Economy/Resources - 256. page

Ministry Industry and Information Technology has serious concerns over surplus in steel production and recently issued an urgent directive to curb the steel production plant. The notice titled “Control the Over Production in Steel Manufacturing” urged the commercial banks to discontinue the lending to those factories who continue to grow its production while disregarding market demand. The notice stated that “total production in 2009 only needs to maintain at 4.7 billion tons to meet the demand while the production output has exceeded between 25 – 30 percent.”

The latest statistics released by the Custom office suggested that the steel export in April was 1.4 million ton, 260,000 ton less than March and down 70.5 percent compared with the same period last year. April year to date export was 6.55 tons, down 59.5 percent compared with last year. For Jan and Feb, large to mid size steel factories lost 15.5 billion yuan, which have been five straight months of financial loss since last October. Among those, half of the factories with production output above 5 million tons suffered financial losses.

Source: May 13, 2009, 21st Century News Group
http://www.21cbh.com/HTML/2009-5-13/HTML_PUBN53A2EA2X.html

Foreign investment in China continues to decline in the past seven months. According to Ministry of Commerce, foreign investment in April was down 22.5 percent to US$5.89 billion compared with the same period of last year and 9.5 percent down from March. The countries with the largest decline were Korea, US and Hong Kong where Hong Kong accounts for 45 percent of total foreign investment in China.

Source: BBC, May 15, 2009 http://news.bbc.co.uk/chinese/simp/hi/newsid_8050000/newsid_8051200/8051229.stm

According to a white paper on disaster relief that the State Council Information Office released on May 11, 2009, changes in China’s climate, economic growth and urbanization are placing increasing pressure on the country’s resources and the environment. On average, from 1990 to 2008, about 300 million people every year were affected, 3 million houses collapsed, 9 million people were re-located, and direct economic damages reached more than 200 billion Yuan. According to the white paper, the 1998 flood of the Yangtze River, the 2006 Sichuan draught, the Huai River flood in 2007, the freezing rain and snow disaster in southern China in 2008 and the Wenchuan earthquake on May 12, 2008, were particularly damaging. 

Source: State Council Information Office of the People’s Republic of China, May 11, 2009 http://www.scio.gov.cn/syyw/ejtt/200905/t319397.htm

The Global Times, under Chinese state-owned People’s Daily, published a report on various views about the strategy to get out of the “US Dollar trap”. All the scholars quoted in the report agreed that in the long run, China should reduce the amount of its assets valued in US Dollars. However, most of them agreed that it’s not wise to do so in the short term. Exit strategies discussed in the report included: increasing the use of RMB as a settlement currency, increasing stockpiling physical strategic resources and taking advantage of existing large US Dollar assets to gain more share in the current world financial system.

Source: Global Times, May 8, 2009.
http://finance.huanqiu.com/roll/2009-05/455186.html

The International Herald Leader, under Xinhua News, reported that a large number of Chinese exporting companies are dealing with more and more refused shipments. With the international financial crisis, various excuses are being used by foreign importers to reject shipped goods. Credit risks are significantly increasing. For example, in the first 2 months of 2009, Chinese private exporters alone lost $100 million due to refused shipments – an increase of 87.5% compared to last year.

 Source: International Herald Leader, May 8, 2009.
 http://news.xinhuanet.com/herald/2009-05/08/content_11334225.htm

Beijing plans to raise water prices to resolve the water shortage crisis due to the six year delay of “South-North Water Diversion” project. Water prices increased four times since 2001, from 3.01 to 5.04. The city is also considering monetary award to encourage reduced water consumption.

Source: Xinhua, May 11, 2009
http://news.xinhuanet.com/politics/2009-05/11/content_11348945.htm

According to Study Times, coal will continue to be the main source of energy through the year 2050, although the percentage of coal in China’s energy supplies may drop from 75% to 60%. “The basic reality of China’s energy is a ‘lack of oil, not enough gas, and a lot of coal,’ with uneven distribution of resources and economic development in the eastern and western regions.” Renewable energy such as wind power, solar power and biomass will hardly account for any meaningful percentage in the overall energy balance. The State should exercise caution with nuclear energy development, warns Study Times.

Source: Study Times, May 4, 2009
http://www.studytimes.com.cn/WebPage/ny1.aspx?act=0&id=2617&bid=4

China Youth Daily listed the challenges for college graduates to find jobs: One, irrational industrial structure makes manufacturing the strongest industry in China and other industries such as design, supply chain, and services that need more college graduates weak. Second, the large gap in social security benefits makes government or state-owned enterprises, offering more benefits, more attractive than agriculture or private companies, offering limited or even no benefits. Third, national monopolies prevent private enterprise from entering certain industries and thus creating jobs.

This year, China will have 7 million college graduates enter the job market.

Source: China Youth Daily, May 1, 2009
http://zqb.cyol.com/content/2009-05/01/content_2648156.htm