Economy/Resources - 239. page

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

At the end of June, 2010, China had $2.4543 trillion in foreign exchange reserves. On August 24, 2010, China Review News reported that China has been implementing a strategy to diversify the allocation of its foreign exchange reserves.　　

According to the U.S. Treasury Department on August 16, China had reduced its holdings of U.S. Treasury bonds by $96.2 billion since July 2009.

Japan’s Finance Ministry announced on Aug. 9 that China had purchased 456.4 billion yen (about 5.3 billion U.S. dollars) in Japanese government bonds in June, which means that China has purchased Japanese government bonds for 6 consecutive months. For the first half year of 2010, China purchased a total 1.73 trillion yen in holdings of Japanese government bonds (about 20.2 billion U.S. dollars). Meanwhile, China has increased its holding of South Korea government bonds by 111%, up to 3.99 trillion won (about 3.4 billion U.S. dollars). In mid-July of 2010, the Chinese Administration of Foreign Exchange bought about 400 million euros in Spain’s 10-year bonds.

Source: China Review News, August 24, 2010
http://gb.chinareviewnews.com/doc/1014/2/4/1/101424122.html?coluid=53&kindid=0&docid=101424122&mdate=0824080231

Wang Xiaolu, a scholar at the National Economic Research Institute under the China Reform Foundation, recently published an article that calculates the 2008 urban residents’ “hidden income” to be as high as 9.26 trillion yuan, about 30% of the year’s gross domestic product (GDP). Wang believes that the existence of gigantic amount of “hidden income” or “grey income” shows the severe distortion of the distribution of national income. The sources of the “hidden income” include corruption, and other means of misappropriation of public funds and private wealth.

On August 24 and 25, the National Bureau of Statistics published two articles on its website, confronting Wang’s study by questioning its methodology.

Source: Jinghua Daily, August 26.
http://epaper.jinghua.cn/html/2010-08/26/content_580292.htm
[Editor’s Note: Jinghua Daily is a Beijing local newspaper]

The People’s Bank of China recently published a “Notice on Issues of Three Types of Organizations, Including Offshore Renminbi’s Clearing Houses, Investing the Renminbi in Banks’ Bond Markets.” China Review News quoted an article by the Shanghai Securities News, commenting that it will improve the Renminbi’s circulation overseas to create the condition for it to “come back” after “pushing it out,” moving forward the goal of making the Renminbi a major foreign exchange currency.

The article stated that there are 3 ways to push the Renminbi to “go abroad.” They are: currency exchange between China and other countries, using the Renminbi for cross-border trade settlement, and Hong Kong’s Renminbi’s offshore market. The article then argued for establishing a Renminbi onshore market in Shanghai to provide a better condition for the Renminbi to circulate back.

Source: China Review News, August 24, 2010
http://gb.chinareviewnews.com/doc/1014/2/4/1/101424105.html?coluid=53&kindid=0&docid=101424105&mdate=0824074956

China will face increasingly more trade protectionism over the coming two to five years, according to an official at the Economic Forecast Division/State Information Center.  Mr. Zhang stated that, as the global economy enters the post-crisis era, then trade wars will escalate.  

“In the next two to five years, China will face increasingly more trade frictions. China’s export will inevitably be the hardest hit by trade protectionism. Furthermore, trade barriers will be the norm and there will be pressure on China’s RMB, expecting it to further appreciate. Filing complaints or turning to the WTO (World Trade Organization) may be of no use. The key to breaking encroaching trade barriers lies in China’s transformation, strategic realignments and the State’s earnings model.

Source: Shanghai Securities News, August 11, 2010
http://paper.cnstock.com/html/2010-08/11/content_39773.htm

Zhou Yongkang, Communist Party Politburo Standing Member, presided over a Legal Daily forum on propaganda. Zhou stated that the media must continue to adhere to “positive propaganda.” ”It is a proven fact that a large number of journalists are strong supporters and promoters of our political and legal work. They are close allies of political and police officers.” Zhou called for journalists to “persevere in unity and stability, continue mainly positive propaganda, promote the main directive and take the initiative.” According to Huanqiu, the Legal Daily was launched in August 1980 as the Communist Party’s main mouthpiece, influencing public opinion on political and legal matters.

Source: Huanqiu, August 13, 2010
http://china.huanqiu.com/roll/2010-08/1012804.html