Chinascope – Page 618

TISCO Struggles as Profits Drop

China.com carried an article on the financial struggle that the Taiyuan Iron and Steel Group (TISCO) is going through. According to the article, TISCO is the largest and most advanced stainless steel manufacturer in the world. Its annual steel production volume exceeds 10 million tons, 40 percent of which is in stainless steel. However the company’s profits have been declining yearly since 2012. They dropped from 18 billion (US$2.8 billion) in 2011 to 10 billion (US$1.55 billion) in 2012; 5 billion (US$0.77 billion) in 2013; 4 billion (US$0.62 billion) in 2014; continuing to a negative 40 billion (US$6.19 billion) in 2015. Recently, the company had to shut down some equipment and production lines and significantly cut back workers’ hours. According to the article, TISCO employees were asked to work one month and take three months off. They were told that during the three months that they are off, they are required not to take on any other jobs and must remain on call in case of any last minute schedule changes. The workers had to take a 20 percent pay cut and some of the workers could only make 50 percent of their pay compared to what they made before. Other measures that the company took included shifting the direct workforce to an indirect role by taking back-end maintenance and support functions such as working in a nearby agriculture farm that the company built. At the same time, TISCO set up sales offices in Shanghai, Guangzhou, Hong Kong and the U.S. in order to expand its sales channels.

Source: China.com, March 20, 2016
http://finance.china.com.cn/industry/hotnews/20160320/3636545.shtml

Briefings | | March 21, 2016 | Economy/Resources

Ministry of Finance: China is Not Concerned about Moody’s Downgrade

People’s Daily reported that, during the 2016 China Development Forum currently being held in Beijing, Lou Jiwei, China’s Minister of Finance, commented on Moody’s recent downgrade of its rating on China. Lou said that China does not particularly have a problem with the downgrade, even though it understands the agency’s concerns about the local debt in China. As to whether China can reduce its current capacity and overcome issues while going through structural reform, Lou said that China didn’t have any policies in place when Moody’s issued the downgrade but, since then, China has decided to spend one trillion yuan (US$150 billion) on capacity and inventory reduction, which shows its confidence in dealing with the issues.

Source: People’s Daily, March 20, 2016
http://finance.people.com.cn/n1/2016/0320/c403268-28212252.html

Briefings | | March 21, 2016 | Economy/Resources

Li Keqiang: China Will Not Have a Hard Landing

On March 16, 2016, Li Keqiang stated at a press conference that China’s economy will not have a hard landing and that Government officials will be held accountable if they do not do their jobs.

"We are fully confident in the long term prospects for the Chinese economy. This confidence is not without basis. We firmly believe that, as long as we continue to reform and open up, China’s economy will not suffer a hard landing."

Li expressed that last year, due to multiple factors, the mainland’s stock market went through abnormal fluctuations and the authorities took comprehensive measures to stabilize the market only to prevent systemic financial risks. As the situation has changed, there is now a need for reform and a need to improve the financial regulatory system. Efforts should be made to achieve full coverage without leaving any regulatory gaps. At the same time there must be coordination among the authorities, as well as accountability.

Li stressed that reform and improving the financial regulatory system is a process and all cognizant departments and local governments should continue to do their jobs in accordance with the existing descriptions of their responsibilities. “Otherwise, you will be held responsible for the slackness.” The press conference lasted two hours and ten minutes with close to 1,200 foreign and domestic reporters in attendance.

Source: People’s Daily, March 17, 2016

http://politics.people.com.cn/n1/2016/0317/c1024-28204946.html

Briefings | | March 18, 2016 | Government/Politics

CCTV Rebuts U.S. Criticism with Documentary, The Human Rights Record of ‘Defender of Human Rights'”

China Central Television (CCTV) broadcasted a documentary film on the evening March 13 on its Channel 1 (CCTV-1) program. The title was, “The Human Rights Records of the ‘Defender of Human Rights.’" It claimed that the film presented the real human rights situation in the United States with informative interviews, authoritative data, and interpretations from experts.

By collecting reports from the mainstream media in the United States and rest of the world, the film enumerated how the U.S. disregards the human rights of its people in all areas of life. For example, in 2015, the United States had more than 56 million homeless people, including 25 percent of the minors in the country. Among the deaths because of injury, of the deaths among adolescents over the age of 15, 1/4 died in shootings. From justice, political rights, labor rights, and basic living guarantees, to the rights of women and children, the so-called "melting pot" of the United States applies a double standard to almost all human rights issues.

The program claimed that the 45-minute-long television documentary used interviews of human rights experts from China, the United States, France, Canada, Russia, Switzerland, and other countries and that it also used an analyses from a plurality of sides and angles of U.S. human rights issues. It evaluated U.S. human rights standards and provided a vivid and close-up window for the public to understand the human rights situation in the United States.

Source: People’s Daily, March 14, 2016

http://world.people.com.cn/n1/2016/0314/c1002-28195502.html

Briefings | | March 17, 2016 | US-China Relations

China to Amend Armed Police Force Law

Last Wednesday, People’s Liberation Army Daily reported that Sun Sijing, Political Commissar of the People’s Armed Police Force (PAPF) and a People’s Congress representative attending the National People’s Congress in Beijing, submitted a proposal seeking an amendment that would put the PAPF exclusively under the command of the Central Military Commission headed by Xi Jinping.

According to Sun, the proposal to amend the law was based on the need to codify Xi Jinping’s recent guidance on the Armed Police Force and to implement the responsibility of the Chairman of the Central Military Commission. "Our Constitution established the responsibility of the Chairman of the Central Military Commission as an important part of the system. The Armed Police Force is part of the national armed forces. This major principle, that the Armed Police Force must follow the command of the Chairman of the Central Military Commission, must be written into law in order to ensure that the Party’s Central Committee, the Central Military Commission, and President Xi Jinping have firm supreme command of the armed forces."

[Editor’s Note: The current Armed Police Force Law, passed in 2009, states that PAPF is under the dual leadership of the State Council and the Central Military Commission.]

Source: National People’s Congress, March 8, 2016

http://www.npc.gov.cn/npc/dbdhhy/12_4/2016-03/08/content_1973601.htm

Briefings | | March 17, 2016 | Defense/Military

Why Does a Bubble Inflate Faster Right before It Bursts?

Recently real estate prices have risen rapidly in several major cities in China. There have been big debates on whether this represents a bubble. Financial Times Chinese published an article suggesting that by observing the past stock and housing market bubbles in the U.S. and Japan, one can see a phenomenon; the closer the bubble is to bursting, the faster it expands.

The article gave three reasons:

First, the buy and the short are supposed to balance the market. At the early stage of the bubble, they are in balance. As the bubble keeps developing, more people want to buy instead of sell. The short can no longer restrict the bubble.

Second, as the bubble grows, some investors start to worry about risk. To attract those rational investors, the market starts to offer higher short-term returns. If these returns are high enough, it will attract more investors.

Third, at the late bubble stage, a uniform consensus forms that the bubble will last forever. Almost all investors jump in to buy the bubbled assets. However, if all of them have bought the assets, to whom will they sell to make profit?

Source: Financial Times Chinese, March 9, 2016
http://m.ftchinese.com/story/001066525

Briefings | | March 16, 2016 | Economy/Resources

Former Officials Challenged National Development and Reform Commission

On March 9, at a break-down group meeting of the 4th session of the 12th Chinese People’s Political Consultative Conference (CPPCC), former Deputy Minister of Railways Hu Yadong criticized the National Development and Reform Commission.

"The [commission’s] annual economic development plan should have shown the actual implementation of the Premier’s [economic] plan at the National People’s Congress, but we didn’t see anything [concrete].

"In government investment, how many projects [will be taken on] and where the money will be spent should be expressed clearly. Leave the rest to the market. You (referring to the National Development and Reform Commission) don’t need to give vague words, such as ‘study to make a decision,’ ‘actively pushing forward,’ and ‘greatly promoting.’ These words do not belong in the actual plan.

"For example, the plan said to build a total of 2,000 km of utility pipes (water, Internet, gas, etc.) in all cities in China this year. I say it can’t be that small a number. We are building so many new residential buildings throughout the country; even 20,000 km is not enough [to support this new construction]. We have paid all the required ancillary fees for new buildings. If we hadn’t paid them, we could not have gotten the building permits. Are we going to get the waste water pipes? Is it that we will get them in some places and we won’t in some other places? Where did the money [that was paid] go?"

Source: Sina, March 10, 2016
http://news.sina.com.cn/c/nd/2016-03-10/doc-ifxqhmvc2263122.shtml

Briefings | | March 16, 2016 | Government/Politics

Wu Guoguang: Xi Jinping’s Reversal of the Course, Will China’s Transition be Peaceful or Marked with Bloodshed?

Cheng Xiaonong: U.S.-China Strategic Relations Have Crystallized

Xinhua Commentaries: “Exposing the Three Major Political Deficits of the U.S.”

The CCP’s Performing Arts Troupes in the U.S.