Economy/Resources - 231. page

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

China News Service reported on January 27, 2011, that, according to the China Gold Association, China’s gold production in 2010 set a new world record at 341 tons. This represents an 8.6% increase from 2009. China has thus remained the world’s top gold producer for the fourth year in a row since it overtook South Africa in 2007. More than 500 counties in China produce gold. The gold industry has become the key industry and a major source of income for over 100 counties. The top five gold producing provinces are Shandong, Henan, Jiangxi, Yunnan, and Fujian. Collectively, they produce 60% of the national output. China’s gold market is also very strong. In 2010, China consumed 510 tons of gold for jewelry production, use in industry, and investment.

Source: China News Service, January 27, 2011
http://www.chinanews.com/fortune/2011/01-27/2817180.shtml

Source: International Herald Leader, January 17, 2011
http://news.xinhuanet.com/herald/2011-01/17/c_13694069.htmchina’s      

China Review News published an interview with Xie Yonghai, Executive Vice President of the Bank of China and Chairman of the Hong Kong Chinese Securities Association. Xie stated that, “The current international monetary system based on the U.S. dollar is biased. China, given its present economic wherewithal needs to become a greater international power.” Xie pointed out that getting regional adoption of the renminbi is the key to internationalizing the renminbi. China has signed treaties with countries on renminbi exchange and free trade. Agreements about the regional adoption of the renminbi are being made with countries in Southeast Asia, South Asia, North Asia, and possibly Latin America, where China is working with Brazil and Argentina.

“Hong Kong will play a major role as the off-shore renminbi trading center.” Xie predicts that “within five years, Hong Kong’s renminbi trade volume will reach 8 trillion yuan. By then, the renminbi will become the third most popular currency in the world, after the dollar and the euro, and part of the IMF’s SDR.”

Source: China Review News, January 24, 2011
http://gb.chinareviewnews.com/doc/1015/7/8/1/101578140.html?coluid=10&kindid=253&docid=101578140&mdate=0124002018

The “2011 World Economy Analysis and Forecasts” published a report by the World Economy and Politics Center of the China Social Science Academy. The report noted a rapidly increasing trend, which is that Chinese companies are acquiring more assets overseas. State-Owned-Enterprises (SOEs), including Petro China, Sinopec, CNOOC, the Baosteel Group, and CHALCO, were the leaders in these acquisitions. The sectors most coveted are those in the extraction industry. Chinese companies acquired 91 companies with a value of US$32 billion between 2005 and mid-2010. Chinese companies made purchases in other industries: Geely (automaker) bought Volvo for US$1.8 billion and Sany Group (a machinery manufacturer) built plants in Germany. Morgan Stanley’s report showed that, by the first half of 2010, China became the second largest overseas acquirer of assets after the U.S.

“However, more than 50% of the overseas acquisitions were not successful after the acquisition, i.e., they didn’t generate more money for the parent company.”

Source: China Youth Online, January 24, 2011
http://zqb.cyol.com/html/2011-01/24/nw.D110000zgqnb_20110124_2-10.htm

Since last year, China has adopted a new policy of diversification in order to handle the huge amount of its foreign reserve. The latest data shows that China’s foreign reserve is $US 2.8473 trillion. In 2010, China’s foreign reserve increased by $US 448 billion. Therefore, in the short term, China has increased its investment in the national debts issued by South Korea and Japan. As a long term strategy, China is going to put more of its reserve into European countries.

Another notable change in China’s foreign reserve policy is to allow Chinese citizens to invest directly in foreign countries. China is making this policy adjustment because, in recent years, China’s sovereign funds have encountered suspicion and barriers when trying to acquire overseas enterprises. China’s large, state owned enterprises will be the main foreign investors. At the same time, China will provide foreign currency loans to private companies and encourage and support more of China’s private enterprises in acquiring foreign companies.

Source: Xinhua, January 17, 2011
http://news.xinhuanet.com/herald/2011-01/17/c_13694069.htm