Economy/Resources - 177. page

On October 21, 2013, Qilu Evening News (http://www.qlwb.com.cn/), the biggest official newspaper in Shandong Province in the People’s Republic of China, published an article commenting on reports that “Property Prices Will Collapse,” a message currently circulating on the Internet. According to this message, the Chinese Communist Party Central Committee has sent out an internal early warning that property prices in 15 cities, including Qingdao and Yantai in Shandong Province, will collapse. Most of the 15 cities are on the east coast of China.

The Qilu Evening News article challenged the credibility of the Internet message by listing a series of statistical data, including the data released by the National Bureau of Statistics of China, which has shown a steady increase in property prices in China, particularly in Qingdao, Yantai, and on the east coast. 

Source: Qilu Evening News, October 21, 2013
http://epaper.qlwb.com.cn/qlwb/content/20131021/ArticelA15002FM.htm?jdfwkey=0quvp3

The Beijing Municipal Party Committee recently passed an emergency air pollution plan. It assigned blue, yellow, orange, and red colors to measure different pollution levels in the air. If it is a “red” level, schools will be closed and if it is a red and orange level, manufacturing plants will be shut down, no firecrackers can be lit and no outdoor BBQ and burning of garbage, leaves, or stalks will be allowed. City law enforcement organs are instructed to carry out the emergency plan.

Source: Xinhua, October 18, 2013
http://news.xinhuanet.com/edu/2013-10/18/c_117766414.htm

Shanghai Securities News reported on October 17 that the national audits of local governments’ debts are coming to an end and that such debts are estimated to be as high as 24 trillion yuan, which amounts to 40 percent of GDP. 

China’s State Council, the country’s cabinet, recently issued a document to tackle the overcapacity in a number of industries including cement, electrolytic aluminum, sheet glass, shipping, and steel.

The Guideline for Tackling Serious Production Overcapacity lists eight tasks in each sector: forbid expanding the capacity of new projects; clear up illegal capacity; eliminate outmoded capacity in an orderly way; promote mergers and the restructuring of enterprises; develop effective domestic demand; expand the international market and expand foreign investments and cooperation; make breakthroughs in technologies and strengthening enterprise innovation; facilitate innovation in government management and create a fair environment for improvement of the market mechanism.

Source: Xinhua, October 15, 2013
http://news.xinhuanet.com/2013-10/15/c_117726958.htm

The debt crisis in the U.S. and Europe has given China new opportunities to merge and acquire foreign enterprises. According to China Review News on October 13, 2013, China has become one of the five largest capital exporting countries in the world. In 2012, Chinese investors invested directly in 4425 overseas companies located in 141 countries and regions with accumulated non-financial direct investments of US$77.22 billion, an increase of 28.6 percent over the previous year. In this new situation, China’s future cross-border mergers and acquisitions show the following trends:

1. Since many countries view state-owned enterprises’ mergers and acquisitions as politically motivated commercial activities, more private enterprises are engaging in cross-border mergers and acquisitions.
2. China’s demand for energy resources is growing rapidly. Of 45 types of bulk minerals that China needs for its development, by 2020, China will achieve self-sufficiency with only 6 of these types. China’s thirst for resources will drive China’s enterprises to get involved in cross-border mergers and acquisitions in more and more diverse industries (finance, IT, and tertiary industries) on a global scale, with the focus on oil, gas, mining, and chemical industries.
3. In order to be effective in avoiding the high risks of the cross-border mergers and acquisitions, China has used and will continue to use the world’s leading professional intermediaries and foreign lawyers to provide consulting services throughout all of the acquisition processes.
4. To merge and acquire advanced technology enterprises in developed countries is a shortcut to using legal means to obtain core technology from foreign countries. Therefore, China’s cross-border mergers and acquisitions will be mainly technology-oriented.
5. To reduce acquisition costs, China will take full advantage of local capital in the foreign markets through the acquisition of listed companies for financing and will directly or indirectly attract investments in foreign capital markets.
6. China will send its management teams to the merged companies overseas and will conduct post-merger cultural integration for the purpose of taking corporate control while maximizing the value of the acquired companies.  

Source: China Review News, October 13, 2013
http://www.zhgpl.com/doc/1027/9/3/7/102793724.html?coluid=53&kindid=0&docid=102793724&mdate=1013071942