Economy/Resources - 187. page

The year 2013 has seen the largest number of college graduates since 1949. With 6.99 million new graduates, there were 190,000 more that last year. However, the rate of employment for these graduates is less than 30 percent. In fact, a large number of small and medium sized enterprises (SMEs) need college students, but many students do not want to work at SMEs.

Zhang Weiying, a prominent Chinese economist and  head of the Guanghua School of Management at Beijing University, attributed the mismatch in the Chinese job market to the ingrained notion that only a job at a state-owned enterprise (SOE) is secure; it is called the "iron rice bowl," whereas a job with a private enterprise is only good for a temporary situation. Zhang believed that the government has set up a large number of SOEs; they receive more resources and better treatment than private enterprises. If SOEs did not have such an identity, employment opportunities would be relatively fair and students would not have to pick and choose.

A media survey found that many students use personal connections to hunt for jobs at SOEs. Many employers’ hiring decisions are based upon the applicant’s connections rather than their capabilities. The students who get into SOEs through personal connections create a new form of nepotism. Beijing News conducted a recent survey which showed that about 21.5 percent of those surveyed admitted this regarding the question, "Have you used personal connections when looking for a job?"

Source: Beijing News, carried by Caijing magazine, May 30, 2013
http://economy.caijing.com.cn/2013-05-30/112843978.html

On May 22, 2013, 21cbh.com, a professional financial news website under the 21st Century Media Group in Guangdong Province, published an article titled, “The Source of China’s Financing Chaos.”

According to the article, a large number of small and medium enterprises have two or even more sets of financial records, one of which is used only for applying for bank loans. However, this set of financial records is not accurate in presenting the true financial situation of the enterprise. As a result of this practice, banks and trust companies would rather lower their interest rate for large enterprises than lend money to the small and medium enterprises.

Source: 21cbh.com, May 22, 2013
http://www.21cbh.com/HTML/2013-5-22/4MMDM2XzY4OTQ4MQ.html

Yi Xianrong, a Research Fellow at the Institute of Finance and Banking under China’s Academy of Social Sciences (CASS), stated that once the control of real estate is relaxed, the Chinese economy will be dead. Yi made the remarks in response to reports that the central government may relax its control of the real state sector. “China’s housing market has been very high even under the tight controls. If the controls are relaxed, there is no doubt that the economy will be dead. Once the bubble bursts, the Chinese economy will not be salvageable whatsoever.”

Source: Sina.com, May 24, 2013

http://news.sina.com.hk/news/20130524/-9-2976740/1.html

Study Times published an article wiritten by Han Kang, Associate Dean of China’s National School of Administration, on the subject of the high risk involved in the urbanization process. Han stated in his article that one of the biggest risks in China’s urbanization is the conflict between the urban and rural regions.

During the seven years from 1996 to 2003, the land cultivated in China dropped from 1.95 billion mu to 1.85 billion mu, about a reduction of 5.124 percent. This was the sharpest drop since the open door reform. During the same period, the employment rate for the agricultural sector remained stable at 49 to 50 percent, with almost zero change.

According to Han, during the process of urbanization, many cities have been putting a lot of effort into developing high-end infrastructure, such as luxury high rises and high-end industrial sectors. The government’s encouragement has played a significant and effective role and has led to extreme high-end urban development without any necessary constraints. Han pointed out that a majority, not a minority, of governments are pursuing this end and are competing with each other in the pursuit of increased high-end urban development."

Source: Study Times reprinted by People’s Daily, May 21, 2013.
http://theory.people.com.cn/n/2013/0521/c49154-21554168-2.html

On May 14, 2013, Radio Free Asia published an article on China’s Debt-to-GDP Ratio titled, “China’s Total Debt Is 107 Trillion; the Ratio of Debt-to-GDP Exceeds 100 Percent.” According to the agency CLSA Asia-Pacific Markets, China’s debt–to-GDP ratio will reach 245 percent by 2015. In 2012, China doubled its new debt ratio as compared to 2011. The debt-to-GDP ratio reached 110 percent in 2012 with new debt growth of 58 percent, 2.9 times more than the GDP growth.

According to Zhang Yaochang, General Manager of the CLSA Hong Kong Policy Research Department, “In fact, it requires a large amount of debt to support GDP growth. China is now addicted to borrowing. If debt levels keep growing at this rate, it will not be sustainable.”

Source: Radio Free Asia, May 14, 2013
http://www.rfa.org/mandarin/yataibaodao/jingmao/nu-05142013145422.html?searchterm=%E4%B8%AD%E5%9B%BD%E5%80%BA%E5%8A%A1%E6%80%BB%E8%A7%84%E6%A8%A1107%E4%B8%87%E4%BA%BF+%E4%B8%8EGDP%E6%AF%94%E5%B7%B2%E8%BE%BE100%25%E4%BB%A5%E4%B8%8A

On May 17, the State Audit Office published the results of an audit conducted from May to September 2012 on 1,139 energy projects. The projects, launched in 2010 and 2011, had the purpose of reducing energy consumption. The audit results showed that, out of the 1,139 projects, 44 projects, involving expenditures of 1.587 billion yuan (US$258 million), did not reach their goal of reducing energy consumption. The study also found that 270 million yuan (US$44 million) of project funding had been mishandled.

Source: Xinhua, May 17, 2013
http://news.xinhuanet.com/politics/2013-05/17/c_115811024.htm