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Wen Jiabao: Stick to the Housing Market Control Strategy

On April 13, 2012, Chinese Premier Wen Jiabao chaired an Executive Meeting of the State Council. Measures discussed included planning near term policies for China’s macro economy. Among all of the decisions made, the key one was to stick to the current policies controlling the housing market. Wen emphasized the requirement of ensuring that those polices would not suffer any level of roll back. The Executive Meeting also identified some other near term challenges: the global financial crisis has not ended; the European debt crisis still persists; the Chinese domestic economy is declining; the pressure of inflation is increasing; small-sized businesses are having a tough time obtaining financial help; and Chinese exports are slowing down. In addition to the housing market policies, the meeting focused on policies in 9 economic areas, which included enlarging the domestic consumer market.

Source: China Review News, April 14, 2012
http://www.zhgpl.com/doc/1020/7/4/9/102074989.html?coluid=151&kindid=0&docid=102074989&mdate=0414090603

CRN: China International Investments Lack Risk Management

China Review News (CRN) recently published an article discussing key issues related to China’s overseas investments. The article referred to the World Investment Report 2011 released by the United Nations Conference on Trade and Development (UNCTAD), which indicated that the total for all global overseas investments in 2010 was US$1.32 trillion. China’s direct overseas investments ranked number five in this report, surpassing traditional investors such as Japan and Britain. Enterprises owned by China’s central government were the primary force in overseas investments. However these investments also experienced a large amount of losses. Since last May, the State-Owned Assets Supervision and Administration Commission (SAC) has released two risk management regulations. SAC recently issued a new order to further control the risks by banning state-owned companies from investing outside of their primary line of business. The article also pointed out another key issue. China lacks a global strategy to balance investments in the areas of research, manufacturing, sales, resources, trade, finance, and information.

Source: China Review News, April 14, 2012
http://www.zhgpl.com/doc/1020/7/4/9/102074945.html?coluid=53&kindid=0&docid=102074945&mdate=0414074702

China Foreign Trade Faces Major Pressure in Three Areas

Yu Benlin, the Deputy Director General of the Ministry of Commerce’s Bureau of Fair Trade for Imports and Exports, spoke at the “Expansion of Sino-US Economic and Trade Cooperation Forum” that was held during the 111th Chinese Imports and Exports Fair (the Canton Fair) on April 15, 2012. Yu explained that Chinese foreign trade is facing major pressure in three areas: increased external attacks, a tighter export environment, and international strategic planned pressure. 1) Increased external attacks: The U.S. has implemented both an anti-dumping and an anti-subsidies policy on imports from China. As an example, Yu mentioned the 2011 anti-dumping and anti-subsidies investigation on China’s solar products. 2) A tightened export market: World market demand remains weak. Taking the E.U. as an example, growth in E.U. countries is slower than expected, the manufacturing industry is shrinking, and its first quarter growth may be weak. 3) Increased International pressure: The world media has shifted its media campaign on China from the “China Threat” to “China Accountability.” Different countries have demanded that China take responsibility for things that are beyond China’s economic capability.

Yu also pointed out that the U.S. has misapplied its regulations to China’s imports according to its own wishes. As an example, he mentioned the “substitution country” used during the anti-dumping investigation. In addition to India, which the U.S. used previously, it has started to use Indonesia and Thailand (for importing goods). The anti-dumping duties that the U.S. imposed during its investigation of Chinese imports were normally above 100 percent.

Source: Xinhua, April 15, 2012
http://news.xinhuanet.com/fortune/2012-04/15/c_111782252.htm

People’s Daily Calls for Strict Compliance with Party Policies

Xinhua reprinted an article originally from People’s Daily that called for strict compliance with the Party’s policies and maintaining the Party’s advancement and purity. It said that only then will the Party be able to “fulfill its historic mission and gain the trust of the people."

The article asked Party members to follow and safeguard the Party’s rules and regulations, saying, “Today, the situations around the world, nation, and Party are going through drastic changes and the ‘four tests’ and ‘four dangers’ are clearly presented right in front of every Party member." "The more powerful and the higher the position one is in, the more necessary it is for one to discipline himself."

[Editor’s note: During his July 1, 2010, speech commemorating the 90th anniversary of the Chinese Communist Party, Hu Jintao spoke of the "four tests" and "four dangers" that the Party is facing. The four tests are tests in governing the country, implementing the reform and opening-up policy, developing the market economy, and dealing with the external environment; the four dangers are the dangers of lost vitality, insufficient capacity, alienation from the people, and rampant corruption.]

Source: Xinhua, April 15, 2012
http://news.xinhuanet.com/politics/2012-04/15/c_111780679.htm

Wen Jiabao Issued Directives for 2012 Anti-Corruption Work

Xinhua circulated an article that Premier Wen Jiabao originally wrote for Qiushi Journal. In the article, Wen wrote about the directives issued for 2012 on anti-corruption work. The article gave credit to the government for its achievements in reform and anti-corruption work. It stressed that 2012 will be the last year for this government and no government body should slack off in executing the anti-corruption plans and policies that the central administration has issued. Wen also asked all levels to take responsibility and to physically carry out the plans.

Source: Xinhua, April 15, 2012
http://news.xinhuanet.com/politics/2012-04/15/c_111781693.htm

Will China’s Economy Face Trouble This Summer?

[Editor’s Note: Recently an Internet article titled “SOEs Are Asked to Clear Their Real Estate Inventories. Is a Wave of Unemployment around the Corner for China?” has been widely re-posted on China’s websites. [1] It quoted some unidentified sources and also many state media reports, questioning whether the problems in China’s economy will explode soon. Chinascope could not verify the source of the information. Nevertheless, due to the topic’s relevance, we translated the article so that our readers would be aware of the information and could evaluate it on their own.]

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Oil Extracted from Filthy Animal Remains Processed for Food Use

Legal Daily reported on a new type of illegal food oil that is being used in food preparation. In the past, illegal food oil, which earned the name "gutter oil," was generally extracted from waste oil and leftovers from restaurants. Such gutter oil was then illegally sold to restaurants as food oil. Recently, a new type of “gutter oil” has been circulating in the marketplace and is being used as food oil. It was extracted from filthy and rotten internal animal organs, skin, and parts that slaughterhouses had thrown out. The daily newspaper reported that the Chinese Public Police Ministry cracked down on a large "gutter oil" network, confiscating over 3,200 tons (about 3.5 million pounds) of such “new gutter oil.”

Source: Legal Daily, April 10, 2012
http://www.legaldaily.com.cn/Social_management/content/2012-04/10/content_3485592.htm?node=35360

Qiushi: Widening Disparity of Income with a Very Small Middle Class

Qiushi published a commentary with an analysis of income distribution in China. This analysis showed that the wealth of local residents increased rapidly in a relatively short period of time as the result of economic development and the economic transformation. While relative to other countries, the inequality in the distribution of property of China’s residents is not very great, the inequality is growing very rapidly. … From the wealth distribution chart, [it is clear] the so-called middle class remains very small.”

Source: Qiushi, April 10, 2012
http://www.qstheory.cn/jj/xsdt/201204/t20120410_150235.htm