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Economy/Resources - 152. page

Central Bank: Q2 Employment Expectations Hit Three-Year Low

China’s central bank, the People’s Bank of China, recently released a report that showed the results of a survey on customer expectations on employment. According to the report, 12.5 percent of the Chinese residents responding to the survey held an optimistic view of the current job market. 43.8 percent of the sampled population either felt uncertain or found the current employment situation to be “very challenging.” This is the lowest number since the second quarter of 2011. 63 percent of the people surveyed agreed that the current prices for housing are still too high, while 34.2 percent thought they were “acceptable.” The survey also covered bankers, 72 percent of whom said the current currency policies are “appropriate.” Entrepreneurs sampled by the survey mostly (62.2 percent) suggested the economy is performing “normally.” However 36.1 percent of them thought the economy was “cooling down.” The Bank’s Entrepreneur Confidence Index dropped 2.1 percent from the first quarter of this year. 
Source: Sina Finance, June 25, 2014
http://finance.sina.com.cn/money/forex/20140625/173919520651.shtml
Briefings | | |   Economy/Resources

The Minimum Wage Went Up an Average of 14 Percent

Xinhua carried an article that was originally published in Economic Information Daily. According to the article, in the first half of 2014, the minimum wage in 12 provinces and cities went up an average of 14 percent. The Ministry of Human Resources and Social Security will soon be releasing more information. This increase is the lowest in recent years. The article stated that it was 22 percent in 2011; it was 20.2 percent in 2012; and it was 17 percent in 2013. The article also stated that, even though the “Minimum Wage Guideline” declared that the minimum wage increase was supposed to take place once every two years, from 2010 to 2014 the actual wage increases occurred once every 1.2 years.

Source: Xinhua, June 30, 2014
http://news.xinhuanet.com/fortune/2014-06/30/c_1111370014.htm

Briefings | | |   Economy/Resources

RFA: It May Cost 300 Million Yuan to Demolish a 270 Million Yuan Project Built Three Years Ago

Radio Free Asia reported that an order was given to demolish a tourist project in Hekou County, Yunnan Province that cost 270 million yuan (US$43 million) to build just three years ago. The cost of the demolition may be as much as 300 million yuan (US$48 million), which is higher than the cost of construction. The total loss of 600 million yuan is around three times Hekou County’s annual fiscal income for 2013. The report stated that the tourist project sits on the Hong River that separates China from Vietnam. It is 1 kilometer (0.62 miles) long covering 16,000 square meters (3.95 acres) and includes 150 commercial stores that can be rented. Initially, many parties objected to the project, but somehow, it was later approved at several upper levels. Currently about two thirds of the commercial space remains vacant.

Many people believe that it has become a major problem that the district government shows off its political accomplishments while wasting resources. A businessman from Guangdong Province told RFA that this is common, especially in rural areas. Another professor from the University of South Carolina said that China lacks a system to allow a stable investment environment for businesses. The government took the lead on this project and then revoked its previous commitment, a phenomenon that may harm social development.

Source: Radio Free Asia, June 20, 2014
http://www.rfa.org/mandarin/yataibaodao/kejiaowen/xql-06202014133916.html

Briefings | | |   Economy/Resources

China to Tighten Control over Land Use

On June 19, 2014, China’s Ministry of Land and Resources held a press conference to explain the new regulation issued on May 22 which will tighten control of the use of land in China. 

Analysts expressed concern that changes in the supply of land will affect the housing market. An official from the Ministry of Land and Resources responded that control of the use of land in major cities will not increase the housing market. 
Statistics indicate that about 40 percent of urban land in China is used inefficiently. Between 10 and 15 percent of residences in the countryside remain unoccupied. About 5,000 square kilometers of urban and industrial land is under construction, which is equal to about 11 percent of the entire urban land in China that has already been built up. Wang Shouzhi, head of the Policy and Regulation Department in the Ministry of Land and Resources said that there is a need to regulate the overall land use on a macro level in order to prevent some locals from making a quick buck in economic development in their blind pursuit of revenue. 
Sources: 
Ministry of Land and Resources, June 20, 2014 http://news.mlr.gov.cn/xwdt/jrxw/201406/t20140620_1321128.htm 
Xinhua, June 20, 2014 
http://news.xinhuanet.com/2014-06/20/c_126646825.htm
Briefings | | |   Economy/Resources

Corporate Defaults on the Rise

On June 19, citing statistics published by UBS Securities, Security Times reported that defaults in China are likely to increase and occur on a large-scale. 

Since the first quarter of 2014, there have been signs of a credit crisis, including downgrades in credit ratings. On March 4, solar equipment producer Shanghai Chaori Solar Energy Science and Technology Co. Ltd. announced it would not be able to make the interest payments that were due on its bonds. This became China’s first-ever domestic bond default. On March 20, 2014, the Shanghai Stock Exchange ordered loss-making Chinese solar cell maker Baoding Tianwei Baobian Electric Co. Ltd. to temporarily delist its "11 Tianwei Bonds." Trading on the bonds had been suspended since March 10 when the company announced that it had posted a loss of 5.23 billion yuan (US$844.51 million) for 2013. That was its second straight year of losses. Increasing numbers of firms are in default. 
The amount involved in the defaults has reached 53.6 billion yuan (US$8.71 billion). The defaults are concentrated in medium to large businesses in real estate and machinery manufacturing and have spreading to over six major cities and provinces. These defaults will likely lead to bankruptcies in real estate and in financial institutions. 

Source: Securities Times, June 19, 2013 
http://kuaixun.stcn.com/2014/0619/11501515.shtml

Briefings | | |   Economy/Resources

Over 300 Cities Suffered Sharp Declines in Land Sales

National Business Daily, a Shanghai based business newspaper, recently reported that local government land sales suffered a major decline in the month of May. According to a report that the China Index Research Institute released, for over 300 cities across China, the number of government land transactions in May declined 45 percent compared to the same period last year. The total sales amount for these transactions fell 38 percent. The total land area accounted for in these transactions fell 49 percent. Experts said that they expect a further decline in the housing market in the coming months. Many government land auctions closed with no deals made or the sales made were at the opening prices. The sales decline occurred across all tiers of Chinese cities regardless of city sizes. In addition to losses in land sales, local governments’ housing related tax income is also seeing a sharp decline. Many local governments in China rely heavily on the housing market for funds for public spending and for providing guarantees to loans to the government. Many economists expressed their worries about government’ debts and called for adjustments to the local industrial structure to create more sources of income.
Source: National Business Daily, June 9, 2014
http://www.nbd.com.cn/articles/2014-06-09/839878.html
Briefings | | |   Economy/Resources

People’s Daily: China Construction Bank to be the First RMB Settlement Bank in Britain

People’s Daily recently reported that China’s second largest bank, the China Construction Bank (CCB), has been authorized to be the official settlement bank for the Chinese currency (RMB) in London. This move improved the competitiveness of Great Britain as one of the main offshore exchange centers for the RMB and fixed a financial infrastructure issue in Britain. It is unusual that CCB’s strongest competitor, the Bank of China, did not obtain this authorization. London has been working hard to defend its role as the primary RMB exchange center outside Asia. London is facing tough competition from Frankfurt and Luxembourg. This new settlement arrangement could reduce the risks for those who tend to use RMB as a payment method outside China. It may also ease the process for Chinese companies planning to invest in Europe. 
Source: People’s Daily, June 13, 2014
http://ccnews.people.com.cn/n/2014/0613/c141677-25144462.html
Briefings | | |   Economy/Resources

Farming Industry under Pressure with Climbing Labor Rates of Peasant Workers

Xinhua recently published an article on the pressure the farming industry in China faces. According to the article, the cost of labor for peasant workers on the outskirts of Beijing grew 89.7 percent over the last five years. The farming industry in the area is under pressure to save labor costs and to improve the efficiency of its farm equipment. The article said that even though more and more farmers are using agriculture machinery, there are still tasks that require a large number of peasant workers, especially skilled laborers. Farming experts also suggested that the government should provide the farmers and the peasant workers with more farm subsidies to help ease the pressure.

Source: Xinhua, June 15, 2014
http://news.xinhuanet.com/fortune/2014-06/15/c_1111149829.htm

Briefings | | |   Economy/Resources