Economy/Resources - 92. page

In order to stabilize the price of pigs, raising pigs has become an important political task in China. Recently, Hunan, Sichuan, Guangdong and other provinces have established a minimum pig production for the year. Each city has been assigned a quantitative target, which is also becoming an important measure for assessing a mayor’s performance.

At the end of September, the Agricultural and Rural Affairs Department of Hunan Province assigned the task for the minimum pig production for 2019 for each of its 14 cities, with a total of 45 million in the province. In addition, Guangdong and Sichuan have also assigned the mayors with the task of raising pigs. Sichuan’s minimum pig production target for this year is 40.08 million, and Guangdong is 34 million.

African swine fever has caused a large number of pigs in China to die or be culled. For the Chinese people, pork accounts for sixty percent of their meat consumption. Continuous pig price increases are becoming a major economic issue. The Chinese government’s solution? Make is a political task by setting a quantitative target.

In August, Chinese Vice Premier Hu Chunhua asked all local governments to guarantee the stable production of pigs. In particular, he called for 70 percent of pig consumption to come from local production. This goal is also included in the mayor’s performance assessment.

Source: Central News Agency, October 3, 2019
https://www.cna.com.tw/news/acn/201910030264.aspx

According to a Caixin article, the African swine fever hasn’t merely pushed the pork prices in China to a record high. Some Chinese experts have estimated that the direct losses that the African swine fever caused will reach RMB 1 trillion. Experts also said that the impact is “nothing less than what a war would bring.” It has hit the poverty alleviation efforts, an official priority, rather hard. The government is striving to eliminate the impact and has taken steps to encourage a reduction in the consumption of pork.

Caixin published a quote from Li Defa, an Academician from the Chinese Academy of Engineering. He is the Dean of the College of Animal Science and Technology at the China Agricultural University and Vice-Chairman of the World Livestock Product Association. At a forum on pigs on September 24, 2019, Li expressed that, based on estimates, the direct loss due to African swine fever is 1 trillion yuan, not considering the upstream and downstream of the industrial chain.

Li said that half of the pigs in the world are produced in China and African swine fever has taught a lesson to Chinese animal husbandry. “It is impossible to prevent epidemics and diseases. The cost of this loss is too great.”

According to Caixin, in May 2019, Qiu Huaji, the director of the Pig Infectious Diseases Research Office of the Harbin Veterinary Research Institute under the Chinese Academy of Agricultural Sciences published a report in the “Shanhe Forum” of the Chinese pig industry on the theory and practice of prevention and control of African swine fever. He said in the report that the impact of African swine fever is wide-ranging. “Although it does not cause human fatalities, the economic losses, the impact on the national economy, the people’s livelihood, and the political, economic, and social impact are nothing less than war.”

In his May 2019 report, Qiu said that some people say that there are 100 million employees in the upstream and downstream of the pig industry, but there are countless families behind these billion people, so the impact is comprehensive. He further said that another important consequence is the impact on “helping the poor and tackling the hardships.” Getting people out of poverty is one of the most important achievements of Xi Jinping, the CCP Secretary.

The Caixin article is no longer available at its website.

Source: RFI, September 25, 2019

http://www.rfi.fr/cn/%E4%B8%AD%E5%9B%BD/20190925-%E5%AD%A6%E8%80%85-%E9%9D%9E%E6%B4%B2%E7%8C%AA%E7%98%9F%E6%8D%9F%E9%80%BE%E4%B8%87%E4%BA%BF-%E4%BC%A4%E7%97%95%E5%A6%82%E6%88%98%E4%BA%89%E4%B9%9F%E9%87%8D%E5%88%9B%E4%B9%A0%E8%BF%91%E5%B9%B3%E8%84%B1%E8%B4%AB%E6%A2%A6

Well-known Chinese news site Sina recently reported that, according to the latest National Bureau of Statistics data, China’s large-scale (officially classified as “Above Designated Size”) industrial companies’ total profit from January to August suffered a year-over-year decline of 1.7 percent. For just the month of August, large-scale industrial companies had a two percent drop in profit, compared to last August. Among these companies, year-over-year, state-held (with controlling stake) companies saw an 8.6 percent profit decline, joint-stock companies had no profit decline or increase, foreign investment based companies suffered a 5.8 percent decline, and privately-owned companies enjoyed a 6.5 percent profit increase. Key industrial segments that saw most of the profit loss are oil, coal, and other fuel processing (-53.1 percent), ferrous metal smelting and rolling processing (-31.3 percent), automobile manufacturing (-19.0 percent), chemical materials and chemical products (-13.1 percent), and textile (-3.4 percent). {Editor’s note: It is very unusual that the National Bureau of Statistics did not release the August profit numbers for state-owned companies this time. Analysts expressed their concerns about a possible unexpected level of profit loss.}

Source: Sina, September 27, 2019
https://finance.sina.com.cn/roll/2019-09-27/doc-iicezzrq8710855.shtml

Xinhua recently reported that, according to the National Bureau of Statistics, China’s 2018 total clothing sales saw a 24.8 percent year-over-year decline, which represents 17.85 billion fewer pieces of clothing. Fabric for the clothing market suffered a similar decline at the same time. Also, based on data that the China Business Federation as well as the China National Business Information Center released, the national average of the proportion of income going toward clothing expenditures in consumer spending went from 6.8 percent in 2017 to 6.5 percent in 2018. Even nationwide, large retailers suffered a 4.2 percent decline in clothing sales. All clothing categories had a decline in sales except sports clothing. In the meantime, clothing prices increased by 1.4 percent in 2018 and the clothing rental business enjoyed some growth as well. Analysts expressed their belief that the cause of the market change was that companies are seeing widespread cost increases in terms raw materials. Fashion trends are also adjusting at a much more rapid pace.

Source: Xinhua, September 12, 2019
http://www.xinhuanet.com/2019-09/12/c_1124988599.htm

The Central News Agency in Taiwan reported that, to avoid a big economic downfall, the State Council of mainland China has urged local governments to expedite the issuance of special bonds, which the governments use to raise money for special projects.

Prime Minister Li Keqiang held an executive meeting on September 4. He announced that, in order to further increase investments, local governments must complete the issuance of special bonds by the end of September and allocate funds to those projects by the end of October.

These bonds are for projects on transportation, infrastructure development, and medical care areas, and are not allowed to be used for real estate projects or repayment of matured bonds.

Depending on the needs of major projects, local government can use the special bond quota planned for the year 2020 in this year.

Source: CNA, September 8, 2019
https://www.cna.com.tw/news/acn/201909080099.aspx

According to IHS Markit, a London based leading research and consulting firm, its recently released Hong Kong Purchasing Managers Index (PMI) shows that, in the month of August, Hong Kong’s business activity experienced its biggest decline since 2008.

The report pointed to the fact that Hong Kong’s business confidence has dropped to a record low. Pessimism continues to spread in major companies. The IHS Markit’s Hong Kong PMI, adjusted for seasonal fluctuations, fell from 43.8 in July to 40.8 in August, the worst month since February 2009. In general, an index above 50 represents an increase in activity in the private economy, while below 50 represents a decline. The calculation of the index includes statistics on new orders, outputs, employment, suppliers’ delivery time, and inventory purchases.

According to IHS Markit’s PMI index, Hong Kong’s economy has been declining for 17 consecutive months. The number of orders that mainland China placed in Hong Kong has fallen sharply. Almost half of the companies surveyed said that orders from mainland China had decreased. They believe that the Sino-US trade war, the sharp depreciation of the renminbi, and the large-scale demonstrations in Hong Kong are the reasons for the decline in orders from the mainland.

Bernard Aw, an economist at IHS Markit, said the latest survey shows that the Hong Kong economy is shrinking at a rate of 4 percent to 4.5 percent. In August of this year, the output, new orders, and the export volume of Hong Kong companies fell sharply. In the history of the company’s compilation of the PMI index, which is more than 20 years, only the 2003 SARS epidemic and the 2008-09 financial crisis were worse than today.

Even worse, more and more companies surveyed believe that the situation will deteriorate even further in the next 12 months. According to IHS Markit, about one-quarter of companies in July were pessimistic about the coming year; in August one-third of respondents held a gloomy outlook.

Source: Deutsche Welle, Chinese channel, September 4, 2019
https://p.dw.com/p/3OzWQ