Economy/Resources - 240. page

The Chinese Minister of Commerce, Chen Deming, recently wrote an article estimating China’s domestic market size for 2010 to be US$2,000 Billion. The article was published with the background that many foreign investors have recently started to worry that China is no longer focusing on attracting foreign investments and is no longer welcoming foreign capital. The article also admitted that foreign investments have declined 2.6% so far this year. The article discussed the strategy on how China plans to get out of the “crisis.” The primary solution is to adjust and upgrade industry structures. Services, high-end manufacturing and environmental products are identified as key areas.

Source: China News Net, July 28, 2010
http://www.chinanews.com.cn/cj/2010/07-28/2432022.shtml

The Director of the Chinese National Population and Family Planning Commission recently suggested in a forum that, for a long period of time, the tension among the Chinese population, natural resources and the environment will remain. On one hand, a stable low birth rate ensures a preferred “population environment” for the long run; on the other hand, too high or too low a growth rate will break the balance of a healthy social development. With the current population growth trend, the Chinese population is having an annual net growth of 8 million people. It is projected that the number will peak at 1.5 billion in 2033. The solution to balancing the population and resources is believed to be speeding up the adjustment of the development model.

Source Xinhua, July 16, 2010
http://jjckb.xinhuanet.com/xwjc/2010-07/16/content_238043.htm

Xinhua recently republished an article by Economic Information Daily that discussed the reason that China could not adjust to the right track of an economic development model. The author of the original article is the well-known Chinese economist Wu Jinglian. Wu believes there are four primary obstacles to the reform: (1) various levels of the government still control some important powers over resource allocation; (2) GDP growth is still the primary indicator for measuring of government performance; (3) the financial situation of the government is heavily connected to the growth of material products; (4) market power is very much constrained in terms of resource configurations.

Source: Xinhua, July 16, 2010
http://jjckb.xinhuanet.com/xwjc/2010-07/16/content_238046.htm

According to China Review News, several media reported that China’s total grain production in the summer of 2010 showed a 0.3% decrease from last year, because the good laborers have migrated to the cities. China Review News observed that the pay for basic labor jobs in cities is much higher than for agricultural work. Therefore many young and strong farmers have migrated to the cities, leaving only the old, the weak, women, and kids at the farms. Also, the low education level in villages makes it hard to adopt mechanization in farmlands, even though it could be a way to make up for the loss of strong laborers.

Source: China Review News, August 2, 2010
http://gb.chinareviewnews.com/doc/1013/9/9/7/101399784.html?coluid=53&kindid=0&docid=101399784&mdate=0802073818

Xinhua recently reported on a swift Chinese response to the IEA’s (International Energy Agency) published number regarding Chinese energy consumption in 2009. The Chinese National Energy Administration (NEA) commented that the IEA number is “inaccurate.” IEA believed that China’s energy consumption in 2009 was the equivalent of 2.252 billion tons of oil, which was the highest in the world and was 4% higher than the United States. Chinese NEA official suggested that IEA is a “rich countries’ club,” and its number “cannot be believed.”  According to the number published by the Chinese National Bureau of Statistics, the figure was 2.132 billion.

Source: Xinhua, July 20, 2010
http://news.xinhuanet.com/politics/2010-07/20/c_12354029.htm

China Review News (CRN) recently reviewed an article published by China Securities Journal, discussing how to rebalance the China-US trade relationship. The article recommended four policies: (1) invest directly in the US; (2) diversify export markets; (3) adjust the foreign investment structure; (4) acquire international natural resources. The article also suggested four reforms: (1) reform the structure of the economy; (2) reform the mechanism of growth (to be more consumer-driven); (3) reform pricing of the factors of production, such as land; (4) speed up the urbanization process. In conclusion, the article called for implementation of two financial strategies: (1) establish a multilayer capital market system in order to obtain international pricing power for commodities; (2) speed up the process of RMB internationalization.

Source: China Review News, July 14, 2010
http://gb.chinareviewnews.com/doc/1013/8/1/6/101381618.html?coluid=148&kindid=0&docid=101381618&mdate=0715003503

People’s Bank of China recently authorized the Bank of China HK as the RMB cash settlement bank for Taiwan. The authorized Taiwanese counterpart can settle RMB cash transactions in Hong Kong. Before this arrangement, RMB settlements were done by two Hong Kong commercial banks. Using Hong Kong as an intermediate platform instead of direct trade is based on the facts that: (1) Mainland China is still restraining capital accounts; (2) Hong Kong has a more complete structure of RMB based transaction management. RMB transactions inside Taiwan are still an item pending negotiation.

Source: China Review News, July 13, 2010
http://gb.chinareviewnews.com/doc/1013/8/0/6/101380695.html?coluid=3&kindid=12&docid=101380695&mdate=0713171355

China Review News (CRN) recently reviewed an article published by Economic Information Daily on the lessons learned about the international credit rating system. The article pointed out that, after the Greek Credit Crisis, China was truly worried about the destructive power that the international credit rating system, which is controlled by three major organizations has. The various parties throughout all levels of the Chinese government and media came to the conclusion that China should have its own credit rating capabilities. With this background, the Chinese rating company Dagong Global Credit Rating released ratings of 50 typical countries. The article suggested that the three major rating organizations are biased and discriminate against developing countries. An example is that the ratings for China and India are even lower than Spain. The article also suggested that the Chinese government should stand behind Dagong and push the Chinese rating business in the U.S. market.

Source: China Review News, July 15, 2010
http://gb.chinareviewnews.com/doc/1013/8/2/0/101382055.html?coluid=53&kindid=0&docid=101382055&mdate=0715030107