Economy/Resources - 159. page
Ministry of Commerce: Foreign Direct Investments Fell by Fourteen Percent
China National Coal Association Will Continue to Limit Production and Reduce Imports in Q4
China Financial and Economic News reported that, according to China National Coal Association, the coal industry in China continues to suffer hardship. Currently close to 70 percent of the coal enterprises have to make pay cuts and 30 percent of the coal companies are in arrears on paying wage. With 300 million tons of coal in their inventory on hand, the Association said it will continue to limit production in Q4 in order to bring the coal price back up, hopefully by 20 percent. The association also proposed to reduce coal imports by 20 million tons in the 4th quarter of 2014. According to the statistics, coal production in the first 8 months of 2014 was 2.5 billion tons, down 1.44 percent from the same period in 2013; sales were 2.4 billion tons, down 1.62 percent from the same period in 2013.
Source: China Financial and Economic News, September 22, 2014
http://economy.caijing.com.cn/20140922/3705114.shtml
Chinese Economists on Compensation Reform in State Owned Enterprises
China Economic Online published an article on the general concern that reform is needed in setting the annual compensation scale for the top managers in State Owned Enterprises (SOE). According to the article, those managers are paid, on average, five times more than their peers in private sectors. In addition, their compensation does not line up with their job performance. The SOE’s are also under the management of the State-Owned Assets Supervision and Administration Commission (SASAC). The article said that the commission’s effort to reshape the board of directors in SOE’s has been unsatisfactory so far. It quoted one Chinese economist who stated that the compensation adjustment effort will involve changes in other areas first: who should set the pay scale and who can make the final call – the board of directors or SASAC? According to the economist, it requires that the government function should be separated from the enterprise management. "The enterprise should be under the management of diversified equity and mixed ownership." He recommended that, "The board members in the SOE’s should be independent, professional, and have accountability."
According to the article, based on the list of compensation in 2013 for the board of directors of the SOE’s, as published by China Economic Research Institute, 259 SOE’s are publicly traded companies. The average annual compensation in 2013 for 83 of the chairmen of the board who received compensation was 840,630 yuan (US$136,894) while 19 of them had annual compensation of over one million yuan (US$162,853). The top management in the financial and banking industry had the highest pay with annual income averaging 940,000 yuan (US$153,077), while the chairmen of the board and bank CEOs were paid at 1.71 million (US$ 278,470) and 2.35 million (US$382,692) respectively.
Source: China Economic Online, September 21, 2014
http://www.ce.cn/cysc/newmain/yc/jsxw/201409/21/t20140921_3570080.shtml
Real Estate Companies Face Lower Profits and Higher Inventory
Huanqiu reported that, in the first six months of 2014, half of the real estate companies saw their profits decline.
21 CN: Profitability of the Large Companies in China is Worrisome
The TenCent website carried an article that was originally published by China Telecom on 21CN. The article stated that Chinese companies have been unable to make it to the list of the top brands in the world. They lag behind in their profitability and in their investment in research and development. According to the article, among the Forbes’ top 100 world’s most valuable brands list and the Interbrand’s Best Global Brands 2013, no Chinese brand made it to the list. Meanwhile the net profit that Chinese companies make lags far behind compared to those large companies in the U.S. and England. According to the China Enterprise Confederation, the profitability of the large companies in China is worrisome. Among the world’s top 500 companies, the average net profit for U.S. companies was 9.33 percent while Chinese companies were at 5.1 percent. Among the world’s top 500, of the 49 companies that had financial losses in 2014, one-third were Chinese companies. The article said that large companies in China lack the capacity for innovation and rely heavily on imports for their core technology. In 2014, among China’s top 500 companies, the average ratio of research and development spending to income from sales was 1.25 percent. This figure had declined over the last three consecutive years. At the same time, the technology commercialization ratio in China is only at 10 percent which is far below the 40 percent ratio in developed countries.
Source: TenCent, September 5, 2014
http://finance.qq.com/a/20140905/058701.htm
Economist: The Real Reason behind China’s High Housing Prices – Printing Too Much Money
On August 31, 2014, China Gate reprinted an article from a newspaper from Mainland China, Yangcheng Evening News (ycwb.com). The article explained the real reason behind the high prices of China’s real estate. The same news was then published in several other Chinese newspapers. According to Wu Jinglian, an economist and a researcher at the Development Research Center of the Chinese State Council, these high prices are the consequence of the fact that the government has been printing too much money. The amount of money that China has issued is at 200 percent of China’s GDP. Therefore, the fundamental strategy to solve the problem of high housing prices in China is to stop releasing so much money.
Source: China Gate, August 31, 2014
http://www.wenxuecity.com/news/2014/08/31/3560834.html
http://blog.ifeng.com/article/33939860.html
http://house.ifeng.com/news/view/detail_2014_08/31/38580591_0.shtml