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Economy/Resources - 218. page

Chinese Foreign Aid Tops Developing Countries, Much Higher Than India

On March 13, Chinese Premier Wen Jia Bao suggested in a press conference that before 2008 China waive more than 40 billion RMB worth of debt from 46 lesser developed countries while providing over 200 billion RMB of foreign aid to developing countries. He also mentioned that the United States provided less than 1/4 of promised aid in 2005.

Beginning in 1950, the Chinese foreign aid program now tops developing countries. During fiscal year 2006 to 2007, India only provided USD $500 million in aid although USD $1 billion was promised. Brazil, another large developing country, received more aid than it provided.

Chinese aid does not have political conditions attached, which makes it well received by developing countries. Currently there are more than 140 countries receiving aid from China.

Source: Elite Reference, March 21, 2009

Official: Inequality Causes Low Consumption

Ren Yuling, a State Council advisor, was recently quoted by China Economic Weekly, a magazine owned by the People’s Daily newspaper. Ren refers to the grave income inequalities across the population. In metropolitan areas, the top 20 percent of the population possesses 66.4% of the financial assets, while the bottom 20 percent owns only 1.3%. With the wealth concentrated in a very few, majority of the people are lack of consumption power. This is the fundamental reason for a low domestic personal expenditure, a major target of the 4 trillion yuan government stimulus package.

Source: Voice of America, March 16, 2009

Government Site Warns Alarming Soil Erosion

China’s Ministry of Water Resources website says that soil erosion has deprived the country of 1 million mu* of arable lands on a yearly basis. From 2001 to 2005, there were more than 150,000 squared kilometers of annual new land losses due to construction activities. Total land loss has amounted to 3.56 million squared kilometers, 37.1% the country’s size. If the trend continues, the 1.4 million mu of black soils in Northeast China will disappear in 50 years, causing a 40% drop in grain production; the lithified land in the southwest will double in 35 years, leaving 100 million people nowhere to stay.

Source: Xinhua, March 18, 2009

*mu is China’s traditional unit of measurement of areas. 1 mu = 666.7 squared meters.

Minister: 300,000 Mid-and-small-size Companies Out of Business

A sample survey shows that 7.5% of the country’s mid-and-small-size companies have gone out of business since the end of 2008, according to Li Yizhong, China’s Minister of Industry and Information Technology. The percentage amounts to an estimated more than 300,000 businesses, using total of 4.3 million in year 2007. Li said that mid-and-small-size companies account for 99% of the nation’s enterprises, 80% of the total employment, and 60% of the size of the economy. Amid the current financial crisis, they are particularly hit hard.

Source: Ta Kung Pao, March 11, 2009

Chinese RMB Becoming Hard Currency?

Chinese currency is quickly being adopted as settlement currency, claimed International Herald Leader under Xinhua on February 16, 2009. Since Dec 2008, China has entered into agreements with eight of its neighboring countries including Vietnam, Myanmar, Russia, Mongolia and South Korea to use Chinese RMB as settlement currency. On Feb 8, 209, China entered into a currency exchange agreement with Indonesia worth 80 billion yuan which allows Indonesians to borrow RMB at banks in Indonesia. China views the international financial crisis an opportunity to “internationalize” its currency to make further inroads into the international economies.

Source: Xinhua, February 16, 2009

Study Times: China To Internationalize Its Currency

China should take advantage of international financial crisis and push to “internationalize” the Chinese Renminbi, says Study Times, journal of the School of the CCPC February 16, 2009. The article takes note of recent State Counsel decisions on using RMB in settling commercial transactions with Hong Kong. The current international crisis has lowered the net worth in the U.S. dollar and the esteem the international communities has held for the U.S. dollar. The article recommends expanding pilot programs to use RMD as settlement currency.

Source: Study Times, February 16, 2009