Archive for ‘China alert’

25/02/2014

Property remains top wealth driver in China-Hurun list | Reuters

Real estate remained the most lucrative road to riches in China last year, according to the Hurun Global Rich List, despite Beijing’s repeated efforts to cool red-hot property prices.

A labourer works at a construction site in Beijing, January 20, 2014. REUTERS/Kim Kyung-Hoon

Six of world’s 10 top real estate tycoons are now from China and Hong Kong, according to Hurun Report Inc, which released its Global Rich list on Tuesday.

Hong Kong property tycoon Li Kai-shing claimed the top spot in the Greater China area with his fortune rising 3 percent to 200 billion yuan ($32.80 billion).

Wang Jianlin, chairman of China’s largest commercial property developer, Dalian Wanda Group, and Lui Che-Woo, founder of casino operator, Galaxy Entertainment Group Ltd (0027.HK), were the runners-up with personal wealth of 150 billion yuan ($24.60 billion) each.

Wang’s fortune doubled last year, while Lui’s wealth jumped 108 percent, the report said.

Wang bought UK luxury yacht maker Sunseeker for $1.6 billion and is planning billion-dollar luxury hotel developments in London and New York.

Home prices in many Chinese cities continued to set records last year despite a four-year government campaign to cool the housing market, official data showed.

via Property remains top wealth driver in China-Hurun list | Reuters.

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23/02/2014

China’s Migrant Workers Lack High-End Skills – Businessweek

China is already facing the challenge of a shrinking labor force. Its working age population—16 to 59—declined by more than 2 million people, to about 920 million last year, compared with 2012. And while the total number of migrant workers is still increasing slowly, up 2.4 percent, to 269 million, last year, many lack needed skills. That’s despite the fact that wages keep rising, up about 14 percent, to around 2,600 yuan ($427) a month last year.

China's Migrant Workers Lack High-End Skills

“It is difficult to hire general workers, which reflects the limited supply of migrant workers. Despite China upgrading and restructuring its industrial base, there are difficulties in recruiting enough skilled technicians to work in these fields,” said Yang Zhiming, deputy minister of Human Resources and Social Security, at a press conference Thursday in Beijing, reported the Global Times.

China is aiming to shift its economy to higher-value-added industries and lessen its reliance on low-end, low-skill manufacturing of shoes, clothes, and toys, a process officials have dubbed tenglong huanniao, or “clearing the cage and changing the bird.” To meet the skills gap, the government will offer more training programs and educate at least 10 million migrants a year. Beijing intends to provide training by 2020 for the entire “new generation” of migrant workers, or those born after the 1980s, which now number about 100 million, according to Yang.

via China’s Migrant Workers Lack High-End Skills – Businessweek.

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23/02/2014

India’s Modi Talks Tough on China – India Real Time – WSJ

The frontrunner to become India’s next prime minister traveled to a town near the country’s disputed Himalayan border with China over the weekend and bluntly warned Beijing to abandon its territorial ambitions.

In a sign of rising Indian wariness of its northern neighbor, Hindu nationalist opposition leader Narendra Modi said China “will have to leave behind its mindset of expansion” and said Beijing should work for “development and prosperity.”

For Mr. Modi, the Bharatiya Janata Party’s candidate for the premiership in upcoming national elections, it was a rare foray into foreign policy on the campaign trail, where he has focused primarily on a weak domestic economy.

Speaking in Pasighat, a town in India’s northeast Arunachal Pradesh state, and again in Assam near India’s border with Bangladesh, Mr. Modi sought to portray himself as strong on defense and unafraid of other regional powers.

“No power on earth can snatch away Arunachal Pradesh from India,” Mr. Modi said.

India’s next leader will inherit a volatile neighborhood.

In addition to a more assertive and well-armed China, which is looking to play a greater role in South Asia and the Indian Ocean, New Delhi also must deal with the fallout of a diminishing U.S. troop presence in Afghanistan.

Security experts warn that reduced Western presence there could fuel Islamic militancy along India’s already troubled border with Pakistan. Bangladesh and Sri Lanka have been gripped by internal political tensions.

via India’s Modi Talks Tough on China – India Real Time – WSJ.

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22/02/2014

China gives order to commence war with Japan ‘if it is appropriate to fight’

This translated article seems to confirm the views of a senior US military person – https://chindia-alert.org/2014/02/20/china-training-for-short-sharp-war-says-senior-us-naval-officer-ft-com/

China has been to war with India, Russia and Vietnam over border/territorial disputes – https://chindia-alert.org/political-factors/chinese-tensions/ – Perhaps this will be another such conflict.

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21/02/2014

* Local-government debt: Bridging the fiscal chasm | The Economist

This article provides support for the views of Charlene Chu, expert on China’s shadow debt – http://www.ft.com/cms/s/0/ffcabcec-7900-11e3-b381-00144feabdc0.html#axzz2tsNdwlvq.  She was one of the key interviewees in Robert Peston‘s recent BBC2 show on “How China Fooled the World”. – http://www.bbc.co.uk/programmes/b03w7gxt

“CHINA’S provincial administrations are often referred to as “local” governments. But the phrase does not do them justice. The province of Guangdong, for example, boasts more than 105m people and a GDP worth more than $1 trillion. Only 11 countries (including China itself) have a bigger population and only 15 have a larger economy.

Equally impressive is the scale of provincial debts. At the end of 2013 China’s national auditor revealed that the liabilities of local governments had grown to 10.9 trillion yuan ($1.8 trillion) by the middle of last year, or 17.9 trillion yuan if various debt guarantees were added. That was equivalent to about a third of China’s GDP. These “local” debts, in other words, had grown fast enough to become a national burden and an international concern.

The audit documented the size of the problem, but revealed little about its location. The debts were all discussed at an aggregate, countrywide level. No provinces were singled out for blame or praise. In the past few weeks, however, almost all of the provincial-level governments have published audits of their own. As well as shedding light on the problem, this information may help to solve it. In principle, the least provident governments are now exposed to public scrutiny. Fiscal shame may help prevent a fiscal fright.

But identifying the most indebted province is not as easy as it sounds. The figures can be sliced and diced in a variety of ways. The coastal provinces of Jiangsu (just north of Shanghai) and Guangdong (just north of Hong Kong) owe the most, accounting for 14% of the total between them. But these two provinces also have the largest economies, generating over 19% of the country’s GDP.

Relative to the size of their economies, the poor western provinces of Yunnan, Qinghai and Gansu bear some of the heaviest burdens, along with the western municipality of Chongqing, which is renowned for its heavy public investment (see chart). The province with the biggest fiscal chasm to cross, however, is Guizhou (whose impressive Balinghe bridge is pictured above). It had liabilities in mid-2013 equivalent to over 80% of its GDP over the previous four quarters.

These figures include money China’s provincial governments have borrowed themselves and other institutions’ debts that they have guaranteed. Sometimes this debt is guaranteed explicitly. Often, the backing is implicit. By the end of 2012 Chongqing had explicitly guaranteed debts worth 18% of its GDP. Gansu, for its part, had implicitly backed borrowings worth 20%.”

via Local-government debt: Bridging the fiscal chasm | The Economist.

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21/02/2014

Behind China’s Labor Unrest: Factory Workers and Taxi Drivers – Businessweek

On top of the other article about pessimistic Chinese economists, this is worrying. See https://chindia-alert.org/2014/02/21/even-chinas-economists-are-singing-the-blues-china-real-time-report-wsj/

“What’s the state of dissent among China’s hundreds of millions of workers? They are increasingly aware of and demanding their rights, according to a new report by the China Labor Bulletin.

Workers sew blue jeans in a Chinese textile factory in 2012

There were 1,171 strikes and protests in China recorded by the Hong Kong-based labor advocacy group from June 2011 until the end of last year. Of those, 40 percent occurred among factory workers, as China’s exports suffered a slowdown and its overall economy cooled. “Many manufacturers in China sought to offset their reduced profits by cheating workers out of overtime and cutting back on bonuses and benefits, etc. These cost-cutting tactics proved to be a regular source of conflict with the workforce,” notes the report, “Searching for the Union: The workers’ movement in China 2011-13″ (pdf), which was published on Thursday.

Meanwhile, the report cites a large number of worker protests “caused by the downsizing, closure, relocation, sale or merger of businesses” spurred by the government’s declared policy of tenglong huanniao, or “changing the birds in the cage.” That’s when Beijing has encouraged the closure of factories engaged in lower-tech businesses, including shoes, textiles, and toys. All together, 57 percent of factory worker protests took place in Guangdong, home to the Pearl River Delta manufacturing region, followed by 9 percent in Jiangsu, home to many export factories in the Yangtze River Delta.”

via Behind China’s Labor Unrest: Factory Workers and Taxi Drivers – Businessweek.

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21/02/2014

* Even China’s Economists Are Singing the Blues – China Real Time Report – WSJ

It’s all relative.  To any developed nation, a GDP growth of just over 7% would look absolutely marvellous!

“China’s state media have long accused foreign analysts of being too bearish on the Chinese economy. Those analysts looking in from the outside are often said to be too eager to be “chanting decline”—chang shuai—when it comes to the economy’s prospects.

This time around, China’s own economists seem to be chanting a pessimistic tune about growth prospects. Perhaps they are not quite as negative as those pesky foreign counterparts—who according to at least one report China’s state media are being told to avoid—but they are increasingly outspoken about slowing growth and rising financial risk.

“We are now in a painful stage,” economist Wang Luolin told a seminar this week.  “Let’s not try to dress things up,” said the consultant to the Chinese Academy of Social Sciences, a government think tank.

Yu Bin, a senior researcher at the influential Development Research Center under the State Council, took a similarly pessimistic view.

“The fact is, China’s economic growth is facing substantial downward pressure,” he said. “I don’t think we should get our hopes up for this year’s growth.”

China’s growth has been slowing amid a recovering global economy coupled with weak domestic demand. The days of double-digit expansion are long gone. Economic growth slipped to 7.7% in the fourth quarter of last year from 7.8% in the third – and many economists see a further slackening ahead.

“We expect the economic growth rate to be just above 7% this year, and that’s about it,” Mr. Yu said. That would be well below the 7.7% expansion in all of 2013.

Mr. Yu added that all three big drivers of China’s growth — investment, consumption and exports— are looking weak.”

via Even China’s Economists Are Singing the Blues – China Real Time Report – WSJ.

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20/02/2014

China training for ‘short, sharp war’, says senior US naval officer – FT.com

China has been training for a “short, sharp war” against Japan in the East China Sea, a senior US military officer has claimed, in comments that underline the growing military tensions in the western Pacific.

Disputed territory

Captain James Fanell, director of intelligence for the US Pacific Fleet, said that a large-scale Chinese military exercise conducted in 2013 was designed to prepare forces for an operation to seize disputed islands in the East China Sea, which Japan calls the Senkaku and China the Diaoyu.

“We witnessed the massive amphibious and cross military region enterprise – Mission Action 2013,” Capt Fanell said at a navy conference last week in San Diego.

“We concluded that the PLA [People’s Liberation Army] has been given the new task of being able to conduct a short, sharp war to destroy Japanese forces in the East China Sea following with what can only be an expected seizure of the Senkakus,” he added.

Conducting a training exercise is very different from having an actual plan to seize the islands. For years, the Chinese military has staged exercises designed to mimic a possible invasion of Taiwan.

However, the comments about China’s military training plans come at a time of considerable tension surrounding the contested islands. The regular presence of both Chinese and Japanese vessels and aircraft in the region has raised the risk of an accident that could spark a wider confrontation.

In December, China declared an air defence identification zone for the East China Sea, which the US and many other countries in the region interpreted as an attempt to cement its sovereignty claim over the disputed islands.

Although Capt Fanell’s remarks were unusually blunt in their assessment of China’s intentions, they represent a growing tide of anxiety from senior US officials about Beijing’s ambitions in both the East China Sea and South China Sea.

Earlier in February, Danny Russel, the US assistant secretary of state for East Asia, warned “there are growing concerns that this pattern of behaviour in the South China Sea reflects incremental effort by China to assert control over the area”. He said that China’s recent actions had “created uncertainty, insecurity and instability in the region”.

Capt Fanell said that Chinese maritime training had shifted in character in the second half of 2013 to prepare for “realistic maritime combat” that its navy might encounter. Last year, it conducted nine operations in the western Pacific that were designed to “practise striking naval targets”.

“I do not know how Chinese intentions could be more transparent,” he said. When Beijing described its activities as the “protection of maritime rights”, this was really “a Chinese euphemism for the coerced seizure of coastal rights of China’s neighbours”, Capt Fanell said.

via China training for ‘short, sharp war’, says senior US naval officer – FT.com.

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20/02/2014

China, UK discuss setting up yuan clearing bank in London – Osborne | Reuters

The British and Chinese governments are in active discussions about setting up a clearing bank in London for China’s currency, a milestone that will put the city in a leading position to offer yuan trade business in Europe.

British Chancellor of the Exchequer George Osborne listens to a question after his speech during a breakfast meeting held by the British Chamber of Commerce in Hong Kong February 20, 2014. REUTERS/Bobby Yip

Taking a leaf out of Hong Kong’s blueprint in being the leading offshore yuan hub after the establishment of Bank of China (Hong Kong) as a clearing bank, the authorities are pressing ahead with having one for the city of London.

The move will help expand the Chinese currency‘s footprint beyond Hong Kong, where more than 80 percent of yuan trade settlement transactions are handled and foster greater confidence among European companies to adopt the yuan, also known as the renminbi, as a currency for trade.

“The UK and Chinese governments are in active discussions now about the appointment of a RMB clearing bank in London, recognising London’s role as the Western centre of offshore RMB

via China, UK discuss setting up yuan clearing bank in London – Osborne | Reuters.

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20/02/2014

China charges former mining magnate with murder, gun-running | Reuters

Prosecutors in central China on Thursday charged the former chairman of Hanlong Mining, which had tried to take over Australia’s Sundance Resources Ltd, with murder, gun-running and other crimes as part of a “mafia-style” gang.

Police last year announced the detention of Liu Han and an investigation into his younger brother Liu Yong – also known as Liu Wei – on suspicion of various criminal activities.

In a report carried by the official Xinhua news agency, prosecutors in the central province of Hubei said the two Lius set up the gang in 1993, along with 34 others, which “carried out a vast number of criminal activities”.

The gang was responsible for nine murders, the report said.

via China charges former mining magnate with murder, gun-running | Reuters.

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