Economy/Resources - 209. page

Guangzhou Daily recently published a report complaining that other countries have rapidly increased the technical trade barriers against Chinese exports. Estimates are that the direct financial losses due to these technical trade barriers have grown by 15% per year over the last several years. Last year, the figure was US$58.2 billion. In addition to traditional trade barriers such as tariffs and quotas, ASEAN (The Association of Southeast Asian Nations) countries have adopted more and more technical trade barriers against China. China’s three largest trade partners (Europe, the U.S. and Japan) have recently imposed more and more complicated technical requirements on Chinese products. For example, Chinese rice exported to Japan faces 579 technical inspection items.

Source: Guangzhou Daily, December 11, 2011
http://gzdaily.dayoo.com/html/2011-12/11/content_1554950.htm

Business Daily recently published a report on China’s currency policy changes after figures on the global manufacturing sector demonstrated it was clearly declining. The report first referred to the latest major decline of China’s PMI (Purchasing Managers Index) to 49. This was the first time since February 2009 that it fell below 50. When the PMI is below 50 it is generally considered to be an indication of recession. Meanwhile, the Euro Area PMI dropped to 46.4 and the British PMI reached 47.6. Global PMI was 49.6 in November. The United States was the only exception with the PMI being 52.7, which the report called “puzzling.” The Chinese central bank responded with an immediate decrease in the Bank Deposit Reserve Ratio. Two to three more decreases in this ratio are highly likely in the first half of 2012. The market is expecting more currency related policy shifts towards loosening up the restrictions on loans. However the concern over inflation is still keeping the government from taking more dramatic actions. The report expressed the belief that the interest rate will not go down.

Source: Business Daily, December 4, 2011
http://www.nbd.com.cn/articles/2011-12-04/620989.html

Beijing Times reported that on November 27, 2011, the China Energy Research Society published the “2011 China Energy Report.” The report indicated that due to a predicted economic growth rate of 9 percent per annum over the next five years, even though the rate of growth of energy consumption will decrease in the next five years, and even though China has a stable domestic oil supply, China’s oil imports will continue to increase. According to the 2010 China Energy Report, China imported 54.8 percent of its oil in 2010. The 2011 report expects the figure will increase to 60% by 2015.  The rate of growth in oil consumption over the next five years is expected to be 4 percent, down from 5.15 percent from 1978 to 2010.

Source: People’s Daily, November 28, 2011
http://energy.people.com.cn/GB/16408967.html

A forum was held in Guangzhou on November 28, 2011, on safeguarding the rights of China’s enterprises. At the forum, Professor Li Jianwei from the China University of Political Science and Law revealed that private enterprises in China have an average lifespan of only 2.9 years. Li said that the reason for private enterprises’ short lifespan is that these enterprises face various legal risks. Compared to national enterprises, private enterprises are in an inferior position.

Source: Guangzhou Daily, November 28, 2011
http://www.ce.cn/xwzx/gnsz/gdxw/201111/28/t20111128_22871174.shtml

According to the statistics of China’s Ministry of Commerce, in 2010, China’s foreign direct investment (FDI) amounted to a historic $68.81 billion. With 5.2% of the global total FDI, China ranked fifth highest in the world. Most of the investment flows to six sectors: leasing, business services, and finance; wholesale and retail; energy and mining; transportation, storage, and postal services; and manufacturing.

The state-own enterprises accounted for 66.2% of the non-financial FDI stock, down three percent from the 2009 figure. Of these, the enterprises and units under the central government reached $42.44 billion, accounting for 70.5% of the flow. Pei Changhong, director of the Economic Institute under the Chinese Academy of Social Sciences, believes that China’s overseas investments are, to a large extent. driven by national policy. The system of relevant policies and investment services has not been fully established. An example is the recent losses suffered in Libya, which occurred because of a lack of investment insurance policies.

In terms of targeted markets, China’s FDI has a high concentration in Asia, especially Hong Kong, and in Latin America. The footprint in developed economies such as North America and Europe is still low. The energy and mining sector remains the top area of investment.

Source: China Economic Weekly, November 29, 2011
http://www.chinanews.com/cj/2011/11-29/3493517.shtml

China Daily recently republished a report on the State Council’s decision to straighten out the financial and market exchanges that facilitate trade activities in stocks, futures, and other financial products without official approval. The State Council’s decision was distributed in the form of an official document which sets the goal of this campaign as the reduction of national financial risks. It was estimated that hundreds of such exchanges will be impacted or completely closed. In the “decision,” all financial institutes with the word “exchange” in the name will need the central government’s approval or at least government approval at the provincial level. In the past few years, more than 300 exchanges have been established across China, doing business in a number of categories such as precious metals and agricultural products. The government has not established laws to regulate these facilities, so no administrative procedures have been put in place to monitor them.

Source: China Daily, November 26, 2011
http://www2.chinadaily.com.cn/hqcj/lc/2011-11-26/content_4492907.html

On November 21, 2011, the 11th China Internet Media Forum was held in Wuhan, Hubei Province. Over 300 representatives from the central government, Xinhua News, People’s Daily, China News Service, Internet media companies, and academia attended the forum. A Deputy Chief of the Propaganda Department of the Communist Party Central Committee spoke at the forum. He stated that there are three trends worth noting: first is that the Internet is becoming more like media and increasingly impacts society; second, the Internet is getting more “mobile;” and third, micro-blogs and other social media are rapidly gaining momentum.

The statistics released at the forum show that the number of Internet users in China is approaching 500 million, that close to 350 million Internet users use cell phones to browse the Internet, and that 900 million cell phone users may be potential customers of the mobile Internet. The most significant trend in Chinese Internet is the burgeoning growth of the social media micro-blogs, with users topping 300 million. Led by the State media, the attendees adopted the Wuhan Declaration, a pact to “vigorously promote socialist core values.”

Source: China News Service reprinted by Huanqiu, November 21, 2011
http://china.huanqiu.com/hot/2011-11/2193180.html

On November 21, 2011, China Securities Journal published an article under the name of Chen Bingcai from the Chinese Academy of Governance titled, “The Fall of Housing Prices Will Benefit Industrial Restructuring.”

Chen claimed that the decline in the price of housing is a trend that will be helpful to an industrial structural adjustment. He suggested that China can endure a 50% decline in housing prices. First, Chinese banks can still get back the principle on their mortgage loans because housing prices have increased 50% to 80% over the last two years. Second, lower home prices are good for the lower end consumers. Third, a drop in real estate prices will not affect owners who occupy their homes (and therefore intend to keep them).

Source: China Securities Journal, November 21, 2011
http://www.cs.com.cn/xwzx/05/201111/t20111121_3135719.html