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Economy/Resources - 197. page

State-Owned Enterprises Warned of Upcoming “Winter Conditions”

Shao Ning, Vice Chairman of the State-owned Assets Supervision and Administration Commission (SASAC), recently attended a management conference at which he stated, “After 30 years of rapid development, the Chinese economy has entered a period of contraction. State-owned Enterprises (SOEs) must prepare for ‘winter conditions’ in the next three to five years.” The first time that the SASAC discussed “winter” was last December when Huang Shuhe, a Deputy Director at SASAC warned twice that SOEs must be prepared for tough winter times in the next three to five years. SASAC Director Wang Yong made similar remarks last March. Wang stated that in a grim economic situation, the SOEs "should identify risk points by improving management and alleviating the bleeding.”

A China Entrepreneurs commentator stated that SOEs are not the only ones that must prepare for a cold winter. “Private enterprises, especially mid to small companies, need to do a better job of preparing for winter. When a cold winter comes, these companies will be the hardest hit as their struggle is in the midst of the market.”

Sources:
Xinhua, June 26, 2012
http://news.xinhuanet.com/fortune/2012-06/26/c_112287187.htm
China Entrepreneurs, July 9, 2012
http://www.iceo.com.cn/column/28/2012/0709/252364.shtml

Briefings | | |   Economy/Resources

Forty Three National Enterprises Qualified Finalist of 2012 “Fortune” Global 500

On July 9, 2012. Fortune Magazine published its 2012 "Fortune Global 500" list of companies as ranked by revenue. Seventy-nine Chinese companies made the list, including 73 Chinese mainland and Hong Kong top companies (the other 6 being Taiwanese with the total representing an increase of 12 over the previous year). Of these, 43 were central enterprises (national companies), an increase of five over the previous year.

Of the 43 central enterprises, the China Merchants Bank, the Emerging Jihua Group, the Anshan Iron and Steel Group, China Power Investment, Huadian Group Ltd., and China Power Construction were new companies on the list.

The 2012 "Fortune Global 500" companies required a minimum full-year operating income of US$22.006 billion, an increase of US$2.52 billion over the minimum income for 2011.

Source: Xinhua, July 10, 2012
http://news.xinhuanet.com/2012-07/10/c_112403123.htm

Briefings | | |   Economy/Resources

China Review News: After 30 Years of Rapid Growth, China Faces an Economic Correction

China’s rapid economic growth has relied on the low cost of capital, the low cost of labor, and low environmental costs. However, the “three low economic costs” no longer exist in China. It is difficult to manipulate the financial market to maintain the low cost of capital. Labor costs are increasing. Former Foxconn employees’ continuously committing suicide is an extreme reaction to employees long working hours and low pay. The demand for environmental protection is now high across the country. The protest in Shifang is the most recent example.

From 2007 to 2011, one quarter of China’s GDP came from net exportation, real estate development, and the automotive industry. However, in 2012, due to internal and external factors, net exportation, real estate development, and the automotive industry are all slowing down. After nearly 30 years of rapid growth, China has to face a period of economic correction with low economic growth and welfare.

Source: China Review News, July 9, 2012
http://www.zhgpl.com/doc/1021/6/2/2/102162285.html?coluid=53&kindid=0&docid=102162285&mdate=0709071414

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Xinhua: Wen Jiabao Emphasized the Continuation of Price Control for Housing

Xinhua recently reported that Chinese Premier Wen Jiabao spoke about the housing market during his visit to Jiangsu Province. Wen stated that the government initiated housing market adjustment has reached a key stage and that “the task remains difficult.” He emphasized that it is a long term government policy to suppress speculative investments in the housing market. He also suggested that information regarding the housing market is a bit out of control right now and the general public is still worried about a potential rebound in prices. Wen asked the local governments not to implement new policies that would move the market in a different direction. He also asked the suppliers to adjust product strategies to offer more regular lower-priced commercial real estate in the general market. During his visit, Wen also mentioned the planned reform of the real estate tax system, which is considered part of the control system for the future housing market.
Source: Xinhua, July 7, 2012
http://news.xinhuanet.com/politics/2012-07/07/c_112383129.htm
Briefings | | |   Economy/Resources

SecuTimes: HSBC June PMI Number Reached a 7 Months Low

SecuTimes recently reported that the HSBC released the final June PMI (Purchasing Managers Index) number for the Chinese manufacturing sector, showing it to be 48.2, the lowest in the past seven months. Experts suggested that the number indicates that there has been a continuous decline in the Chinese economy. Some also suggested that this could be part of the process of bottoming out and there might be a small rebound in the third quarter. The National Bureau of Statistics released a similar PMI number, showing it to be 50.2, which was also a 7 month low. PMI is an indicator of financial activity reflecting purchasing managers’ acquisition of goods and services. A PMI number below 50 typically reflects a decline.
Source: SecuTimes, July 3, 2012
http://kuaixun.stcn.com/content/2012-07/03/content_6119446.htm
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CRN: Nearly 70% of the People Cannot Afford Housing

China Review News (CRN) recently reported on a research survey on the housing market. The nationwide survey covered 23 provinces and 4 municipalities that are directly under the central government. The results were that 66% of the people surveyed said that, given the current market prices, they still could not afford housing. Near 60% said they believed that this year is not the right time to buy real estate. The report also showed that the percentages were highly consistent across different regions. However, there was still a high demand nationwide for commercially available real estate. It seemed, however, that this high demand has not turned into actual purchases. After two years of strict government price control of the housing market, 35% of the people surveyed believe that housing prices are “stabilizing.” Meanwhile 29% of those surveyed still believe that prices are “going up.”
Source: China Review News, July 6, 2012
http://www.zhgpl.com/doc/1021/6/0/9/102160963.html?coluid=10&kindid=258&docid=102160963&mdate=0706173845
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China’s Energy Strategies in Light of the Changes in the Global Energy Pattern

On July 3, 2012, China Review News published an editorial discussing China’s energy strategies from the perspective of the current changes in the global energy pattern. The 2012 World Energy Statistics Yearbook showed that China’s primary energy consumption increased 8.8% last year, far exceeding the decline in the level of consumption in developed countries. China’s dependence on foreign oil increases about 3% every year. In 2011, China depended on foreign oil for 56.5% of its usage. Meanwhile, the U.S. energy self-sufficiency rate has been gradually increasing; in 2011, it reached 81.4%.

The article asserted that China must speed up its domestic oil exploration and development in the sea and the western territory. At the same time, China must make full use of energy resources around the world by jointly developing oil and gas resources with the countries in Central Asia, Russia and the Middle Eastern areas. China must also actively study and track major trends in energy technologies and lay a solid foundation in energy technology and innovation.

Source: China Review News, July 3, 2012
http://www.zhgpl.com/doc/1021/5/3/5/102153504.html?coluid=136&kindid=4710&docid=102153504&mdate=0703002045

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CRN: After Making a Big Contribution, China Should have More Rights in the IMF

China Review News (CRN) recently published a commentary on the fact that China made a US$43 billion contribution to the International Monetary Fund (IMF) as a way of helping Europe. The announcement was made at the G20 meeting that was recently held in Mexico. The commentary emphasized that the size of the Chinese contribution is the third largest, after Japan and Germany. However, the country controlling the largest voting share in the IMF, the United States, did not offer a single penny. The author expressed the belief that this is one important means China is using to have more say in the IMF, where the United States has veto power and Europe has chaired the organization for over 60 years. The commentator suggested that some cost may be involved on the side of the emerging countries in the process of changing the “unfair” situation and obtaining more control.
Source: China Review News, June 28, 2012
http://www.chinareviewnews.com/doc/1021/4/9/0/102149081.html?coluid=136&kindid=4710&docid=102149081&mdate=0628001505
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