Economy/Resources - 250. page

The Chinese State Council Executive Meeting held on December 9 came up with several policies designed to stimulating consumer spending: (1) Continuing of the policy of "Home Appliances to the Countryside"; (2) Extending the "Automobiles to the Countryside" project through the end of next year; (3) Continuing the "Home Appliances Replacement project"; (4) Increasing the subsidies to farm machinery purchases; (5) Expanding the scope of the "Energy Savers’ Project"; (6) Extending the reduction of the sales tax on cars below 1.6 liters; (7) Extending the waiver of business taxes on "individual housing transfers" from 2 years to 5 years; and (8) Deferring various insurance payments by companies with financial difficulties.

Source: Xinhua, December 9, 2009
http://news.xinhuanet.com/politics/2009-12/09/content_12619143.htm

The Central Committee of the Communist Party of China (CPC) and the State Council jointly organized the Central Economic Work Conference, which closed on December 7, 2009.

Xinhua summarizes the five signals from the conference as follows: Synchronize stable growth and acceleration of transformation of the economic development mode. Maintain the current fiscal and monetary policies. Increase the supplies of commercial housing and strengthen residents’ consumption power. Relax residence controls to promote urbanization in small and medium cities. Widen market access and deepen reform to add impetus to development

Source: Xinhua, December 7, 2009
http://news.xinhuanet.com/fortune/2009-12/07/content_12606896.htm

Housing prices in China have risen through the roof and are outside the range of any reasonable income, leaving 85% of families in China unable to buy a residence, disclosed the Chinese Academy of Social Sciences (CASS) in its 2010 Economic Blue Book. Government land supply policy and developers holding land for profit are blamed for the rise in housing prices in 2009.

The blue book indicated a reasonable ratio between house prices and resident’s income is between 3 and 6. However, in 2009, that ratio between city housing and city residents is 8.3, 22.08 for off farm workers, and 29.44 for farmers.

Source: Xinhua, December 7, 2009
http://news.xinhuanet.com/house/2009-12/07/content_12604520.htm

Xinhua Net reported on Nov. 30 that Chinese Premier Wen Jiabao commented on international trade after the China-Europe Summit. Wen said that it was unfair to ask China to increase the RMB exchange rate while applying protectionism against China. He believed the request was actually an effort to restrain China’s development. Wen also suggested that keeping the Chinese currency stable benefits the Chinese economy as well as the recovery of the world economy.

Source: Xinhua, November 30, 2009
http://news.xinhuanet.com/world/2009-11/30/content_12564226.htm 

According to a Xinhua’s International Herald Leader’s article on December 3, 2009, Chinese products have been experiencing three tribulations overseas: exposure of the tainted products, becoming anti-dumping targets, and being misinterpreted by those wearing “tinted glasses.”

Toxic toothpaste, tainted toys, poisonous dumplings and milk … have led Chinese products into a “poisonous” crisis. Meanwhile, Chinese products are becoming “anti-dumping” targets due to the cheap price supported by cheap labor. In addition, westerners view Chinese goods with tinted glasses, labeling “Made in China” as a “China’s foreign economic expansion tool” and blaming Chinese businessmen because they never consider social values such as human rights, environment and safety issues.

Source: Xinhua’s International Herald Leader, December 3, 2009
http://news.xinhuanet.com/herald/2009-12/03/content_12580393.htm

A Ministry of Water Resources official released that there are about 270 million farmers with no access to safe drinking water. Besides pollution, excessive fluoride arsenic, manganese, brackishness and other issues are found in drinking water in some of China’s rural areas. “According to the tests conducted by the Ministry of Health last year and this year, roughly only 48% of the water projects that have been completed meet government standards. When people look at the water, it appears very clear but the bacteria exceeds the standard,” said the official.

Source: China Economy Net, November 23, 2009
http://www.ce.cn/xwzx/gnsz/gdxw/200911/23/t20091123_20480090.shtml

According to China Economic Weekly under the People’s Daily, since the opening of the economy began, China has transitioned from a country with a narrow income disparity to being one of those with the largest income disparity. “On the surface, it is a matter of the economy, but at a deeper level, it is a matter of system and policy.” A proposed guidance on redistributing revenue was submitted to the State Council for approval close to six months ago and it remains pending. The guidance was meant to “smooth the distribution structure among the State, enterprises and the people.”

The BBC reported that China’s disparity "has gone beyond the reasonable limit" according to many commentators. There is a strange situation existing in China. That is, while the poor have increased hatred and dissatisfaction, the rich are also complaining about society due to the increasing violence and crimes.

Source:
1. Chinese Economic Weekly, 41th Issue, 2009
http://paper.people.com.cn/zgjjzk/html/2009-10/28/content_370333.htm
2. BBC Chinese, October 27, 2009
http://www.bbc.co.uk/zhongwen/simp/indepth/2009/10/091026_china_richandpoor.shtml

By the end of September, China Investment Corporation (CIC) completed phase one of its acquisition of a 45% share of Nobel Holdings Investments Ltd., a Russian oil and gas company. The second phase will include investment in assets around the oil field. The entire deal amounts to $300 million. This move is only one month after CIC spent $939 million to purchase 11% of Global Depositary Receipts (GDR) of a Kazakhstan oil company. Experts suggested that this current series of Chinese acquisitions is the result of the devaluation of US Dollar. CIC’s investing into natural resources is a new trend in its investment strategy.

Source: China Economy Net, October 16, 2009.
http://www.ce.cn/xwzx/gnsz/gdxw/200910/16/t20091016_20214735.shtml