Economy/Resources - 229. page

The Sinopec Group announced on March 16, 2011, that it had signed a partnership MOU with Saudi Aramco to jointly develop a world class deep-processing refinery at Yanbu on the Red Sea coast. The Sinopec Group will hold a 37.5% stake, and Saudi Aramco a 62.5% stake in the project. The refinery plans to start operation in 2014. Su Shulin, Sinopec’s general manager, said that the joint venture will deepen the strategic partnership between the two companies and diversify Sinopec’s sources of energy outside China.

Source: Xinhua, March 16, 2011
http://news.xinhuanet.com/world/2011-03/16/c_13782256.htm

The Minister of Culture Cai Wu, disclosed during the current “Two Sessions” (the National People’s Congress and People’s Political Consultative Conference, China’s rubber stamp political advisory body) that, over the next five years, training sessions have been planned for 240,000 full time and 300,000 part time employees in the culture industry so they can become “the leaders in developing the public cultural service system.” “We need to put effort into developing a cultural team at the grassroots level. A cultural public service system … needs to be effective, controllable, and have high-tech equipment in order to meet the public’s demands.” Cai added that it is a most important task during the era of “developing socialist culture with Chinese characteristics.” 

Source: People’s Daily, March 10, 2011
http://2011lianghui.people.com.cn/GB/215096/14112018.html

According to a report released by the National Development and Reform Commission, a quarter of Chinese residents have no clean drinking water, one third of the urban population breathes polluted air, and less than 20% of garbage goes through proper treatment. The report says that, "Large numbers of people are exposed to polluted air, water, and soil.” It further states, “China’s ecological environment is very fragile; forests cover only 18.21% of China’s land surface, which is less than 67% of the average for the world’s countries. China has 1.74 million square kilometers of desertified land. 90% of its natural grassland suffers from degradation.”

Source: Economic Information, March 9, 2011, reprint by People’s Daily
http://politics.people.com.cn/GB/1027/14096289.html

The Agriculture and Rural Affairs Committee of the National People’s Congress (NPC) recently revealed that the total amount of farmland in China is approaching the “red line” of 1.8 billion Chinese acres (1 Chinese acre is 667 square meters), which is considered the minimum required acreage to sustain China’s population. Available farmland has been on the decline for the past 15 years. The committee noted that some of the key causes for the decline include real estate development, urban renewal projects, and industrial park construction. The committee called for “the strictest” implementation of farmland protection regulations.

Source: China Review News, February 25, 2011
http://gb.chinareviewnews.com/doc/1016/0/9/9/101609940.html?coluid=45&kindid=0&docid=101609940&mdate=0225083838

China Review News (CRN) recently republished an article by the deputy dean of the School of Economics of Fudan University, on the risks to a volatile economy. The article summarized the external elements that may bring risks: 1) unexpected changes in the international environment, such as the recent Arab Revolution; 2) unexpected economic recovery in the developed countries, of which the United States is the leader; 3) the continued existence of some old problems that caused the global financial crisis.

The article also identified the internal causes of risks: 1) complicated pressures leading to inflation; 2) the pressure of economic structural adjustments; 3) pressure caused by domestic market friction. The article concluded that the current approach to controlling inflation, which is based solely on currency policies, needs to be adjusted, and that effective implementation of policies requires understanding and support from the general public.

Source: China Review News, February 25, 2011
http://gb.chinareviewnews.com/doc/1016/0/9/8/101609884.html?coluid=53&kindid=0&docid=101609884&mdate=0225074409

On February 12, 2011, Xinhua reported that the General Office of the State Council sent out a notice about establishing the National Security Review and Approval System for Foreign Acquisitions of Chinese Companies. A multi-ministry joint committee will be created to administer the review process. The notice encompassed the System’s scope, content, working mechanism, and procedures. The national security review mainly covers companies that foreign investors may actually control. The fields the companies will deal with will include military, key agriculture products, critical energy and resources, important infrastructure, important transportation, key technology, and heavy equipment. The State Development and Reform Commission and the Ministry of Commerce are the leading agencies on the operational front. These regulations apply to investors from Hong Kong, Macau and Taiwan. The process of reviewing the acquisition of financial companies will be regulated separately.

Source: Xinhua, February 12, 2011
http://news.xinhuanet.com/2011-02/12/c_121070713.htm

On February 18, 2011, the People’s Bank of China (PBOC) announced that it will increase the bank reserve ratio by 0.50% on February 24. This is the second reserve ratio hike this year and the eighth since the start of 2010. With this rate hike, PBOC expects to keep 350 billion yuan in the banking system from entering circulation.

China, however, refused to allow significant appreciation of the Renminbi against the U.S. dollar. On February 17, 2011, Zhou Xiaochuan, governor of the central bank, said in Paris that “(China) has never paid special attention to external pressure for the Renminbi’s appreciation. The Chinese government will decide the pace on its own.”

Sources:
1. Xinhua, February 18, 2011
http://news.xinhuanet.com/fortune/2011-02/18/c_121098458.htm
2. Xinhua, February 19, 2011
http://news.xinhuanet.com/fortune/2011-02/19/c_121099068.htm

Guangming Daily reported on the 2011 Investigation Report of the International Business Survey issued by Grant Thornton China on February 16, 2011. According to the survey, following the global economic recovery, Chinese enterprises’ intentions to expand have markedly increased. It showed that 45 percent expect to be involved in M&A activities in the next three years. That is an increase of 19 percent over last year’s 26 percent. It is also higher than the global average of 34 percent. Among the enterprises surveyed, 26 percent anticipate acquiring companies overseas in the next three years, the highest level since 2008. Overseas acquisitions have increased rapidly in recent years. Since the start of February of this year, Chinese companies have spent over US$10 billion on acquisitions. At the moment, large state-owned enterprises are responsible for most overseas acquisitions. Due to opposition from hostile overseas forces, many face obstacles and failure. Thus many private enterprises and other economic entities have been driven to join the acquisition activities.

Source: Guangming Daily, February, 17, 2011
http://economy.gmw.cn/2011-02/17/content_1624010.htm