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Economy/Resources - 230. page

Experts Warn Foreign Investments Pulling out of China

As the financial giants Lehman Brothers, AIG, Merrill Lynch, and Morgan Stanley have started to sell out their business and real estate investments in China, experts are concerned about its impact on China’s financial order. The latest statistics released by China Bank suggest that China’s funds outstanding for foreign exchange were down 50 percent in August compared with the first seven months of 2008, which is an obvious indication that foreign investments have started to back out of China. The experts warned that the real estate downturn and the large swing on the stock market have pushed the yuan to go up. If foreign investors and companies started to cash out their investments, it will have immeasurable impact on China’s financial order.

Source: Wenweipo, September 21,2008

Infant Formula in U.S. in High Demand to be Mailed to Mainland China

Following the tainted formula scandal in China, stores in New York’s Chinatown area saw a sharp increase in formula sales. Some of the stores were completely sold out. Most of the customers are immigrants who have sent it to babies back in their hometown in China. Those parents rushed to the stores right away and bought one to two years worth of supplies to be mailed back to China. Some customers were asked by friends and families from mainland China to buy formula for them.

Online formula sales also jumped. Chinese websites in New York City area received a number of postings from the parents in China who were seeking channels to buy infant formula from the US.

Source: Ming Pao, September 18, 2008

Exposure to Lehman Brothers of Chinese Banks Reaching $331 Million

Industrial and Commercial Bank of China (ICBC) and Bank of China have total exposure to failed U.S. investment bank Lehman Brothers of $151.8 million and $75.62 million respectively, the official Xinhua news agency said on September 17, 2008.  Exposure of both banks accounts for 0.01 percent of their respective total assets.  The exposure consists of Lehman-related bonds and loans, said Xinhua.

Sources in Shanghai indicate the exposure of other major banks.  Industrial Bank has exposure of $33.60 million and China Merchant Bank has exposure of $70 million. Construction Bank is still in the process of assessing possible losses and no figures have been released.  Communications Bank has limited exposure, according to sources from the bank.

Source: Xinhua, September 17 and 18, 2008

The Luxury Performing Arts Center is criticized for Lack of Practical Uses

Pu Chunxi, a renowned Chinese actor recently openly criticized the National Centre for the Performing Arts or the “The Egg” for too much extravagance and lack of practical uses.  Pu listed a number of flaws in the design and questioned “Who is the China National Opera Built for?” Pu’s criticism was widely posted by Chinese media and website and drew warm responses from the visitors.  Some called him “Artist with Conscience”.

Designed by French architect Paul Andreu with construction started in December 2001, National Centre for the Performing Arts held the inaugural concert in December 2007. The project is said to be pushed forward by former President Jiang Zemin.

Source: Nan Fang Weekend, September 3, 2008

China Petroleum Plans Massive Layoff

State-own China National Petroleum Corporation (CNPC) is estimated to be cutting up to 10,000 employees in the Beijing area alone by the end of October, reported Xinhua.   This year is considered the most difficult year for both CNPC and Sinopec.  CNPC’s August 28 interim report shows a 39% decline in pre-tax income from the previous reporting period.  On July 25, CNPC indicated that company-wide layoffs would reach 80,000 in the next three years.  The move was viewed as one to control cost and loosen financial pressure.  The company’s Tianjin and Hebei subsidiaries have already started layoffs, with Beijing to follow in October and Shanghai next year.  Northeastern China will be the last since it is CNPC’s major base.  To prevent employee complaints, a group of senior officials close to retirement has been tasked with implementing the downsizing.

Source: Xinhua, September 4, 2008

Death Toll from Sichuan Earthquake Reaches 38

As of September 2, 2008, the death toll from a 6.1-magnitude earthquake in Penzhihua, Sichuan Province on August 30 rose to 38, with 589 injured. The official Xinhua news agency reported that 941,000 of the population were affected, 181,2000 were evacuated and 392,000 homes were destroyed. A 7.9- magnitude earthquake hit the southwestern province on May 12, killing 69,226 people and leaving 15 million homeless.

Source: Xinhua, September 2, 2008