Economy/Resources - 249. page

A severe drought, which began in the fall of 2009, has plagued most of Southwest China and part of South China, affecting 11.88 million people, 800 million livestock, and 11.2 million acres of farmland, says the Office of State Flood Control and Drought Relief Headquarters (SFDH). 

Xinhua recently published an article by its Washington DC reporter on the relationship between Wall Street and Washington. Wall Street made a fortune in 2009 and the average income increased by 18%. The Obama administration is feeling really uneasy about this and his approval rate is sliding. Although the Wall Street “fat cats” are responding with lowered cash payments to their employees, the Whitehouse is actually the “Tom” in the cat-mouse game. The article pointed out that there is no fundamental conflict of interest between the two. “Jerry” is largely working with “Tom” for a PR show.

Source: Xinhua, January 24, 2010
http://news.xinhuanet.com/fortune/2010-01/24/content_12864554.htm

Global Times, under Chinese state daily news Renmin, recently republished an article by Outlook Weekly describing the loss of balance in the distribution of wealth in China. The rapid growth of the Chinese economy in recent years has created a large number of wealthy people. In 2009, the top 40 richest individuals all had over US$7 billion in net worth, while only 24 met the same standard in 2008. Research shows that the primary source of income for the wealthiest is the real estate market. The second primary source is the capital market. 19 out of the 40 richest individuals are in the real estate business. The wealthy in China accumulate wealth exceptionally quickly. This brings their method of obtaining income into question. Corruption, “grey income,” and monopolies are among the issues. The biggest problem, the article pointed out, is that the gap between the wealthiest and the average Chinese is getting larger and larger.

Source: Global Times, February 13, 2010
http://china.huanqiu.com/roll/2010-02/717742_2.html

Xinhua recently published an article reviewing the Chinese economy in 2009. The article started with mentioning a strong GDP increase of 8.7% which translates into RMB 33.5 trillion. “Almost the beacon that shines and leads the world economy,” the author claimed. He believed China’s accomplishments symbolized the fact that China is now a major economy in the world. This may get “some old capitalist countries” really worried.

However, the article also reminded that the Chinese per capita GDP is still below US$3,000, which is far behind the countries with tens of thousands of dollars for the same number. Therefore, any attempt that overstates China’s actual economic strength to increase Chinese responsibilities is unfair. As a rising world power, China needs to turn the economy from a “large” one to a “strong” one.

Source: Xinhua, January 25, 2010
http://news.xinhuanet.com/comments/2010-01/25/content_12864765.htm

China Publishing Group (CPG) held its annual meeting on January 28 and 29. The Deputy Director of the Press and Publication Administration Sun Shoushan praised CPG’s 2009 achievements. Sun put in print CPG’s future direction: being listed on the stock exchange and realizing assets and sales over 10 billion yuan (US$1.5 billion).

Sun outlined CPG’s development strategies: 1. Uphold the (Chinese Communist Party’s (CCP’s)) flag and not get diverted achieving the correct public opinion and publishing standards. 2. Strengthen itself financially to achieve the needed stock reform and listings. 3. Actively participate in public cultural service to gain public support; 4. Make great progress in the national effort of “going abroad” to promote Chinese culture and improve China’s cultural “soft power.” 5. Develop talent.

Ed: Founded in 2002, CPG is under the leadership of the CCP’s Propaganda Department and the administration of the Press and Publication Administration.

Source: Xinhua, February 1, 2010
http://news.xinhuanet.com/newmedia/2010-02/01/content_12911663.htm

Hong Kong Exchange (HKEx) Chief Executive Li Xiaojia recently commented that Hong Kong should seize the opportunity to participate in the internationalization of the RMB in the next ten years. He believes this will provide Hong Kong a big chance for development. It will enhance Hong Kong’s status of an international financial center. Li believes HKEx should take 3 steps: (1) Establish a basic infrastructure such as a settlement system; (2) Offer RMB-based financial products at the right time; (3) Improve the service level and risk management. Li believes the RMB has already started to be a regional settlement currency, and it will be an investment currency. In the end it will become an international reserve currency.

Source: Xinhua, January 25, 2010
http://news.xinhuanet.com/gangao/2010-01/25/content_12873554.htm

Winter in the year 2009 brought China strong shortages of energy due to unusually cold weather. The National Energy Administration explained the situation giving four primary reasons: (1) the low water level in the middle and lower reaches of the Yangtze River; (2) rapid recovery of China’s macro economy in Q4 of 2009; (3) the low stock level of coal, as well as a bottleneck in railway capacities; (4) a sharp increase in consumer demand caused by the fact that most of the regions were attacked by rainy and snowy weather.

Actions being taken by the authorities are: (1) increasing the coal gas production level; (2) increasing the supply of natural gas by expanding the volume of imports; (3) speeding up the construction of Natural Gas Storage and Adjustment Facilities.

Source: Xinhua, January 22, 2010
http://news.xinhuanet.com/fortune/2010-01/22/content_12858478.htm

Although China’s annual car sales topped the world at 13.5 million in 2009, it is too early to celebrate.
The real winners, according to the author, are actually foreign companies.

China’s automotive industry depends heavily on foreign companies to supply parts. Especailly regarding auto electronics, engines, and transmissions, foreign company’s market share is 90% .

China has yet to have its own brand. Its advantage in automotive production is low cost laborers. he profit margin is quite low. Without its own brands, China’s astronomical auto sales volume can only help others.

Source: China Business Times, January 20, 2010
http://www.cbt.com.cn/a/lilunpinglun/pangguanzheqing/2010/0120/6346.html