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Power Shortages Widespread

As of August 5, of all the 541 power plants in China, 219 have less than 7 days worth of coal inventory. Power shortages have occurred in provinces such as Shangxi, Henan, Hunan and Liaoning where local authorities have implemented planned blackouts. On July 29, the shortage hit 10.22 million Kilowatts in Shandong Province, close to one-third of the power requirement in the province.

The power shortage was attributed to lack of quality coal, which has forced the shutdown of some major power plants.

Industry experts fear that the shortage will spread to more provinces and regions including Jiangsu, Fujian, Hubei and Jiangxi and Chongqing. 70% of the power consumed in Beijing depends on power plants outside the Beijing region. Two of them, Shalingzi and Wangtan Power Plants have their coal inventory hovering at around a 2 day level of reserves.

Source: Xinhua, August 6, 2008

Gordan Chang: Chinese Pay More Attention to U.S. Election than Olympics

After a recent two month visit to four Chinese cities, including Beijing and Shanghai, China scholar and lawyer Gordan G. Chang gave a speech in New York on August 1. The author of The Coming Collapse of China noticed that the Chinese leaders appear to lack confidence about the upcoming Beijing Olympics.

Chang and his wife were also surprised by the lack of interest to the game among Chinese people. Many Chinese are more interested in the U.S. presidential election than the Games.

Per Chang’s observation, China’s post Olympic economic forecast is gloomy.

Source: Epoch Times, August 5, 2008

Foreign Owned Enterprises Approaching 300,000

As of the end of June 2008, China had 8.6 million domestic enterprises, 280,000 foreign-owned enterprises and 27.28 million small businesses (“individual industrial and commercial households”), according to a recent release by the China State Administration of Industry and Commerce.

Source: Xinhua, July 10, 2008

250 Million Unemployed in China

2008 was a record year for China’s unemployment rate. A total of 250 million people are currently out of a job. Many of the 6 million college graduates will find it harder to find work this year. Affected by a strong Chinese Renminbi and rist in the cost of materials, many export-oriented companies have gone bankrupt. Due to a central government policy of eliminating ‘backward’ businesses, state owned companies were being closed at a peak rate.

In a recent estimate by Tian Chengping, former minister of China Labor and Social Security Ministry, in 2008, China’s unemployed population will reach 50 million in urban areas and 200 million in rural areas.

Source: China New Digest, July 9, 2008

Olympics Negatively Affecting Chinese Coal Market

The Beijing Olympics will have negative impact on the Chinese coal market, said Market, a newspaper under the ownership of the People’s Daily on June 27. Supplies of coal will likely decrease due to pressure from the international community on human rights and air quality in China. The authorities are expected to shut down mines to reduce accidents. Coal trucks will either be turned away or re-directed at check points leading to Beijing. For example, the Hebei provincial government has banned cargo trucks from entering into Beijing between July 1 and September 20.

Source: Market, June 27, 2008

Yum! Brands Inc. Cracks Down on Corruption in its China Operations

With speedy expansion into the China market, Yum! Brands Inc. is facing a rise in the number of business frauds and has launched a crackdown on internal corruption. The latest dismissal took place in a Pizza Hut store in Shanghai in mid-June where an employee was dismissed as a result of forging a fake financial statement.

According to statistics disclosed by Yum! Brands Inc., by the end of 2007, there were 2,100 KFC stores, including 300 opened in 2007, while the total number of Pizza Hut stores reached 300 including, 100 new stores opened in 2007. The revenue of Yum! Brands Inc. in China reached 21.5 billion yuan and its profits grew by 30 percent, accounting for 1/3 of its profits worldwide.

Source: China Business, June 23, 2008

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