Skip to content

Economy/Resources - 146. page

People’s Daily: Be Vigilant for Financial Industry Overdevelopment

People’s Daily recently published an article discussing the relationship between the financial industry and the real economy. The article referred to an IMF statement that, if the financial industry holds too large a share of the economy, then the cost of a financial crisis will wipe out the contribution the financial industry has made to the economy. It seems advanced economies such as the U.S. and Japan are showing signs of overdeveloped financial industries. The article pointed out that the purpose of the financial industry is, in fact, to serve the real economy. Overdeveloping it may result in bubbles of overpriced assets, a lack of sufficient regulation, and wasted liquidity within the financial industry. The U.S. economy demonstrated all these issues in its development history; the world economy is still suffering the consequences of the last financial crisis. The article concluded that the rebalancing of the financial industry may take a long time to reach its end and the global capital market could still face another crisis in the near term.  
Source: People’s Daily, May 28, 2015
http://finance.people.com.cn/stock/n/2015/0528/c67815-27068489.html
Briefings | | |   Economy/Resources

Britain Seized Fake Cosmetic Products Made in China

Guizhou Information Network, a large online news network in Guizhou Province, recently reported that the British police rooted out a large underground network that consisted of Chinese and some Eastern European factories that were producing poisonous cosmetic products. These products could already have been distributed all across Britain. The criminals produced these fake brand-name goods and sold them via large online shopping sites such as eBay and Amazon. Over the past 18 months, more than 5,500 websites carrying these products have been closed down. Impacted brands include Christian Dior, Estee Lauder, Dove, MAC, Benefit, and Urban Decay. The products all contained excessive quantities of heavy metals and were sold at a fraction of the prices of the authentic original brand-name products. They were manufactured in China and Eastern Europe and then were all packaged in Northeast China before shipping. 
Source: Guizhou Information Network, May 18, 2015
http://www.qiansen.org/shrd/2015-05-18/201.html
Briefings | | |   Economy/Resources

People’s Daily: China Surpassed the U.S. to Become the Largest Oil Importer

People’s Daily recently reported that, based on the data that the General Administration of Customs (GAC) released, China imported a daily average of 7.4 million barrels of crude oil in April. This volume is the equivalent of one thirteenth of the total global daily level for the consumption of oil. China also surpassed the U.S. daily import level of 7.2 million barrels. The report suggested that the Shale Oil Revolution has rescued the United States from its dependency on imported oil. In the meantime, China’s oil demand is still climbing, even when the Chinese economy is slowing down. Experts suggested that China’s purchase of a large amount of oil from Iran last month could be the reason for the dramatic outcome in April. However they also expressed the belief that the Chinese slowdown in economic growth will continue to push up the volume of oil imports.
Source: People’s Daily, May 12, 2015
http://world.people.com.cn/n/2015/0512/c1002-26988336.html
Briefings | | |   Economy/Resources

National Development and Reform Commission: More Reform Measures to be Introduced

On May 18, China Youth Daily reported that, according to the National Development and Reform Commission, more reform measures will be introduced soon in order to ease the pressure from the slowdown of economic development. The reforms will take place in areas that include the investment and financing system, pricing, State Owned Enterprises, the tax and financial systems, urbanization, and the countryside. The article stated that the goal is to stimulate the market, regain confidence, promote reform in State Owned Enterprises, protect intellectual property, and speed up transformation within government entities.

Source: China Youth Daily, May 18, 2015
http://finance.youth.cn/finance_gdxw/201505/t20150518_6640811.htm

Briefings | | |   Economy/Resources

China Won Russian High Speed Rail Project

People‘s Daily reported that the China Railway Group Limited’ subsidiary, China Railway Eryuan Engineering Group Co. Ltd., has formed a consortium with two Russian companies. This consortium signed a 20 billion ruble ($390 million) agreement with the Russian Railways to design and construct a high-speed railway system from Moscow to Kazan.

The project is 770 kilometers (480 miles) long, with the highest speed being 400 km. per hour. It is the first overseas contract that the China Railway Group has won.

Sources:
1. People’s Daily Online, May 6, 2015
http://world.people.com.cn/n/2015/0513/c1002-26991896.html
2. People‘s Daily Online, May 6, 2015
http://usa.chinadaily.com.cn/epaper/2015-05/06/content_20637032.htm

Briefings | | |   Economy/Resources

The 117th Canton Fair Saw a Decline in the Volume of Exports

Well-known Chinese news site Sina recently reported on the 117th China Import and Export Fair (also known as the Canton Fair) which concluded on May 5. As China’s largest import/export fair, the Canton Fair is considered “symbolic.” It is China’s foreign trade barometer and wind vane. According to the official statistics of the Fair, the total contract value this year was US$28.1 billion, which represents a year-over-year decline of 9.64 percent. The number of business visitors also declined. This level of decline matches the actual first quarter import/export data that the General Administration of Customs (GAC) recently reported. It seems that meeting the goal of a six percent annual increase in trade that the central government set earlier, will be a difficult task. At this year’s Fair, the export of electromechanical products saw an overall increase, but exports to Japan, Russia, and the United States declined by 31.4 percent, 30 percent and 25.9 percent, respectively. Home appliances and consumer electronics products, which hold 47.5 percent of the total trade volume, suffered a significant decline. For example, the consumer electronics category saw a decline of 34.1 percent, year-over-year. 
Source: Sina, May 6, 2015
http://finance.sina.com.cn/roll/20150506/065222114888.shtml
Briefings | | |   Economy/Resources

Xinhua: 2014 Shanghai Financial Supervisory White Book Published

Xinhua reported on the 2014 Shanghai Financial Supervisory White Book which was recently published. According to the report, in 2014, 2,063 financial crime cases went through legal proceedings; a total of 2,378 people were involved. These numbers were up 46.2 percent and 47.8 percent respectively compared to 2013. Credit card fraud still ranked number one. The rest of the crimes included taking illegal public deposits, illegal financing and loans, insurance fraud, and insider trading. Reports indicated that another trend highlighted in the White Book was that the number of crimes that financial professionals committed reached a record high in 2014.

Source: Xinhua, May 10, 2015
http://news.xinhuanet.com/fortune/2015-05/10/c_127783921.htm

Briefings | | |   Economy/Resources

The Effort to Join SDR May Include RMB Depreciation

Laohucaijing.com published a commentary about the speech that Zhou Xiaochuan, president of China’s central bank, gave at the meeting of the International Monetary Fund (IMF) on April 18, 2015. The commentary warned that, based on Zhou’s remarks, the bubbles in China’s housing and stock markets will burst in the second half of 2015 and RMB depreciation may be likely.

According to the commentary, Zhou’s speech was very detailed and important, unequivocally demonstrating China’s determination to be included in the IMF’s Special Drawing Rights (SDR). The currency value of the SDR is determined by summing the values in U.S. dollars, based on market exchange rates, of a basket of major currencies (the U.S. dollar, Euro, Japanese yen, and pound sterling). 
The core of Zhou’s speech was that the Chinese Government is working to allow free conversion of the RMB, or at least managed free conversion. The condition for joining SDR is free conversion of the RMB, which China cannot do at the moment. Therefore managed free conversion is a major step forward. If managed conversion is implemented, the bubble in China’s housing and stock market will burst. Chinese will be looking all over the world for investment opportunities. To avoid a reduction in foreign exchange reserves, China’s central bank may depreciate the RMB in the second half of the year. 
Source: Laohucaijing.com, May 7, 2015 
http://www.laohucaijing.com/news/23466.html
Briefings | | |   Economy/Resources