Archive for ‘Chindia Alert’

11/03/2015

China to raise retirement age as pressure on pension fund rises | Reuters

China’s pension fund will come under tremendous pressure to break even in coming years and as such, the government needs to gradually raise the official retirement age to salvage the finances, a top official said on Tuesday.

Military delegates arrive for the opening of the annual full session of the National People's Congress, the country's parliament, at Tiananmen Square in Beijing March 5, 2015. REUTERS/Carlos Barria

Yin Weimin, minister of human resources and social security, said the government will gradually raise the official retirement age, which is as low as 50 for some female workers, but stressed that any policy changes will be phased in over five years.

He did not say when retirement ages will be raised.

Analysts have long warned about China’s state pension crisis and the severe funding shortage, with some estimating that the cash shortfall could rise to as high as nearly $11 trillion in the next 20 years.

Yin said the finances were not as dire for the moment, but warned about challenges ahead.

“The pension fund faces tremendous pressure in terms of breaking even in future,” he told reporters at a news briefing on the sidelines of the annual meeting of China’s parliament.

The fund’s income stood at 2.3 trillion yuan (243.28 billion pounds) in 2014, exceeding its expenditure of 2 trillion yuan for the year, he said.

But in coming years, the proportion of Chinese over the age of 60 will rise to 39 percent of the population, from 15 percent now, Yin said.

via China to raise retirement age as pressure on pension fund rises | Reuters.

09/03/2015

Kashmir fight adds to hurdles for Modi’s reform push | Reuters

A ruckus over the release from prison of Masarat Alam Bhat, the man who led the most serious revolt in decades against the Indian military in Kashmir, is adding to mounting problems for Prime Minister Narendra Modi as he tries to push economic reform through parliament.

Masarat Alam Bhat (2nd R), a Kashmiri separatist leader, speaks on his mobile phone at his residence in Srinagar March 9, 2015. REUTERS-Danish Ismail

The Lok Sabha was temporarily adjourned on Monday after opposition parties demanded to know why the separatist leader was released at the weekend by Kashmir’s state government, which Modi’s nationalist party supports.

“I am angered and condemn the release, just like other lawmakers,” Modi said in parliament. “I can assure you that my government was not informed about the decision by the state government and neither were we consulted.”

Modi swept to office ten months ago promising rapid economic transformation but disparate opposition parties have united to block his agenda, forcing the government to rely on executive orders called ordinances to pass unpopular policies.

With two weeks remaining of the current session of parliament before a recess, the government needs to win support for ordinances, including those raising the foreign direct investment limit in the insurance sector, or they will expire.

via Kashmir fight adds to hurdles for Modi’s reform push | Reuters.

09/03/2015

China says progress being made on India border talks | Reuters

Progress is being made on drawn-out border talks with India, China’s foreign minister said on Sunday, likening the process to climbing a mountain that becomes harder the closer to the summit you get.

Chinese Foreign Minister Wang Yi gestures as he speaks at a news conference at the annual session of the National People's Congress (NPC), the country's parliament, in Beijing, March 8, 2015. REUTERS/Stringer

The neighboring giants have had numerous rounds of talks over the years without making much apparent process, in a dispute which dates back to a brief border war in 1962.

Chinese Foreign Minister Wang Yi described the problem as one “left over from history”.

“After many years of hard efforts, the border talks continue to make progress, and the dispute has been brought under control,” Wang told reporters on the sidelines of China’s annual meeting of parliament.

“At the moment, the boundary negotiation is in the process of building up small and positive developments,” he said. “It’s like climbing a mountain: the going is tough, and that is only because we are on the way up.”

China lodged an official protest last month when Indian Prime Minister Narendra Modi visited one of the border regions in dispute.

via China says progress being made on India border talks | Reuters.

09/03/2015

China hints Japan to be invited to war memorial parade | Reuters

China will welcome all national leaders to a military parade marking the 70th anniversary of the end of World War Two, the foreign minister said on Sunday, the strongest sign yet that it could invite wartime enemy Japan.

Sino-Japan relations have long been poisoned by what China sees as Japan’s failure to atone for its occupation of parts of the country before and during the war, and it rarely misses an opportunity to remind its people and the world of this.

In the last two years, ties have also deteriorated sharply because of a dispute over a chain of uninhabited islets in the East China Sea, though Chinese and Japanese leaders met last year in Beijing to try to reset relations.

But the remarks by Chinese Foreign Minister Wang Yi come as the two countries plan to hold their first security talks in four years in Tokyo on March 19, an indication of a possible improvement in strained ties.

“Our goal is to remember history, commemorate the martyrs, cherish peace and look to the future,” Wang said of the parade at a briefing on the sidelines of China’s annual meeting of parliament.

“We will extend the invitation to the leaders of all relevant countries and international organizations. No matter who it is, as long as they come in sincerity, we welcome them,” Wang said in response to a question about whether Japanese Prime Minister Shinzo Abe would be invited.

via China hints Japan to be invited to war memorial parade | Reuters.

06/03/2015

PM Narendra Modi heads to Seychelles, Mauritius, Lanka; tour begins on March 10 – The Times of India

Prime Minister Narendra Modi will leave on March 10 on a three-nation visit — Seychelles, Mauritius and Sri Lanka — the external affairs ministry announced on Friday with no mention, however, of the Maldives, which was being considered earlier.

On his first trip abroad in 2015, the Prime Minister will be visiting the three countries from March 10 to 14, the ministry said.

On March 11, in Seychelles, Modi will hold bilateral discussions with President James Alexis Michel to strengthen bilateral maritime ties and enhance development cooperation.

Modi will be in Mauritius on March 11 and 12 where he will have extensive meetings with his Mauritian counterpart, Sir Anerood Jugnauth, to further enhance the special and unique relations.

The Indian Prime Minister will also be the chief guest at Mauritius’s National Day celebrations.

via PM Narendra Modi heads to Seychelles, Mauritius, Lanka; tour begins on March 10 – The Times of India.

06/03/2015

Chinese city shuts factories as environmental law bites | Reuters

An industrial city in eastern China has closed several factories, including many steel and nickel pig iron producers, in an apparent sign the government is stepping up enforcement of a new environmental law in the face of growing public discontent over pollution.

Premier Li Keqiang told the annual session of the National People’s Congress, or parliament, on Thursday his government would do everything it could to fight pollution.

China’s vast and energy-intensive steel sector is at the heart of the government’s war on pollution, but it also encapsulates the challenges of curbing smog without denting the economy. Complying with stricter standards would have knock-on effects throughout industry and raise costs for steel producers who are already feeling the pinch of tepid demand.

Most steel producers in Linyi, a city in coastal Shandong province, appear to have been shuttered, industry sources said.

“Almost all the steel-making production in Linyi has closed, and there is no date for when to resume production,” said an official with Linyi Yuansheng Casting Co Ltd, one of the mills in the city, who declined to be identified.

via Chinese city shuts factories as environmental law bites | Reuters.

06/03/2015

China’s Fosun buys 5 percent stake in British travel group Thomas Cook | Reuters

China’s Fosun International (0656.HK) has bought a 5 percent stake in Thomas Cook Group (TCG.L), deepening its foray into Europe’s tourism sector and potentially helping the British company to compete with travel leviathan TUI Group (TUIT.L)

Fosun paid 92 million pounds ($140 million) for the Thomas Cook stake and will seek to double its holding in the world’s oldest travel group to 10 percent, it said in a filing to the Hong Kong stock exchange on Friday.

News of the investment, which the companies said came after two years of talks, sent Thomas Cook shares soaring by as much as 22 percent in morning trade. At 6.20 a.m. ET the shares were up 18.8 percent at 143 pence.

Thomas Cook said that it expects the tie-up to enhance earnings in the financial year to Sept. 30, 2016, assuming plans under the partnership are implemented in 2015.

One of the plans is to explore collaboration opportunities with Club Mediterranee (CMIP.PA), the French holiday company Fosun bought last month, where it is seeking to turn around a business that is struggling in Europe and move more aggressively into fast-growing markets such as China.

via China’s Fosun buys 5 percent stake in British travel group Thomas Cook | Reuters.

05/03/2015

China 2015 defense budget to grow 10.1 pct, lowest in 5 years – Xinhua | English.news.cn

China on Thursday announced a 10.1-percent rise in its national defense budget in 2015, the lowest growth in five years as the country confronts mounting pressure in the face of an economic slowdown.

According to a budget report released shortly before the country’s top legislature starts its annual session, the government plans to raise defense budget to 886.9 billion yuan (about 144.2 billion U.S. dollars).

That would make China the second largest military spender in the world following the U.S., whose defense budget amounted to 600.4 billion U.S. dollars in 2013.

Nonetheless, the 10.1-percent rise represented the lowest expansion in China since 2010, when the defense budget was set to grow by 7.5 percent.

The figure has thereon been riding on a multi-year run of double-digit increases, expanding 12.2 percent last year.

Thursday’s budget report did not explain the rationale behind this year’s abated growth, but a government work report to be presented by Chinese Premier Li Keqiang may offer some clues.

According to the report, national defense development would be coordinated with the country’s economic growth.

The Chinese economy grew 7.4 percent in 2014, registering the weakest annual expansion in more than two decades. The government set this year’s growth target to approximately 7 percent, brewing new concerns that the world’s economic powerhouse is losing steam.

But the report played down such concerns, stressing that China is now in a “new normal” state, where a balance ought to be stricken between growth and structural optimization.

via China 2015 defense budget to grow 10.1 pct, lowest in 5 years – Xinhua | English.news.cn.

05/03/2015

China’s nuclear plant plans get new momentum – Business – Chinadaily.com.cn

State Council gives green light for two reactors at Hongyan River in Liaoning

China's nuclear plant plans get new momentum

China’s nuclear energy development plans got a fresh impetus on Wednesday after the State Council gave the green light for new reactors at the Hongyan River nuclear power plant.

According to industry sources, units 5 and 6 of the Hongyan River nuclear plant in the northeastern Liaoning province got construction approval from the State Council before the Lunar New Year.

“It is a big step forward for China to revive the industry and more nuclear projects are expected to start construction this year. However, the official documents are yet to be finalized,” a source in a State-owned nuclear company told China Daily.

New nuclear projects are also in the pipeline, the source said, adding that the moves would help optimize China’s energy mix amid mounting pressure from air pollution.

Tang Bo, an official at the National Nuclear Safety Administration, said earlier that the regulatory body has been working on the environmental impact assessment and safety inspection of nuclear projects including the Hongyan River nuclear project, the Shidao Bay nuclear demonstration project in Shandong province and units 5 and 6 of the Fuqing nuclear power plant in Fujian province.

“We have drawn up a draft list of new projects for final approval,” he told China Daily earlier. “Our job is to clear the potential risks and help with the technical preparation of the nuclear sites before the government’s final approval,” he said.

Following the Hongyan River nuclear project, units 5 and 6 of the Fuqing nuclear power plant are the next possible candidates for approval, experts said.

“The Fuqing nuclear project will possibly get the nod from the government in April at the earliest,” the source said.

The equipment purchase order for units 5 and 6 of the Fujing nuclear power plant, which uses the Hualong One reactor design, known as the third-generation nuclear technology, is nearly complete, the source said.

China, with the world’s largest number of nuclear power plants under construction, is now pushing ahead to embark on a program of new nuclear projects to reduce the proportion of fossil fuels in its primary energy consumption.

Last year, the State Council rolled out an energy plan to have a more efficient, self-sufficient, green and innovative energy production and consumption mechanism.

The plan targets to have 58 gigawatts of nuclear power in operation by 2020 and at least 30 gW under construction. To meet that target, China needs to add at least another 10 gW of installed capacity with approval of six to eight reactors each year, according to estimates from industry experts.

After the Fukushima Daiichi nuclear disaster in Japan in 2011, China suspended approval for nuclear plants in order to revise its safety standards. However, it lifted the ban on new nuclear power stations at the end of 2012, and said it would only approve projects proposed for coastal areas within 2015.

via China’s nuclear plant plans get new momentum – Business – Chinadaily.com.cn.

05/03/2015

5 Takeaways From China’s State-of-the-Nation Speech – WSJ

With a state-of-the-nation speech, Chinese Premier Li Keqiang announced an era of slower growth, saying “China’s economic development has entered a new normal.” The nearly 100-minute speech inside Beijing’s Great Hall of the People on Thursday outlined the Chinese government priorities for the coming year. The overriding imperative: generating enough growth to keep people happy while the government guides a transition away from smokestack industries to services.   

1 China’s ‘new normal’ is slower, but not slow.

The lowered growth target of about 7% is the lowest in over a decade, but still — Chinese state media reminded — fast for a major economy. A willingness to see an economic free-fall after years of heady growth it isn’t. Mr. Li several times cited the need to keep the economy humming along. He said maintaining “medium-high-level growth” is crucial to boosting living standards, creating jobs and finding new growth drivers.

2 Is smaller better?

While China’s large and often unpopular state enterprises typically capture a large share of bank loans and other government support, Mr. Li gave more than a shout-out to small businesses. He promised to make it easier to start new businesses and encourage people to do so. It isn’t so much an ideological retreat from state control to the private sector. The reason, he said, is that China needs to create jobs and smaller businesses do that.

3 The government isn’t going away

For all the progress, China’s government still believes strongly in the state’s hand over the invisible hand. The deficit is being widened – to 2.3% of gross domestic product from 2.1% – to spend more money to create growth. Big infrastructure projects are still in vogue, with the government promising 800 billion yuan (about $127.6 billion) for new railways and a similar amount for water projects. One of President Xi Jinping’s pet projects, a bevy of cross-border infrastructure projects to bind neighboring economies to China’s orbit known as the new Silk Road, received three mentions.

4 What about the environment?

Expected to be a hot topic, the environment didn’t feature highly in government priorities. Last year, Mr. Li vowed to “declare war on pollution” in a bow to rising middle-class complaints about noxious air, especially in Beijing. A documentary by a former state TV reporter released last weekend went viral. Mr. Li’s speech, however, offered tinkering on already-laid plans. Energy intensity – a measure of energy used to create economic growth – is to be cut 3.1%, lower than last year’s 4.8% but enough to reach a long-term target.

5 China still has a long way to go.

For all China’s tremendous success in becoming an economic powerhouse, income gaps are wide and many people — especially in rural areas — struggle. These government reports are a good reminder of that. This year, Mr. Li said, 60 million more rural Chinese will get access to safe drinking water. Some 200,000 people live without electricity, though more will get it, he said. The social safety net the government has struggled to build out is still thin. The government’s raising pensions, but even so the lowest basic pension across urban and rural China will be 70 yuan a month, less than $12.

via 5 Takeaways From China’s State-of-the-Nation Speech – WSJ.

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