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.
Economy/Resources - 157. page
Ministry of Commerce Official: China Will Soon Become a Net Capital Exporter
China Surprisingly Suffered a US$100 Billion Decline in Foreign Exchange Reserves
Close to 50 Percent of Real Estate Development Companies Went Out of Business in the Past Five Years
Guangming Daily recently published an article about real estate development companies. The article stated that by the end of 2013, the number of real estate development companies registered in China was 42,000, which was 36.6 percent lower than the number in 2010 and 50 percent lower than 2008. The article said that, because the current real estate market continues to be soft, most of the small to mid-size real estate development companies face serious cash flow issues. Some of them have a debit ratio close to 120 percent, while the short term liquidity ratio and total Asset Turnover are getting worse as well. In addition, the on-hand inventory level continues to grow. The article said that the only solution to the problem is to have an aggressive sales strategy and to use the income from sales revenue to pay back the debts.
Source: Guangming Daily, October 17, 2014
http://economy.gmw.cn/2014-10/17/content_13565131.htm
In China, 82 Million People Live in Poverty
Beijing Suffers Intense Haze
From Oct 7 to Oct 11, Beijing suffered five days of intense haze. A large portion of Northern China was also the victim of haze. In many places, the visibility was below 1 km (0.6 mile). Sometimes it was even below 500 meters (0.3 mile).
The Hong Kong based South China Morning Post reported that, in order to create a clean sky during the upcoming APEC Economic Leaders’ Meeting in Beijing, "employees of government departments, quasi-government institutions, and organizations in Beijing will be granted a six-day holiday starting on November 7 and continuing through November 12." "The meeting will be held on November 10 and 11. The ministers of 21 Pacific-rim governments will meet from November 7."
People’s Daily published an article stating that China’s current smog treatment is ineffective. There have been many theories on the cause of the smog, but no one knows exactly which one is the real culprit. On the simpler pollution treatment issue, local governments are not synchronized. The central government has established a coordination mechanism with six provinces/autonomous regions/cities to treat the air pollution. It includes Beijing, Tianjin, Hebei, Shandong, Shanxi, and Inner Mongolia. However, different local government have different regulations. For example, Hebei’s fine for pollution discharge is only 20 or 30 percent of the amount of fines in Beijing. Some companies would rather move to Hebei to pay the penalty than spend money to treat the pollution.
The local environmental protection agencies do not have enough power to enforce pollution treatment regulations. Many big pollution offenders also contribute a substantial amount of taxes to local governments. As a result, the local governments protect them.
Source:
1. South China Morning Post Online, October 10, 2014
http://www.scmp.com/news/china/article/1613232/beijing-marks-apec-summit-extra-public-holiday-moves-cut-pollution
2. People’s Daily Online, October 10, 2014
http://politics.people.com.cn/n/2014/1010/c1001-25801921.html