SecuTimes recently reported on the issue of local governments facing pressure due to debts that will mature at a peak time in 2012. According to the National Audit Office, it is estimated that local government debts amounting to RMB 3 trillion (US$477 billion) are expected to mature this year. With the adjusted interest rate, 2012 is the year in which local governments face the highest risk of defaulting on their debts. By the end of 2010, total local debts reached RMB 9.67 trillion (US$1.54 trillion). In fact, local governments never planned to pay off their debts with budgeted fiscal funds. Instead, nearly all expected payments were based on anticipated land sale income that was not included in the official budget. However, the cooling housing market has caused a significant decline in land sales. It is estimated that the funding gap for these debts is about RMB 500 to 1000 billion. In the meantime, local governments are required to fund housing construction plans for low income families. This will further increase the likelihood of a debt crisis.

Source: SecuTimes, April 28, 2012
http://news.stcn.com/content/2012-04/28/content_5510372.htm

China Economy recently reported that the Ministry of Commerce released a first quarter foreign trade review showing the market’s movement in six key areas: (1) The import and export growth rates significantly slowed down, which was a continuation of the direction established in the last quarter of 2011. (2) Chinese exports to Europe suffered a decline, while trade with emerging markets showed rapid growth. (3) Labor-intensive products (such as shoes) recorded very slow growth, while mechanical and electrical products exhibited healthy growth. (4) Coastal provinces reported much slower growth than the Middle West provinces. (5) Private companies were responsible for more than half of the growth in foreign trade. (6) Import growth significantly slowed. Some commodities were produced in much larger quantities, with lower prices.

Source: China Economy, April 27, 2012
http://www.ce.cn/xwzx/gnsz/gdxw/201204/27/t20120427_23280625.shtml

A recent National Bureau of Statistics report show that, in 2011, the population of Chinese farm workers, farmers who left their land and chose to work in cities, reached 252 million, up by 4.4 percent from 2010. Of these workers, there were 158 million migrant workers who travel outside their local region to find jobs, 3.4 percent more than 2010. The report showed that 65.4 percent of farm workers were concentrated in the eastern region, down 1.5 percent from 2010; 17.6 percent were in the central region, up by 0.7 percent; 16.7 percent were in the western region, up by 0.8 percent; and the balance of 0.3 percent worked in Hong Kong, Macau, or outside of China.

The survey also reported that there were fewer farm workers who worked outside of their residential province. The jobs that the farm workers held remained in the manufacturing, construction, and service industries. The average monthly income for the migrant workers in 2011 was 2,049 yuan (US$350), up by 21.2 percent from 2010. The middle and central regions had a greater increase than the Eastern region. There has been improvement in delayed wages and extended working hours. The level of participation in social insurance has improved but still remains low.

The term "migrant worker" refers to the farm workers who work outside of their residential village or town for more than 6 months. The sample survey was conducted among 200,000 farm workers from 7,500 villages and 899 counties in 31 provinces.

Source: Xinhua, April 28, 2012
http://news.xinhuanet.com/local/2012-04/28/c_123050775.htm