Chinascope – Page 832

Excess Capacity Problems May Lead China to a Long-term Depression

On July 28, 2013, China Review News published an article on China’s excess capacity problems, where demand for products is less than the potential supply. The overcapacity of China’s industries has spread from traditional industries to emerging industries. In the first quarter of 2013, the capacity of China’s industrial enterprises that was actually utilized was only 78.2 percent. The capacity that has been utilized in some major industries has dropped below 75 percent, for example, building materials (72.5 percent), the railway, shipping, and other transportation equipment manufacturing industry (73.6 percent), and the coal mining industry (74.9 percent). There has been a definite and ongoing surplus in certain industries. In 2012, the overcapacity in China’s steel industry was 21 percent; cement’s overcapacity reached 28 percent; the overcapacity in electrolytic aluminum production reached 35 percent; and the overcapacity in the automobile industry was 12 percent. China’s solar photovoltaic cell production capacity accounts for 60 percent of what is needed for the whole world, but the excess capacity of PV cell production has reached 95 percent.

According to the article, excess capacity problems may lead China to a long-term depression. The article provides several suggestions on how to solve the problem, such as discouraging local governments from making further investments.

Source: China Review News, July 28, 2013
http://www.zhgpl.com/doc/1026/5/0/9/102650985.html?coluid=53&kindid=0&docid=102650985&mdate=0728071042

Briefings | | July 31, 2013 | Economy/Resources

People’s Daily: China’s Dream Is a Dream to Establish a New Fair and Rational International Order

On July 29, 2013, People’s Daily published an article titled, “The China Dream’s Significance for the World.” The article explained that the China dream has multiple perspectives. At the end of the article, it concluded:

“China’s dream is a dream to establish a new fair and rational international order. In today’s world, the old, unfair, and irrational international order has not fundamentally changed; it is a major cause of local turbulence in the world.”

Source: People’s Daily, July 29, 2013
http://opinion.people.com.cn/n/2013/0729/c1003-22355697.html

Briefings | | July 31, 2013 | Government/Politics

Xinhua: The Economic Slowdown Must Not Exceed a Tolerable Bottom Line

On July 30, 2013, the CCP Central Committee Political Bureau met and discussed the direction of China’s economy. Based on that discussion, Xinhua published an article, also on July 30, 2013, suggesting that China’s economy is in a “ridge climbing” period (like climbing a steep and difficult slope). Therefore, it is important to “ensure the economy runs within reasonable parameters.”

The article stated that the goal is to “stabilize the people’s mind.” China must not let the economy fluctuate up and down. The economic slowdown must not exceed a tolerable bottom line. The stability-oriented macro-policies do not allow any big adjustments. The government is the final decision maker in terms of macro-policies, micro-policies, and social policies so as to build a stable economic and social development system in China.

Source: Xinhua, July 30, 2013
http://news.xinhuanet.com/2013-07/30/c_116746038.htm

Briefings | | July 31, 2013 | Government/Politics

People’s Daily: Ministry of Commerce Responded to the Idea of Foreign Investments Fleeing China

People’s Daily recently reported that China’s Ministry of Commerce suggested that the so called “phenomenon” of foreign investments fleeing China for Southeast Asia is just a few OEM (Original Equipment Manufacturer) factories leaving for neighboring countries. The minor scale does not constitute a trend. However the Chinese government does recommend that investors move to the Western region inside China where they can realize the same benefits. Starting with the end of year 2011, the actual foreign investment level has been on the decline. Observers expressed the belief that investors were moving their money to Southeast Asia where they found the lower labor costs more attractive. The government found there was a 9.18 percent decline in the number of new companies founded based on foreign investment. As an answer to this decline, in the first half of this year, the Chinese government simplified the process of approving foreign investments.

Source: People’s Daily, July 27, 2013

http://finance.people.com.cn/n/2013/0727/c1004-22346039.html

Briefings | | July 30, 2013 | Government/Politics

China Released First List of Sunsetting Industry Sectors

China.com recently reported that the Chinese Ministry of Industry and Information Technology released the official 2013 list of the industry sectors planned for sunsetting. The first batch incorporates 19 industrial sectors which include iron and steel, coke, ferroalloy, calcium carbide, aluminum, copper (including recycled copper) smelting, lead (including secondary lead) smelting, zinc (including recycled zinc) smelting, cement (clinker and grinding), plate glass, paper, alcohol, monosodium glutamate, citric acid, tanning, printing and dyeing, chemical fiber, and lead-acid batteries (plates and assembly). The Ministry required all production capacity with old-generation technologies to cease operation by this September and to be disassembled for retirement by the end of the year. None of the capacity is allowed to be transferred to other regions. All individual companies covered in the scope of this government list have been identified and publicly listed on the local government websites as well as in primary local media publications.

Source: China.com, July 25, 2013

http://finance.china.com.cn/industry/hotnews/20130725/1671753.shtml

Briefings | | July 30, 2013 | Economy/Resources

China News: China will not Consider Large Stimulus Package

China News recently reported that Chinese Minister of the Treasury Lou Jiwei disclosed that China was not planning on any large scale stimulus package to boost the economy. Lou made the comment at the recent G20 Summit that took place in Moscow. Lou said that the Chinese job market is still healthy, although economic growth has been slowing down. He expressed that the Chinese government would rather rely on structural reforms to address the growth issue. Lou also mentioned three key focus points in the near term: (1) Reduce government control over the marketplace – over 165 government approval requirements were removed in the past several months; (2) Convert all current tax forms to Value-Added Tax (VAT) in the entire services industry in the next two years to speed up the growth of the services industry; (3) Try to achieve a balanced budget and cut government spending by five percent.

Source: China News, July 21, 2013

http://finance.chinanews.com/cj/2013/07-21/5065583.shtml

Briefings | | July 30, 2013 | Economy/Resources

Each Year in China over 100 Million Contract Hepatitis B

The Ministry of Health disclosed that there are 350 million Hepatitis B Carriers in the world and close to 100 million of them are in China. Of the 700,000 people who die from viral hepatitis diseases each year, 50 percent of them are in China. Also, Hepatitis B is ranked number one among the infectious disorders. It account for 1/3 of the total in China. Each year over 100,000 people contract the Hepatitis B virus.

Source: July 27, 2013, People’s Daily
http://npmpc.people.com.cn/n/2013/0727/c125298-22346921.html

Briefings | | July 29, 2013 | Information/Technology

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.