Economy/Resources - 177. page

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  

21st Century Business Herald reported that local governments have revised downward the forecasts of their economic growth. One reason is that the targets were set too high. Shanghai was the only one that had the same target rate as the national forecast of 7.5 percent. All other regions had much higher targets. 

Guangming Daily carried an article stating that, according to the statistics published by the China Index Academy, in September 2013, the average increase in housing prices for 100 cities in China was 10,554 yuan (US$1,724) per square meter, up 1.07 percent from August. According to the article, this was 16th consecutive month that saw an increase. The average increase in 10 large cities, including Beijing and Shanghai, was 18,179 yuan (US$2,930) per square meter, up 13 percent compared to the same period last year. The article stated that, of those 10 cities, Beijing had the highest increase. It also pointed out that, while the housing prices for the first tier cities kept increasing, the prices in third and fourth tier cities have  remained relatively stable and are not expected to see much fluctuation in the future..

Source: Guangming Daily, October 2, 2013
http://politics.gmw.cn/2013-10/02/content_9076291.htm