Economy/Resources - 151. page

Xinhua recently reported that the Central administration announced on April 1 that it will set up a new special economic zone in Hebei Province, 100 kilometer (62 miles) southwest of Beijing. It will be called the “Xiongan New Area” and will be situated in the region where Beijing, Tianjing, and Baoding are located. It will cover 100 square kilometers (25,000 acres) at the start of its development, grow to 200 square kilometers (49,000 acres) in the second phase, and 2,000 square kilometers (494,000 acres) in the final phase. According to Xinhua, Xi Jinping visited An Xing County in Hebei Province on February 23 and hosted a development planning forum during his visit. According to Radio Free Asia, Xiongan New Area will help to ease the population, transportation, and environmental stress in Beijing while promoting economic development in the inner provinces such as Hebei and Henan provinces. The Xiongan New Area will become the third special economic zone following the Shen Zhen special economic zone and the Pudong New Area in Shanghai.

Source:
Xinhua, April 1, 2017
http://news.xinhuanet.com/politics/2017-04/01/c_1120741571.htm
Radio Free Asia, April 1, 2017
http://www.rfa.org/mandarin/yataibaodao/jingmao/hc-04022017133455.html

Pan Shiyi, Chairman of the Board of SOHO China stated that his company had to cancel its plan to sell a property due to China’s currency control. Pan made the statement on March 23, at the SOHO China’s news conference to release 2016 financial data.

SOHO China is a large real estate developer in China.

SOHO China sold its SOHO Century Plaza in Shanghai for 3.3 billion yuan (US$ 470 million) on July 29, 2016, at 76,700 yuan per square meter. Pan said that the company would sell another three non-core business projects: Lingkong SOHO, Hongkou SOHO, and SOHO Tianshan Plaza.

SOHO China even reached an agreement on the price to sell Hongkou SOHO to a famous company. Pan planned to use the proceeds to buy an overseas investment. However, due to China’s currency control, the company realized that it could not exchange the Renminbi proceeds for a foreign currency in order to buy an overseas investment. However, in China, holding Renminbi is not as safe as holding real estate (Renminbi deflates but real estate prices keep rising). So his company cancelled the sale.

SOHO did not sell any of those three properties.

Source: The Paper, March 23, 2017
http://www.thepaper.cn/newsDetail_forward_1646200

At the China Development Forum (March 18-20 in Beijing), Chen Wenhui, Vice Chairman of the China Insurance Regulatory Commission (CIRC) listed six big risks that China’s financial industry faces:
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On March 27, Beijing Business Today, a daily newspaper affiliated with the Beijing Daily Newspaper Group, reported on its front page that housing authorities in China’s capital tightened regulations on commercial real estate projects.

Late Sunday, the city’s housing, urban planning, industry and commerce, and banking authorities released  an official statement that new commercial real estate projects — including those converted from office buildings to individual units — may be sold only to qualified enterprises, public institutions, and social organizations. In addition, the smallest unit for sale should not be less than 500 square meters.

Moreover, personal loans for the purchase of commercial real estate have also been suspended. The statement also said that second-hand commercial housing can only be sold to individuals who have paid their income taxes or social insurance for five consecutive years and have no houses under their names in Beijing.

Prior to this new round of strict tightening, commercial real estate converted for residential use has been a viable alternative given Beijing’s prohibitively high housing prices, despite the fact that the children of the residents are not qualified to attend school near where they live. In the past few years, 50 to 60 percent of commercially developed real estate has been sold to individuals for (residential) living.

Housing market analysts expect the new regulations will slow down the commercial real estate market significantly and reduce the number of units changing hands by over 30 percent.

According to 21st Century Business Herald, a Guangzhou-based national newspaper, the tightened restriction has the purpose of slowing down population growth in Beijing, as well as preventing a negative impact that the rising cost of office space will have on business activities.

Sources:
Beijing Business Today, March 27, 2017
http://www.bbtnews.com.cn/2017/0327/186746.shtml
21st Century Business Herald, March 28, 2017
http://www.21jingji.com/2017/3-28/2OMDEzNzlfMTQwNTU2OQ.html

According to an article that the Chinese Edition of Deutsche Welle carried, many German companies have complained about the increase in the number of counterfeit products made in China and sold through Chinese E-Commerce giant Alibaba. The article said that VDMA, an association of German companies in the engineering industry, conducted a survey which found that 28 percent of German equipment manufacturing companies, including Siemens and SKF, the ball and roller bearing manufacturer, were aware that their products had been counterfeited and sold through the e-commerce Alibaba platform. One manufacturer commented that “Alibaba is famous for providing a large number of fake products!” The article stated that the counterfeiting activities range from trade name infringement to unsafe fake spare parts and equipment, especially in regard to automotive products. One VDMA lawyer told Deutsche Welle that China is the major source of fake products but it has made progress in dealing with counterfeiting issues. However there has been little development on copyright protection issues. According to the article, Alibaba has initiated efforts to deal with the counterfeiting issues. In 2016, with assistance from Alibaba, Siemens branch in China successfully located 150,000 fake sockets and remote controls which were worth several million euros.

Source: Deutsche Welle, March 18, 2017
http://www.dw.com/zh/山寨太多德国制造业向阿里巴巴开炮/a-38006874?&zhongwen=simp

Caixin, a mainstream news media specializing in China’s economy, reported that China’s labor force continues to decline and its aging population continues to expand. According to data that China’s National Bureau of Statistics released in January 2017, at the end of 2016, the number of working-age population who were between the ages of 16 and 60 was about 33.25 million lower than in 2011. At the same time, China’s population aged 60 years and over at the end of 2016 increased by 45.87 million compared with 2011.

The report also mentioned that China’s population structure compared unfavorably with India.

Source: Caixin, February 27, 2017
http://datanews.caixin.com/2017-02-27/101059600.html