulators initiated investigations into Haitong and three other major brokerage firms, GF, Huatai, and Founder, for allegedly failing to identify clients properly. Regulatory authorities are now officially probing a total of six top players of the so-called National Team, which consists of 21 brokerage firms the government relied on exclusively to bail out the financial market this summer.

Cheng Boming, Citic general manager, and Chen Hongqiao, president of Guosen, are reported to have had close ties with Zhang Yujun, the former CSCR assistant chairman.

Zhang coordinated the massive intervention during this summer’s market rout. On September 16, he became a target of the Central Commission for Discipline Inspection for "severe violations of discipline." Cheng, along with a dozen or so of Citic’s top managers, was arrested a day earlier. On October 23, Chen, who served as Zhang’s deputy before joining state-owned Guosen Securities, hanged himself in his Shenzhen home.

Citic was also implicated in a case involving a star private equity fund manager, Xu Xiang, who was detained in early November on suspicion of insider trading.

Source: Beijing Youth Daily, November 29, 2015