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Economy/Resources - 158. page

Central Bank Implies the Economy Has Worsened

China Business News reported that China’s central bank, the People’s Bank of China, stated at its third quarterly meeting that "The intricacies of the financial situation in China should not be underestimated," indicating the economy has worsened. 

According to financial analysts, the statement was significant in view of the message from the previous quarterly meeting where the central bank stated, “The economic and financial structure began to show positive changes, but the situation is still complicated. Both favorable and unfavorable factors coexist." Removal of the positive remark at the central bank’s third quarterly meeting may mean that, presently, negative factors have probably increased compared to the second quarter, adding pressure to the economy. These negative factors are mainly reflected in business conditions and the slowing down of the growth of profit. The latest PMI index shows that the trend of recovery in manufacturing and service industries has stopped. 
As China’s central bank, the People’s Bank of China issues monetary policy and regulates financial institutions in mainland China. 
Source: China Business News, October 8, 2014
http://www.yicai.com/news/2014/10/4025204.html
Briefings | | |   Economy/Resources

Global Times: Germany Has Become the Largest Trade Surplus Country

Global Times recently reported, based on newly released IMF numbers, that Germany replaced China to become the country with the largest trade surplus. This shows that Germany has built its success on an extremely high export level rather than on imports. It seems that Germany has not encouraged its domestic consumer spending, which could otherwise help the EU’s weak growth. Instead, Germany is becoming a drag on the EU’s overall economy. China has held the top surplus title for many years. However the Chinese currency, the RMB, has appreciated by 30 percent since 2006. In the upcoming IMF/World Bank Annual Meetings in Washington, Germany is expected to face pressure from the international community when it is asked to take action to stimulate its domestic economy to help the EU recover.
Source: Global Times, October 3, 2014
http://world.huanqiu.com/exclusive/2014-10/5157608.html
Briefings | | |   Economy/Resources

Xinhua: Hefty Import Tariffs Drive Chinese People to Shop Overseas

Xinhua published an article stating that the hefty import tariffs imposed on mid to high end products and the fact that tax free product development lags behind have caused the growth in the number of Chinese people shopping overseas. The article said that the trend does not help to improve China’s domestic consumption; nor does it ease domestic economic pressure. The article stated that, among 20 luxury consumable goods, the prices on the Mainland are 45 percent higher than Hong Kong, 51 percent higher than the US and 72 percent higher than France. The result is that, during the current week long national holidays, the number of Chinese people shopping overseas has increased dramatically. The statistics showed that Chinese people spend an average of 20,000 yuan (US$3,255) overseas on each trip with 58 percent of their spending going toward shopping.

Source: Xinhua, October 5, 2014
http://news.xinhuanet.com/politics/2014-10/05/c_127065170.htm

Briefings | | |   Economy/Resources

People’s Daily: China’s Energy Consumption Remains High

On October 2, 2014, People’s Daily reported that China continues to consume the largest amount of the world’s energy. 

In the past 10 years, the consumption has surged rapidly. In 2010, China became the No. 1 consumer of energy in the world. The consumption increased from 1.5 billion metric tons in 2001 to 3.7 billion metric tons in 2013. The annual increase has averaged 190 million metric tons or an eight percent growth rate. 
China’s share of total global energy consumption went up from less than 11 percent early the 2000s to 22 percent today. From 2002 to 2012, China’s energy consumption increase accounted for 58 percent of the entire world growth of energy consumption. 
China’s energy supplies mainly rely on domestic coal and imported oil. Domestic coal dominates the energy structure, causing severe environment pollution. 
Source: People’s Daily, October 2, 2014
http://politics.people.com.cn/n/2014/1002/c1001-25772362.html
Briefings | | |   Economy/Resources

BBC Chinese: China’s Per Capita Carbon Dioxide Emissions Exceed the EU Number

BBC Chinese recently reported on the latest numbers for China’s carbon dioxide emissions. For the first time, emissions per capita exceeded the level in the EU. For a long time, China has maintained that the Chinese emissions level needed to remain high due to the country’s strong economic growth. However the Chinese government has always added that China’s per capita number was way below other large economies. From now on, this claim will no longer be true. At the present time, the total Chinese emissions level is higher than that of the United States and the European Union combined. A high ranking Chinese government official recently pointed out that China has been taking action to reduce emissions instead of just talking and that it is the lack of communication that has put China in a “misunderstood” position. According to the World Meteorological Organization, carbon dioxide emissions reached a record high in 2013.
Source: BBC Chinese, September 21, 2014
http://www.bbc.co.uk/zhongwen/simp/china/2014/09/140921_china_emission.shtml
Briefings | | |   Economy/Resources

Sinosteel’s Revenue Decline May Result in a Default

Beijing News published an article in which it reported that Sinosteel may not be able to meet its obligation to pay an amount due that totals tens of billions of yuan. According to the article, the liabilities to asset ratio for Sinosteel has remained between 90 and 95 percent since 2009. Prior to 2009, the business model for the State-owned steel companies involved importing ore and doubling or tripling the price when re-selling the ore to domestic downstream steel mills. In late 2009, these downstream steel mills were allowed to import ore, thus eliminating the high profit margin for large State-owned companies. Sinosteel’s revenue dropped from 180 billion yuan in 2010 to 140 billion yuan in 2013. Another reason for the financial loss is that it has failed in a series of investments overseas.

Sinosteel is under the China’s State-Owned Assets Supervision and Administration Commission. It has 86 subsidiaries, of which 63 are in China and 23 overseas. Their functions include developing and processing metallurgical mineral resources, trading and logistics of metallurgical raw materials and products, related engineering technical services, and equipment manufacture. 
Source: The Beijing News, September 24, 2014 
http://www.bjnews.com.cn/finance/2014/09/24/334968.html
Briefings | | |   Economy/Resources

China Uncovered $10 billion in Fraudulent Entrepot Trade

At a press conference on September 25, 2014, the State Administration of Foreign Exchange (SAFE) discussed its investigations into entrepot trade, a trading post where merchandise can be imported and exported without paying import duties. SAFE stated that its investigations confirmed that the amount of China’s entrepot trade using false documents had reached $10 billion. 
Wu Ruilin, Deputy Director of the Management Inspection Division of SAFE, stated that, since April of last year, SAFE has conducted special investigations of entrepot trade in 13 provinces and cities. In 2014, the effort has expanded to include 24 provinces and cities. 
Wu further explained that these investigations found that entrepot trade has become a speculative arbitrage tool because many companies use forged or altered commercial documents, re-use property documents, or use the import declaration documents for general cargo trade. 

Source: State Administration of Foreign Exchange, September 25, 2014
http://www.safe.gov.cn/resources/wcmpages//wps/wcm/connect/safe_web_store/safe_web/whxw/ywfb/node_news_ywfb_store/d258558045990e0ba668aed2d1baac76/
Briefings | | |   Economy/Resources

Ministry of Finance: State-owned Enterprises Have Liabilities to Asset Ratio of 65 Percent

On September 22, 2014, China’s Ministry of Finance released the economic performance report on State-owned enterprises for the period of January through August. 

The report showed that, as of the end of August, the value of State-owned assets exceeded 99 trillion yuan, with total liabilities at nearly 65 trillion yuan; the ratio of liabilities to assets was 65 percent. The central government owned enterprises showed high financial expenditures. In the first eight months of the year, these grew by 22.4 percent. 
The report also showed that, compared to the same period last year, the rate of growth of both the revenues and profits in these State-owned enterprises continued to decline. Costs, however, continued to increase faster than revenue. 
 Source: China Business News, September 23, 2014 
http://www.yicai.com/news/2014/09/4021971.html
Briefings | | |   Economy/Resources