Economy/Resources - 238. page

 On September 10, 2010, Xinhua reported that, according to a speech made by an official from China’s Ministry of Agriculture, China’s textile industry uses over 10 million tons of cotton each year, while the average annual domestic cotton production is only 7.06 million tons.

In this century, China has been importing over 2 million tons of cotton per annum. The highest amount of imported cotton recorded was 3.6 million tons. This year, the amount of imported cotton increased more than 60%.

Since the beginning of this century, the cotton plantation area in China has decreased more than 14 million mu (ed. note: 1 US acre = 6.07 mu) compared to the last century, leaving only 80 million mu of cotton plantations.

Source: Xinhua, September 10, 2010
http://news.xinhuanet.com/2010-09/10/c_13489750.htm

Inflation in China has been driven by constant food price adjustments and a 10%+ food price increase, which puts excessive pressure on low-income residents, resulting in major social upheaval, said a Study Times article.  

The article disagrees with some Chinese economists who advocate a moderate annual inflation of 5% to 6%. While the Consumer Price Index (CPI) may remain low, food prices have increased significantly, pushing the CPI upward.  

The populace can’t adjust to the 5% to 6% CPI increase because of the veiled food price increases. In 2004, 2007 and 2008, the CPI increased 3.9%, 4.8% and 5.9% respectively. “These are the three years when the populace was most unhappy about existing price controls."  

Should food prices increase by more than 3%, "major social problems will ensue," said the article. 

Source: Study Times, September 6, 2010
http://www.studytimes.com.cn:9999/epaper/xxsb/html/2010/09/06/12/12_43.htm

China Review News republished a People’s Daily article by Yang Yiyong, Director of the Social Development Institute, National Development and Reform Commission (NDRC). In the article, Yang listed the major issues of income disparity in China:
– Disparity between urban income and farmland income;
– Disparity in farmland income between developed regions and under-developed regions;
– Disparity among different industries.

The gap in the initial income distribution is widening because state-owned enterprises’ monopoly power enables them to seek high profit and thus high income, and lower income and inadequate social protection to laborers who have a lower social status. The government also lacks an effective mechanism to achieve a balance in income distribution. That’s due to the lack of a well-established personal income tax system and social security system and the disparity in social welfare among different groups of people.

Source: China Review News, September 7, 2010
http://gb.chinareviewnews.com/doc/1014/3/8/6/101438691.html?coluid=53&kindid=0&docid=101438691&mdate=0907080330

Lianhe Zaobao reported that, in a recently published list of the 500 largest Chinese enterprises, state-owned enterprises occupied all of the top 10 positions. With 1.39 trillion Yuan ($207 billion dollars) in revenue, China Petroleum & Chemical Corporation continued to hold the top position for the sixth year in a row. State owned companies dwarfed their privately owned counterparts. Among the 60 largest companies with over 100 billion Yuan ($15 billion dollar) in revenue, only five were privately-held, while all others were state-owned.

Source: Lianhe Zaobao, September 5, 2010
http://www.zaobao.com/zg/zg100905_001.shtml

More farmland will be lost as urbanization in China advances. The urban population, which is currently at 46.8%, will increase to 54% by 2015, to 65% by 2020, and close to 70% by 2030, according to Ma Xiaohe, Deputy Director of the State’s Academy of Macroeconomic Research under the National Development and Reform Commission. 

“Given the reality of more people and less land, so many people moving into the city will certainly require a lot of land … Furthermore, due to the urbanization process, more highways have to be built, water and utilities are a great part of what is needed, and public service facilities have to be set up. This, in turn, will reduce farmland even further.”  

He concluded that China is facing an unprecedented challenge in preserving farmland and preventing food shortages.

Source: Huanqiu, August 30, 2010
http://china.huanqiu.com/roll/2010-08/1058881.html

The fundamental cause for rising food prices are the soaring housing prices, according to Yin Zhongli, official from the State’s think tank, the Institute of Finance and Banking, which is under the domain of the Chinese Academy of Social Sciences.  

He suggested, “Bad weather and international markets may have touched off the food price hike but the fundamental cause is soaring house values. Even when the weather improves, inflation is unlikely to improve. Housing prices driven by inflation are emerging.” He warns that if the housing prices remain unchanged, wages may double.  

“Unless the authorities provide low-income housing, the housing prices driven by inflation will persist for a long time.”

Source: Caijing, August 30, 2010
http://blog.caijing.com.cn/expert_article-151340-10445.shtml

In a recent forum, Yin Weimin, Minister of Human Resources and Social Security, discussed four main weaknesses of China’s current Social Security System: (1) elderly unemployed city residents don’t enjoy any pension or monetary protection; (2) the aging traditional pension system still covers the government system and public institutions; (3) there is a lack of smooth connections between various social security related systems; (4) supplementary social protection systems are under very slow development and do not satisfy diverse market needs.

Yin suggested that a sound social security system is urgently needed for sustainable social development. The biggest unfairness is the fact that a large chunk of the population lacks basic social protection arrangements.

Source: Xinhua, August 23, 2010
http://news.xinhuanet.com/2010-08/23/c_12474383.htm