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China’s Reaction to Trump’s Election Win

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Xinhua Commentary Series: Spotlight on the U.S. Presidential Election

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

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

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China Secutimes: Tishman Speyer, a Leading US Real Estate Firm, Is Fleeing China

On August 31, 2012, China Secutimes published an article titled, “The Largest U.S. Real Estate Firm Is Fleeing China’s Real Estate Market; What Signal It Discloses.” Tishman Speyer, a U.S. real estate developer, is trying to sell its properties in China. The two plots of land that Tishman Speyer currently has for sale are in New Jiangwan in Shanghai. One plot is worth 1.6 billion yuan (US$252 million) and the other one is worth 3.2 billion yuan (US$505 million).

Tishman Speyer started developing real estate in China in 2005. Over the last 7 years, it has expanded its real estate projects in several cities such as Shanghai, Beijing, Tianjin, and Chengdu. However, Tishman Speyer has begun the process of withdrawing from China. According to China Secutimes, “In 2012, foreign capital invested in China’s real estate market will probably decrease by 50 percent,” bringing foreign capital invested in China’s property market to the lowest amount in the last seven years.

Source: China Secutimes, August 31, 2012
http://news.stcn.com/content/2012-08/31/content_6797642.htm

Briefings | | |   Economy/Resources

The Era of High Profits Is Ending

On August 30, 2012, China Reviews published an article titled “China’s Enterprises Have Left the Era of High Profits Far Behind.” From January to July 2012, the accumulated profits of state-owned enterprises (excluding state-owned financial enterprises) fell by 13.2 percent compared to the same period last year. Of these state-owned enterprises, the total accumulated profits of the central state-owned enterprises declined 10.7%, while the total accumulated profits of local state-owned enterprises declined 18.3%. The profits made by China’ state-owned enterprises have decreased in each of the past seven consecutive months.

“At present, an average of nearly 28 percent of China’s manufacturing industry’s capacity remains idle; 35.5 percent of manufacturing enterprises’ capacity utilization is at 75% or less.”

Source: China Reviews, August 30, 2012
http://www.zhgpl.com/doc/1022/1/7/0/102217016.html?coluid=53&kindid=0&docid=102217016&mdate=0830043155

Briefings | | |   Economy/Resources

COSCO Suffers Huge Financial Loss: Nearly 4.9 Billion Yuan in First Half of 2012

According to China Ocean Shipping (Group) Company’s semi-annual report, COSCO lost 4.872 billion yuan in net profit (US$767.3 million) in the first half of 2012, a decline of 79.72 percent compared to last year. COSCO’s loss even exceeds China Aluminum’s huge loss of 3.2 billion yuan. Expecting to lose more money this year, Wei Jiafu, COSCO’s Chairman and CEO, has applied for financial support from the relevant departments in China.

Source: http://www.nbd.com.cn/, August 31, 2012
http://www.nbd.com.cn/articles/2012-08-31/678379.html

Briefings | | |   Economy/Resources

Qiushi: Six Rules behind Adjustments to the U.S. Dollar

Qiushi Journal, a bi-weekly magazine published by the Central Committee of the Chinese Communist Party, recently republished an article discussing the hidden rules behind each major U.S. dollar adjustment made since the Second World War. The author claims that six rules have been discovered: 1) the U.S. dollar became stronger before a global financial crisis and declined afterwards; 2) each time the U.S. dollar appreciated, it brought “a catastrophic blow” to the emerging economies at that time; 3) each time the U.S. dollar depreciated, somewhere in the world an economy would have bubbles, such as Japan in the 1980s; (4) the U.S. dollar obeys “political cycles” which correspond to U.S. presidential elections; (5) the U.S. dollar follows different strategies against “capital surplus” nations (like Europe) and “trade surplus” nations (like China); (6) the U.S. dollar is used to manipulate commodity prices. The author also offered some ideas on how to take advantage of these findings.
Source: Qiushi, August 23, 2012
http://www.qstheory.cn/jj/hqsy/201208/t20120823_177320.htm
Briefings | | |   Economy/Resources

RFA: Number of Golf Courses Growing Despite Prohibition

Radio Free China (RFA) recently reported, based on a number of Chinese media sources, that more and more golf courses are being built across China. In 2004, the Chinese State Council issued an order to stop building all gulf courses. However, the number of golf courses grew from 170 in the year 2004 to over 600 today. Although the central government organized an investigation and clean-up in 2011, the golf courses are still functioning well. Local governments give strong support to many of these establishments because they rely on high-end businesses to bring in local revenue. Some of these golf projects were approved under different names, such as “sports parks,” where other real estate, such as luxury homes, could also be developed. According to China Youth Daily, of all of these 600 plus golf courses, only one is open to the public. The rest are all luxury clubs which only offer expensive membership to the wealthy. 
Source: Radio Free China, August 31, 2012
http://www.rfa.org/mandarin/yataibaodao/yl-08312012154633.html
Briefings | | |   Economy/Resources

Ministry of Foreign Affairs: U.S. Politicians Should Stop Accusing China

China News recently reported that the spokesman for the Chinese Ministry of Foreign Affairs commented on some of the points that Mitt Romney made in his acceptance speech at the Republican National Convention. The spokesman suggested that U.S. politicians, regardless of their party affiliation, should maintain an objective and rational attitude when commenting on Chinese affairs. He asked the U.S. politicians to stop using empty charges to accuse China and to stop interfering in China’s internal affairs. He emphasized that mutual respect and win-win cooperation should be the basic tone when developing the relationship between the two countries. These principles are in line with the core interests of both sides and will bring peace and prosperity to the Asia-Pacific region, as well as to the entire world.
Source: China News, September 1, 2012
http://www.chinanews.com/gn/2012/09-01/4150796.shtml
Briefings | | |   US-China Relations

China’s Economy Faces Nine Major Challenges

[Editor’s Note: Li Zuojun, Deputy Director of the Institute of Resources and Environmental Policy Research at the Development Research Center of the State Council, published an article discussing the major problems that the Chinese economy faces. The Development Research Center of the State Council (DRC) is a leading policy research and consulting institution directly under the State Council. According to Li, the nine problems are: declining economic growth, inflation, economic bubbles, the changing economic growth engines, adjustments in our industries and regional business structures, environmental constraints, the social costs of development, the deteriorating international environment, and resistance to reform. The following are excerpts from Li’s article.] [1]

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Reports | | |   Report

Profits dropped in China’s Industries

On August 27, 2012, the National Bureau of Statistics of China released statistics for China’s industries. According to the statistics, the profit for China’s national enterprises dropped 2.7% for the period of January through July, as compared to the same period in 2011. In July alone, the number dropped by 5.4 percent. This was the sixth consecutive month of cumulative negative growth. Falling iron and steel prices have led to losses for many listed companies that have published their interim reports for the first half of 2012. Maanshan Iron and Steel lost 1.9 billion yuan, Shandong Iron and Steel lost 996 million, and the Hangzhou Iron & Steel Group Company lost 107 million. Others, including the Shagang Group, saw their profits cut in half. The same occurred in coal and electricity companies where their profits went down between 10 and 14 percent in the second quarter of 2012.

Source: Caijing.com, August 29, 2012
http://comments.caijing.com.cn/2012-08-29/112089425.html

Briefings | | |   Economy/Resources