Chinascope – Page 670

FT Chinese: Offshore Funds Are Leaving the Chinese Stock Market

On July 15, 2015, Financial Times Chinese published an article on its website titled, “Offshore Funds Pull Out of the Chinese Stock Market.” The article stated, “As of yesterday, global investors had been pulling capital out of Chinese stocks via Shanghai – Hong Kong Stock Connect for seven straight trading days. Since July 6, 2015, overseas buyers have liquidated 44.2 billion Chinese yuan (about 7.1 billion US dollars) from their Chinese stock holdings via the Stock Connect trading link between Hong Kong and Shanghai.

Beijing initiated tough rescue measures to save China’s stock market. It is allowing more than half of listed companies to suspend stock trading. Major shareholders have been banned from selling any shares of their stocks. China’s Central Bank has injected liquidity into the stock market.

For now, the rescue efforts have succeeded in containing the panic in the stock market. "Some rescue measures, however, have shocked Western investors, such as requiring listed companies to report good news in order to boost the price of their stock." Many analysts have recently criticized the Chinese government’s rescue efforts. They describe the current market improvement as a government induced rebound after a decline.

Michael Lai, investment director at GAM, wrote, “The final straw was allowing half the companies listed to suspend trading, effectively turning A-shares (Chinese domestic stocks) into an unsalable market.” Some investors doubt Beijing’s ability to support the market.

Source: Financial Times Chinese, July 15, 2015
http://www.ftchinese.com/story/001063008?full=y

Briefings | | July 14, 2015 | Economy/Resources

Xinhua: China’s Serious Soil Pollution Is Worsening

Xinhua recently reported that the Chinese Ministry of Environmental Protection realized that China faces a serious worsening of its soil pollution. The Ministry will come up with a six to seven year plan to get the situation under control. Li Ganjie, the Deputy Minister of the Ministry, called for immediate action to design laws that help protect China’s soil. Currently there is no law that governs the area of soil pollution prevention. According to the United Nations’ title, 2015 is the “International Year of Soil.” In a recent summit of high ranking Chinese government officials, the “soil safety” issue was raised as a serious threat to national food safety, water safety, and the entire safety of the environment. Over the past 20 years, China has faced a significant area reduction of high quality arable land, soil erosion, soil acidification, and various other types of soil pollution. Urgent needs have been identified in the areas of technological innovation and legal protection as well.

Source: Xinhua, July 11, 2015

http://politics.people.com.cn/n/2015/0711/c1001-27289421.html

Briefings | | July 14, 2015 | Economy/Resources

BBC Chinese: China Criticized the UN High Commissioner for Human Rights

BBC Chinese recently reported that China was very angry with Mr. Zeid Al Hussein, the United Nations High Commissioner for Human Rights. It criticized him for “interfering with China’s internal affairs” as well as “not being professional.” Mr. Hussein expressed his concern in relation to the new restrictions imposed on human rights and freedom after China released its proposed draft National Security Law to the public for comments. Hua Chunying, the spokesperson for the Chinese Ministry of Foreign Affairs immediately said that China was “strongly dissatisfied and resolutely opposed to Mr. Hussein’s comments.” Hua also declared that Mr. Hussein’s judgment was “total guesswork” and was “untenable.” The proposed new law, if passed, allows the government to close down Internet sites or cut off regional Internet connections entirely, “under certain conditions.”

Source: BBC Chinese, July 9, 2015

http://www.bbc.com/zhongwen/simp/china/2015/07/150709_china_un_politics

Briefings | | July 14, 2015 | Government/Politics

Ukraine Has Become China’s Largest Corn Supplier

Well-known Chinese news site Sina recently reported that according to the latest statistics from Customs, China imported 403,881 tons of corn from Ukraine in May. This caused the total amount of corn imported from Ukraine to reach 1.55 million tons so far this year (as of May). That volume was near 90 percent of China’s total corn imports. China has been trying to establish the strategy of diversifying its supply sources for food and oil seeds. Since 2012, China has had in place a US$3-billion “loan for corn” agreement with Ukraine, which quickly became China’s largest corn supplier. Until the end of last year, the United States was China’s largest corn supplier. In the first five months of this year, the import volume from the United States sharply dropped by ninety-five percent. With a tougher relationship with Russia, Ukraine’s struggling agriculture is getting more and more dependent on China’s need for cereals and meat. U.S. senior economist Fred Gale suggested that this trend is in line with China’s strategy of investing in some of the “neglected regions.”

Source: Sina, July 6, 2015

http://finance.sina.com/bg/economy/sinacn/20150706/16421292316.html

Briefings | | July 14, 2015 | Geo-Strategic Trend

SASAC Notice: SOEs Losing Money to Reduce Financial Losses by 50 Percent over Next Three Years

According to China Review News, State Owned Enterprises (SOEs) were first given the direction to “increase revenue and reduce spending.” Then recently, the State-owned Assets Supervision and Administration Commission (SASAC) issued another notice urging SOEs that are losing money to reduce their financial losses by 50 percent over the next three years. The article said that, in order to reach the target, in addition to increasing revenue and reducing spending, the SOEs will need to improve their internal controls and speed up the reform and reorganization process, especially regarding the control of SOE asset loss.

Source: China Review News, July 8, 2015
http://hk.crntt.com/doc/1038/3/4/0/103834024.html?coluid=45&kindid=0&docid=103834024&mdate=0708103814

Briefings | | July 13, 2015 | Economy/Resources

China’s June PPI Down 4.8 Percent Year on Year

According to the latest release from the National Bureau of Statistics on July 9, China’s producer prices continued to fall in June, indicating a prolonged weakness in demand.

In June, China’s Producer Price Index (PPI), which measures the average change in the price of goods and services sold by manufacturers and producers in the wholesale market, fell 4.8 percent year on year, compared to the 4.6 percent drop in May. Month on month, the producer price index in June went down 0.4 percent. The drop in June marks the 40th consecutive month of the decline of the index and represents the sharpest drop since 2009.

For the 4.8 percent PPI drop, prices of production materials fell 6.2 percent in June, contributing 4.7 percentage points to the PPI drop during the month. Prices of consumer goods were down 0.2 percent.

Source: National Bureau of Statistics, July 9, 2015 http://www.stats.gov.cn/tjsj/zxfb/201507/t20150709_1211569.html

Briefings | | July 10, 2015 | Economy/Resources

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.