Economy/Resources - 244. page

The Journal of China’s Academy of Social Science, a government think tank, published an article stating that the external appreciation of the RMB might lead to domestic inflation. The Chinese RMB is facing two challenges: one from the international market to appreciate and the other from domestic market to depreciate. There are three reasons. First is that the settlement system for Chinese exports prohibits the free flow of foreign exchange – all exchange earned by exporters must be sold to the State at the official rate. The State has increased the money in circulation by 15,000 bn RMB for the $2,400 bn foreign exchange reserves. Second is that the relaxed monetary policy has led to staggering loans reaching 9,500 bn RMB. Third is that the various bank deposits represent potential purchasing power.

Source: China Review News, April 22, 2010
http://www.chinareviewnews.com/doc/1012/9/7/0/101297006.html?coluid=7&kindid=0&docid=101297006

The “Internet of Things” refers to utilizing the Internet and modern technology, such as RFID, censoring, GPS, and scanning, to identify, locate, track, and manage object movement. Deng Shoupeng, the Vice Chairman of the China Federation of IT Promotion pointed out at the “2010 Wireless Communication Application Conference,” that 2009 is the first year that China has entered the “Internet of Things” market. In 2010, the “Internet of Things” market in China will have reached 200 billion Yuan, including IC, censor, software, and other related industry chains. The size will grow to 750 billion Yuan by 2015.

Deng listed five areas in which China is currently lacking: standards, core technology to support the "Internet of Things," coordination among regions and industries, policies and regulations, and people who understand both the Internet and business.

Source: Xinhua, April 22, 2010
http://news.xinhuanet.com/internet/2010-04/22/content_13399614.htm

Xinhua recently reported that nine government units, namely Peoples’ Bank of China, the Central Propaganda Department of the CCP, the Ministry of Finance, the Ministry of Culture, the State General Administration for Radio, Film & Television, the State Administration of Press & Publications, the China Banking Regulatory Commission, the China Securities & Futures Commission, and the China Insurance Regulatory Commission, jointly released a guidline on financial industry support of the culture industry. The report called for successful implementation of the guidline in three areas: (1) widely publicizing the policies; (2) establishing a smooth bridge between financial and culture industries; (3) carefully performing groundwork.

Source: Xinhua, April 22, 2010
http://news.xinhuanet.com/video/2010-04/22/content_13402020.htm

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