Economy/Resources - 198. page

A recently released research report "to resolve the mid to long-term risk to the nation’s account for asset liabilities” predicted that the gap between the amount in the Chinese pension account and the amount due to be paid out will reach 18.3 trillion yuan [~US$3 trillion] in 2013. The report notes that, due to the impact of China’s aging population, the  co-ordinated pension account will be a huge burden for the nation’s finances. Actions have been recommended to relieve the pressure, including delaying the retirement age; allocating state-owned shares; and reforming (the retirement policies) of government departments and institutions.

The study was a joint effort between the Bank of China research team, led by Cao Yuanzheng, the chief economist for the Bank of China, and the Fudan university research group, led by Ma Jun, the chief economist for the Greater China area of Deutsche Bank.

Source：Xinhua，June 14，2012
http://news.xinhuanet.com/politics/2012-06/14/c_112210997.htm

CNForex recently reported that HSBC reported the official May PMI (Purchasing Managers Index) number for the Chinese manufacturing sector to be 48.4. The index has remained under 50.0 for 7 consecutive months, which indicates that the manufacturing sector has been shrinking. It is believed that the PMI number reflects that the current economy is suffering from weak domestic and international demand, causing manufacturing companies to have a reduced output. Statistics show that, in May, these companies employed the lowest number of laborers in the last 3 year. The unemployment rate in this sector is increasing. Also in May, inventory declined and product prices dropped. PMI is an indicator of financial activity; it reflects purchasing managers’ acquisition of goods and services. A PMI number below 50 typically is an indication of decline.

Source: CNForex, June 1, 2012
http://www.cnforex.com/news/html/2012/6/1/f28feb312993372e1fe7438418ded68d.html

According to the Ministry of Statistics, from January through May of 2012, a total of 288 million square meters or 3.1 trillion square feet of real estate changed hands, a reduction of 12.4 percent from the same period last year; the rate of the decline decreased by 1 percent compared to January through April. The total sales volume was 1,693 billion yuan or US$266 billion, down 9.1 percent compared to the same period last year; the rate of decline decreased by 2.7 percent compared to January through April.

Of the total number of real estate transactions, residential housing space was down 13.5 percent, office space went up 3.6 percent, and commercial buildings fell 1.4 percent. The total sales volume for residential housing declined by 10.6 percent while the office space went down 8.7 percent, and commercial buildings rose 3.9 percent.

In terms of the total decline in real estate space, the eastern region was the highest at 14.1 percent. The central region was second at 10.2 percent and the western region was 11.1 percent.

By the end of May, 307 million square meters or 3.3 trillion square feet of real estate space remained unsold, up 4.32 million square meters or 46.5 million square feet from April. Of the unsold real estate, residential space went up by 2.7 million square meters or 29 million square feet, office space went up by 60,000 square meters or 645,600 square feet, and commercial buildings went up by 430,000 square meters or 4.62 million square feet.

Source: Xinhua, June 9, 2012
http://news.xinhuanet.com/house/2012-06/09/c_123258567.htm

The Ministry of Finance announced that it plans, for the first time, to issue 41.6 billion yuan in local government bonds for the following seven regions: Qingdao, Guangxi, Chongqing, Shanxi, Gansu, Hainan, and Xinjiang. The bonds are for either a three year or five year term. The three year bonds are valued at 20.6 billion yuan and the five year bonds are valued at 21 billion yuan. Shanxi has the largest share totaling 8.5 billion yuan while Qingdao has lowest share totaling 1.5 billion yuan.

The on sale date for the three year bonds is June 15, 2012, while the five year bonds will be sold on June 29, 2012.

Source: People’s Daily, June 8, 2012
http://finance.people.com.cn/GB/153179/153522/18124989.html

The People’s Bank of China announced that it was lowering its interest rates by 0.25 percentage point, effective June 8, 2012. The one year deposit rate will drop from 3.5% to 3.25% and the one year lending rate will fall from 6.56% to 6.31%. This is the first time since December 23, 2008, that the central bank has lowered interest rates. At that time, the central bank lowered its interest rates by 0.27 percentage points.

Source: Xinhua, June 7, 2012
http://news.xinhuanet.com/fortune/2012-06/07/c_112152900.htm

Xinhua recently reported that the State Council is planning to allow foreign companies to enter China’s stock market by issuing shares of stock in Chinese currency (RMB). The government is designing a pilot program and is preparing rules and technical details. Also under consideration is allowing foreign organizations with Chinese currency to invest those foreign-owned RMB in China’s domestic market. The plan supports Shanghai in becoming an international financial center, while it strengthens Hong Kong’s current status as an international financial center. The plan is part of China’s effort to widen the use of China’s currency internationally and to enhance the acceptance of China’s currency as an international reserve currency. The new pilot program may be extended to issuing bonds and establishing funds, in addition to stock shares.

Source: Xinhua, June 2, 2012
http://news.xinhuanet.com/finance/2012-06/02/c_123225878.htm