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BBC Chinese: China to Adjust Salary Structure for State-Owned Company Management

BBC Chinese recently reported that, starting on January 1, 2014, 72 large central government owned companies started adjusting their management salary structure. These companies include PetroChina, Sinopec, China Mobile, and some banks and railway companies. According to the Ministry of Human Resources and Social Security, after the reform, the salary level of these companies’ leadership teams will very likely decline. In China, the central government owned company management personnel are both corporate administrative professionals and government officials at the same time. The management personnel typically include the Chairman of the Board, the Chief Executive Officer, the Chairman of the Board of Supervisors, and the Top Secretary of the Communist Party branch in the company. The new plan will set the ceiling on the management salaries to be around eight times the average salary of the company’s staff. The current level is around 12 times.
Source: BBC Chinese, January 3, 2015
http://www.bbc.co.uk/zhongwen/simp/china/2015/01/150103_china_stateowned_corporation_salary
Briefings | | |   Economy/Resources

CASS Predicts Soft Landing in the Housing Market in 2015

On December 26, 2014, the China Academy of Social Sciences (CASS) published its Housing Green Paper, the China Housing Development Report (2014-2015). The report made a number of predictions: that the restrictions on house purchases will be eliminated in 2015; that, with upcoming government incentives, there is hope that the housing market will have a soft landing; and that half of the developers will no longer be in business. 

The report predicted that, in the next couple of years, the housing market will continue to decline. In the last 5 cities (Beijing, Shanghai, Guangzhou, Shenzhen and Sanya) that currently have restrictions on the number of houses one may be allowed to purchase, these restrictions will be removed within a year. Ni Pengfei from CASS commented that once the restrictions are eliminated, the assumption that it is a seller’s market and the myth of ever increasing housing prices will be completely shattered. 
The report predicted that the central and local governments will promulgate policies to facilitate a soft landing in the housing market. Such policies may include removing any restrictions on how many houses one can buy, loosening the lending requirement for those who own two or more houses, and reducing transfer fees and personal income taxes. 
Ni Pengfei held that, given the low returns on housing investment and the surplus in the housing market, government incentives would not stop the decline of the housing market. The report expressed the belief that, with the surplus of houses on the market and the surplus of developers’ capabilities, more than half of future developers will change their line of business or otherwise disappear from the market. 
Source: China News Service reprinted by Xinhua, December 26, 2014 
http://news.xinhuanet.com/politics/2014-12/26/c_127338644.htm

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Housing Market Continued to Decline in November

According to the latest data released on December 18 by the National Bureau of Statistics, November saw prices for new homes fall, when compared to the prices in October, in 67 of the 70 medium and large cities. There was no change in the remaining three cities. Thus, November is the third consecutive month of overall decline with no price increase across the board. Compared to November 2013, the prices for new homes dropped in 68 of the 70 cities. 

With respect to existing houses, when compared to prices in October, November prices dropped in 58 of the 70 cities and in 67 cities when compared to November 2013. 

Source: National Bureau of Statistics, December 18, 2014 http://www.stats.gov.cn/tjsj/zxfb/201412/t20141218_655220.html

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China Cancer Map Shows the Geographic Distribution of Cancer Cases

Life Times, which is under People’s Daily, published a “China Cancer Map” showing the geographic distribution of the cancer cases in China. 

Including all cities in China, the forms of cancer with the highest occurrences are thyroid cancer and breast cancer. Lung cancer ranks the highest in the three provinces in northeast China and Yunnan provinces. Jiangsu Province has the highest number of cases of gastric cancer, colorectal cancer, and liver cancer. 
The map shows that liver cancer cases occur mostly in the coastal provinces of Zhejiang, Guangxi, and Jiangsu, while the provinces of Liaoning, Shandong, Gansu, Jiangsu, and Fujian tend to have more colorectal cancer cases. Gynecological cancer cases appear to be concentrated in Inner Mongolia, and the provinces of Shanxi, Shaanxi, Hubei, Hunan and Jiangxi. 
Sources: Life Times reprinted by Huanqiu, December 17, 2014 
http://mt.huanqiu.com/Html/ahtml/china/2014-12-17/5251565.html
Briefings | | |   Economy/Resources

Sino-Russia Trade Suffers from Ruble Depreciation

On December 17, 2014, China National Radio reported that the Russian Ruble was the worst performing currency with a 49 percent depreciation rate (against the dollar) this year and is damaging Sino-Russian trade. 

One issue is that, along the Chinese border at Heihe, Heilongjiang Province, the number of Russian tourists has significantly declined since the beginning of November. Another is that, according to Tian Chunsheng, the Secretary-General of the China and Russia Eastern Europe and Central Asia Economic Institute, Russian businesses have now resorted to defaulting on their payments for imports from China, thus damaging small and medium exporters in China. 
China National Radio noted that the China-Russia currency swap agreement signed back in October will be tantamount to China “giving money to Russia,” as the Russian Ruble continues to depreciate. It is because the Sino-U.S. agreement allows exchanges of currency based on a fixed exchange rate. 

Source: China National Radio, December 17, 2014 http://finance.cnr.cn/txcj/20141217/t20141217_517131147.shtml

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Xinhua: China has the Largest Number of Students Studying Abroad

Xinhua reported that from 1978 to 2013, a total of 3.06 million Chinese students studied overseas. The United Nations has ranked China as No. 1 in the world for students studying abroad. 

According to Xinhua, at the beginning of the open door policy, most Chinese students went to the United States, Japan and other developed countries. Now they are in over 100 countries. More Chinese students who have finished their studies have returned to China. In 2013, the total of such returning students reached 350,000, 30 times the number from the beginning of this century. 
China now has over 360,000 foreigners studying at over 700 universities and colleges in China. These foreign students are from more than 200 countries, compared to three countries in the 1950s. 
Source: Xinhua, December 13, 2014 
http://news.xinhuanet.com/politics/2014-12/13/c_1113631428.htm
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China’s Economic Roadmap for 2015

Xinhua reported that the Central Economic Work Conference, held from December 8 to 11, 2014, set new economic targets for 2015.

Xi Jinping spoke at the conference, giving an overview of the current economic situation and outlining the economic goals and tasks for 2015. Li Keqiang discussed the implementation of the economic priorities for 2015. 
Xinhua said, “Our economy still faces many difficulties and challenges. There is a strong pressure pushing the economy downward. We face growing pains from the economic structural adjustments, increasing difficulties for businesses, and a surge in some economic risks.” 
The major tasks for the economy next year are as follows: 
1. Strive to maintain steady economic growth. 
2. Actively search for and cultivate new growth points. 
3. Accelerate the transformation of the agricultural development mode. 
4. Optimize the pattern of geo-economic development. The overall strategy for regional development is to have the east lead, to develop the west, to revive the northeast, and to rise in central China. 
5. Strengthen the protection and improvement of people’s livelihoods. 
Source: Xinhua, December 11, 2014 
http://news.xinhuanet.com/fortune/2014-12/11/c_1113611795.htm
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Reform: From Business Tax to Value Added Tax

Economic Information Daily reported that real estate and construction may implement a reform from a business tax to a value added tax. 

The State Council set forth the goal that the reform from the business tax to the value added tax should be completed by the end of the 12th five plan period, which is 2011 to 2015. With one year left, the value added tax may be put in place in real estate and construction starting as early as next March. It is anticipated that the tax rate will be 11 percent. Based on preliminary estimates, analysts predict that the reduction in taxes may reach 500 billion yuan. For most companies, implementation of the valued added tax means that accounting and taxation need to be handled by two separate departments, rather than the current practice of using one department. 
Source: Economic Information Daily reprinted by People’s Daily, December 8, 2014 http://politics.people.com.cn/n/2014/1208/c70731-26164819.html
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