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Beijing Housing Authorities Tighten Regulations on Commercial Real Estate Projects

On March 27, Beijing Business Today, a daily newspaper affiliated with the Beijing Daily Newspaper Group, reported on its front page that housing authorities in China’s capital tightened regulations on commercial real estate projects.

Late Sunday, the city’s housing, urban planning, industry and commerce, and banking authorities released  an official statement that new commercial real estate projects — including those converted from office buildings to individual units — may be sold only to qualified enterprises, public institutions, and social organizations. In addition, the smallest unit for sale should not be less than 500 square meters.

Moreover, personal loans for the purchase of commercial real estate have also been suspended. The statement also said that second-hand commercial housing can only be sold to individuals who have paid their income taxes or social insurance for five consecutive years and have no houses under their names in Beijing.

Prior to this new round of strict tightening, commercial real estate converted for residential use has been a viable alternative given Beijing’s prohibitively high housing prices, despite the fact that the children of the residents are not qualified to attend school near where they live. In the past few years, 50 to 60 percent of commercially developed real estate has been sold to individuals for (residential) living.

Housing market analysts expect the new regulations will slow down the commercial real estate market significantly and reduce the number of units changing hands by over 30 percent.

According to 21st Century Business Herald, a Guangzhou-based national newspaper, the tightened restriction has the purpose of slowing down population growth in Beijing, as well as preventing a negative impact that the rising cost of office space will have on business activities.

Sources:
Beijing Business Today, March 27, 2017
http://www.bbtnews.com.cn/2017/0327/186746.shtml
21st Century Business Herald, March 28, 2017
http://www.21jingji.com/2017/3-28/2OMDEzNzlfMTQwNTU2OQ.html

German Manufacturers Complain about Increase in Counterfeit Products Sold through Alibaba

According to an article that the Chinese Edition of Deutsche Welle carried, many German companies have complained about the increase in the number of counterfeit products made in China and sold through Chinese E-Commerce giant Alibaba. The article said that VDMA, an association of German companies in the engineering industry, conducted a survey which found that 28 percent of German equipment manufacturing companies, including Siemens and SKF, the ball and roller bearing manufacturer, were aware that their products had been counterfeited and sold through the e-commerce Alibaba platform. One manufacturer commented that “Alibaba is famous for providing a large number of fake products!” The article stated that the counterfeiting activities range from trade name infringement to unsafe fake spare parts and equipment, especially in regard to automotive products. One VDMA lawyer told Deutsche Welle that China is the major source of fake products but it has made progress in dealing with counterfeiting issues. However there has been little development on copyright protection issues. According to the article, Alibaba has initiated efforts to deal with the counterfeiting issues. In 2016, with assistance from Alibaba, Siemens branch in China successfully located 150,000 fake sockets and remote controls which were worth several million euros.

Source: Deutsche Welle, March 18, 2017
http://www.dw.com/zh/山寨太多德国制造业向阿里巴巴开炮/a-38006874?&zhongwen=simp

China’s 2017 Economic Theme: Seeking Progress while Maintaining Stability

President Xi Jinping said on February 28 that this year, in order to achieve healthy development, China will stick to the basic economic theme of “seeking progress while maintaining stability.”

Xinhua News Agency reported Xi’s outline for this year’s economic work: to improve the quality and efficiency of the economy, to deepen supply-side structural reform, and to make major headway in economic restructuring. Xi gave this speech at the 15th meeting of the Central Leading Group on Finance and Economic Affairs, which he heads.

Three other politburo standing committee members, Li Keqiang, Liu Yunshan, and Zhang Gaoli also attended the meeting.

Xi urged that more effort be put into reducing excessive production capacity and that government departments firmly solve the problem of zombie enterprises, as they are unprofitable, debt-laden, and tie up public resources. As for people affected by the reduction in excessive capacity, Xi said that they should receive training for new job skills as well as social aid.

Xi reiterated the necessity of establishing long-term methods to promote the stable and healthy development of the real estate market. He again affirmed that “houses are built to be inhabited, not for speculation.”

Xi also said that the decisions made at all meetings of the Central Leading Group on Finance and Economic Affairs must be implemented.

Source: Xinhua News Agency, February 28, 2017
http://news.xinhuanet.com/politics/2017-02/28/c_1120545454.htm

China’s Labor Force Decreased by 33.25 Million over the Last Five Years

Caixin, a mainstream news media specializing in China’s economy, reported that China’s labor force continues to decline and its aging population continues to expand. According to data that China’s National Bureau of Statistics released in January 2017, at the end of 2016, the number of working-age population who were between the ages of 16 and 60 was about 33.25 million lower than in 2011. At the same time, China’s population aged 60 years and over at the end of 2016 increased by 45.87 million compared with 2011.

The report also mentioned that China’s population structure compared unfavorably with India.

Source: Caixin, February 27, 2017
http://datanews.caixin.com/2017-02-27/101059600.html

Liaoning Province 2016 GDP Number Was 23 Percent Higher than Reality

Well-known Chinese news site Sina recently reported on newly released official economic statistics that showed a 23 percent decline in Liaoning Province’s 2016 GDP number. The surprising number reflected the adjustments needed because of the province’s illegal activities in faking the province’s official statistics. The governor of Liaoning acknowledged his predecessor’s wrongdoing. However, the adjusted new number also reflected an economic decline resulting from debt defaults, production reductions, and massive layoffs in this industrial province that relies heavily on producing steel. Last April, Liaoning became the first province in seven years to report a negative growth rate. Many economists expressed their belief that political manipulation of economic data has been a widespread issue across China. Liaoning is not an isolated case. For many years, China’s national GDP total has always been less than the sum of GDP numbers from all provinces.

Source: Sina, February 23, 2017
http://finance.sina.com.cn/stock/usstock/c/2017-02-23/doc-ifyavvsk2920406.shtml

Xinhua Commentary: Trade Protectionism Won’t Solve the Problems the U.S. Faces

Xinhua carried a commentary that a professor from Fudan University wrote titled, “Trade Protectionism Will Not Solve the Problems the U.S. Faces.” The article said that, since Trump took office, he has publicly promoted “Buy American and Hire American.” He withdrew the U.S. from TPP and requested a renegotiation of NAFTA. These indicate that trade protectionism is on the rise and has become the latest unstable factor affecting the progress of the global economy. The article cited the following three reasons that trade protectionism will not solve the problems the U.S. faces. First, trade protectionism will harm the interests of the U.S. multinational corporations because they will lose the profits from trade while the foreign countries will lose on trade volume. Second, it will hurt the competitiveness of the U.S. economy because even though, on a short term basis, it will help the industries that are less competitive, it will also cause those industries to lose the motive to expand and advance in technological renovation. Therefore, they will become less competitive in the global market. Third, it will damage the future of the U. S. economy because the possible global trade war will seriously affect those U.S. companies that rely on exports. As the U.S. focuses on its own interests and becomes isolated and selfish, it will weaken the confidence of investors from the U.S. and around the world. Therefore it will not help U.S. economic growth in the long term. The article concluded that, if U.S. does not face its own domestic economy, political, and social structure issues but rather blames unfairness and an imbalance in international trade deals, it will not help to solve its own problems. Rather, it will hurt others as well as itself.

Source: Xinhua, February 26, 2017
http://news.xinhuanet.com/world/2017-02/26/c_129496228.htm

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