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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
Briefings | | |   Economy/Resources

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
Briefings | | |   Economy/Resources

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

Briefings | | |   Economy/Resources

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
Briefings | | |   Economy/Resources

Cancer Village in Shaoyang: Over 30 Died of Cancer in 10 Years

Yuxi is a small village from She-tian-qiao Town of Shaodong County. It used to be famous for the high quality of its chestnuts and radishes. Now no one wants the chestnuts and radishes from Yuxi. Since 2003 more than 30 people from Yuxi have died from cancer. Previously, cancer was very rare in the village. The villagers believe that this change started when the Xinlong glassworks factory moved to the village.

A reporter observed that the factory was near the village’s farmland. Almost everything within eyesight was contaminated by the pollution from waste water having a dark-black color. Villagers told reporters that, after Xinlong built the factories, highly polluted sewage water was discharged into the river almost every day.

Since 2007, the villagers have been collecting a lot of evidence that Xinlong glassworks illegally discharged sewage. They reported the discharge to the environmental protection department, but never got a reply.

Villagers went to the Shaodong EPA to appeal. Wang Xiran, head of Shaodong EPA, told them, “Xinlong glass factory does have pollution, but with the tens of millions they produce each year, it is not something we can close just because we want to."

Source: Xinhua, June 28, 2012
http://news.xinhuanet.com/politics/2012-06/28/c_123342343.htm

Briefings | | |   Economy/Resources

China Academy of Science Found Misusing Rearch Funds

In 2011, the Institute of the state owned China Academy of Science (CAS) distributed morale and welfare benefits to employees using program funds in an amount totaling almost 100 million yuan. Liu Jiayi, Auditor General of the National Audit Office of China, indicated that, in 2011, nine CAS institutes were found to have engaged in such practices, including the following institutes:

The Institute of Geographic Sciences and Natural Resources Research: 25.68 million yuan
The Institute of Zoology: 20.06 million yuan
The National Space Science Center: 17.07 million yuan
The Institute of Biophysics: 12.78 million yuan (from 2009 to 2011)
The Academy of Mathematics and Systems Science: 8.4 million yuan
The Institute of Electronics: 7.3 million yuan
The Institute of Psychology: 1.8 million yuan

Source: China Business, June 28, 2012
http://www.cb.com.cn/1634427/20120628/390263.html

Briefings | | |   Economy/Resources

CRN: State Owned Companies’ Profits Are Declining

China Review News (CRN) recently published a report on the Ministry of Finance’s newly released numbers. The numbers showed that, during the period from January to May, the total profit of all state-owned companies declined 10.4% compared to the same period last year. The monthly decline from April to May was 11.8%. The Ministry expected a continuation of the decline in the near future. The report expressed the belief that the main cause of the decline was the combination of a weakened international market and low domestic demand. The domestic consumer market is very weak due to higher living costs. Another reason for the profit decline mentioned in the report was the disappearing benefits that resulted from the earlier large stimulation package that the government initiated after the global financial crisis started in the U.S. The report also identified three operational issues: (1) state-owned companies actually had a total income increase while suffering a total profit decline; (2) internal costs such as wages increased rapidly; (3) only companies with monopoly power saw their profits increase.
Source: China Review News, June 19, 2012
http://www.zhgpl.com/doc/1021/4/4/9/102144962.html?coluid=53&kindid=0&docid=102144962&mdate=0619075811
Briefings | | |   Economy/Resources

Outlook Weekly: How to Reform China’s Financial Safety System

Outlook Weekly, a weekly magazine under Xinhua, recently published an article on the way to establish a new system to ensure China’s financial safety. The article identified four major relationships to focus on: (1) the relationship between financial risks and economic development; (2) the relationship between financial openness and financial protection; (3) the relationship between financial freedom and government monitoring and administration; (4) the relationship between speed versus profit, and scale versus quality. 
The article discussed six strategic components of financial safety: (1) controlling the risk in international capital flows; (2) enhancing financial monitoring and administration; (3) coordinating currency policies; (4) examining the goal of currency exchange rate policies; (5) reforming foreign currency management; (6) adjusting international payment balances. 
The article called for four operational actions: (1) adjusting the government’s role; (2) developing a new financial theory to handle the new situation; (3) ensuring financial stability; (4) deploying new risk control measures.
Source: Outlook Weekly, June 4, 2012
http://news.sohu.com/20120604/n344722898.shtml
Briefings | | |   Economy/Resources