Economy/Resources - 220. page

Qiushi, the core publication of the central committee of the Chinese Communist Party published an article on its website warning that urbanization at the current excessive rate is posing a serious threat to China’s food supply. The threat is three-pronged: a reduction in the farming population, in farmland itself, and in government funds. “This will inevitably lead to the food crisis arriving much sooner than anticipated.” The article stated that the authorities have manipulated the composition of the price index by increasing the weight of housing prices and expenditures on education. Their objective is to reduce the impact of food prices and ease the public’s concern over inflation. “This is just like a thief, who covers his ears when he steals a bell. It will not allay fears of inflation. It may, instead, conceal the impact of over-urbanization on the supply of food.”

Source: Qiushi, February 16, 2011
http://www.qstheory.cn/lg/zl/201102/t20110216_68361.htm

Sino-European International Group, a privately owned Chinese company based in Wenzhou, China, recently signed a contract to build luxury helicopters in China jointly with Eurocopter. All parts will be imported from Europe, while assembly will be done inside China. The plan for the future is that all parts will be produced in China. An initial investment of half a billion RMB was spent to establish a factory in Changshu. Official release of helicopters for sale is scheduled for next June. The price for each helicopter is planned be in the range of RMB 30 million to 60 million. Eurocopter is the largest helicopter vendor in the world. It belongs to EADS (European Aeronautic Defence and Space Company N.V.)

Source: Xinhua, February 11, 2011
http://news.xinhuanet.com/2011-02/11/c_121066688.htm

According to the Statistics Bureau’s data released last year, the salary level of those in China’s financial securities industry was six times that of the average salary for other professions. Among all professions, the highest salary was 11 times more than the lowest one. The most recent statistics released by the Salary Institute of Human Resources and the Social Security Ministry show that the difference has now widened to 15 times. Based on the current data, the income disparity among different professions in China is the greatest in the world.

Source: Huanqiu (Global Times), February, 10, 2011
http://china.huanqiu.com/roll/2011-02/1485203.html

On February 8, 2011, the People’s Bank of China announced that, effective February 9, it will raise the benchmark interest rate by 0.25%; the one-year deposit rate will be 3%; and the one-year lending rate will be 6.06%. Scholars suggest this increase is due to the pressure of high inflation and the real estate bubble. They expect that 2011 will bring even more rate hikes.

Ba Shusong, Deputy Director of the Financial Research Institute, Development Research Centre of the State Council, stated that China will adopt a monetary tightening policy in 2011. Ba outlined three causes for the rate increase: 1. A rapid increase in loans in January 2011, which some estimated at 1.2 trillion yuan. 2. Consumer product price increases due to weather and the Chinese New Year. 3. Continuous price increases for commodities overseas.

China News Service referred to the central bank’s monetary policy report, which was released before the Chinese New Year. The report stated it would "use ‘society’s total financing amount’ to measure the scale of financing." China News Service interpreted this to mean, "PBOC does not look just at ‘RMB loans,’ but also at corporate bonds, stock, trust loans, and entrusted loans, etc. for deciding on monetary tightening."

Sources:
1. People’s Bank of China Website, February 8, 2011
http://www.pbc.gov.cn/publish/goutongjiaoliu/524/2011/20110208183128735889235/20110208183128735889235_.html
2. China News Service, February 8, 2011
http://www.chinanews.com/cj/2011/02-08/2828737.shtml
3. China News Service, February 8, 2011
http://www.chinanews.com/cj/2011/02-08/2828736.shtml

On January 30, 2011, after the State Council issued its first document of the year, Chen Lei, the Minister of Water Resources, held a press conference where he announced, "China has an annual water shortage of 40 billion cubic meters. Two-thirds of its cities suffer from a shortage of water." Chen said that the No. 1 Document sets targets to improve China’s plan to conserve water over the next five to 10 years.  According to the No. 1 Document, China will intensify its efforts to accelerate the development of the nation’s water conservation and promote the sustainable use of water resources.

Source: Xinhua, January 30, 2011.
http://news.xinhuanet.com/2011-01/30/c_121040588.htm

People’s Daily published a review, stating that China’s culture-based industry boomed in 2010. Movie box office revenues exceeded 10 billion yuan, which is a 33% increase over the prior year. Total publishing revenue exceeded 1.3 trillion yuan, a 20% increase from 2009. About 50% of culture-based companies on the stock market did their IPOs in 2010, absorbing 10.4 billion yuan from the market.

”However, there are still gaps between China’s culture-based industries and those of Western countries. The total production is still small (China needs to have a $4 trillion-yuan market to be on the same footing with Western nations), lacks major cultural enterprises and brand-names, lacks resources and experts, finds it difficult to procure funding, finds policy support lacking, and has experienced a large trade deficit in cultural products.”

Source: People’s Daily, January 28, 2011
http://paper.people.com.cn/rmrb/html/2011-01/28/nw.D110000renmrb_20110128_1-16.htm?div=-1

People’s Daily recently reported that, with the completion of the newly planned 4,715 kilometers of high speed railway for the year 2011, the entire Chinese high speed railway system will cover a total of 13,000 kilometers, forming a national network. In the next five years, half of the planned railways will be high speed railways. The current high speed network covers 18 provinces. It is the world’s largest high speed railway system in terms of total mileage. According to the Ministry of Railways, electronic ticketing will be completed this year. The high speed railway system is expected to be the primary form of railroad transportation. The Ministry also believes that the massive construction project will not cause a “debt crisis” despite the lack of profitability on many of today’s routes.

Source: People’s Daily, January 24, 2011
http://ccnews.people.com.cn/GB/13796228.html

People’s Daily reported on January 27, 2011, that the State Council Executive Meeting chaired by Chinese Premier Wen Jiabao just announced eight new regulations for the real estate market: (1) Take it one step further and hold local governments responsible for achieving stabilization of the real estate market; (2) Have the Housing Project for Low-Income Families initiate new construction; (3) Adjust the relevant tax policies; (4) Improve differentiated home loan policies for different types of families; (5) Strictly manage the supply side of land available for housing; (6) Reasonably guide the demand side of the housing market; (7) Implement mechanisms for government officials’ accountability; (8) Continue to guide the media as well as public opinion.

Source: People’s Daily, January 27, 2011
http://politics.people.com.cn/GB/1024/13824772.html