According to Xinhua, the Ministry of Finance recently released statistics showing that China’s national revenue increased by 8.8 percent in the first 6 months of 2014, as compared to the same period in 2013. Of the national revenue increase, tax revenue grew by 8.5 percent and non-tax revenue by 11.1 percent. The national GDP increased by 7.4 percent.
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Tough Issues for Balance Sheets of Local Governments
In a recent article in China Finance, which Xinhua then reprinted, Ma Jun, the chief economist for China’s central bank, the Bank of China, wrote about the balance sheets of local governments and related issues.
In the Second Half, China’s Economy Faces Three Big Risks
According to Economic Information Daily [under Xinhua], in the second half, China’s economic performance needs to be alert to the following three risks, as the economy is still facing downward pressure. The first risk is "deflation" in the industrial and manufacturing sectors. As of June this year, China’s PPI showed 28 months of continuous negative growth. The second risk is increased pressure due to the policy adjustments in the real estate market. The adjustments in the real estate market are expected to continue into the second half. The third risk is the number of defaults in market debt.
China’s Junk Bond Crisis Is Looming
On July 22, the Chinese media wallstreetcn.com reported that, with the frequent defaults on debt in China, 2014 is becoming the year of defaults for the Chinese financial market.
The State Council Approved the Pearl River West River Economic Belt Development Plan
China Review News carried an article that was originally published in People’s Daily about the development plan for the “Pearl River West River Economic Belt.” According to the article, the Guangdong Development and Reform Commission has received approval from the State Council to proceed with the development plan. The plan makes eco-environmental protection a prerequisite, while focusing on the development of infrastructure, urbanization, and public services in the Pearl River and West River regions. According to the article, the plan will help to increase the effort of environmental protection while promoting economic exchanges in the inland region. According to the approval that the State Council issued, the municipal governments of Guangdong and Guangxi provinces will collaborate in carrying out the execution of the development plan. The Guangdong Development and Reform Commission will also be responsible for supervision and inspection.
Source: China Review News, July 20, 2014
http://hk.crntt.com/doc/1032/9/5/8/103295866.html?coluid=151&kindid=11511&docid=103295866&mdate=0720115937
Local Governments Are Increasing Their Investments
China Enterprise News reported that, in spite of the central government’s efforts, local governments are increasing their expenditures and banks are funding the local governments through financial management products.
Government Think Tank: China Faces Extended Slow Growth
Cai Fang, Director of the Institute of Population and Labor Economics under the Chinese Academy of Social Sciences, published to rebuttal to the prediction that the bubble of the Chinese economy may burst. He also admitted that China’s economy is in for a period of slow growth.
Tencent: Seven Ways to Transfer Funds Out of China
According to Tencent Financial, the wealthy in China use a number of means to transfer large amounts of money out of China.