Economy/Resources - 234. page

China has become one of the major luxury goods consumers in the world. A recent Bain survey showed that, in 2009, Chinese spent $9.6 billion on luxury goods, which accounts for 27% of the world total, while China’s GDP only accounts for about 5% of the world GDP. According to Boston Consulting Group (BCG), the consumption of luxury goods in Chinese will reach 40 billion USD by 2015; Bain’s estimation for 2015 Chinese luxury goods expenditures is 14.6 billion USD. According to another consulting firm, McKinsey, about half of the Chinese luxury goods are used as gifts. 

Zhang Xin, Professor and Ph.D. Advisor to the Marxism Institute, People’s University outlined five challenges to China’s modernization process. Zhang furthered his thoughts during one of a series of interviews on "Studying and Practicing the Scientific Concept on Development" organized by Xinhua Net.

The five challenges are:
1. Countryside Modernization – the urban-rural gap is getting wider
2. Environment – a challenge China has been facing over a long period
3. Resources
4. Regional Development Imbalance
5. Relatively Backward Technology

The greatest conflict that China faces is the conflict between interests. While China experiences exceptional economic growth, problems related to social security, an urban-rural gap, a regional economic development gap, and problems in taking people’s homes/land for new development are all interest-related conflicts that threaten social stability.

Source: Xinhua, April 19, 2010
http://news.xinhuanet.com/video/2010-04/19/content_13383544.htm

The International Herald Leader, under Xinhua, published an article suggesting that a better looking face is needed for Chinese capital going abroad. The article identified the Chinese economy’s rapid growth as the primary reason for Chinese to invest in the outside world. However, a negative image of Chinese investments is being built in some countries because: (1) the competitors are spreading negative views; (2) Chinese investors are not acting properly; (3) the industries receiving investments are tough; (4) some western countries spread slander.

The author believes Chinese capital must have a better image. It relies on the self-discipline of Chinese investors as well as media reports. Unfortunately western media have a monopoly and they are often the origin of false accusations.

Source: Xinhua, April 15, 2010
http://news.xinhuanet.com/herald/2010-04/15/content_13358462.htm

Xinhua recently republished a report by China Securities Journal on an April 7 event in which the governments of Guangdong Province and Hong Kong signed a framework agreement of cooperation. The agreement focuses on improving Hong Kong’s status as an international financial center. It was made clear that the goal is to enhance Hong Kong’s leading position by integrating resources and services provided by Guangdong Province. The two sides agreed to jointly push the tests of cross-border RMB settlements with needed infrastructure. This is one step in exploring the path of the internationalization of the Chinese currency. Other important elements of the agreement are making the region a center for air travel, shipping, cargo distribution and human talent.

Source: Xinhua, April 8, 2010
http://cs.xinhuanet.com/xwzx/05/201004/t20100408_2387891.htm

According to Farmers Daily (www.farmer.com.cn) on April 9, 2010, more than 300 million people in rural areas do not have any clean drinking water. Over 60% of the substandard drinking water is the result of non-natural factors. The cancer mortality rate, which is closely related to environmental pollution, increases year by year in the rural population.

The causes of pollution in rural areas are 1) few waste and water treatment facilities; 2) chemical fertilizers and pesticides everywhere; 3) high pollution and high energy consumption industrial enterprises entering the rural areas.

Source: Farmers Daily, April 9, 2010
http://www.farmer.com.cn/gd/snwp/201004/t20100409_536442.htm

The Guidance on the Financial Support of Revitalization, Development, and Prosperity of Cultural Industries was issued on March 26 by nine central party and government agencies including the People’s Bank of China, the Propaganda Department of the Central Committee of Chinese Communist Party, the Ministry of Finance, Ministry of Culture, State Administration of Radio Film and Television, the General Administration of Press and Publications, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission. 

China is going to beef up its investment in promoting 3G mobile networks over the next two years. On April 8, the Ministry of Industry and Information Technology (MIIT) and seven more ministries jointly issued a “Notice on Promoting the Development of 3G Mobile Communication Network,” outlining the goal and implementation strategy for 3G-network development. The notice calls for 3G-network coverage in all cities at or above the prefecture level and the majority of counties, towns, major highways and tourist areas, by 2011. 400 billion Yuan will be invested in 3G-network construction and over four hundred thousand 3G base stations will be built to support one hundred fifty million 3G users.

According to MIIT, China had only 16 million 3G users as of February 2010.

Source: Shanghai Stock Information Service, April 9, 2010
http://paper.cnstock.com/html/2010-04/09/content_10460.htm

Outlook Magazine published an article, disclosing that many farmers in China have over-used antibiotics in raising animals, causing meat, eggs, and milk to contain antibiotic residues. Some farmers sell animal products after feeding antibiotics to sick animals. Some farmers routinely feed animals with low doses of antibiotics, though the animals are not sick. These practices produce more resistant bacteria among animals and also threaten human health.

The average Chinese consumes 138 gram of antibiotics per year, the highest in the world and ten times the amount used in the U.S. on an average basis. Among the antibiotics users, only 20% truly need them and 80% are abusers.

Source: Outlook Magazine, April 12, 2010
http://news.sohu.com/20100412/n271440936.shtml