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China’s Food Crisis May Be More Serious than Expected

At present, the impact of the Sino-US trade wars on the lives of the people who live in the mainland has emerged gradually. This is especially so as prices of goods such as vegetables, pork, and eggs have risen. A recent fire at a grain warehouse and the reduction in summer grain production once again sent a signal that China has a food crisis. Ye Tan, a well-known Chinese economist, published an article that has been circulating on the Internet. It is titled, “Considering internal and external problems, China’s food situation may be more serious than we imagined.” Below is the translation of a summary of the article.

On July 18, the national summer grain production data that the National Bureau of Statistics released showed that the total summer grain production was 138.72 million tons in 2018, down by 3.0 percent or 3.06 million tons from 2017. On August 10, the Committee of the Market Early Warning Experts of the Ministry of Agriculture and Rural Affairs released an analysis of the supply and demand situation as to China’s agricultural products in August 2018. The analysis predicted a shortage of corn production from 2018 to 2019 with the ending balance down by 17.75 million tons. The gap had grown from the previous year.

In addition, as of August 15, the projected wheat purchase in the main producing areas was 41.059 million tons, a year over year decrease of 20.331 million tons. Among the three provinces of Henan, Anhui and Hubei, there was a sharp decline of 55.1 percent in Henan and 45.9 percent in Anhui. In Henan, the production accounts for about a quarter of the country’s wheat production.

The reduction in summer grain and in wheat production is alarming. According to the National Grain and Oils Information Center, China’s corn, rice and wheat production will suffer a reduction of 8.08 million tons, 5.545 million tons, and 7.867 million tons respectively in 2018 compared to 2015. According to a report by the World Bank, China’s total food demand is expected to reach 670 million tons in 2020 and 700 million tons in 2030. Even if China could maintain a record high of 620 million tons, the gap would still be large.

At present, China imports 95.53 million tons of soybeans every year. The self-sufficiency rate is less than 20 percent. In the case of corn, China also imports about 760,000 tons from the U.S., accounting for one-quarter of total imports. As the trade war escalates, a food shortage crisis will surface.

At the same time, there are reports on fires that have broken out in grain warehouses. Regarding the most recent one, coincidentally, the timing was that the fire occurred after the party issued a notice on July 23 that it would perform an inspection of the grain warehouse. In less than a week, at 8:00 am on July 29, a fire broke out in the No. 1 storage warehouse of that Datong Grain Reserve in Weinan City, Jilin Province. Afterwards, the local official said that the fire had nothing to do with the upcoming audit. Four days before the incident, the Central First Inspection Team had just entered the site for inspection. In another coincidence, the five cameras in the granary failed just before the fire due to wind, electrical appliances, and other reasons. In March of this year, there was a fire at the Jiaozuo grain warehouse in Henan Province. The staff of the Central Grain Reserve also denied that the fire was related to the inspection of the national grain clearing warehouse.

In recent years, the China Grain Reserves Corporation has been accused of becoming a very large base of corruption. The authenticity of the grain production data has been questioned for many years. According to the official data, it is estimated that China’s grain output has been overstated by a minimum of hundreds of millions of tons.

Source: 10jqka.com.cn, August 6, 2018
http://master.10jqka.com.cn/20180806/c606217537.shtml

Beijing News: NAFMII Warned and Punished Dagong Global

Beijing News recently reported that the Dagong Global Credit Rating Group, China’s primary credit rating company, was under fire. China’s National Association of Financial Market Institutional Investors (NAFMII) just issued a “severe warning” to Dagong and banned Dagong from doing business in the debt financing tool ratings market segment for one year. Investigations showed that Dagong was providing direct consulting services to companies to which it had been issuing credit ratings. Dagong provided forged documents to the authorities during the investigations, trying to hide its conflict of interest. Dagong is China’s primary credit rating company. It was established to compete against global leaders like S&P, Moody’s, and Fitch. It is the only rating company in China authorized by the central bank to rate all debt financing tools (except government bonds) and the participating companies that use those tools.

Source: Beijing News, August 17, 2018
http://www.bjnews.com.cn/finance/2018/08/17/499954.html

Russia Praised China for Continuing to Import Iranian Oil

Well-known Chinese news site Sina recently reported that China refused to follow the U.S. sanction plan on Iran. Iran is China’s largest oil supplier. To stop importing oil from Iran would have a major impact on China’s economic growth. Russian media have been widely reporting China’s position against the U.S. sanctions and have praised China for setting a good example globally. In the meantime, China sent its 30th navel escort fleet to the Middle East, once again demonstrating its conduct as a world leader. The United States had sent its fleet towards the Hormuz Strait, where Iran conducted live ammunition military exercises. The Chinese fleet has three warships that belong to the North Sea Fleet. Russian experts have expressed the belief that China’s recent naval move did provide with Iran tangible support, that the Chinese military presence may ease the tension in the Middle East region, and that it could actually prevent a new round of conflict.

Source: Sina, August 9, 2018
http://finance.sina.com.cn/money/future/fmnews/2018-08-09/doc-ihhnunsq1727971.shtml

PetroChina Plans to Increase Price of Natural Gas by 40 Percent This Winter

China Energy Network, a news network that People’s Daily sponsors, recently reported that PetroChina announced its new winter natural gas pricing structure. All customers can expect a minimum 20 percent price increase this winter. This minimum percentage was set by the Chinese government as the baseline price. In Eastern China, the PetroChina price increase will be 38 percent, across all types of customers, including the consumer market. In Southern China, the increased number will be 40 percent. Natural gas related stocks skyrocketed after the announcement. The Chinese government officially increased the tariff against U.S. liquid natural gas (LNG) by 25 percent. In the past 12 months, China became the second largest U.S. LNG buyer (after South Korea). After China’s tariff announcement, in the month of July, China’s import volume from the U.S. already dropped in half.

Source: China Energy, August 8, 2018
http://www.cnenergy.org/yq/trq/201808/t20180808_675676.html

Open Letter Appeals to Xi Jinping to Stop the Massive Handouts to Foreign Students

A U.S. based blog site – weiquanwang (rights protection site) – recently published an open letter to the Chinese Communist Party Central Committee and requested that China stop providing blanket massive subsidies to foreign students in China. The letter stated that millions of ordinary Chinese people have to tighten their belts for their children’s education, while the government hands out disproportionate subsidies to thousands of international students in China.

As of July 31, 2018, 295 people had signed the letter, which was titled, “Citizens’ Opinion on Requesting an End to the “Universal” Fiscal Subsidies to Foreign Students.” Among them were 49 lawyers (not including one lawyer who withdrew under pressure), six journalists, and 240 doctors, professors, teachers, and other activists.

The author Liu Shuqing, a human rights Lawyer and a lecturer from Shandong Qilu University of Technology, has already mailed it to Chinese President Xi Jinping, Premier Li Keqiang, Chair of the National People’s Congress Li Lishu; Minister of Education Chen Baosheng, Finance Minister Liu Kun, and Director of Legal Affairs of the NPC Standing Committee Chen Chunyao.

The letter stated, “We are not a group that suffers from xenophobia.  . . . We understand our government’s moderate assistance to poorer countries. We understand the practice of granting scholarships to a small number of outstanding foreign students, but the principle body of doing this should be schools and universities.  . . . What we are opposed to is the ‘universal’ and high amount of fiscal subsidies to foreign students without considering our national conditions. What we oppose is the irrationality of policies and the lack of procedural justice in the process of policy making. What we value is the Chinese national’s equal rights to education and the taxpayer’s rights to have a say on fiscal expenditures.”

The letter pointed to the fact that China’s per capita income in 2017 ranked 69th in the world, a very low level. By China’s own poverty standard, 40 million people are still living in poverty. Without a system that provides the basic guarantees of education and medical care, incidents of poverty related dropouts have occurred from time to time. Chinese university students need to pay a high tuition. Scholarships, assistantships, and work-study programs cannot offset these payments. For an ordinary Chinese family, a university education is a heavy burden.

The letter criticized the handing out of 60,000 to 100,000 yuan annually to almost every foreign student, the number of which has grown dramatically. It is an immoral policy as the government is obligated to have its actions be approved by the tax payers before it makes such policies of foreign aid.

The letter said it understands that there may be strategic considerations related to the “One Belt, One Road” initiative. By increasing the proportion of foreign students in the country, the regime hopes that they will become the backbone of the local people and help to promote strategic implementation. However this way of using fiscal subsidies to attract foreign students is wrong.

Source: Radio France Internationale, August, 9, 2018
http://rfi.my/2zJb.T

China to Become the World’s Largest Natural Gas Importer by 2019

Recently, the International Energy Agency (IEA) issued the “Natural Gas Market Report 2018,” which predicts that, by 2019, China will become the world’s largest natural gas importer due to the lack of domestic supply. By 2023, China’s natural gas imports will reach 171 billion cubic meters, most of which will be LNG (liquefied natural gas).

According to the Chinese Ministry of Energy, China and India have become the fastest growing countries in demand for natural gas, especially LNG. Last year, China surpassed South Korea and became the second largest importer of LNG after Japan.

The Report shows that China and emerging Asian markets are promoting global natural gas consumption. Between 2017 and 2023, China will account for 37 percent of the increase in global natural gas consumption, surpassing every other country in the world. Regarding the forecast period, the Report expects the global natural gas market to exceed 4 trillion cubic meters by 2022, while China’s demand will grow at an average annual rate of 8 percent, accounting for more than one-third of the growth in global demand.

At present, the United States is the main producer of natural gas and exporter of LNG, accounting for nearly 45 percent of global production growth and nearly three-quarters of LNG export growth.

Source: Shanghai Security News, July 20, 2018
http://news.cnstock.com/paper,2018-07-20,1029054.htm

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