Economy/Resources - 197. page

According to the Ministry of Human Resources and Social Security, at the end of June, the minimum wage was adjusted upwards in 16 provinces and cities. The increase averaged 19.7 percent over 2011. Currently Shen Zhen has the highest monthly minimum wage of 1500 yuan per month, while Beijing has the highest minimum hourly rate of 14 yuan per hour.

According to Su Hainan of the Committee on Labor Compensation of China’s Labor Association, the increase in 2012 was less than the 22 percent increase of 2011 over 2010, but it was still within expectations. Su said, “The standard of the minimum wage is a double edged sword. If it increases too slowly, it will affect worker’s basic living standards, but if it increases too fast, it will have a negative effect on the economy, especially now that we have a labor surplus compared to market demand.”

Currently the standard minimum wage varies greatly between regions; the minimum wage is still determined by each local region. Su observed, “In the long term, the fundamental solution is to resolve the unbalanced economic development between regions by investing more and promoting economic development in those regions that are behind, such as the middle western region.”

Source: Xinhua, July 29, 2012
http://news.xinhuanet.com/politics/2012-07/29/c_123487285.htm

On July 20, 2012, Qiushi, a journal of the Central Committee of the Chinese Communist Party (CCP), reprinted an article from the China Jinggangshan Executive Leadership Academy Journal titled “Beware of the Real Economy Being Virtualized.” The real economy, which refers to the production and service sectors, is declining in China due to higher costs (of goods and labor), heavy taxes, overcapacity, limited investment, financing problems, and a lack of innovation.

However, the virtual economy is overly booming in China due to the huge returns from real estate, the stock market, the futures market, coal resources, antiques, art works, financial products, loan sharking, and the speculative markets for some agricultural products. Such a phenomenon poses a significant potential risk for sustainable economic development in China. In analyzing the main reasons behind the virtualization of the real economy, the article’s writer proposed some solutions for improvement.

Source: Qiushi, July 20, 2012
http://www.qstheory.cn/jj/xsdt/201207/t20120723_171534.htm

China News Review published an opinion article about China’s current economic environment. According to the article, from July 13 to 15, Premier Wen Jiabao visited Chengdu City in Sichuan Province, where he held a forum on the current economic climate in Henan, Hunan, Guangxi, Sichuan and Shanxi provinces. According to Wen, China’s economic growth rate is in a steady and stable state and still within the expected target set at the beginning of the year. However, the current economic climate is not showing signs of improvement. The economic difficulties are expected to continue for an extended period of time.

China News Review cited figures that the Ministry of Statistics published, saying GDP for the first half grew 7.8 percent, down from 8.1 percent in the first quarter. GDP for the second quarter grew 7.6 percent, falling below 8 percent for the first time in three years. The official June Purchasing Manager’s Index reached 50.2, an indication that there is still growth in the manufacturing sector. The article stated, “The statistics for the second quarter suggest that China’s economy is facing tougher challenges than expected and will not see signs of recovery very soon.”

Source: China News Review, July 17, 2012
http://opinion.china.com.cn/opinion_14_46714.html

On July 17, 2012, the National Work Force Employment Conference was held in the Great Hall of the People in Beijing. Premier Wen Jiabao attended the conference and spoke on labor issues. He stressed the importance of creating job opportunities and noted that it is a top priority to protect and secure people’s livelihoods. Wen asked all levels of government bodies to gain a better understanding of the urgency. He also recognized that the current and future job market faces more complicated and serious challenges and said that a bigger effort was needed to create more job opportunities.
 
According to official statistics, in urban and rural areas, a total of 98 million new employment positions were created between 2003 to 2011. Among those 40 million were for college graduates, 30 million were for workers from state-owned enterprises who had been laid off, and 28 million were for laid off workforce who had re-entered the work force. By the end of 2011, the total number of peasant workers had reached 250 million, up by 139 million from 2003. Each year, there are a total 12 million professional workers taking middle to advanced vocational education classes and 150 million taking training courses.

Source: Xinhua, July 18, 2012
http://news.xinhuanet.com/2012-07/17/c_112460838.htm

An 18-year-old mechanical processing company in the Pearl River Delta is facing difficulties just trying to survive. The head of the company posted a message on the Internet to complain about his situation. The message went viral on the Internet because it resonated with so many others. From the message, one can gauge the many problems that the company faces: The extremely narrow financing channels, rapidly increasing labor costs, a high tax burden, asset bubbles and inflation, and gray expenditures (money that must be spent "under the table"). The company is an individual case. However, it resonated with many others because private enterprises face a similar plight.

In recent years, due to the banks reluctance to lend, private enterprises have had to turn to loan sharks; raise their employees pay; in spite of structural tax cut calls, "decreases" have gradually, to the contrary, resulted in de facto "increases"; rising housing prices have led to higher rents, and rising inflation has caused the cost of raw materials to increase, so that private enterprises’ operating costs have risen faster. State-owned enterprises and local governments strictly control the high-profit industries, so private enterprises can only try to survive in the low-profit areas.

In the end, some private enterprises faced the dire fate of either having to close down or, in utter defeat, to hand their business over to others.

Source: Beijing News, July 17, 2012
http://www.bjnews.com.cn/finance/2012/07/17/210658.html

Source: BBC Chinese Edition, July 14, 2012
http://www.bbc.co.uk/zhongwen/simp/chinese_news/2012/07/120714_china_internet_weibo.shtml

On July 16, 2012, Qiushi, a journal of the Central Committee of the Chinese Communist Party, published an article titled “Is China’s Economy Really Heading Downstream?” The article’s writer expressed the belief that, although China’s economic growth has indeed been slowing down for the past 5 consecutive seasons, the current economic slowdown is still within a normal range. He asserted that, as Southeast Asian countries have a more obvious advantage in terms of  labor cost, it is an inevitable trend for China to make some adjustments in terms of labor-intensive manufacturing and foreign trade structures and that, with China’s $3.3 trillion foreign exchange reserves, a short-term deficit won’t seriously impact China’s economy.

Source: Qiushi Journal, July 16, 2012
http://www.qstheory.cn/zxdk/2012/201214/201207/t20120712_169555.htm