Economy/Resources - 181. page

On August 21, 2013, 21cbh.com, a professional financial news website under the 21st Century Media Group in Guangdong Province, published an article on the increasing financial black holes in Jiangsu Province. Over 10 heads of bank branches have been removed from their positions or held legally responsibile for financial black holes in the steel trading market. From January to June 2013, the number of bad loans in Jiangsu Province increased by 18.2 billion yuan (US$2.97 billion). By the first half of 2013, the total bad loans belonging to the steel trading market in Jiangsu Province were 21.3 billion yuan (US.3.48 billion), among which, the nonperforming loan (NPL) ratio was 42.3 percent, 23.3 percent higher than it was at the beginning of this year. It is expected that the number of new bad loans will continue to increase.

To effectively resolve the steel trade market’s credit risk, the Jiangsu government recently proposed to repackage bad loans for State-owned enterprises to take over. Some financial professionals have concerns that such repackaging process may change these debts in the financial markets into the taxpayers’ responsibility.

Source: 21cbh.com, August 21, 2013
http://www.21cbh.com/2013/8-21/yONTg5Xzc0NjIyOA.html

The China Tourist Hotel Association published a consolidated report with information from over 2,000 hotels having the level of three stars and above. It included the financial results for the first half of 2013. The consolidated results showed that the average occupancy rate was 53 percent, which was below the breakeven rate of 60 percent. This was down six percent from the same period in 2012. The average hotel revenue was down 8.5 percent; food and beverage revenue was down 17.2 percent; meeting and conference revenue was down 17.8 percent, which was the greatest amount from all areas. The total revenue was down 11.8 percent. The results also suggested that 31.1 percent of the hotels are not optimistic about their business opportunities in the future.

The report stated that China’s hotel and restaurant industry had experienced double digit growth over the past thirty years. The growth rate even exceeded 22 percent over a period of twenty of those years.

The drop in hotel revenue resulted from the following four circumstances. Government entities decreased their spending due to the tightened meals and entertainment policy. Foreign tourism was down five percent due to the world’s economy. The downturn in the stock market had an impact. The government’s misjudgment of the market resulted in an excess supply. This last circumstance was cited as the major reason for the lowered occupancy rates.

Source: People’s Daily, August 18, 2013
http://finance.people.com.cn/n/2013/0818/c1004-22601996.html

Xu Kunlin, an official from the National Development and Reform Commission (NDRC), China’s antitrust enforcement agency, indicated that the next target of antitrust investigations will be closely related to consumers and that petroleum, telecommunications, automobiles, and banks are all in the scope of investigation. In particular, in respect to banks, Xu stated that banks that fix rates will be investigated after the reform of market interest rates. 

Since the beginning of the year, NDRC has conducted antitrust investigations and issued fines to companies producing liquid crystal panels, liquor, milk powder, and gold jewelry. The investigation of automobiles has covered domestically produced vehicles as well as foreign imports. 

Source: Xinhua, August 16, 2013                                                                                             http://news.xinhuanet.com/fortune/2013-08/16/c_125179650.htm

On August 14, the Hurun Research Institute, together with GroupM Knowledge, released the GroupM Knowledge-Hurun Wealth Report 2013. The 40-page research report analyses China’s wealthy people broken down according to their regional distribution across China, as well as their investments, consumption preferences, and how they use the media.

The number of millionaires (defined as individuals with a personal wealth of CNY 10 million, equivalent to US$1.6 million and GBP 1 million) grew by three percent in 2012 to 1.05 million, while the number of the super-rich (defined as individuals with a personal wealth of CNY 100 million, equivalent to US$16 million and GBP 10 million) reached 64,500, up two percent from the previous year. The growth, the slowest in five years, has decelerated for the second consecutive year.

Beijing remains in first place with an increase of 5,000 to 184,000 millionaires, and with an increase of 200 to 10,700 super rich. Guangdong ranks second with 172,000 millionaires and 9,600 super rich. Shanghai follows with 147,000 millionaires and 8,500 super rich.

A quarter of the millionaires say they are very confident about China’s economy in the coming two years, a decline of three percent from the previous year. The confidence level of the year before was 54 percent. Sixty-six percent of the millionaires say they are fairly confident – a two percentage point increase from a year earlier, while nine percent of millionaires say they are not confident – a two percentage point increase from a year earlier. This is the highest number in last three years.

Source: Xinhua, August 15, 2013
http://news.xinhuanet.com/2013-08/15/c_125174202.htm

On August 7, 2013, National Business Daily published an article titled, “Multiple Provinces Foresee Revenue Shortages; Next Year Will Be the Most Difficult Year.” Recently, several local governments held their 2013 first half-year financial work conferences. Local governments found that their revenue growth has decreased to varying degrees, especially in the Mid-West provinces. It is now time for local governments to pay back their debts. According to the National Audit Office of the People’s Republic of China, about 53 percent of local governments’ debts will be due by the end of 2013. Once their debts are due, local governments will have to take out new loans to pay back the old ones. 

Source: National Business Daily, August 7, 2013
http://www.nbd.com.cn/articles/2013-08-07/764217.html
http://epaper.nbd.com.cn/shtml/mrjjxw/20130807/153301.shtml

On August 8, 2013, the State Health and Family Planning Commission of China announced the list of hospitals that have been approved to implement the human organ transplant project. They include the Beijing Union Medical College Hospital and the China-Japan Friendship Hospital, with a total of 165 hospitals nationwide. At present, China has become the world’s second largest organ transplantation country. Each year more than 8,000 transplant surgeries are performed. There is a huge gap between supply and demand. There are about 300,000 organ failure patients each year.