Economy/Resources - 234. page

Study Times, a weekly Chinese Communist Party School newspaper, published an article pointing out problems with State-Owned Enterprises (SOEs), especially those with monopoly positions in China. It argued that many of these SOEs lack core competitiveness in the international market and damage fair competition in China. “With the government’s subsidies, their employees receive large salaries even though the company loses money.” “After recent reforms and reorganizations, the SOEs have become larger and their market dominance stronger, making it impossible for privately owned companies to compete with them.” This is the result of the SOEs misusing the government’s public power. Some large SOEs have financial power and economic influence as significant as that of a provincial government. The article didn’t offer any solutions.

Source: Study Times, December 6, 2010
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2010/12/06/12/12_47.htm

From November 22 to 26, 2010, the People’s Daily published five commentaries, one per day, on stabilizing prices in China. These commentaries echoed the State Council’s “Notice on the Protection of the General Price Level and the Stability of the Basic Livelihood of the Masses” that was issued on November 20. These articles stressed that China is able to control prices and that “the reason for rising farm product prices is that some bad people stockpiled farm products to increase prices."

Source: People’s Daily Online, November 28, 2010
http://politics.people.com.cn/GB/1026/13334957.html

Tsang Chun-wah, Financial Secretary of the Hong Kong S.A.R. government, recently commented that 75% of the cross-border RMB settlements are made through Hong Kong. In the first half of this year, cross-border RMB settlements reached a total of RMB 67 billion. Tsang believes that Hong Kong will play a more and more important role in the process of internationalizing the RMB. He suggested that the Chinese economy is bringing Hong Kong new potential as a global growth leader. Hong Kong is becoming a very good place to raise capital. In the future, Tsang believes, one of the areas Hong Kong plans to focus on is RMB offshore transactions.

Source: Xinhua, November 16, 2010
http://news.xinhuanet.com/2010-11/16/c_12779545.htm

China’s central bank, the People’s Bank of China, announced that, starting November 16, 2010, the RMB Deposit-Reserve Ratio increased by 0.5% to 17.5%. This is the fourth time this ratio was adjusted this year. Analysts believe it is very likely the central bank will raise interest rates in a few months. Based on some estimates, every 0.5% increase freezes RMB 350 billion. Since the ratio adjustment does not ease the high inflation situation, this move is recognized as a sign of a new round of interest rate increases. China’s central bank blames the recent issuance of U.S. Dollars for China’s inflation, calling it “imported inflation.” It was also promised that “hot money” would be strictly controlled.

Source: China Review News, November 11, 2010
http://gb.chinareviewnews.com/doc/1015/0/0/7/101500716.html?coluid=45&kindid=0&docid=101500716&mdate=1111080113

Xinhua reported on the 2010 China Mining Congress and Expo that was held in Tianjin from November 16-18. More than 4,000 government officials, experts, and top administrative leaders of financial institutions from over 50 countries gathered at the conference. Senior government officials from the world’s big mining countries in Canada, South Africa, and Australia spoke at the opening ceremony and said that (their countries) welcome China’s investment. At the same time, they expect that their mining industries will increase communication and exchanges with China.

Source: Xinhua, November 17, 2010
http://news.xinhuanet.com/2010-11/17/c_12786880.htm

Zhang Xiaojing, Director of Macro Studies at the China Academy of Social Sciences, urged top leaders to take drastic measures to promote reform and to change the crisis into an important opportunity for reform. Next year is the beginning of the twelfth five year plan. Zhang believes that, if the theme of the Chinese economy is transformation, these five years will be critical for that transformation. Zhang wrote that while crises and opportunities will continue, the uppermost leaders should demonstrate their courage and guts to promote reform so that the transformation will make fundamental progress.

Source: Qiushi, November 16, 2010
http://www.qstheory.cn/zz/gcysk/201011/t20101116_56744.htm

According to a Xinhua report, several top Chinese officials recently expressed concern about rapid price increases due to inflation in China. On November 11, Wen Jiabao, while visiting Guangzhou for the Opening Ceremony of the Asian Games, paid a visit to a local supermarket. Wen asked the sales-persons there about prices, supplies, and the sales of fruits and vegetables. Wen told them, “The State Council is working on policies to control rapid price increases.”

On November 16, at China’s Global Debt and Capital Market conference, Zhou Xiaochuan, President of the Bank of China, said, “China is facing the risk of an inflow of capital” and “the rising prices in China need attention from all areas.”

Sources: Xinhua, November 16, 2010
http://news.xinhuanet.com/2010-11/16/c_12782257.htm
http://news.xinhuanet.com/2010-11/16/c_12781043.htm

On November 5, the Managing Director of the International Monetary Fund (IMF) announced that the IMF Executive Board approved the Far-Reaching Governance Reform Plan. Once implemented, China’s voting power will reach 6.07%. It will surpass Germany, France, and Britain, being behind only the U.S. and Japan. China’s current voting share is 3.65%. The planned reform will shift 6% of the overall shares to emerging markets. Europe will also give two seats on the Executive Board to emerging market countries to increase the representation of those countries. China suggested that this reform just reflects the reality of the world economy. The “historic agreement” was reached in October, during the G20 conference of treasury ministers and central bank governors.

Source: Xinhua, November 6, 2010
http://news.xinhuanet.com/2010-11/06/c_12745053.htm