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Guangming Daily: 30 Percent of Online Products Failed the State Inspection

Guangming Daily reported that the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) has been conducting random inspections of online products this year. The AQSIQ recently published a report on its findings that close to 30 percent of the online products failed the inspection. Of the products inspected, shoes had the highest failure rate followed by toys made with flannel material. The report also named a certain brand of cashmere products that contain only Angora hair. Other materials include down jackets that contains fake down. The Administration claimed it will conduct an inspection again in November and will take necessary actions to deal with the manufacturers who make defective products.

Source: Guangming Daily, November 6, 2014
http://tech.gmw.cn/2014-11/06/content_13773599.htm

Briefings | | |   Economy/Resources

Xinhua Article on China’s Current Manufacturing Model

Xinhua published an article on the current manufacturing model in China. The article said that manufacturers do not invest sufficiently in research and development and do not have the urge to transition from a traditional manufacturing company into one that conducts its own technological innovations. Because Chinese manufacturers don’t own the core technology and can only make a small profit, they have lost their competitive advantage in the international market. The article also pointed out that the contribution from China’s scientific research remains low. The rate at which a research concept is actually converted into the final product is at less than 5 percent. At the same time, China is losing most of its elite talent to foreign countries. According to the article, the statistics available during a recent international optoelectronics expo held in Wuhan City suggested that 77 percent of the world’s cell phones are made in China each year. However, China only owns less than 3 percent of the chip technology. Therefore it has to spend over US$200 billion a year on cell phone chip imports.

Source: Xinhua, November 10, 2014
http://news.xinhuanet.com/info/2014-11/10/c_133778091.htm

Briefings | | |   Economy/Resources

China’s CPI Growth Continues to Slow Down

Economic Information Daily reported that the anticipated growth of the Consumer Price Index (CPI) in October will reach a new low of 1.4 percent. It is likely that the 1.6 percent growth earlier, which was the new low for the last 56 months, had not bottomed out. Estimates for the CPI growth for October came in at 1.4 percent. Analysts believe that the consecutive decline in the CPI monthly growth is indicative of the deepening pressure from the deflation in the world economy. The sharp slowdown in the CPI and PPI growth requires further relaxation of China’s monetary policy.

“We cannot supply a simple explanation of the decline using numbers alone. The real problem is that the factors causing the decline are very complex, including expansionary macroeconomic policies, rising costs amid economic growth, dependence on foreign raw materials, and other factors. These factors are structural and deep-rooted. They cannot be resolved using short-term macroeconomic policy.” 

Source: Economic Information Daily reprinted by Xinhua, November 7, 2014 
http://news.xinhuanet.com/2014-11/07/c_127187247.htm

Briefings | | |   Economy/Resources

Disasters in October Caused Direct Economic Losses of 8.1 Billion Yuan

On November 6, the Ministry of Civil Affairs released information explaining that, in the month of October, the occurrence of a number of calamities resulted in direct economic losses of more than 8.1 billion yuan (US$1.33 billion). The disasters in October consisted primarily of earthquakes, flooding in the south, and snow in the northeast. The disasters impacted over 3.25 million people in 21 provinces and resulted in direct economic losses of 8.1 billion yuan. During the disasters, over 8,000 houses and buildings collapsed and an additional 179,000 houses and buildings suffered different degrees of damage. A total of 3,527,000 hectares of crops were damaged, while 421,000 hectares of crops were totally destroyed. 

Source: Ministry of Civil Affairs, November 6, 2014
http://www.mca.gov.cn/article/zwgk/mzyw/201411/20141100723376.shtml
Briefings | | |   Economy/Resources

Seventy Percent of Coal Companies in the Red; Inventory Hits 400 Million Tons

On November 5, 2014, the 21st Century Business Herald reported that, at 400 million metric tons, the inventory of coal in 2014 has hit a record high in China. Seventy percent of coal companies are in the red. 

At a November 4 press conference, Song Yuanming, Deputy Director of the State Administration of the Coal Mine Safety Supervision Bureau, stated that there is a serious oversupply of coal on the market. 
According to statistics, 23 State-owned companies that account for 76.7 percent of the 30 publicly listed coal companies saw their profits slashed in the third quarter. The industry wide decline was, on average, 67 percent. On October 17, the China National Coal Association released information that 70 percent of all coal companies in China are losing money. 
The earnings for one metric ton vary between a profit of six yuan and a loss of over 20 yuan. The coal price index of 136.3 for the second half of 2014 reflects a 38.9 percent or 86.7 point decline from its peak in July 2008. Experts expressed that the coal inventory level in 2014 will exceed 400 million metric tons, hitting a record high in history. In 2009, the coal inventory level was 50 million metric tons. 
Source: 21st Century Business Herald, November 5, 2014 
http://money.21cbh.com/2014/11-5/zNMDA0MDRfMTMzMzIzNA.html
Briefings | | |   Economy/Resources

People’s Daily: Banking Industry Suffers an Increase in Nonperforming Loans

People’s Daily recently reported that the third quarter numbers for commercial banks showed significant negative signs of an economic slowdown. All 16 publicly traded banks have seen apparent declines in their net profit growth rates. The 16-bank Q3 reports have also demonstrated a rapid increase in nonperforming loans, reaching RMB 605 billion (nearly US$99 billion). This represents a year-over-year increase of 31.7 percent. Some banks revealed that most of these nonperforming loans were seen in the east coast provinces and in the sector of medium and small sized private businesses. Many of these banks are now more focused on cleaning up low quality assets as well as increasing their loans to the more profitable industries. Some experts expressed the belief that a certain level of increase in more nonperforming loans can be expected in the foreseeable future.
Source: People’s Daily, November 1, 2014
http://finance.people.com.cn/n/2014/1101/c1004-25952006.html
Briefings | | |   Economy/Resources

China Index Academy: Statistics Show Prices of Newly Constructed Homes Dropped in October

Xinhua reported that, according to a report that the China Index Academy published, based on 100 cities that were sampled, the average price for newly constructed homes was 10,629 yuan (US$1,733) per square meter in October, down 0.4 percent from September and 0.52 percent lower when compared to the same period in 2013. According to the report, October is also the sixth consecutive month that saw housing prices drop. The report also projected that cash support from the banks will remain the main driver to determine the trend for the real estate market in the 4th quarter. It predicted that, in the fourth quarter, the market will continue to burn off the existing inventory, while housing prices could fall further compared to the previous months.

Source: Xinhua, November 3, 2014
http://news.xinhuanet.com/house/bj/2014-11-03/c_1113081410.htm

Briefings | | |   Economy/Resources

Foreigners Filed Half of the Cases Involving Disputes over Trademark Licenses

According to the Beijing Higher People’s Court, trademark licensing cases have spiked in the past two years. Foreigners have filed half of them. 

The Beijing First Intermediate People’s Court and the Beijing Higher People’s Court have jurisdiction over administrative cases and appeals on patents, trademarks, and copyrights. From January 2014 to September 2014, Beijing First Intermediate People’s Court accepted 7,749 new administrative cases involving disputes over trademark licenses and closed 3,632. Beijing Higher People’s Court accepted 1421 appeals and closed 905 new administrative cases. The cases accepted and closed were significantly higher than the same period last year. According to Beijing Higher People’s Court, foreigners filed about half of the new cases. Many involved major international companies. 
Source: Xinhua, October 30, 2014 
http://news.xinhuanet.com/2014-10/30/c_1113051347.htm
Briefings | | |   Economy/Resources