Economy/Resources - 196. page

People’s Daily published an article on the “Chinese Farmers’ Economic Status Report” that The Center for Chinese Rural Studies at Central China Normal University (CCRS) recently released. According to the report, the gini coefficient of China’s rural resident income gap is 0.3949, which is close to 0.4, the international warning standard. A major factor that caused the widening income gap among farmers is their wages, which account for 70% of their per capita income. “The income gap among rural residents represents the gap between workers and peasants and between urban and rural areas."

Source: People’s Daily, August 22, 2012
http://politics.people.com.cn/GB/n/2012/0822/c1001-18798331.html

As China has become the world’s second largest market for luxury goods, the population of young consumers has steadily been growing, particularly when compared to the small number of affluent luxury consumers in Europe and the United States who are mostly over the age of 40. According to the World Luxury Association (WLA), the average Chinese consumer of luxury goods is 15 years younger than the European consumer, and 25 years younger than the American consumer. Ouyang Kun, CEO of the WLA’s China Office, said that more than half of China’s luxury goods consumers have monthly earnings of about 10,000 yuan (US$1,570) with an age between 25 and 28.

“The world’s youngest luxury goods consumers are in China. The vast majority of them received their money from their parents.” said Ouyang Kun. As China’s first generation of entrepreneurs didn’t spend their time enjoying their lives because they were starting and growing their businesses, they then passed that wish on to their children, who now own the best phones, the best bags, and the best pens. A large factor affecting this trend is the way the offspring of millionaires and billionaires compare themselves to others. They use the possession of luxury goods as a way to identify themselves and show themselves off, as well as their family’s wealth and social status, while European and U.S. parents rarely buy luxury goods for their children.

Source: People’s Daily, August, 15, 2012
http://finance.people.com.cn/n/2012/0815/c1004-18745005.html

Three typhoons consecutively slammed 12 of China’s coastal provinces, causing severe damage. The three typhoons hit Jiangsu, Fujian and Zhejiang in the first half of August, delivering strong storms, heavy rains, floods, and landslides. According to the Ministry of Civil Affairs, the typhoons affected 30.84 million people, and caused 51 deaths, while 21 went missing. Over 4.06 million residents were evacuated to other regions; 80,000 houses collapsed with 500,000 houses damaged. The crops on 22.98 million acres of land were hit hard; the crops covering 2.63 million acres were totally ruined, resulting in direct economic losses of 65.5 billion yuan ($10.3 billion).

Source: Xinhua, August 13, 2012
http://news.xinhuanet.com/2012-08/13/c_112712692.htm

On August 14, 2012, Boxun reported that, according to Money Week magazine, since the beginning of August, 23 Chinese concept stocks have been delisted from U.S. stock markets,   .

Those enterprises that are still struggling in the U.S. stock markets are losing money, as their share prices have plunged. As an example of all China concept stocks, VisionChina Media’s share price fell over 96%. The nightmare continues. Those entrepreneurs who still have the "American dream" are the next to get hurt.

Source: Boxun, August 14, 2012
http://www.boxun.com/news/gb/finance/2012/08/201208140802.shtml

China Review News (CRN) recently published an article discussing how China should manage its large foreign exchange reserves. The article started by comparing China with Japan and Germany, two countries that also have large foreign exchange reserves. The ratio of net privately owned assets versus total foreign exchange reserves in Japan is 56%; in Germany it is 86%; and in China it is 50%. The article suggested that China should establish new policies to allow privatization of the ownership of foreign exchange and assets. The author offered four actionable items: (1) establishing a foreign currency based bond market that limits trading to domestic customers; (2) allowing foreign companies to issue bonds in Chinese currency; (3) with some restrictions, allowing domestic residents to invest directly in foreign markets; (4) loosening up the restrictions on Chinese companies’ international investments. The author expressed the belief that a certain level of privatization of foreign exchange reserves will lower the government’s foreign exchange management risks and will also lower the pressure of issuing more Chinese currency.

Source: China Review News, August 6, 2012
http://www.zhgpl.com/doc/1021/9/0/1/102190145.html?coluid=53&kindid=0&docid=102190145&mdate=0806070937

Qiu Shi, a magazine of CCP Central Committee, recently published an article discussing the direction in which China’s economy is headed, given the background of the global downturn. The author expressed the belief that, although the global economy seems to be recovering slowly, the long term expectations are that it is moving in a negative direction. The world economy currently is a mixed bag of a number of pros and cons, such as uncertainty in Europe, lowered global inflation, capital outflows in emerging countries, and global investments shrinking in value. Impacted by the world economy, China faces some challenges: (1) the high pressure of a downturn; (2) small businesses are still struggling; (3) food prices are fluctuating significantly. The author suggested that China should take positive actions: (1) government investments should continue; (2) the government should support strategic new industries; (3) Mid-Western provinces will have more growth based on industries that have moved from the east; (4) domestic consumer spending should be encouraged; (5) second half imports and exports will speed up. The article concluded that the Chinese economy still has hope despite its difficulties.

Source: Qiu Shi, August 2, 2012
http://www.qstheory.cn/jj/jjyj/201208/t20120803_174163.htm