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Economy/Resources - 188. page

People’s Daily: RMB Appreciation Hits New Highs

People’s Daily recently reported that the Chinese currency (RMB) exchange rate reached a new high in ten of the trading days in April. This was the largest round of appreciation since 2005. The appreciation level so far this year was over six times more than the level of the entire last year. However, the report expressed the belief that, based on the basic data of the Chinese economy, this round of RMB appreciation seems to be overheated. The State Administration of Foreign Exchange recently announced regulations to tighten up control over foreign exchange inflow. This move effectively cooled down the inflow of hot money, which was widely considered to be the result of the monetary “easing” policies of Japan, the U.S., and the European Union. Experts suggested that the appreciation may become an obstacle for Chinese exports and that the RMB has room for depreciation.
 
Source: People’s Daily, May 11, 2013
http://theory.people.com.cn/n/2013/0511/c40531-21447088.html
Briefings | | |   Economy/Resources

Nanfang Daily: State Council Considering Individual Overseas Investment System

Nanfang Daily, a daily newspaper based in the City of Guangzhou, recently reported that the State Council Executive Meeting discussed a plan to open the option for individuals to invest directly overseas. Currently only some approved organizations (QDII) are permitted to make direct overseas investments. A plan for direct individual investments to be made into the Hong Kong stock market was attempted in 2007, but was called off. It was decided that a new international investment system for individuals will be established with a carefully designed protection mechanism for medium and small investors. A clear plan for opening up capital accounts was also discussed at the Executive Meeting. The French bank Societe Generale recently released a report pointing out that, based on a series of steps the Chinese State Council took, “a five-year road map to a freely exchangeable Chinese currency (RMB) is very clear.” The Hong Kong Stock Exchange is expected to be the biggest winner of these new policies. 
Source: Nanfang Daily, May 8, 2013
http://news.nfdaily.cn/caifu/content/2013-05/08/content_68409983.htm
Briefings | | |   Economy/Resources

CASS: Imbalance in Housing Market, Price Hikes to Continue

According to the National Bureau of Statistics, for the month of March 2013, 68 out of the 70 cities across the country saw housing prices rise higher than the previous month. A report, released by the Chinese Academy of Social Sciences (CASS), pointed to the observation that overall prices of real estate rebounded after the State Council’s February measures to curb housing prices. The report warned of the fact that supply and demand in the housing market are out of balance and that prices face the danger of getting completely out of control.

The industry generally believes that, by adopting means under a planned economy to handle commercial residential real estates driven by market forces, the government has moved on the wrong direction in its current real estate market regulation policy.

In analyzing the causes of the current round of price increases, Bowen Xi, a manager at a real estate company, mentioned three main factors. The first is the fiscal pressure of local governments. At present, only Beijing city has implemented the 20 percent transaction tax; other cities are looking for ways to circumvent it. Second, on a long-term basis, what determines the housing price is supply and demand. There are still large numbers of people who do not have a house. Due to urbanization, for a long period of time, many people have been moving into cities. Third, China’s prices are also affected by the monetary policy of the Western countries. Quantitative easing of western currencies will result in an issuance of more RMB to the market, causing an increase in the price of assets.

Source: People’s Daily, May 7, 2013
http://house.people.com.cn/n/2013/0507/c164220-21385112.html

Briefings | | |   Economy/Resources

People’s Daily: Four Challenges to Upgrading Industrial Structure

The China Center for International Economic Exchanges, headed by former Chinese Vice Premier Zeng Peiyan, issued a report on the transformation of China’s industrial structure. The report concluded that China faces four challenges to upgrading its industrial structure: the lack of key technology, the pressure from international competition, the pressure on employment, and structural and institutional obstacles.

As China has grown to be the world’s manufacturing powerhouse, it has had to rely on imports for many of its key technologies, large complete groupings of equipment, core components, and important basic elements.

Internationally, the United States, Japan, France, and other countries have proposed and implemented a "remanufacturing” strategy. Developing countries such as China, India, Brazil, and South Africa have, one by one, entered into accelerated industrialization, causing sharp price hikes in energy and other resources. All of this has gradually diminished China’s competitiveness.

How to upgrade the industrial structure without losing jobs is a challenge. Expanding the service industry is necessary to resolve this problem.

Finally, China must deepen reform to provide structural and institutional assurance to the upgrading of its industrial structure.
 
Source: People’s Daily, May 6, 2013
http://scitech.people.com.cn/n/2013/0506/c1007-21372018.html

Briefings | | |   Economy/Resources

BBC Chinese: EU Planning Punitive Tariffs against Chinese Photovoltaic Products

BBC Chinese recently reported that the European Union is preparing to impose punitive tariffs on photovoltaic products imported from China that are worth billions of dollars. It is widely expected that these trade protections will anger China. The EU is trying to protect key European vendors such as the German company SolarWorld. The Chinese government has already said that China will not remain quiet and have no reaction. The output of Chinese photovoltaic products quadrupled between 2009 and 2011. Products made in China currently occupy 80 percent of the EU market. The EU market is half the size of the global market, which is worth $77 billion. The EU Trade Commission is getting ready to implement the anti-dumping measures; it claims there is sufficient evidence to support this action. 
Source: BBC Chinese, May 3, 2013
http://www.bbc.co.uk/zhongwen/simp/world_outlook/2013/05/130503_eu_china_solar.shtml
Briefings | | |   Economy/Resources

People’s Daily: 60+ Population to Exceed 200 Million in 2013

China’s Vice Minister of Civil Affairs in Beijing recently said that, for a long period of time, China will be facing the serious challenge of having an aging population. As of the end of 2012, the population of elderly who were 60 years and above had reached 194 million, accounting for 14.3 percent of the total population. That figure is expected to exceed 200 million in 2013, 400 million by 2034, and 472 million by 2054.

According to statistics, China currently has 36 million elderly who are disabled, 22 million who are of an advanced age, 99 million who live alone, and 23 million who are living in poverty.

Source: People’s Daily, May 2, 2013
http://cppcc.people.com.cn/n/2013/0502/c34948-21342382.html

Briefings | | |   Economy/Resources

People’s Daily: Top Ten Companies That Suffered Large Losses are State Owned

People’s Daily recently reported on the final 2012 annual reports of publicly traded companies. Of those companies that suffered the largest losses, the top ten are all state-owned. These ten companies had total losses of RMB 50 billion (US$8.11 billion). They received a total of RMB 57 billion (US$9.25 billion) in government subsidies last year as well. The number one loser was China Ocean Shipping (Group) Company (COSCO), which reported a loss of RMB 9.56 billion (US$1.55 billion). The second and the third were Aluminum Corporation of China (CHALCO) and Metallurgical Corporation of China (MCC); they lost RMB 8.23 billion (US$1.33 billion) and RMB 6.95 billion (US$1.13 billion), respectively. Five of the top ten were steel companies, led by Anshan Iron and Steel, which lost RMB 4.16 billion (US$670 million). All these companies blamed the downturn in the market for their losses. However, based on a deeper study of the reports, many state-owned companies spent a large amount of money in different industries, instead of their primary ones. They especially suffered heavy losses in their stock market investments.
Source: People’s Daily, April 28, 2013
http://ccnews.people.com.cn/n/2013/0428/c141677-21313410.html
Briefings | | |   Economy/Resources

Iron and Steel Industry: Supply Exceeds Demand with High Cost and Low Profit

According to the China Iron and Steel Association, the sales for China’s Iron and Steel industry were up 0.94 percent to 875.8 billion yuan (USD$142 billion) in the first quarter of 2013, compared to the same period last year, while its first quarter profit reached $2.486 billion yuan (USD$400 million). Monthly profits in Q1 declined, with 1.3 billion (US$210 million) in January, 998 million (US$162 million) in February, and 267 million (US$42 million) in March. These figures suggest that, while the production volume remains high, it exceeds the weaker market demand. Predictions are that the overall iron and steel market will improve over last year. However it will continue to operate at a high cost and with low profit.

Source: People’s Daily, April 28, 2013
http://finance.people.com.cn/n/2013/0428/c1004-21312705.html

Briefings | | |   Economy/Resources