Economy/Resources - 170. page

On March 3, 2014, Qiushi, a journal of the Central Committee of the Chinese Communist Party, published an article titled, “China’s Manufacturing Industry Faces Ten Dilemmas.” A description of the ten dilemmas follows:

1. A lack of the capacity to innovate: China lacks self-owned independent intellectual property products.
2. Low value-added products: China is the equivalent of a world plant; however, it makes only minimal profits because foreign multinational companies, which have Research and Development (R & D) and management advantages, take away most of the profits.
3. Severe overcapacity: China currently has a total of 24 sectors, but 21 out of these 24 sectors already have overcapacity problems.
4. High-end talent shortage: China lacks Research and Development talent.
5. Corporate tax burden is too heavy: Chinese enterprises have to pay a tax of over 30 percent. Then there is the cost of corruption, plus additional fees. Thus China’s actual corporate tax burden is among the highest of all countries in the world.
6. Increasing costs: Salaries and wages keep increasing.
7. A shortfall in funding: The problem of financing directly restricts the survival and development of small and medium enterprises.
8. Strained resources and the environment: Pollution
9. Deterioration of the domestic environment: These include debt problems, a widening gap between the rich and the poor, economic depression, and the abnormal development of real estate.
10. Trade barriers: Increasing trade conflicts with other countries

Source: Qiushi, March 3, 2014
http://www.qstheory.cn/zs/rdht/201403/t20140303_326550.htm

A China Youth Daily team that monitors online public opinions issued a report on February 27. The report, based on a calculation of the amount of keyword-tagged information that has appeared at various online platforms since March 2013, came up with the top ten hot topics of public opinion, namely: environmental protection, anti-corruption, social security, food and drug safety, the stability of (housing) prices, Internet regulation, reform of the household registration system, judicial reform, health care reform, and social mores.

The issue of "environmental protection" rose to the top of the list, with three times more online discussions than the No.2 issue of anti-corruption. Of the 68 million online discussions, more than 70 percent (70.8 percent) of the netizens focused on PM2.5, a measure of particles less than 2.5 micrometers in diameter found in the air, which are believed to pose the greatest health risk. With over 48 million discussions on the matter it had more than a one third (35.6 percent) jump over last year. China Youth Daily received responses to over 1,000 questionnaires on how to deal with the air pollution. Approximately one third (29.3 percent) of the respondents called on the Government to strengthen its regulatory responsibility.

The topic of "anti-corruption" and "social security" ranked No. 2 and No. 3. on the list. The amount of total online discussion was about 22 million each, with a difference of only 3 percent. These two issues have made the list three years in a row, but the change this year is that "anti-corruption" jumped to No.2.

Source: China Youth Daily, February 27, 2014
http://zqb.cyol.com/html/2014-02/27/nw.D110000zgqnb_20140227_1-03.htm

The Yahao Real Estate Selling and Consulting Solution Agency recently released statistics on the Beijing housing market. According to those statistics, in January 2014, there were a total of 6,908 transactions in the Beijing real estate market. These properties covered 744,200 square meters. In terms of the number of transactions and the total square meters of the properties involved in the transactions, the figures represented a 40 to 50 percent drop compared to December 2013 and to the same period in January 2013. 

On February 24, 2014, Study Times, the publication of the Party School of the Central Committee of the CCP, published an article titled “RMB Internationalization Leads Chinese Economic Breakthrough.” The article reported that the People’s Bank has signed a currency swap agreement with the European Central Bank and the Bank of England, two of the three “World Central Banks.” According to the article, a currency swap with major world powers is a convenient way to realize the internationalization of the RMB. China’s economy has reached a critical juncture. It is time to take the initiative to move forward on the road of RMB internationalization. However, a currency war may be bloody and violent. 

Source: Study Times, February 24, 2014
http://www.studytimes.com.cn/shtml/xxsb/20140224/3929.shtml

People’s Daily published an article titled, “It Is a Dangerous Sign that Revenue from Selling Land Has Become the Major Source of Income for Municipal Governments.” The article said that, according to the statistics published by the Ministry of Land and Resources, in 2013, income from land sales was 4.1 trillion yuan (US$0.67 trillion) which was 33 percent of the national income. The article stated that, ten years ago, the cost of land was 20 percent of the cost of housing. In recent years however, it has grown to be 60 percent or even higher. The article pointed out, “Land sales may appear positive but it sends many dangerous signals. … The municipal government can easily rely on land as its income source rather than developing its own economy or making changes to its economic structure. This also increases the financial risk while it impairs the stability and safety of the tax revenue.”

Source: People’s Daily, February 23, 2014
http://finance.people.com.cn/n/2014/0223/c1004-24436578.html

On February 16, 2014, dahe.cn published an article titled, “China’s Housing Prices Have Quietly Started to Slump; in Some Cities the Sales Volume Has Decreased 50 Percent.” China is facing an economic slowdown, overcapacity, local debt problems, and over-printed currency on the market (leading to inflation and soaring prices). In the next two to three years, the excess housing supply will be the biggest problem. Property sales have decreased in 9 out of 10 cities; some cities’ property sales volume has dropped to half the volume of the previous year. Many banks are preparing for the worst as they predict a drop in housing prices is just around the corner.

Source: Dahe.cn, February 16, 2014
http://news.dahe.cn/2014/02-16/102636587.html