Archive for ‘China alert’

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11/04/2014

Beijing seeks to ban purchase of cigarettes with public funds | Reuters

Good news for Chinese health, bad news for the cigarette industry.

“China’s capital Beijing is proposing to ban the use of government money to buy cigarettes, either as gifts or to be provided at official functions, state media said on Friday, in the latest move to try and curtail smoking.

Extinguished cigarettes are seen in an ashtray at the Shanghai Railway Station December 23, 2013. REUTERS/Aly Song

China, home to some 300 million smokers, is the world’s largest consumer of tobacco, and smoking is a ubiquitous part of social life, particularly for men. Cartons of cigarettes are commonly given as presents or provided at formal events.

The Beijing government rules, currently in the proposal stage, would ban cigarettes being provided or given at any official event, the official Xinhua news agency reported.

The rules also seek a ban on promotional sales activities or advertising for cigarettes and a ban on smoking in public places like train stations, hospitals and schools, with fines of up to 200 yuan ($32), the report said.

Beijing, along with other parts of China, already bans smoking in many public places, though the rules are generally ignored.

Xinhua did not say when the new rules may go into effect.

Tougher regulation of smoking is a priority this year, officials from the National Health and Family Planning Commission said in January, adding that the agency was pushing lawmakers to toughen laws on tobacco use.

The ruling Communist Party said last year that officials must not light up in schools, workplaces, stadiums, and on public transport, among other places, so as to set a positive example.

($1 = 6.2125 Chinese yuan)”

via Beijing seeks to ban purchase of cigarettes with public funds | Reuters.

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10/04/2014

Chinese Communist Party banquets cut by half in 2013 under Xi’s austerity drive | South China Morning Post

A new study has revealed the impact of President Xi Jinping’s belt-tightening measures, with the number of official banquets falling by as much as 50 per cent last year.

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Zhang Zhongliang, director of the statistical education centre of the National Bureau of Statistics, showed that Xi’s year-long campaign not only cut down expenditures but also freed up time by “setting officials free” from such obligations.

Zhang read out some findings of the study on the effects of Xi’s eight-point austerity directive at the Beijing-based Communication University of China, the Southern Metropolis Daily reported on Thursday.

He said county-level officials, who typically spend the most time at banquets among all ranks of government, on average attended 12.2 official banquets per week last year, compared to 18.2 per week in 2012.

Zhang said county engagements dropped by one-third, while provincial and national-level officials saw the number of banquets drop by half.

This gave civil servants an average of 30 minutes more with their loved ones, Zhang said.

It was not reported whether the survey was based on reports from bureaus or monitoring by third parties.

At least six different sectors were directly affected by the crackdown on official parties, mainly the catering, tobacco and wine industries, the study said.

Zhang said the catering industry’s growth dropped to 3.8 per cent last year from 8.8 per cent the previous year. The total sales of luxury wines in the mainland market plunged 40 per cent in the same period.

Zhang said these measures partly contributed to a slowdown in the country’s economy but it was “a price that must be paid” to root out corruption.

Extravagance among party cadres drove up consumption in the short-term, but would distort supply and demand in the long run, he said.

via Communist Party banquets cut by half in 2013 under Xi’s austerity drive | South China Morning Post.

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10/04/2014

What Drives China’s Protest Boom? Labor Disputes and Land Grabs – Businessweek

What are the main reasons Chinese take to the streets, picket government offices, and besiege factory gates? A recent report by the Chinese Academy of Social Science provides some answers on why people protest, a question that keeps China’s party officials awake at night.

Workers gathering on a square before the government headquarters in Wenling, east China's Zhejiang province on Feb. 17

Most protests erupt over labor disputes and land grabs, according to the Annual Report on China’s Rule of Law No 12 (2014), also known as the Blue Book of Rule of Law. The analysis reviewed 871 “mass incidents”—protests involving more than 100 people—carried out by more than 2.2 million people from January 2000 through September of last year, as the official China Daily reported.

As China’s leaders push for faster urbanization, with plans to convert hundreds of millions more farmers into city dwellers, land disputes are a growing problem likely to get even bigger. “In land acquisitions and forced demolitions, for example, many officials often overlook public interest,” Shan Guangnai of the Chinese Academy of Social Sciences told the official newspaper.

The majority of the protests involved fewer than 1,000 people. Still, almost one-third of the incidents included between 1,000 and 10,0000 people, and 10 megaprotests involved more than 10,000 people demonstrating en masse. Of the largest, half were protesting pollution issues. The two other main causes were traffic accidents and conflicts involving China’s many ethnic groups, which include Tibetans, Muslim Uighurs, and Mongolians.

Almost one-half of the protests were directed at government, with disputes due to problems with law enforcement, land acquisitions, and forced demolitions involving local officials, plus various other rights issues. The remainder of the demonstrations focused on conflicts with enterprises, landlords, schools, and village committees. The large majority of protests—about four-fifths—were organized rather than spontaneous, and 36 incidents resulted in a total of 79 deaths.

The report also showed that protests occur most often in more-developed regions, including eastern and southern China, with Guangdong province alone accounting for about 30 percent. And the number of incidents is rising each year.

via What Drives China’s Protest Boom? Labor Disputes and Land Grabs – Businessweek.

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10/04/2014

Chinese Exports Plummeted Last Month. Puzzled? We Have You Covered – China Real Time Report – WSJ

China’s exports were down 6.6% on year in March, confounding economists, many of whom expected growth of over 4%.

What’s going on?

First, it’s important to remember that China’s trade statistics in the first quarter are often skewed by the Chinese Lunar New Year holidays, when activity slows down in much of East Asia.

But economists expected exports to show signs of a pickup in March, the first month not affected by the holidays, which this year fell in late January and early February.

One explanation is the March data was warped by over-invoicing. This is a practice by which Chinese companies dodge capital controls by using fake export invoices to get money into the country to benefit from relatively high onshore interest rates.

Beijing cracked down on the practice last spring, but over-invoicing was still prevalent in March 2013. Since then it has decreased because of tighter regulatory controls. The government’s efforts to guide the yuan currency lower this year also has diminished the attraction of such a carry trade.

That could mean the year-ago comparison was artificially boosted, making March 2014’s numbers look poor by comparison.

“Do not worry about the export data,” wrote Louis Kuijs, an economist at RBS in Hong Kong, in a note to clients.

RBS estimates year-on-year export growth in March 2013 was inflated by 11.8 percentage points due to over-invoicing. The bank also thinks export growth on-year in March this was 5.2% adjusting for over-invoicing.

“The competitiveness of China’s manufacturing sector is still solid, allowing its export sector to benefit from global demand growth,” Mr. Kuijs wrote.

Andrew Tilton, an economist at Goldman Sachs in Asia, agreed with this assessment.

“The main reason is that the over-invoicing distortions were peaking last year around this time,” he said. Now, “the increased currency volatility and deprecation is discouraging that activity from a financial incentive perspective.”

via Chinese Exports Plummeted Last Month. Puzzled? We Have You Covered – China Real Time Report – WSJ.

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09/04/2014

The Real China Housing Collapse: ‘Vintage’ Buildings – China Real Time Report – WSJ

They don’t build ‘em like they used to, and when it comes to housing in China, that’s probably a good thing.

According to the official Xinhua news agency, the price behind the breakneck pace of China’s construction boom since the reform and opening is becoming clear, with buildings collapses frequently involving those constructed in the 1980s and ‘90s.

That was evident last week, when a five-story residential building constructed in 1994 collapsed in Fenghua in coastal Zhejiang province, killing one person and burying several others in the rubble.

Only an eyebrow-raising 22% of China’s housing stock was built before 2000. But its recent vintage doesn’t necessarily mean it’ll last very long: According to an unnamed government official Xinhua cited this week, China’s buildings are generally expected to last for just 25 to 30 years. The reason is poor quality of construction and design, Xinhua said, adding that many seismically unsafe buildings from the ‘80s and ‘90s in the country still exist.

As of Tuesday afternoon, some 1.6 million comments were posted on Weibo about the Zhejiang collapse, with most microbloggers expressing astonishment and fear while blaming local authorities and developers.

“Developers run completely rampant over us,” wrote one user. “Where can ordinary people go to seek justice? Don’t tell me authorities just wait until there’s an accident to start paying attention?”

“In other countries, an 8.0 quake only kills eight people,” wrote another. “Our houses collapses even on days without a hint of trouble.”

At least six multiple-story buildings have collapsed in China since 2009—including one in Shanghai under construction that bizarrely toppled over virtually intact—though not all have caused casualties. In one particularly deadly 2009 incident, 17 people were killed after a two-story building constructed in the 1980s collapsed in Hebei after a heavy rain, Xinhua reported (in Chinese).

via The Real China Housing Collapse: ‘Vintage’ Buildings – China Real Time Report – WSJ.

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08/04/2014

Growth Not Good Enough: Chinese City Changes the Rules – China Real Time Report – WSJ

Fast growth is no longer the fast track on the official career path.  At least that’s what the city of Shenyang is trying to tell its Communist Party cadres.

According to the People’s Daily, the Shenyang government is changing its rating system for officials, lowering the scores for economic development and GDP growth while adding points for “reform and innovation” and  environmental protection (in Chinese).

Shenyang, the capital of Liaoning province and the largest city in northeastern China, used to be the home of the nation’s iron and steel industry and was best known for its forest of smokestacks and chimneys. Now the city is hoping to reduce its dependence on heavy industry and erase its reputation for soot and smog.

The newspaper said that “food and drug safety” and “public health and safety” will be added to improving people’s livelihood, increasing employment and ensuring housing security in the calculations of which officials get promoted – and which fall behind.

An official at the municipal government confirmed that the change had been made though he was unable to provide further details on the actual scoring system.

China’s Communist Party chief Xi Jinping said in November last year that China could no longer “choose its heroes according to economic growth records alone.” Improvements in daily life, social progress, environmental protection and other indicators all had to be taken into account, he added.

Premier Li Keqiang, speaking at the annual session of parliament in March, also tried to address mounting public concerns over the pollution that has accompanied economic growth by saying that China was no longer chasing fast growth at any price. He said employment was now the government’s top concern.

Chen Haibo, mayor of Shenyang, has echoed those sentiments.

“The threshold for environmental protection will be much higher this year,” he said at a meeting of the local legislature early this year.

The mayor also noted that Shenyang’s economic growth target would be 9% this year – its lowest level in over a decade. Last year, growth in Shenyang came in at 10%, down from 11% the previous year, according to the provincial government’s official news site.

China has some of the best environmental laws on the planet, but the rewards for breaking them have long outweighed the penalties. If Shenyang follows through, and other cities follow suit, it could be very good news for China’s environment.

via Growth Not Good Enough: Chinese City Changes the Rules – China Real Time Report – WSJ.

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07/04/2014

Why China Needs Such Rapid GDP Growth: More Jobs – Businessweek

As China frets about meeting its target of about 7.5 percent growth in 2014, it’s time for more stimulus. The State Council, China’s cabinet, announced plans this week to further expand railways across the country, renovate dilapidated urban housing, and provide new tax breaks for small businesses. Many analysts are expecting a return to looser credit policies this year as well.

But what China considers unacceptable levels of gross domestic product growth would be the envy of most other countries. So why do China’s leaders demand such rapid rates of economic expansion?

A clue to that is found in Premier Li Keqiang’s recent work report, China’s version of a state of the union speech. Creating enough jobs—mentioned 11 times in the document released on March 5—is what drives Chinese officials’ obsession with fast-rising GDP.

China needs high levels of growth—at least 7 percent, says Li—to ensure enough jobs for 7.2 million college grads and 10 million people flooding cities from the countryside every year. China’s leaders have set a target of producing at least 10 million jobs this year, and a record-high 13.1 million urban jobs were added last year. “Employment is the basis of people’s well-being,” Li said in the work report. “We will steadfastly implement the strategy of giving top priority to employment.”

The trouble is, new stimulus mainly means more investment-driven expansion, which already accounts for about half of the economy. That’s problematic given industrial overcapacity and soaring debt levels held by local governments and companies. And while it indeed boosts the headline GDP number, it doesn’t always create lots of jobs. Heavy industries such as steel, aluminum, and real estate construction, which have rapidly expanded particularly in the years following China’s 2009 stimulus, tend to be capital-intensive rather than labor-intensive.

The country has struggled in recent years to substantially boost the portion of its economy driven by consumption and the job-creating service sector. The plan to cut taxes may provide some support toward that goal. Unfortunately, more train tracks and urban housing may instead set China back.

via Why China Needs Such Rapid GDP Growth: More Jobs – Businessweek.

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07/04/2014

Housing Cools in China; Developers Face Loans They Can’t Repay – Businessweek

Amid a cluster of half-built brick townhouses surrounded by peach groves on the outskirts of Fenghua city, workers could be seen taking down metal scaffolding and hauling away steel plates last month. They had heard that Zhejiang Xingrun Real Estate, the company building the housing development called Peach Blossom Palace, was insolvent. “The developer owed us hundreds of thousands of yuan” for scaffolding and steel, said workers Xie and Wang, who would only give their surnames. “We are taking these materials back for now because there’s no work here.”

Unfinished houses at Zhejiang Xingrun’s development in Fenghua

The collapse of Zhejiang Xingrun may signal the start of a shakeout among the nation’s almost 90,000 real estate companies. After China began allowing private homeownership in 1998, homebuilders binged on easy credit from banks and other lenders. Now many developers are struggling with debt as thousands of apartment buildings across the country sit empty and the government makes it harder to borrow. CBRE Global Investors says there are about 30,000 developers after small construction companies and those formed for only one project are eliminated. “That is far too many, even for a country as large as China,” says Richard van den Berg, country manager for China at CBRE. “Consolidation needs to take place.”

Home prices in China have climbed 60 percent since 2008, when the government began a 4 trillion yuan ($645 billion) stimulus program to counter the effects of the global financial crisis. Former Premier Wen Jiabao began trying to cool the property market in 2010, imposing higher down-payment requirements, raising interest rates on loans for second-home purchases, and increasing construction of low-cost housing. Li Keqiang, who succeeded Wen in March 2013, further tightened credit in June, in part by cracking down on nonbank lenders.

About 67 percent of housing under construction in China last year was in less affluent cities such as Fenghua, according to Nomura Holdings (NMR). About 120 miles south of Shanghai, with a population of 500,000, Fenghua is best known as the birthplace of former Chinese nationalist leader Chiang Kai-shek. The city is filled with pawn shops, textile and garment factories, and empty residential buildings.

via Housing Cools in China; Developers Face Loans They Can’t Repay – Businessweek.

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07/04/2014

Taiwan anti-China protest exposes island’s nationalist divide | Reuters

A chaotic sit-in to protest against a trade deal with China has shut down Taiwan’s parliament and exposed deep divisions over the island’s identity after seven decades of living apart from its vast, undemocratic rival across the strait.

A protester sits in front of a pile of chairs used to block the door, inside Taiwan's Legislative Yuan, Taiwan's parliament, during protest to oppose the controversial trade pact with mainland China, in Taipei April 5, 2014. REUTERS/Pichi Chuang

The mainly student protesters, who proffer sunflowers as a symbol of hope, denounce the pact as an arrangement suiting Taiwan’s wealthy. They say it will lead to mass encroachment by China, and its one-party mindset, on the island’s cherished democratic values and institutions.

Its advocates, including Taiwan’s president and his government, say it is a vital step to normalizing relations with Beijing and will provide jobs and improve living standards.

Protesters demand the repeal of the trade deal, which was only one step away from parliamentary ratification before the sit-in began.

They also demand lawmakers pass an oversight mechanism of trade pacts with the mainland before they pass the current trade deal – a move the government has agreed to in principle and could potentially pave the way toward an end to the stalemate.

“The government has fallen into the palm of big money here in Taiwan,” said Miles Lin, 25, the main protest leader. “That, combined with pressure from Beijing, drove them to ram this pact through the legislature.”

via Taiwan anti-China protest exposes island’s nationalist divide | Reuters.

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02/04/2014

BBC News – China Maoming environmental protest violence condemned

Authorities have condemned an environmental protest in southern China that turned violent, calling it “serious criminal behaviour“.

Residents ride past a burning public security kiosk during a protest against a chemical plant project, on a street in Maoming, Guangdong province, 1 April 2014

Residents in Maoming, Guangdong province, on Sunday protested against the construction of a petrochemical plant that manufactures paraxylene.

Violence broke out, with reports of several injured protesters. On Tuesday, the protests spread to Guangzhou.

Protests are rare in China, where it is illegal to protest without a permit.

Hundreds of Maoming residents marched on the streets on Sunday, protesting against the proposed plant. Some protesters said turnout was more than 1,000.

Clashes with police broke out, with reports of tear gas being fired at protesters. Photos and videos posted on Chinese social media appeared to show injured protesters, police chasing demonstrators with batons, and burning cars.

Smaller protests appeared to continue, spreading to Guangzhou, the provincial capital, on Tuesday.

via BBC News – China Maoming environmental protest violence condemned.

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