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Economy/Resources - 148. page

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

China’s Banks See Non-Performing Loans Surge

The cooling off of the housing market and the economic slowdown have led to a sharp increase in bad debts and in the non-performing loan (NPL) ratio. 

The bad debts of the China Industry and Commerce Bank hit a record high – the hightest since 2006. In the third quarter, the NPL ratio was 1.06 percent. The NPL amount grew nine percent reaching 115.5 billion yuan. This is the largest increase since 2006. 
Quarterly reports of other banks also showed that the NPL ratio and amount have increased since the beginning of 2014. At the end of September, the NPL ratio was 0.99 percent for the China Industrial Bank, 1. 20 percent for China Merchants Bank, and 1.39 percent for China CITIC Bank. The growth rate of the NPL was 0.23 percentage points, 0.30 percentage points and 0.36 percentage points, respectively. 

Source: Chinese Business, October 30, 2014 
http://www.cb.com.cn/finance/2014_1030/1091953.html

Briefings | | |   Economy/Resources

New Rules to Battle Local Government Debts

On October 28, China’s Ministry of Finance issued the first of a series of directives on handing outstanding local government debt. 

According to the directive issued, local government debt outstanding as of December 31 must be categorized so that appropriate authorities will be assigned to take responsibility. The effort is meant to identify local debts with the ultimate goal being to include all government debts into budgets. Some debts may be converted into corporate debts through public-private partnerships (PPP). 
Analysts observed that the issuance of the directive indicated that China has entered the peak of debt repayments and many local governments face pressure to repay large debts that are due. The PPP model that the directive promotes, in fact, will allow the use of private funds to lessen the enormous pressure on local governments. 

Source: Economic Information Daily reprinted by People’s Daily, October 29, 2014
http://gd.people.com.cn/n/2014/1029/c123932-22752301.html

Briefings | | |   Economy/Resources

SAFE Acknowledges China Currently Has Capital Outflows

On October 23, 2014, Guan Tao, head of the department of international payments at the State Administration of Foreign Exchange, said at a press conference that China currently has capital outflows but it is considered a risk or a problem. 

According to Guan, for the second quarter, although the trade surplus expanded, posting a current account surplus, China recorded a net outflow of $16.2 billion under its capital account, a reduction from a net inflow of $94 billion in the first quarter. The growth of the foreign reserve for international payments declined from over $100 billion to $20 billion, an 82 percent reduction from the first quarter. Preliminary estimates show that the pattern continued in the third quarter. 

Guan stated that it is possible that capital flows may be more volatile due to the uncertainties of the complex domestic and international environment. 
Source: China News Service reprinted by People’s Daily, October 23, 2014                                 http://politics.people.com.cn/n/2014/1023/c70731-25894310.html

Briefings | | |   Economy/Resources

Ministry of Commerce Official: China Will Soon Become a Net Capital Exporter

On October 22, Zhang Xiangyang, the Assistant Minister of Commerce of China held a State Council Information Office press conference at which he said that China will soon become a net capital exporter. Official data shows that as of the end of 2013, China’s total outbound foreign direct investment stock amounted to a cumulative US$660 billion. For the same period, China accumulated inbound foreign direct investment was US$950. It is widely expected that, as China’s outbound investment is growing at a rate far exceeding its inbound investment, the day for China to become a net exporter of capital is just around the corner. Zhang predicted that the outbound investment for 2014 will show growth of about 10 percent, reaching about US$120 billion.
Zhang said, "In my personal view, it is just a matter of time for the outbound investment to exceed the amount of inbound investment. … China has reached a stage of exporting capital, and will soon become a net exporter of capital. It is a realistic issue."
Zhang pointed out that the stock of China’s US$660 billion foreign investment accounts for only 2.5 percent of the world’s total, the equivalent of 10 percent of the United States and half of Japan. He maintained that, in terms of quantity, China "still has a long way to go."
Source: China News Service, October 22, 2014
http://www.chinanews.com/gn/2014/10-22/6706730.shtml
Briefings | | |   Economy/Resources