Economy/Resources – Page 155

China’s Energy Strategy from 2014 to 2020

On November 19, the State Council released the Energy Development Strategy Action Plan (2014-2020). In an effort to restructure China’s energy consumption and production, it has adopted a four-point approach.

The first is to reduce consumption. The plan includes placing a ceiling on the annual energy consumption at 4.8 billion metric tons of the standard coal equivalent until 2020. The second is to be self-sufficient. By 2020, the domestic production of energy will reach 4.2 billion metric tons of the standard coal equivalent. Energy self-sufficiency will be around 85 percent. The third is to go green. By 2020, the share of non-fossil fuels in the total primary energy mix will rise to 15 percent. The share of natural gas will be above 10 percent and that of coal will be reduced to under 62 percent. The fourth is to adopt an innovation-driven strategy. The goal is, by 2020, to build an open, competitive and orderly energy market system.

Source: Xinhua, November 19, 2014

http://news.xinhuanet.com/fortune/2014-11/19/c_127228804.htm

Briefings | | November 20, 2014 | Economy/Resources

Chinese Steel Exports See Rapid Growth

Well-known Chinese news site Sina recently reported that, according to the China Steel Industry Association, China’s steel exports for this year could reach 80 million tons. China’s steel production level is half of the world’s total. With the slowdown of the Chinese economy, the Chinese steel makers are trying their best to export, maintaining very low prices. This has caused China’s international competitors, from South Korea to South Africa, to drop their prices significantly. According to Tokyo Steel Manufacturing CEO Kiyoshi Imamura, the level of China’s annual steel exports is the same as the level of Japan’s entire steel production. Japan is the second largest steel maker in the world. Chinese steel exports to the United States increased by 50 percent in September, while exports to Taiwan and India increased 400 percent. Based on Chinese customs reports, China’s steel exports this year set a historic record, enjoying a year-over-year jump of 73 percent. Experts and even the Chinese manufacturers all expressed the belief that the situation for trade disputes will significantly worsen, for sure.

Source: Sina, November 12, 2014

http://finance.sina.com.cn/money/future/fmnews/20141112/155320798415.shtml

Briefings | | November 18, 2014 | Economy/Resources

Industrial and Commercial Bank of China: Bad Debts Grew 72.5 Billion Yuan (US$11.83 billion)

Xinhua recently reported on the financial performance of the Industrial and Commercial Bank of China. Based on the first three quarters of 2014, even though its net profit is growing, the amount of outstanding bad debts has reached 766.9 billion yuan (US$125 billion), an increase of 72.5 billion yuan (US$11.83 billion) since the end of the second quarter. Its bad loan ratio is 1.16 percent, up by 0.09 percent from the second quarter. The report also stated that the bank’s overall risk compensation ability is stronger as its loan loss provision grew 69.8 billion yuan (US$11.39 billion); its provision coverage ratio, an indicator of how protected a bank is against future losses, is at 247.15 percent, down 15.74 percent from the second quarter, while its loan provision ratio, the ratio of loan loss provision to outstanding loans, is at 2.88 percent up 0.04 percent from the second quarter.

Source: Xinhua, November 17, 2014
http://news.xinhuanet.com/fortune/2014-11/17/c_127217568.htm

Briefings | | November 17, 2014 | Economy/Resources

A Reduction in Production Led to APEC Blue

On November 13, 2014, the Beijing Environmental Protection Bureau stated that the measures taken during the APEC period to reduce air pollution brought blue skies to Beijing (APEC blue). According to its press release, during this period, PM2.5 particles were reduced by over 30 percent on a daily basis in Beijing and its neighboring regions. Since there were fewer cars on the road, the automobile speed in Beijing went up from 22 km per hour to 50 km per hour.

Construction sites were shut down from November 3 to 12. Factories which released a high concentration of pollutants were temporarily closed. The use of privately owned automobiles was subject to daily restrictions based on whether the license numbers were odd or even. Lastly, Tianjin, Hebei, and other neighboring regions also cooperated temporary in helping to reduce pollution.

Source: Xinhua, November 13, 2014

http://news.xinhuanet.com/2014-11/13/c_1113239432.htm

Briefings | | November 14, 2014 | Economy/Resources

Ministry of Education: Engineering Graduates Lack Hands-on Ability

On November 13, 2014, China’s Ministry of Education released its 2013 report on engineering education, the first of its kind. The report was based on visits to six trade associations and societies, interviews of close to 30 experts, surveys of over 260 employers, and surveys conducted on over 40,000 students.

The report concluded that over 80 percent of employers were able to recruit college graduates in the engineering field and that close to 70 percent of these graduates now work in areas relevant to their majors in college. The report also found that engineering graduates lack hands-on ability and that engineering graduates need to improve their international competitiveness, management skills, and cross-disciplinary ability.

Source: Xinhua, November 13, 2014

http://news.xinhuanet.com/2014-11/13/c_1113239452.htm

Briefings | | November 14, 2014 | Economy/Resources

Defaults on Residential Loans Continue

On November 7, 2014, Caixin published an article on bad loans in the first half of 2014. The article stated that 90 percent of the bad bank loans in Sichuan Province were residential loans.

Back in September, the China Banking Regulatory Commission, Sichuan Office, ordered banks under its jurisdiction to conduct internal audits of their residential loans. The result of these internal audits showed that, from January to June of 2014, nonperforming loans made by banks in Sichuan Province increased to 277 million yuan, of which 247 million yuan were residential loans. These loans accounted for about 90 percent of the total nonperforming loans, representing a 79 percent increase compared to the previous year.

This was not an isolated case. As the economy has slowed down, defaults on housing mortgages have been rising throughout China due to reduced family income or declining business. For example, in Erdos Inner Mongolia, where people walk away from their investment houses when the housing price goes down, bad residential loans reached 500 million yuan in August 2014.

Source: Caixin, November 7, 2014

http://finance.caixin.com/2014-11-07/100747927.html

Briefings | | November 13, 2014 | Economy/Resources

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 | | November 10, 2014 | 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