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Economy/Resources - 142. page

People’s Daily: China Has an Excess of Commercial Real Estate

People’s Daily published an article which reported that, during the recent 2015 Boao Real Estate Forum in Hainan, experts attending the forum concluded that the Chinese market has an excess of commercial real estate. The article said that it is a difficult situation that will last for a long period of time. Everyone must accept it and be ready to endure the resulting consequences. According to the article, in Tianjin, at least five shopping malls and department stores closed in the past six months. The empty spaces had to be rented out as business buildings. Some of them are on a month to month basis at only 80 yuan (US$12.52) per square meter. In Chongqing, the vacancy rate of the shopping centers is at 10.2 percent. The article stated that the weak consumer market has affected the vacancy rate, with the growth rate falling behind the newly developed commercial shopping centers. Some of the vacancies resulted when the centers tried to bring in improper store brands.

Source: People’s Daily, August 23, 2015
http://house.people.com.cn/n/2015/0823/c194441-27502236.html

Briefings | | |   Economy/Resources

Railway Cargo Volume Continues to Slide

On August 18, 2015, the China National Development and Reform Commission released statistics on railway cargo volume. Railway cargo volume is one of the three major economic indicators reportedly used by Li Keqiang, current Premier, to measure China’s economy. The other two indicators are electricity consumption and the loans that banks disburse.

According to the statistics, from January to July, railway cargo volume was down by 10.2 percent, year on year, with a total of 1.98 billion metric tons. The Railway Freight Ton-Kilometers (RFTK) decreased by 11.8 percent, totaling 1,396.5 billion ton-kilometers. In July alone, railway cargo volume declined by 10.9 percent and RFTK dropped by 14.4 percent, year on year. The China National Development and Reform Commission attributed the continued slide to the weak transport demand for coal, metallurgy, mine construction materials, and other major bulk materials. 

Similarly, the statistics released in July showed that, in the first six months of 2015, railway cargo volume was down 10.1 percent, year on year, totaling 1.7 billion metric tons. The RFTK was down to 1,205 billion ton-kilometers, a reduction of 11.4 percent year on year. 
Sources: China National Development and Reform Commission, August 18, 2015 and July 24, 2015 http://www.ndrc.gov.cn/jjxsfx/201508/t20150818_745402.html http://www.ndrc.gov.cn/jjxsfx/201507/t20150724_742728.html

Briefings | | |   Economy/Resources

Impact of the Yuan’s Depreciation on the Housing Market

Daily Economic News published an article that discussed the impact of the yuan’s depreciation on the housing market. Continued depreciation of the yuan will increase the cost real estate developers have to pay in order to obtain overseas financing. They may be forced to reduce housing prices to ease their financial difficulties. 

According to the article, depreciation will increase the cost of corporate finance overseas. Considering the small amount of such overseas financing, the impact may be limited. However, the depreciation will push real estate developers to return to the Chinese domestic market for financing. For money-hungry real estate developers, if the devaluation continues, it will definitely increase the cost of overall financing abroad. When such costs increase by over five percent, the downstream housing market will be affected. 
Source: Daily Economic News, August 12, 2015 
http://www.nbd.com.cn/articles/2015-08-12/937543.html
Briefings | | |   Economy/Resources

Chinese Banking Industry Saw a Large Number of Nonperforming Loans

Well-known Chinese news site Sina recently reported that, according to the China Banking Regulatory Commission (CBRC), the Chinese banking industry suffered the highest nonperforming loans ratio since 2010. In the first half of this year, the banks accumulated nonperforming loans totaling RMB 1.8 trillion (around US$290 billion), which represents a year-over-year increase of 35 percent. This half-year increase is larger than the increase China saw for the entire year of 2014. Shang Fulin, Chairman of the CBRC, suggested that the banking industry should take the task of controlling the rapidly growing number of nonperforming loans as a top priority task. Risk management and prevention are key to this work.
Source: Sina, August 6, 2015
http://finance.sina.com/gb/wsj-ftchinese/ftchinese/20150806/02331311090.html
Briefings | | |   Economy/Resources

Caixin: July Chinese Manufacturing PMI Continued to Decline

Well-known Chinese financial site Caixin recently released its official Chinese Manufacturing PMI index number for July. It was 47.8 – lower than the June number of 49.4. The Caixin PMI was formerly known as the HSBC PMI, which was a well-respected economic indicator that financial institutions widely monitored globally. The British financial company Markit formed the PMI and Caixin recently took it over from HSBC to become the sponsor for the PMI index. The Caixin PMI has been below 50 for five consecutive months so far. Based on sub-indexes under this PMI, in July, both total new business and new exports were on the decline. Manufacturing output suffered the largest decline since November 2011. The employment level in manufacturing has declined for the past 21 consecutive months. 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. 
In the meantime, Xinhua reported that, according to The General Administration of Customs, China’s July exports declined 8.9 percent, year-over-year. Exports to Europe suffered the greatest loss. 
Source: Caixin, August 3, 2015
http://economy.caixin.com/2015-08-03/100835560.html
Source: Xinhua, August 8, 2015
http://news.xinhuanet.com/fortune/2015-08/08/c_1116188457.htm
Briefings | | |   Economy/Resources

Huanqiu: Foxconn Shifts Its Investments to India

According to a report by Huanqiu, Foxconn, the supplier for Apple, Blackberry, Xiaomi, and Amazon, has signed a US$5 billion contract with India to build an electronic manufacturing plant. The article said that, as one of the fastest growing markets for smart phones, India is a country that smart phone manufacturers, including the ones from China, wish to tap into. In addition to Xiaomi, the TCL Corporation, another Chinese multinational electronics company, is planning to build its plants in Brazil and India. As the manufacturing costs continue to grow in China, driven up by the increase in labor, currency, and energy costs, the price of China made products is close to the U.S. The article said that having investments in countries like India will not only consume the excess production capacity that China has but will also assist Chinese enterprises to “step out” and gain added value for China made products.

Source: Huanqiu, August 7, 2015
http://finance.huanqiu.com/ppgc/2015-08/7232641.html

Briefings | | |   Economy/Resources

Competition Might Save the Chinese Stock Market

On August 3, 2015, Chen Peixiong, a researcher at the Guangdong Industry Development Institute, published a commentary in Hexun stating that few understood the reason for the failure of the Chinese stock market. He proposed that competition among multiple stock markets might save the Chinese stock market. 

In the commentary, Chen held that the Chinese stock market is not a stock market. Therefore, any attempts to analyze, administer, and rescue the Chinese stock market by applying economics and stock market theories would be doomed. 
Chen said that one should go beyond the stock trades and should see whether the stock market moves with the economic trends. A stock market serves as an economic barometer of a country and its existence is conditioned upon whether it is consistent with the economic trends. It is totally nonsensical to say the Chinese style stock market is irrelevant to the Chinese economic trends. The problem with the Chinese stock market lies in the design of the rules or mechanisms. As a planned economy, China can regulate and monitor the stock market to the maximum extent, but it will have no effect. 
Chen recommended either allowing multiple stock markets to compete or to design a stock market outside the constraints of the current system. 
Source: Hexun, August 3, 2015 
http://opinion.hexun.com/2015-08-03/178026529.html
Briefings | | |   Economy/Resources

China’s 2014 GDP Consumed a Quarter of World’s Energy

Well-known Chinese news site Netease recently reported that, according to Li Yizhong, the former Minister of Industry and Information Technology, in 2014, China consumed 25 percent of the world’s energy in order to produce 13 percent of the world’s GDP. According to Li, the Chinese economy relied heavily on resource consumption. This has caused the large scale of environmental pollution which is too severe to sustain. Statistically, China’s unit GDP energy cost was twice as much as the rest of the world. Li called for optimization of resource planning and utilization, not only to reduce manufacturing energy costs, but also to bring the green environment back to the nation. Li made the comments at a summer economists’ forum held recently in Beijing.
Source: Netease, July 25, 2015
http://money.163.com/15/0725/10/AVC4VKQ500252G50.html
Briefings | | |   Economy/Resources