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Economy/Resources - 153. page

It Will Take Five Years to Deplete China’s Housing Inventory

On June 13, 2014, China Business News (also called First Financial Daily or Yicai) reported that, as of the end of 2013, 4.863 billion square meters of residential housing were under construction. Based on the annual average sales between 2009 and 2012, it will take five years to deplete the 4.863 billion square meters, assuming there are no other new developments after 2014. Thirty five major cities have hit a record high in their housing inventories. Twenty nine of them have shown an increase over last month. Three of those hit the hardest are Nanchang with an increase of 77.4 percent; Ningbo with 60.9 percent, and Jiujiang with 56.9 percent. According to analysts, using five to ten months as the normal time to deplete the inventory, starting from March 2014 it will take 100 months in Tangshan, 57 in Wuxi, 39 in Tianjin, 36 in Ningbo, 33 in Shanghai, 33 in Hangzhou and 30 in Xian. 

Source: China Business News, June 13, 2014
http://www.yicai.com/news/2014/06/3924379.html
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Study Finds China’s Homeownership Rates and Housing Vacancy Rates Are High

On June 10, China’s Southwestern University of Finance and Economics (西南财经大学) released a report showing the results of a study on the country’s housing market. The report showed that, in 2013, the rate for home ownership in China was as high as 90.8 percent. The rate was 95.8 percent for rural homes and 87.0 percent for urban homes. The rate measures the percentage of homes that were owner occupied. The statistics showed the rate was 65 percent in the U.S., 60 percent in Japan, and 63 percent for the entire world. The urban ownership rate for multiple homes, which gauges the percentage of urban families that own multiple homes, was 18.6 percent in 2013, an increase of 2.7 percent over the figure for 2011. In March of 2014, the urban multi-home ownership rate jumped to 21.0 percent.
In 2013, China’s urban housing vacancy rate, the proportion of the homeowner inventory that was vacant for sale, was 18.6 percent, 1.8 percent higher than the rate in 2011. The report estimated that there were 48.98 million vacant homes in urban China. Outside of China, the housing vacancy rate was between 1 percent and 3 percent in the U.S., below 5 percent in Hong Kong, around 9.5 percent in the EU countries, 13.1 percent in Japan, and 17.6 percent in Taiwan.
Interestingly, the vacancy rate for low-end housing, that is, government subsidized low price housing sold to low-income earners, was as high as 23.3 percent. The study also showed that the proportion of ownership of low-end housing is the highest among the top 25 percent of households in terms of income level, while 27.5 percent of the low-end housing owned by the top 25 percent of households is empty. The report concluded that "a serious waste of resources exists and there is a ‘mismatch’ in the allocation of low-end housing."
Source: Beijing Youth Daily, June 11, 2014
http://epaper.ynet.com/html/2014-06/11/content_64516.htm
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People’s Daily: Ministry of Commerce Ruled against EU and U.S. Exporters

People’s Daily recently reported that the Chinese Ministry of Commerce announced the results of an anti-dumping investigation it had conducted. The Ministry of Commerce announced that the sale of tetrachloroethene exported to China and originally produced in the European Union and the United States is considered illegal dumping. The ruling was considered final. China’s domestic vendors suffered substantial damage as a result of the dumping. The EU and the U.S. companies named in the Ministry’s ruling will be charged anti-dumping duties based on the scale of their dumping activities. According to the announcement, the case was established on May 31, 2013. And it took a year to reach its conclusion. Tetrachloroethene is a colorless chlorocarbon liquid widely used for dry cleaning of fabrics.
Source: People’s Daily, June 30, 2014
http://finance.people.com.cn/n/2014/0603/c1004-25097799.html
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Hurun and the Chinese HNWI Issued 2014 Emigration White Paper

The Hurun Report and the immigration agency’s Visas Consulting Group recently released the Chinese High Net Worth Individuals (HNWI) White Paper. According to the 2014 white paper, in 2013, 9.3 million Chinese emigrated, making China the fourth ranking country in the world next to India, Mexico, and Russia. The U.S. and Canada were their top choices for emigration. According to the white paper, the top three reasons for emigrating overseas were to provide a better education for their children, environmental pollution, and food safety. Other reasons included social warfare, medical care, and the safety of personal assets. Among the families interviewed by Hurun, the average preferred amount to spend on investment immigration is 5 million (US$830,000).

Source: China Economy, June 7, 2014                                                                                               http://www.ce.cn/xwzx/gnsz/gdxw/201406/07/t20140607_2937886.shtml

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China’s Agricultural Population May Decline to 10 Percent

According to Ministry of Housing and Urban-Rural Development, China‘s agricultural population may decline to about 10 percent.  Currently, about 40 percent of China’s population is engaged in agriculture.

Zhao Hui, an official from the Ministry of Housing and Urban-Rural Development, stated in an interview that as urbanization continues, fewer and fewer people will engage in farming. It is likely that the agricultural population will drop to about 10 percent of the total population. The land used for rural development, however, is about 3.5 times the land used for urban development. That is, it is 70 percent of the total land for development is used for rural development. To avoid having 10 percent of the population use 70 percent of the land, Zhao urged that China should have breakthrough in the institutional mechanisms to allow a rational allocation and flow of population and resources.  
Source: Beijing Business Today reprinted by Xinhua, June 6, 2014 
http://news.xinhuanet.com/2014-06/06/c_126584660.htm
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Survey Finds Sixteen Percent of the Land in China is Polluted

On April 17, China’s Ministry of  Environmental Protection, the Ministry of Land and Resources released an "Official Report on National Soil Pollution," based on an eight-year survey of over 6.3 million square kilometers of land across the country. The report found that about 16 percent of the country’s soil and 19 percent of its arable land were polluted to one degree or another. The vast majority of the pollution came from cadmium, nickel, copper, arsenic, mercury, lead, DDT and PAHs. The latest results contrast with the situation in October 2011, when 8.3 percent of the arable land was polluted.

In his government report earlier this year, Chinese premier Li Keqiang announced the initiation of a "Soil Remediation Project." However, Chinese scholars estimated that soil pollution prevention and remediation demands trillions or even tens of trillions in investment, while the central government’s budget for soil remediation during the twelfth five-year plan period, or 2011 to 2015, is only 30 billion yuan (US$4.8 billion).

Source: China Youth Daily reprinted by Xinhua, June 6, 2014 
http://news.xinhuanet.com/2014-06/06/c_126585250.htm
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China’s 2013 Gold Production Topped the World for the Seventh Year

People’s Daily reported that China has been the world’s largest gold producer for seven years in a row. In 2013, its gold output reached 428.16 tons. According to the president of China’s Gold Association, "China’s 2013 gold production increased by 6.23% over last year, a new historic record."

As of the end of 2012, China’s gold reserves of 8,196.24 tons ranked second in the world. In addition, for the first time, China’s gold consumption, which was 1176.40 tons in 2013, jumped to world’s top spot. According to an official from the Ministry of Industry and Information Technology, "For the first time, China’s gold consumption has surpassed India. With an increase of 41.3 percent over last year, China has become the world’s largest gold consumer." In 2013, China’s gold consumption was about 27 percent of the global consumption of physical gold.

Source: People’s Daily Online, June 5, 2014
http://finance.people.com.cn/n/2014/0605/c1004-25105841.html

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Problems in China’s Outbound Investment in the Mining Industry

According to a Xinhua report, over the past five years, over 95 percent of the overseas mergers and acquisitions made by Chinese companies in the mining industry ended in failure.

A major problem is that most individual Chinese companies lack an in-depth understanding of the political, economic, legal, and cultural differences in the host countries. Another issue is the proportion of stock ownership on the Chinese side. A higher Chinese ownership simplifies the decision making process and streamlines the operations. However, it invites opposition from the host countries and may even result in a lower market valuation. Chinese companies have also complained about fraudulent mining data and exaggerated mining exploration statistics.

In 2013, China topped the world in both production and consumption of iron ore, crude steel, steel, and non-ferrous metals. Chinese outbound investment in the mining sector jumped from US$4.2 billion in 2007 to 20.2 billion in 2013.

Source: Xinhua, June 1, 2014
http://news.xinhuanet.com/fortune/2014-06/01/c_126570335.htm

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