Chinascope – Page 940

Xinhua: Only One China-Concept IPO in U.S. Stock Market

Xinhua recently reported that, in the first half of this year, only one Chinese company had its IPO in the U.S. stock market. That one stock dropped below its issuing price on the first day it was offered. It seems the “IPO window” for Chinese stocks will not be open this year. Given this circumstance, 14 Chinese companies went through the privatization process in order to withdraw from the U.S. stock market. There are two primary reasons for this situation: 1) The poor performance of the global economy has resulted in U.S investors having a conservative attitude; 2) The China-Concept stocks are still suffering from their poor credit background.

Source: Xinhua, July 21, 2012

http://news.xinhuanet.com/finance/2012-07/21/c_123450036.htm

Briefings | | July 24, 2012 | US-China Relations

National Bureau of Statistics: Housing Market Still at Key Crossroads

China Review News (CRN) recently reported that the National Bureau of Statistics released its June report on the housing market. The report showed that 25 out of 70 major and mid-sized Chinese cities reported housing price increases. That number is 19 more than the number from May. However, most of the cities have lower prices than last year. For example, for new real estate, Beijing, Shanghai, Guangzhou, and Shenzhen fell 1.3 percent, 1.9 percent, 1.6 percent, and 2.5 percent, respectively. Experts suggested that there are 3 reasons of the recent June price rebound: 1) Lower interest rates (the central bank lowered the interest rate twice in one month); 2) Worries in the market of the possibility of a big price rebound; 3) Some sellers obtained good sales results after lowering prices earlier and are now marking the prices up. It is widely believed that the government imposed market adjustments are still at a critical stage before housing prices return to a reasonable level.

Source: China Review News, July 18, 2012

http://www.zhgpl.com/doc/1021/7/1/3/102171322.html?coluid=45&kindid=0&docid=102171322&mdate=0718160342

Briefings | | July 24, 2012 | Economy/Resources

Premier Wen Jiabao Warns of a Tougher Labor Market Ahead

On July 17, 2012, the National Work Force Employment Conference was held in the Great Hall of the People in Beijing. Premier Wen Jiabao attended the conference and spoke on labor issues. He stressed the importance of creating job opportunities and noted that it is a top priority to protect and secure people’s livelihoods. Wen asked all levels of government bodies to gain a better understanding of the urgency. He also recognized that the current and future job market faces more complicated and serious challenges and said that a bigger effort was needed to create more job opportunities.

According to official statistics, in urban and rural areas, a total of 98 million new employment positions were created between 2003 to 2011. Among those 40 million were for college graduates, 30 million were for workers from state-owned enterprises who had been laid off, and 28 million were for laid off workforce who had re-entered the work force. By the end of 2011, the total number of peasant workers had reached 250 million, up by 139 million from 2003. Each year, there are a total 12 million professional workers taking middle to advanced vocational education classes and 150 million taking training courses.

Source: Xinhua, July 18, 2012
http://news.xinhuanet.com/2012-07/17/c_112460838.htm

Briefings | | July 23, 2012 | Economy/Resources

China News Review: We Need to Be Fully Prepared for Economic Difficulties

China News Review published an opinion article about China’s current economic environment. According to the article, from July 13 to 15, Premier Wen Jiabao visited Chengdu City in Sichuan Province, where he held a forum on the current economic climate in Henan, Hunan, Guangxi, Sichuan and Shanxi provinces. According to Wen, China’s economic growth rate is in a steady and stable state and still within the expected target set at the beginning of the year. However, the current economic climate is not showing signs of improvement. The economic difficulties are expected to continue for an extended period of time.

China News Review cited figures that the Ministry of Statistics published, saying GDP for the first half grew 7.8 percent, down from 8.1 percent in the first quarter. GDP for the second quarter grew 7.6 percent, falling below 8 percent for the first time in three years. The official June Purchasing Manager’s Index reached 50.2, an indication that there is still growth in the manufacturing sector. The article stated, “The statistics for the second quarter suggest that China’s economy is facing tougher challenges than expected and will not see signs of recovery very soon.”

Source: China News Review, July 17, 2012
http://opinion.china.com.cn/opinion_14_46714.html

Briefings | | July 23, 2012 | Economy/Resources

Central Government Agencies Disclose Spending Figures

As of July 20, 2012, a total of 98 central government agencies had published their actual 2011 expenses and their budgeted expenses for 2012 in the following three spending areas: overseas trips, auto purchases, and maintenance expenses for meals and receptions. The total 2011 expenses in these categories amounted to 9.36 billion yuan. Overseas trips accounted for 1.98 billion; auto purchases and maintenance expenses accounted for 5.92 billion; and meals and receptions accounted for 1.47 billion. The 2011 actual expenses for the Ministry of Taxation alone were 2 billion yuan, with 1.36 in auto purchases and maintenance. The budgeted expenses for 2012 were down by 1.38 billion to 7.98 billion yuan with 2.14 for overseas trips, 4.35 for auto purchases and expenses, and 1.49 for meals and receptions. Spending for the armed police was in 2011 actuals, but that figure was excluded from the 2012 budget.

Some experts suggested that there were more areas in which expenses could be reduced further. For example, cutting unnecessary overseas trips could result in a reduction of 30 percent; auto purchases could be reduced as well by limiting the new car purchases and selling used cars to recoup some of the expenses. Others indicated that a system of checks and balances is lacking, where new guidelines are yet to be established. The article indicated that the parties who have violated the system should take more responsibility.

Source: China Economy, July 21, 2012
http://www.ce.cn/cysc/newmain/yc/jsxw/201207/21/t20120721_21196784.shtml

Briefings | | July 23, 2012 | Government/Politics

China’s Private Enterprises Are in Dire Straits

An 18-year-old mechanical processing company in the Pearl River Delta is facing difficulties just trying to survive. The head of the company posted a message on the Internet to complain about his situation. The message went viral on the Internet because it resonated with so many others. From the message, one can gauge the many problems that the company faces: The extremely narrow financing channels, rapidly increasing labor costs, a high tax burden, asset bubbles and inflation, and gray expenditures (money that must be spent "under the table"). The company is an individual case. However, it resonated with many others because private enterprises face a similar plight.

In recent years, due to the banks reluctance to lend, private enterprises have had to turn to loan sharks; raise their employees pay; in spite of structural tax cut calls, "decreases" have gradually, to the contrary, resulted in de facto "increases"; rising housing prices have led to higher rents, and rising inflation has caused the cost of raw materials to increase, so that private enterprises’ operating costs have risen faster. State-owned enterprises and local governments strictly control the high-profit industries, so private enterprises can only try to survive in the low-profit areas.

In the end, some private enterprises faced the dire fate of either having to close down or, in utter defeat, to hand their business over to others.

Source: Beijing News, July 17, 2012
http://www.bjnews.com.cn/finance/2012/07/17/210658.html

Briefings | | July 20, 2012 | Economy/Resources

Major General Zhu Chenghu: China May Need to Modernize Its Nuclear Arsenal

On July 18, 2012, Major General Zhu Chenghu spoke at a seminar where he announced that China may need to modernize its nuclear arsenal in response to a planned U.S.-backed missile defense system that may have a destabilizing effect on strategic stability. China "must modernize its nuclear arsenal" because the deployment of a U.S. missile defense system "may reduce the credibility of China’s nuclear deterrence. … Therefore Beijing needs to improve its capability to survive and infiltrate. … Otherwise, we will have a tough time maintaining that we have a credible system of nuclear deterrence.”

Source: Radio Free Asia, July 19, 2012
http://www.rfa.org/mandarin/Xinwen/Hezixiandaihua-07192012035326.html

Briefings | | July 20, 2012 | Defense/Military

Huanqiu: Russia Should Not Have Fired at Chinese Fishing Ships

Huanqiu published a commentary titled "Russia Should Not Have Fired at Chinese Fishing Ships. "On July 16, 2012, an incident occurred in which the Russian coast guard seized a Chinese fishing vessel and detained 17 fishermen after it found they were allegedly fishing illegally in Russian-controlled waters in the Sea of Japan. During the pursuit, the Chinese sailors resisted being boarded, so the Russian coast guard fired directly at the ship. “The reckless behavior of the Russians at the grass-roots level not only harms Chinese confidence in fostering a long-term friendship with Russia, but also provides excuses for forces seeking to undermine Sino-Russia ties."

Source: Huanqiu, July 18, 2012
http://opinion.huanqiu.com/1152/2012-07/2923188.html

Briefings | | July 20, 2012 | Geo-Strategic Trend

China’s Reaction to Trump’s Election Win

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

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