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China to Increase Oil and Electricity Price

National Development and Reform Commission issued a notice stating that Oil and Electricity price will increase starting June 20. The notice said that the increase would exclude three provinces (Sichuan, Shanxi, and Gansu) which were affected by the earth quake.

China has been imposing the government controlled oil pricing system with supplemental funding from the government to keep the oil price low. The recent increase was resulted from the pressure of the worldwide oil price surge.

Source: BBC, June 19, 2008 http://news.bbc.co.uk/chinese/simp/hi/newsid_7460000/newsid_7464300/7464311.stm

Reservoirs May Flood Yellow River This Year

The Yellow River is likely to flood this year, warned China Meteorological Administration on June 16, 2008. Rainfall is expected to increase by 20 to 50 percent compared with previous years. The last flood in the Yellow River occurred back in 1982. “The flood situation is very severe due to dangerous reservoirs and hidden safety crises,”  said China Meteorological Administration. The Yellow River is China’s second largest with 5,464 km in lengths.

Source: Xinhua, June 16, 2008
http://news.xinhuanet.com/politics/2008-06/16/content_8379394.htm

State Imposes Coal Ceiling Price

On June 19, 2008 China State Development and Reform Commission announced temporary price ceiling for coal. Effective December 31, 2008, the June 19 settlement price for coal used for power generation will become the temporary ceiling price. The purpose of this price intervention is claimed to “prevent price hikes of coal and electricity, and to promote coordinated, stable and healthy development of coal and power industry.”

Source: Xinhua, June 20, 2008
http://news.xinhuanet.com/newscenter/2008-06/20/content_8403443.htm

Fear Arises Over Housing Market Downturn Following Stock Market Plunge

China’s housing developers showed great concern over the plunge stock market fearing the further decline in housing market. The statistics showed that the number of sales closed in Beijing for the week of June 9 was 2017, a 25 percent down compared with the same period of 2007 and 50 percent down from 2006.

China’s stock market fell over 10 percent last week, the worst ever in the past twelve years.

Source: Xinhua, June 16, 2008
http://news.xinhuanet.com/fortune/2008-06/16/content_8380076.htm

Xinhua Warns Aganst Economic Slowing Down

Chinese economy may have peaked. Outlook quoted China’s National Bureau of Statistics: “2007 may have seen the peak of economic development for this round. From this year, economy will gradually slow down.” Another government thinktank warns, “Prevention of economic downturn is the problem we should watch out for, now and in the near future.”

According to National Bureau of Statitics on June 12, the CPI for May was down to 7.7% while the PPI for May was up to 8.2% for the fifth consecutive months. It was the first time since February 2007 that PPI was increasing higher than CPI.  Unsettling factors include the U.S. policies to provent recession, particularly the lowering of interest rates, states Outlook News Weekly, a Xinhua journal, on June 14.

Source: Outlook News Weekly, June 14, 2008
http://news.sohu.com/20080614/n257491684.shtml

Losing Low Cost Advantages – China’s Auto Parts Industry to Lose Trillions in Orders

The latest research results released by AlixPartners, an international consulting firm, suggest that as the value of the yuan and the price of raw materials have increased, the cost of China’s auto parts have gone up 16 percent. Foreign buyers are thus losing interest in China’s auto parts market because of the rise in cost and are gradually reducing their orders. It was estimated that China will lose US$16 trillion in auto parts orders by 2010.

Source: China Stock Daily, June 6, 2008 http://www.cnstock.com/paper_new/html/2008-06/06/content_61922543.htm