Chinascope – Page 834

Empty Ghost Towns in China Indicate Burst Housing Bubble

On July 21, 2013, China Review News published an article, which was originally from http://www.xinmin.cn/, on China’s “ghost towns.” According to the article, a ghost town is an empty town in China where the local government has built a lot of new apartments and commercial buildings at great cost. There are 12 large ghost towns in China, four of which are in Inner Mongolia.

In 2009, China’s real estate investments accounted for 10 percent of China’s GDP. In contrast, in the United States, real estate investment does not exceed 6 percent of its GDP. The writer believes that some housing bubbles have already burst.

Source: China Review News, July 21, 2013
http://www.zhgpl.com/doc/1026/4/0/4/102640407.html?coluid=53&kindid=0&docid=102640407&mdate=0721073650

Briefings | | July 24, 2013 | Grapevine

IMF: China’s Total Public Debt Exceeds 50 Percent of Its GDP

On July 21, 2013, China Review News published an article titled “China’s Local Governments Owe Over US$12 Trillion in Debt; a Dangerous Sword Hangs over the Head of the Economy.” Since 2010, local governments’ debts have become the sword of Damocles hanging over China’s economy. According to China’s National Audit Office statistics, the amount of the debt that local governments owe exceeds US$12 trillion. However, The International Monetary Fund (IMF) believes that China’s total public debt exceeds 50 percent of its GDP.

According to the article, China needs large scale financial reform as well as fiscal reform over the next 10 to 30 years.

Source: China Review News, July 21, 2013
http://www.zhgpl.com/doc/1026/4/0/5/102640566.html?coluid=45&kindid=0&docid=102640566&mdate=0721100348

Briefings | | July 24, 2013 | Economy/Resources

China Review News: Don’t Break the Red Line of 1.8 Billion Mu of Arable Land in China

On July 21, 2013, China Review News published an article explaining why it is important to safeguard the 1.8 billion mu of arable land in China. As the urbanization in China is spreading fast, some urbanization supporters propose to break the red line of the 1.8 billion mu of arable land so as to further expand urban construction. The article explained that the 1.8 billion mu of arable land is the minimum bottom line to ensure food security in China.

Source: China Review News, July 21, 2013
http://www.zhgpl.com/doc/1026/4/0/4/102640403.html?coluid=53&kindid=0&docid=02640403&mdate=0721073613

Briefings | | July 24, 2013 | Economy/Resources

China News: Huawei Rejected the U.S. and Britain’s Claims about Its Spying

China News recently reported that Chinese network equipment vendor Huawei insisted on its innocence in the situation in which the British government decided to conduct an investigation into Huawei’s Network Security Assessment Center in Britain. The investigation is in response to the requirement that the Intelligence and Security Committee of the British Parliament issued. Huawei suggested that the goal of its British operations is to enhance the security level of its customers. In 2012, Huawei invested 1.3 billion pounds in Britain. At the same time, Huawei also denied the accusation that former CIA Chief Michael Hayden made that it has been spying for the Chinese government. Huawei claimed that it purchases US$6 billion worth of products from U.S. companies annually, which generates tens of thousands of U.S. jobs. Huawei asked for the evidence that can support Mr. Hayden’s position.

Source: China News, July 19, 2013

http://finance.chinanews.com/it/2013/07-19/5064316.shtml

Briefings | | July 23, 2013 | Information/Technology

Global Times: Japan Opposes China’s Oil Development in East China Sea

Global Times recently reported that Japanese Chief Cabinet Secretary Yoshihide Suga issued strong statements at a press conference on July 18. Yoshihide stated that Japan “absolutely opposes” the China National Offshore Oil Corp. (CNOOC) attempt to develop seven new oil and natural gas fields in the East China Sea. The seven new sites are located near the so-called “middle line.” The Japanese government has not yet received any “clear reply” from China on its official inquiry about this new development plan. The Chinese Ministry of Foreign Affairs commented that China never accepted the so-called “middle line,” which was solely an invention of the Japanese government. Chinese legal expert Xin Guangmei suggested that there has never been a legal sea-based borderline between China and Japan. China has its own opinion on how to draw the border which is different from the Japanese “middle line.” The Japanese “media show” of finger-pointing at China on the new oil development plan is just another attempt to destroy the foundation of a healthy border negotiation.

Source: Global Times, July 18, 2013

http://world.huanqiu.com/exclusive/2013-07/4146196.html

Briefings | | July 23, 2013 | Geo-Strategic Trend

Xinhua: China No Longer Limits Commercial Loan Interest Rates

Xinhua recently reported that the Chinese central bank announced it will no longer control the interest rates that banks set for commercial loans. The new policy takes effect starting July 20, 2013. The banks now have the full power to decide their interest rates. This is very different from the traditional method that the central bank required, which was to satisfy a floating minimum rate based on a formula. Rural area credit unions can now also enjoy the freedom of offering their own commercial loan interest rates without the central bank imposing an upper ceiling. However, in order to “protect the healthy development of this market sector,” the new policy does not apply to mortgage loans for the housing market. The central bank suggested that the new policy is to expand the room for negotiation between banks and their customers and to encourage differentiation among banks and bank products. One of the goals of the new policy is to lower the financing costs for companies in the real economy.

Source: Xinhua, July 19, 2013

http://news.xinhuanet.com/fortune/2013-07/19/c_116614513.htm

Briefings | | July 23, 2013 | Economy/Resources

Xinhua Commentary: Reported Housing Statistics Are Questionable

On July 19, China News Review published a report on the “2013 Development of People’s Livelihood in China.” The report claimed that close to 90 percent of Chinese families own their own housing space. The average size for housing is 100 square meters (1,076 square feet) per family or 30 square meters (323 square feet) per person. On July 20, Xinhua published a commentary calling the published results questionable and misleading because they used the average statistical method. The commentary stated that some families don’t own houses while some groups of people own multiple or even dozens of housing properties. It questioned whether the data was correct, why the housing leasing market would be so prosperous in the city, and why large numbers of families still live in “snail house” conditions. In the end, the commentary suggested that a different methodology should be applied in calculating the results so that it truly reflects reality.

Source: Xinhua July 20, 2013
http://news.xinhuanet.com/comments/2013-07/20/c_116613384.htm

Briefings | | July 22, 2013 | Economy/Resources

Beijing Youth Daily: Business Entities’ Savings Grew While Personal Saving Declined

Xinhua carried an article that Beijing Youth Daily had originally published. The article said that People’s Bank published financial statistics showing that, by the end of June, the total national savings in China had reached 1.009 quadrillion yuan (US$160 trillion). This was the first time it broke the 1 quadrillion mark. In the first half of 2013, total savings grew 9,090 trillion (US$1,480 trillion), up 1,710 trillion (US$278 trillion) compared to 2012. Specifically, personal saving grew 4,139 trillion (US$674 trillion) and savings for the non-financial entities grew 2,320 trillion (US$378 trillion). The article disclosed that growth in government and business entities has propelled the growth in national savings; whereas personal savings, as a percentage of the national savings, has been declining over the past ten years. The article stated, “It is an indication that the public funding allocated to education and health areas are far less than desired thereby pushing the general public to find ways to come up with "preventive savings" themselves.

As to the reason for the growth in personal savings, the article pointed out that, first, people are reluctant to spend money because many still receive a low income; second, the government provides insufficient funding for the education, medical, and housing areas, which forces residents to have their own “preventive savings.”

The article called the imbalance of the saving ratio a key issue to be addressed in income distribution reform.

Source: Xinhua, July 21, 2013
http://news.xinhuanet.com/fortune/2013-07/21/c_116622492.htm

Briefings | | July 22, 2013 | 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.