Economy/Resources - 189. page

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

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

Zou Dongtao from China’s Central University of Finance and Economics published an opinion piece in which he discussed six potential risks underlying the stability of China’s economy and warned that these risks cannot be ignored.

Zuo stated that the foundation of economic stability is not solid and that conflicts in economic operations are accumulating. The potential risks are in the follow areas:

1. Marginal efficacy of investment is diminishing. With investment interests lacking and more investment needed to maintain the current economic growth, the investment-driven economic model is not sustainable.

2. Production capacity surplus is increasing. In the first quarter of this year, over a third of the businesses in textiles, paper, synthetic fiber, nonferrous metal, ferrous metal, and steel indicated that they have serious over-capacity.

3. Consumption of electricity in manufacturing and railroad cargo volume remain low, showing slow industrial growth.

4. The money supply demonstrates fast growth while businesses have “anemia.” Although M2 reached one trillion yuan, many enterprises are short on cash flow.

5. The revenue of the central government shows a negative growth and local government debts show increasing risks. Compared to same period last year, the central government’s revenue decreased by 5.2 percent.

6. Mid and small sized businesses continue to face serious issues. According to a recent survey of Chinese enterprises, on the most difficult issues businesses ranked the problems as follows: “labor costs rising” (78.3 percent), “excessive burden of social security and taxes” (56.2 percent), and "profit margin too low” (45.3 percent). 

Source: jrj.com.cn (Financial Sector), April 24, 2013
http://opinion.jrj.com.cn/2013/04/24073415253621.shtml

Xu Xiaonian, economist and professor at the Sino-Europe International Business Institute, commented about China’s economy. Xu said that nobody, including entrepreneurs, has a sense of security when “the state advances as the private sector retreats.”

During a public event on April 21, Xu said that the most valuable resource in a country’s economic development is its entrepreneurs. It is an imperative task for the Chinese government to consider how to keep these entrepreneurs in China. Xu said, “(The Authorities) cannot do things in the style of the Cultural Revolution – when the authorities could detain people and confiscate (private) property at will. To do so will destroy people’s sense of security. (Entrepreneurs) will not only emigrate overseas, they won’t even have any investment plan inside China.”

The Hurun Rich List 2012 showed that 44% of the rich people in China are considering emigrating overseas; 16% have already emigrated or in the process of emigration.

Source: BBC Chinese, April 22, 2013
http://www.bbc.co.uk/zhongwen/simp/china/2013/04/130422_china_rich_immigration.shtml

According to an article in China Review News on April 23, 2013, broad money supply (M2) in China has increased quickly. It reached 103.61 trillion yuan in March of 2013. China’s M2 stock and incremental has jumped to the first in the world. This does not match China’s status as a developing country. Currently, China‘s GDP accounts for only a quarter of the world‘s total. An excess money supply will only lead to inflation.

Source: China Review News, April 23, 2013

http://www.zhgpl.com/doc/1025/1/2/2/102512217.html?coluid=53&kindid=0&docid=102512217&mdate=0423080551