Economy/Resources - 191. page

In Beijing on December 4, 2012, the CCP Central Committee’s Political Bureau held a meeting on the economic work to be done in 2013. The result of the meeting was that China will continue to strengthen its control over real estate pricing.

The meeting set the direction for the year 2013 as follows: maintain the continuity and stability of macro-economic policies and apply appropriate precautionary adjustments and micro adjustments to the economy; try to expand domestic demand and continue strict control over over-production; maintain the stability of the general price level and regulate market prices and fee structures; improve people’s living standards and strengthen control over real estate pricing.

Source:
Huanqiu, December 4, 2012.
http://china.huanqiu.com/politics/2012-12/3344280.html

On December 4th, 2012, Xinhua published an article on how widespread private lending has become in China. Many small and medium sized enterprises borrow money using private financing. Recently, the Public Security Bureau in Zhangzhou City, Fujian Province issued a warning to alert the people about “illegal funding activities.” One recent incident of “illegal funding" involved up to 80 million yuan.

Source: Xinhua, December 4, 2012
http://news.xinhuanet.com/2012-12/04/c_113895746.htm

On November 20, 2012, Qiushi Theory, a periodical on political theory published by the Central Committee of the Chinese Communist Party and the CCP Central Committee school, reprinted an article from Ziguangge (cpc.people.com.cn), a periodical under People’s Daily, having the title, “Boosting Consumption Is the Fundamental Way for China to Get Out of Its Economic Predicament”.

According to the article, China’s economic growth rate has fallen over the past several quarters. The period of the export-led economy may be over. Therefore, China’s economy must shift from excessive dependence on external markets to production for the domestic market. China’s Ministry of Commerce has established a goal in its 12th Five-Year Plan of having around a 15% average annual increase in total retail sales of consumer goods so as to reach the goal of 32 trillion yuan by 2015.

Source: Qiushi Theory, November 20, 2012
http://www.qstheory.cn/jj/jjggyfz/201211/t20121122_195708.htm

On December 3, 2012, Radio Free Asia published an article titled “Some Foreign Companies in China Are Alleged as ‘Sweatshops.’” According to a report released by “China Labor Watch,” a non-governmental organization with headquarters in New York City, Mattel company and other foreign enterprises in China have become “sweatshops.”  The article said that Mattel, the world’s largest toy manufacturer, has four factories in China. Its workers often have to work overtime, sometimes up to 113 overtime hours per month. This is considerably more than the overtime hours allowed by law.

Source: Radio Free Asia, December 3, 2012
http://www.rfa.org/mandarin/yataibaodao/nu-12032012155429.html

China Review News (CRN) recently published a commentary about the issue of reforming the system for the redistribution of wealth, which has been identified as a focal point of public opinion. The commentary suggested that a breakthrough will be required in five areas to solve the problem of the unfairness in the distribution of wealth: (1) First-time distribution needs to avoid the sharp differences that exist between the company’s growth versus wage growth and between management income versus the income of the average worker. (2) The process needs to include the growth of government income versus the growth of citizen’s income. (3) The reform must solve the root cause of “gray income” and corruption. (4) Enhanced tax system reform is required to improve the balancing function of taxation. (5) The average citizen’s income level should be raised when the job market expands. The commentary also called for protecting China’s middle-class population. The author concluded that reform is not a simple matter. Instead, it requires adjustments in the political, economic, legal system, and cultural areas.

Source:China Review News, November 29, 2012
http://www.zhgpl.com/crn-webapp/doc/docDetailCreate.jsp?coluid=53&kindid=0&docid=102320766&mdate=1129080126

According to Zhang Monan, a researcher from the Economic Forecast Department of the State Information Center, China faces difficulty maintaining the economic growth it has experienced over the past 30 years. Since the beginning of this year, China has seen an overall decline in investments, exports, and spending as well as in company’s profit margins, revenue, and production volume.

Zhang believes that China no longer has the advantage of being a low cost and narrow margin market. She suggested that reforms should start with breaking up the monopolies in energy resources and in the power structure; adjustments need to be made in the existing interest groups in China; government intervention should be minimized; and collaboration among all channels must be encouraged in order to work together to find a model that is suitable.

Source: China News Review, December 1, 2012
http://www.zhgpl.com/crn-webapp/doc/docDetailCreate.jsp?coluid=45&kindid=0&docid=102323382&mdate=1201090425

An article in Beijing Times reported on a scholar who criticized the low and inadequate compensation for land acquisition. The scholar said it was a major problem with China’s current massive land seizures. The compensation that local governments give when they grab land from farmers is very low. Then they sell it to developers at a price ten or dozens of times higher, leading to acute social conflicts.

Zheng Fengtian, a professor at Renmin University of China said that the major problem with China’s rural land acquisition is that the standard for compensation is too low. A survey conducted by the Development Research Center of the State Council found that 40 to 50 percent of the value-added part of land acquisition goes to investors, 20 to 30 percent goes to the local government, 25 to 30 percent goes to the village organizations (grassroots government body), and the farmer who sold the land receives only 5 to 15 percent of the entire pie.

Zheng added that the huge amount of revenue that local governments receive gives them a fervent appetite for grabbing land and reselling it, resulting in massive and rapid use of arable land for non-agricultural occupation. Since 1990, China has been suffering an average loss of 10 million mu (1 mu equals to 667 square meters) of arable land per annum.

Source: Jinghua Times, November 29, 2012
http://news.jinghua.cn/351/c/201211/29/n3814339.shtml

On November 24, 2012, China Review News published an article titled, “The Fiscal Pitfall of Urbanization.” According to the article, the rapid urbanization in China, which relies on land sales and financing (borrowing money), may lead to a big debt crisis.

Source: China Review News, November 24, 2012
http://www.zhgpl.com/doc/1023/1/5/4/102315497.html?coluid=53&kindid=0&docid=102315497&mdate=1124082302