Economy/Resources - 227. page

An article appearing in Xinhua’s Economic Information Daily quoted Li Daokui, a member of China’s Central Bank’s Committee on Monetary Policy, as stating, “The world, including China, has entered into an era of high inflation. Over the next five to ten years, China’s inflation will remain at a high level. Predictions are that, in the next decade, prices of energy and resources will be an important factor pushing up inflation.” 

On May 12, 2011, China’s central bank, the People’s Bank of China, decided to increase the deposit reserve ratio another half percent. It was the fifth increase this year. It is believed to be a signal that decision makers are determined to fight inflation and excess liquidity. The announcement came after the State Statistics Bureau and the central bank published April’s economic and financial data. While economists believe this is a gesture to combat high inflation, they fear that inflation will remain high in the foreseeable future. This recent hike in the ratio is able to freeze 370 billion yuan and is considered a way to tighten liquidity. Experts believe there is a downside risk on both the real estate market and the real economy in terms of the cost of loans. Since 2008, the central bank has increased the ratio 17 times.

Source: Xinhua, May 12, 2011
http://news.xinhuanet.com/2011-05/12/c_13872209.htm

Starting on April 29, 2011, the northern part of China has been hit with large-scale sandstorms. The sandstorms were the strongest this spring, covering 10 provinces, including Gansu, Xinjiang, Inner Mongolia, Ningxia, Shaanxi, Shanxi, Hebei, and Beijing, and 286 counties or cities (about 2.3 million square kilometers). The total population impacted by the sandstorms was 90 million. It’s the second time this year that Beijing and the Tianjin area were attacked by sandstorms. Downtown Beijing’s ground visibility was reduced to five kilometers. This round of sandstorms originated in Southern Mongolia and the South Xinjiang Basin. Coupled with low precipitation in the region, cold air was the main force that pushed the sand and dust south.

Source: China News Service, April 30, 2011
http://www.chinanews.com/gn/2011/04-30/3009731.shtml

Regarding the recent 2011 China Private Wealth Report, which notes the trend of wealthy people’s investments emigrating overseas, follow-up debates have appeared in some local newspapers. An article in Jinan Times, which is based in Shangdong Province, expressed the deep concern that China is losing wealth as well as talent. The author suggested four solutions to the problem: 1) Improve the implementation of laws that will truly protect private property; 2) Improve the tax system to ensure fairness and justice; 3) Repair the relationship between the general public and the wealthy; 4) Break industrial monopolies and introduce more investment channels. In another article in Shenzhen Economic Daily based in Guangdong Province, the author expresses several concerns regarding the trend: 1) It will be a drain on national wealth; 2) An outflow of wealth will dampen the demand for the service industry; 3) The trend will result in less investment in real estate, a further blow to the already shaky sector; 4) There is no clear and convenient solution to this problem.

Source: China Review News, April 24, 2011
http://gb.chinareviewnews.com/doc/1016/7/0/5/101670526.html?coluid=49&kindid=974&docid=101670526&mdate=0424082041
http://gb.chinareviewnews.com/doc/1016/7/1/6/101671697.html?coluid=53&kindid=0&docid=101671697&mdate=0425004647

Guangzhou based Yangchen Evening News published an article on the recent heated debates about increasing wages. Over the past year, the authorities in the central government have expressed an urgent need to increase the minimum wage. For example, in April 2010, at the executive meeting of the state council, Premier Wen Jiabao named the reform of income distribution and the social security system as the top agenda items. In May 2010, the National Development and Reform Commission released its study on income distribution in several provinces. The State Council circulated NDRC’s “Opinion on Key Tasks to Strengthen Economic Reform in 2011,” and vowed to make reforming income distribution its top priority. 

A plan put forth by the Ministry of Environmental Protection suggests that the next 10 years will be the “golden period” for the development of sewage disposal in China. Thousands of sewage disposal factories will be developed. However, thousands of tons of sludge from each of these facilities will need to be disposed of, a big problem that must be handled urgently. Currently, a majority of the cities in China are equipped with sewage disposal facilities, but sludge disposal has still not been addressed. “Secondary pollution” is quite serious. On November 26, 2010, the Ministry of Environmental Protection issued a notice demanding the prompt development of methods for sludge disposal. The notice requires that sewage and sludge disposal units be planned, constructed, and put into use simultaneously in future development; existing sewage disposal factories must complete the sludge disposal requirement within two years.

Source: Economic Information, April 25, 2011
http://www.jjckb.cn/2011-04/25/content_303901.htm

Voice of America (VOA) recently reported that Chinese export businesses are planning to leave coastal provinces for inland locations or other countries. The report gave the example of the Apple iPhone OEM (Original Equipment Manufacturer) vendor FoxConn’s plan to invest US$12 billion to open new plants in Brazil. With salary increases, raw material price increases, and currency appreciation, the exporters’ production costs are growing steadily. A global supplier in Hong Kong estimates there will be a 15% increase in the price of Chinese exports. Although the government is encouraging the businesses to move their plants to inland provinces, the concern is that the increase in transportation costs to access sea ports will eat up the savings. Moving manufacturing lines to locations in nearby countries like Vietnam and Indonesia may become easier choices for their existing infrastructures.

Source: Voice of America, April 20, 2011
http://www.voanews.com/chinese/news/20110420-China-Manufacturing-by-Heda-Bayron-120312824.html

The Chinese Minister of Water Resources, Chen Lei, recently spoke at a forum, stressing a strict control of the nation’s annual water consumption. The goal set for the year 2015 is 635 billion cubic meters; it is 670 billion for the year 2020. The Ministry is speeding up the process of defining national water consumption standards for high-water-consumption industries and for the service industry. Chen also emphasized that it is very important to protect drinking water sources and underground water. He said China has the most difficult water management situation in the world. The next step is to hold heads of local governments responsible for enhancing water management supervision and for implementing the administrative system.

Source: China News Service, April 15, 2011
http://www.chinanews.com/gn/2011/04-15/2976679.shtml