Economy/Resources - 30. page

Well-known Chinese news site Sina (NASDAQ: SINA) recently reported that, according to the Dongguan City Bureau of Statistics, the city saw a first half-year GDP growth of 1.5 percent year-over-year. China’s national GDP growth during the same time period was at 5.5 percent, and GDP growth in Canton province (where Dongguan City is located) was 5.0 percent. Dongguan’s growth rate was second to last among major Chinese cities, and it ranked last among cities with an annual GDP of over one trillion yuan.

The Cantonese city of Dongguan, once nicknamed the “World’s Factory,” has manufacturing as the cornerstone of its economy. Last year, the city’s industrial value added reached RMB 624.4 billion (around US$86.7 billion), ninth in the country, and Dongguan ranked third among Chinese cities in manufacturing of computer, communication and other electronic equipment. In this year’s first first half, however, Dongguan’s computer, communication and other electronic equipment manufacturing sector fell by 4.9 percent, and electrical machinery and equipment manufacturing fell by 7.4 percent. The negative growth of these sectors has had a significant impact on Dongguan’s economy.

Take mobile phone production as an example — Dongguan is China’s manufacturing base for mobile phones nationally. Recently, one out of every four smartphones in the world was made in Dongguan. It used to produce 400 million mobile phones a year; production peaked in 2019 and then gradually declined. Last year, the production of mobile phones in Dongguan was only 197.6167 million units, a drop of more than half from the peak.

In the first half of this year, Dongguan’s exports decreased by 9.4 percent. The city’s past rapid growth was the result of globalization — the capital, technology, equipment, and orders driving economic activity in the city all came from abroad. This economic dependency on external factors has become a liability as global trade slumps, directly affecting Dongguan’s economy.

Source: Sina, August 13, 2023
https://news.sina.com.cn/o/2023-08-13/doc-imzhahxz5975357.shtml

Chinese media Jiemian reported that Liu Haibo, the senior vice president of real estate giant Wanda Group, has been arrested for reasons yet to be announced. According to a Wanda insider, the main reason behind the arrest is related to internal corruption within the company, and the amount of money involved is huge. In addition to Liu Haibo, a number of others from Wanda Group have also been taken away.

Liu Haibo graduated from Beijing University of Aeronautics and Astronautics in July 1991, and he joined Wanda Group in 2010. He served in a number of senior positions, including assistant president, executive deputy general manager of the development department, general manager of the development department, regional general manager, group chief vice president, and senior vice president. He has been in charge of Wanda Group’s investment business for a long time.

The news of Liu Haibo’s arrest has sent shockwaves through the real estate industry. Wanda Group is one of the largest real estate companies in China, and its involvement in corruption is a major blow to the industry. It remains to be seen what charges will be brought and what the full extent of the corruption is, but the news is sure to have a negative impact on Wanda Group’s reputation and business prospects.

Source: Central News Agency (Taiwan), August 8, 2023
https://www.cna.com.tw/news/acn/202308080256.aspx

The remnants of Typhoon Doksuri caused severe flooding in China’s northeastern provinces of Heilongjiang and Jilin, known as the country’s “breadbasket.” The flooding has killed at least 14 people and displaced tens of thousands more. It has also damaged or destroyed millions of hectares of crops, raising concerns about food security for China’s 1.4 billion people.

The flooding is the latest in a series of natural disasters to hit China’s agricultural sector in recent months. In May, heavy rains in Henan province caused widespread damage to wheat crops. In June, a drought in northern China took a toll on corn and soybean plantings.

The Ministry of Agriculture and Rural Development has warned that the flooding in Heilongjiang and Jilin could have a “serious impact” on China’s agricultural production. The ministry said that the flooding has damaged or destroyed about 10 million hectares of crops, and that it could take several years for the region to recover.

The flooding is also a major blow to China’s efforts to achieve self-sufficiency in food production. China is the world’s largest producer of wheat, and it is among the largest producers of corn and soybeans, but the country still needs to imports significant amounts of these crops to meet domestic demand. This year’s flooding could lead to increased food imports, which would put a strain on China’s economy.

The Chinese government said that it is taking steps to mitigate the impact of the flooding, including providing relief to those affected and investing in infrastructure to help prevent future disasters. It remains to be seen how the flooding will impact China’s food security in the long term.

Source: Voice of America, August 7, 2023
https://www.voachinese.com/a/deadly-floods-hit-china-s-major-grain-producing-region-fueling-food-security-concerns-20230807/7214602.html

Nikkei Chinese Edition recently reported that, according to data just released by the Chinese National Bureau of Statistics, China’s Manufacturing Purchasing Managers Index (PMI) for July is 49.3. The Chinese real estate market continued to slump, and the production growth of building materials was sluggish. Although the PMI was 0.3 percentage points higher than last month, it has been below the 50 threshold for four consecutive months. This is the first time since October 2019 that the PMI has seen such a stretch of low prints, when it was below 50 for six consecutive months.

The Chinese PMI is based on a survey of 3,200 manufacturing companies, aggregating data on items such as new orders, production and employees. A reading above 50 indicates expansion in manufacturing activity relative to the previous period, while a reading below 50 indicates contraction.

Looking at the composition of July’s PMI number, new orders as a primary indicator stood at 49.5. Production fell 0.1 percentage points to 50.2, exceeding 50 for 2 consecutive months. The employment index, which reflects employment trends, deteriorated. Numbers also showed smaller businesses are more pessimistic about the economy. Zhang Liqun, a researcher at the Development Research Center of the Chinese State Council, said that more than 60 percent of enterprises believe that current demand is insufficient. Many analysts said that policy makers may be hesitant to use aggressive stimulus to boost domestic consumption amid fears of rising debt risks, despite Beijing’s urgent desire to improve the economy.

Source: Nikkei Chinese, July 31, 2023
https://cn.nikkei.com/china/ceconomy/53092-2023-07-31-14-32-32.html