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Xinhua: Politburo Meeting Sent Important Economic Signals

Xinhua recently reported that the Chinese Communist Party Politburo met on December 5 to discuss focal economic development plans for 2015. The meeting sent significant signals on next year’s roadmap: China must face “the new norm” of economic development focusing more on quality and profitability; the economy must cut a new balance between growth and structural adjustments; strategic new industries and the services industry should become the two new economic engines; the agricultural development model should improve and modernize; regional economic developments should be more balanced across the country; special attention should be given to unemployment and to helping the poor; economic reforms now must to go deeper; international trade should reach a stable balance.
Source: Xinhua, December 5, 2014
http://news.xinhuanet.com/fortune/2014-12/05/c_1113541805.htm
Briefings | | |   Economy/Resources

Registration of Real Property Rights to Pave Way for Taxation

China Securities Journal under Xinhua reported that the authorities have started a pilot program in several cities to register real property rights. Nation-wide implementation may unfold next year. 

Real property rights that must be registered include usufructuary rights. The owner of a usufructuary right has the right to possess, utilize, and obtain the profits from the real property owned by others. Generally, land in China is owned by the State. The usufructuary rights include the right to use state-own land, the right to occupy buildings, as well as the right to use farm land, pastures, forests and seas. Earlier this year, it was announced that all real property rights must be registered within three years. 
Analysts observed that the registration is a fundamental component of China’s land reform. Further, completion of registration is a pre-requisite to legislation and implementation of real property tax. 
Source: China Securities Journal reprinted by Xinhua, December 2, 2014 http://news.xinhuanet.com/fortune/2014-12/02/c_127267878.htm
Briefings | | |   Economy/Resources

Xinhua: One Out of Ten Water Sources Do Not Meet the Standard

Xinhua recently reported that the latest research results that the Ministry of Water Resources released showed that only 86 percent of the drinking water sources met the national water quality standards. The research was based on a sampling of 4,555 drinking water sources nationwide. Among these sources, lakes suffered the severest quality issues, with merely 65 percent meeting the national standard. Most of the low-quality underground sources are located north of the Yangtze River, while most of the above-ground ones are near the highly industrialized pollution areas. Some provincial governments have still not approved many of the water protection regulations. The main cause of this problem is the conflict of interest between the ones to be regulated and the beneficiaries (of the regulations), especially for the water sources that cross borders. Currently China’s per capita water resources are only a quarter of the global average. The northern part of China suffers a very severe water shortage. 
Source: Xinhua, November 19, 2014
http://news.xinhuanet.com/politics/2014-11/19/c_1113313280.htm
Briefings | | |   Economy/Resources

State Councilor: China May Fall into a Severe Depression

Xia Bin, a State Councilor with China’s State Council, recently made a speech in Shanghai in which he predicted that China’s growth will slow down over the next three years and China’s economy will fall into a severe depression. 

Xia indicated that the authorities will try to ensure a 7.5 percent rate of growth in China’s GDP this year, but, based on statistical analysis, the growth will slow down this year, next year, and the year after that. The financial reform has not been put in place. However a large amount of funds for infrastructure has been raised, resulting in local government debts that have become a very serious social issue. Creditors hold sit-ins in front of local governments demanding payment. 
Xia said he believes that the real estate boom has ended and that falling house prices have become an inevitable consequence. He predicted that, in the next two years, the growth rate may slide below 6 percent and China will be in a severe depression. 
Xia said that companies and local governments have engaged in Ponzi schemes. They borrow money only to service bank interest rather than to make new investments. The high financing cost of money is not just the problem of banks; it is a problem for the entire system. 
Source: East Money, November 26, 2014
http://finance.eastmoney.com/news/1371,20141126450232052_0.html
Briefings | | |   Economy/Resources

People’s Daily: China Revealed Details of Its Strategic Oil Reserve Capability

People’s Daily recently reported that, according to the National Bureau of Statistics, Phase One of the National Strategic Oil Reserve project has been completed. There are 12.43 million tons of crude oil stored in four National Reserve Bases. That’s the equivalent of around 91 million barrels. This is the first time the Chinese authorities have revealed detailed numbers on their National Strategic Oil Reserves. These numbers are lower than the estimates that Western analysts have provided. The Bureau has furnished no information on Phase Two and Three of the Reserve construction plan. The Phase One reserve volume is only enough to supply nine days’ worth of consumption, which is far below the 90-day Import Volume standard that the International Energy Agency recommended. The current low global oil price offers China a very good opportunity to stock up on its Reserves. 
Source: People’s Daily, November 22, 2014
http://energy.people.com.cn/n/2014/1122/c71661-26073735.html
Briefings | | |   Economy/Resources

Omissions Result in 2.4 Million Yuan in Bank Fines in Shanghai

Xinhua published an article on the Shanghai Banking Regulatory Commission’s fines issued to seven banks in Shanghai. The article said that the fines indicate that there are omissions in the bank’s credit card approval process. The seven banks in Shanghai included six Chinese banks and one foreign bank, the Citi Bank in China. The total amount of fines was 2.4 million yuan (US$391,849). The article listed the three types of omissions that had the highest rate of occurrence in the banking industry. These were a lack of control in approving credit card applications, a generous credit line, and a lack of strict control in dealing with abnormal transactions.

Source: Xinhua, November 23, 2014
http://news.xinhuanet.com/fortune/2014-11/23/c_1113362910.htm

Briefings | | |   Economy/Resources

China’s Forestry Industry Suffers Major Losses Due to Alien Insects

Xinhua reported on the recent forest pest control conference held in Changshai City of Hunan Province. A major issue discussed at the conference was that the infected forestry in China has grown from 120 million mu (19.7 million acres) in 2000 to 180 million mu (29.6 million acres) in 2013. The direct economic loss has grown from 80 trillion yuan (US$13 trillion) to 110 trillion yuan (US$18 trillion). The article said that, currently, there are over 8,000 types of alien insects in China and over 40 million trees die from as of result of insect infestation with two-thirds of the loss due to alien insects. According to the article, in the year 2000 foreign insects were intercepted at the border 500 times. By 2013 the number had grown to 610,000. At that time, 25 types of pests had invaded China; by 2013, the number grew to 38 different types.

Source: Xinhua, November 22, 2014
http://news.xinhuanet.com/fortune/2014-11/22/c_1113359472.htm

Briefings | | |   Economy/Resources

New Urban Planning Guidelines Mean Fewer Super Large Cities

On November 20, 2014, the State Council announced new guidelines on the classification of cities based on the size of their population. 

According to the new classifications, cities with a population of over 10 million are "super large cities." Those having a population between 5 million and 10 million are called "extra large cities." "Large cities" have a population from 1 to 5 million; "medium cities" are between 500,000 and 1 million; and "small cities," have a population under 500,000. As a result, most cities will be downgraded. The number of super large cities will be reduced from the current 140 to 16. The new classifications are meant to redirect the flow of migrants from large cities to smaller cities. 

Source: Beijing Times, November 21, 2014 
http://epaper.jinghua.cn/html/2014-11/21/content_145671.htm

Briefings | | |   Economy/Resources