Archive for ‘austerity’

01/12/2013

For Cognac Makers, the Chinese Party is Over – Businessweek

French cognac makers won’t be toasting the Chinese New Year. After several years of double-digit growth, cognac sales in China have tanked as President Xi Jinping clamps down on conspicuous consumption.

Shares in Rémy Cointreau (RCO:FP), maker of Rémy Martin cognac, plunged nearly 10 percent on Nov. 26 after the company said it expected a “substantial double-digit decline” in profits because of weak Chinese sales.

The Chinese New Year, which falls on Jan. 31 in 2014, ordinarily would bring a sales windfall, with Communist Party leaders hosting cognac-soaked banquets and giving each other bottles costing $200 and up. But, Rémy Chief Executive Officer Frédéric Pflanz told Bloomberg Television, “We don’t necessarily expect a bettering of the situation” for the next few months. Chinese distributors are sitting on large, unsold stocks and aren’t placing new orders, he said.

via For Cognac Makers, the Chinese Party is Over – Businessweek.

26/11/2013

Sales of postcards drop amid push for austerity |Politics |chinadaily.com.cn

Printers claim SOEs scrapping orders of gifts

Companies making calendars and greeting cards say they have seen a huge drop in orders after the Party\’s top discipline body banned officials spending public money on their products.

The Central Commission for Discipline Inspection announced the ban on Oct 31, forbidding Party organs, government departments, State-owned enterprises and public institutions from buying, printing, mailing and handing out New Year cards, postcards and calendars.

The move was seen as the latest attempt to promote frugality and curb extravagance among officials.

In recent years, local governments and institutions have bought, printed and given away a large number of cards and calendars at the Spring Festival holiday, the commission said, adding that as the materials have become more luxurious, the waste in public funds has become more serious.

On Oct 14, the State-owned Assets Supervision and Administration Commission issued a notice saying the authority will strengthen supervision and inspection as well as strictly prohibit State-owned enterprises from buying, printing, mailing and giving away New Year cards.

While figures on the amount of public money spent on greeting cards, postcards and calendars every year are unavailable, a county official in Jiangxi province, who gave only her surname, Li, said her government purchases 40,000 New Year cards or postcards every year for about 5 yuan (80 cents) each.

While civil servants can each get 10 cards, some officials may ask for more than 150, she said.

\”Some cards are sent in the name of individuals, some are sent in the name of departments to higher level governments or officials,\” Li added.

Xinhua News Agency also quoted another county official in Central China as saying, \”the money used (in his county) to buy cards is more than 300,000 yuan, equivalent to the money needed to build a Hope Primary School\”.

There are more than 2,800 county-level administrative regions and more than 300 city-level administrative regions in China, as well as thousands of State-owned enterprises and public institutions.

The Bank of China\’s Zhejiang branch has scrapped a plan to purchase 73,900 wall calendars, 52,600 desk calendars and 26,000 postcards, Xinhua reported.

The ban, however, is potentially a disaster for companies that make postcards and calendars.

via Sales of postcards drop amid push for austerity |Politics |chinadaily.com.cn.

11/09/2013

China ditches pointless awards in latest anti-waste push

More austerity.

Reuters: “China said on Wednesday that it will ditch 76 pointless official – and sometimes obscure – awards as it seeks to rein in waste and extravagance, part of President Xi Jinping‘s crusade against pervasive corruption.

Government departments will, for example, no longer be able to award prizes for “excellent vocational education teaching materials” or “administration in accordance with the law” for tax collectors, according to the new rules.

“In recent years, many government departments … have been obsessed with these kinds of awards and evaluations and formalism has run rampant,” the central government said in a statement on its website (www.gov.cn).

“Not only has this not had the desired effect, it has been a huge waste of personnel and resources and has even caused unhealthy tendencies, causing a strong reaction in society.”

A similar campaign in 2009 had resulted in annual savings of 6.4 billion yuan ($1.05 billion), the government said.

“The cancelling of these 76 awards is just the first step, and the project will continue and deepen,” it added.

Plaques marking the award of such prizes and evaluations can be seen everywhere in China from ministries to parks and subways and generally have little real meaning as they are mostly given for political rather than competitive reasons.

The new rules echo demands made of officials to simplify their lives and get closer to the people by Xi since he took over as Communist Party chief last November.

He has made cutting back on ostentation and waste a key theme of his administration, seeking to assuage anger over corruption and restore faith in the party.”

via China ditches pointless awards in latest anti-waste push | Reuters.

see also: https://chindia-alert.org/2013/05/25/restraint-is-the-new-red-in-china/

02/09/2013

No decision in India on shutting petrol pumps at night: Moily

The Hindu: “Amidst a storm over proposal to shut petrol pumps during night to taper fuel demand, Oil Minister M. Veerappa Moily on Monday said the government had not made any such proposal and the idea had come from public.

“No decision has been taken to keep petrol pumps dry during any part of the day,” Oil Minister M. Veerappa Moily said on Monday. File photo

“It is not our idea. It is an idea which is coming from public and others. No decision has been taken to keep petrol pumps dry during any part of the day,” he told reporters.

His Ministry plans to launch a massive fuel conservation drive from September 16 to cut fuel demand by 3 per cent and save an estimated Rs. 16,000 crore or $2.5 billion in Forex outgo.

“We are toying with the ideas (on conserving fuel) that have come to us. That doesn’t mean we have accepted them or are enforcing shutdowns,” he said.

Mr. Moily said before the planned launch of September 16 campaign, several proposals to save cut fuel consumptions have come to the government and as per usual practice are being mulled over by his ministry.

“It is incorrect to say that any decision on shutting petrol pumps has been taken,” he added.”

via No decision on shutting petrol pumps at night: Moily – The Hindu.

30/08/2013

European Nations Woo Chinese Home Buyers With Visas

BusinessWeek: “Southern Europe’s cash-strapped governments are wooing wealthy home buyers from overseas by offering so-called golden visas to purchasers of high-end properties. Portugal, Greece, and Cyprus are offering temporary-residency permits to foreign investors, and Spain is about to kick off its program. The main targets are wealthy Chinese, who have been snapping up properties from Vancouver to London as Beijing tightens controls on real estate speculation on the mainland. Luis Hortelão, a broker with Re/Max in Lisbon, says his Chinese clients “know exactly what they want: a modern property to rent out during their absence and a visa to travel in Europe.”

Limassol, Cyprus

In Portugal buyers must pay a minimum of €500,000 ($670,000) for a property to be eligible for a five-year residency permit. A total of 102 visas has been granted since the program began last year, according to the Portuguese Immigration and Borders Service, mostly to Chinese buyers. Edmund Zhao, a real estate developer from Hangzhou in eastern China, expects to receive his permit any day now after paying €700,000 for an apartment in the resort town of Cascais. Zhao must spend at least seven days in Portugal during the first year and 14 days every two years thereafter. His visa will also let him travel freely through the Schengen Area, made up of 26 European countries that have abolished immigration controls at their borders. “I want to move there with my wife and parents as soon as possible,” says Zhao, 38, who wants to send his future children to European schools.

Searches for Portuguese properties on Juwai.com, a Chinese real estate website aimed at international home buyers, rose more than threefold from January through April, says Andrew Taylor, its co-chief executive officer. Home prices in Portugal are less expensive than in some parts of China; €300,000 buys a 2,000-square-foot villa facing the sea, according to Wang Ning, a manager in the international property department at SouFun Holdings (SFUN), owner of China’s biggest real estate website. That amount buys a 730-square-foot apartment in central Shanghai.”

via European Nations Woo Chinese Home Buyers With Visas – Businessweek.

See also: https://chindia-alert.org/2012/05/19/the-world-turned-upside-down-how-workers-are-moving-from-piigs-to-brics/

25/07/2013

China unveils fresh measures to boost growth

BBC: “China has unveiled a series of moves aimed at boosting growth, indicating that policymakers are concerned about the slowdown in its economy.Worker climbs out of an underground construction site in Hefei, China

The steps include tax breaks for small businesses, reduced fees for exporters and opening up of railway construction.

China’s economic growth rate has slowed for two quarters in a row and there are concerns that it may slow further.

But the cabinet said the economy was in a reasonable shape and it was pushing for reforms to stabilise growth.

“The economy is still running in a reasonable range,” the cabinet said.

“We must look at now and beyond to let restructuring and reform play an active role in stabilising growth.””

via BBC News – China unveils fresh measures to boost growth.

See also: https://chindia-alert.org/economic-factors/china-needs-to-rebalance-her-economy/

23/07/2013

China starts 5-year ban on new gov’t buildings

First ostentatious spending, then came curtailment of banquets and now building construction. China is ratcheting up its austerity drive.  But one wonders if this is countering the efforts to re-vitalise the economy.

Xinhua: “Central authorities on Tuesday introduced a five-year ban on the construction of new government buildings as part of an ongoing frugality campaign.

Building construction

Building construction (Photo credit: Toban B.)

The General Office of the Communist Party of China (CPC) Central Committee and the General Office of the State Council jointly issued a directive that calls for an across-the-board halt to the construction of any new government buildings in the coming five years.

The ban also covers expensive structures built as training centers or hotels.

The directive said some departments and localities have built government office compounds in violation of regulations.

The directive called on all CPC and government bodies to be frugal and ensure that government funds and resources be spent on developing the economy and boosting the public’s well-being.

According to the directive, the construction, purchase, restoration or expansion of office compounds that is done in the guise of building repair or urban planning is strictly forbidden.

The directive also bans CPC and government organizations from receiving any form of construction sponsorship or donations, as well as collaborating with enterprises, in developing construction projects.

While allowing restoration projects for office buildings with dated facilities, the directive stresses that such projects must be exclusively aimed at erasing safety risks and restoring office functions.

According to the instruction, such projects must be approved first by related administrative departments and luxury interior decoration is prohibited, with criteria and spending to be set in accordance with local conditions.

The directive stipulates that expenditures on office building restoration should be included in CPC and government budgets.

According to the instruction, buildings with reception functions, such as those related to accommodation, meetings and catering, should not be restored.

The directive orders all CPC and government departments to rectify the misuse of office buildings, including those that are used for functions that have not been approved.

The directive says CPC and government officials with multiple posts should be each given only one office, while offices for those who have retired or taken leave should be returned in time.

Local authorities should establish or perfect the management of government buildings by strictly verifying the buildings’ size, according to the directive.

Departments that have moved to renovated or newly-built locations should transfer the original office blocks to government office administrators in a timely fashion, according to the directive.

Departments and units at all levels should address the office shortage caused by adding new institutions by themselves. If the additions do not meet their needs, government office administrators should adjust existing resources to solve the shortage, according to the directive.

Strict approval procedures are also required for renting new office blocks, according to the directive.

“Banning the building of new government buildings is important for building a clean government and also a requirement for boosting CPC-people ties and maintaining the image of the CPC and the government,” according to the circular.”

via China starts 5-year ban on new gov’t buildings – Xinhua | English.news.cn.

12/07/2013

Austerity threatens to take gloss off China’s national games

I wonder if the government’s austerity drive and the anti-corruption drive is contributing to the slow down in spending and exacerbating the slowdown in the economy?

FT: “Fireworks are out and frugality is in at China’s national games after the organising committee rushed to comply with edicts requiring officials across the country to tighten their belts as the economy slows.

A football match is held inside the Shenyang Olympic Sports Centre Stadium, one of the five football venues of the 2008 Beijing Olympic Games, in Shenyang...A football match is held inside the Shenyang Olympic Sports Centre Stadium, one of the five football venues of the 2008 Beijing Olympic Games, in Shenyang, capital of northeast China's Liaoning province August 1, 2007. Picture taken August 1, 2007. REUTERS/Stringer (CHINA) - RTR1SG8T

The austere sporting championships, which start at the end of August in the northeastern province of Liaoning, will contrast with China’s lavish spending on major events from the Beijing Olympics in 2008 to the world expo in Shanghai in 2010 when the economy was growing at a double-digit pace.

Now, with growth dipping towards 7.5 per cent and Xi Jinping, the new president, railing against ostentatious displays of wealth, the organisers of the Liaoning games – China’s national equivalent of the Olympics – have gone out of their way to highlight their cost-saving measures.

The funding for the games, held every four years and the largest national sporting event in the country, has been cut by 78 per cent from the original budget to Rmb800m ($130m), with fewer new competition venues and less spending on entertainment than initially planned, they announced.

The opening ceremonies will be held during the day to reduce the need for lighting, the first time since 1987 that they have not been at night. The organisers also vowed not to use fireworks, departing with the tradition of bombastic pyrotechnic displays at the start of Chinese sporting events.

“For the opening and closing ceremonies, stadium construction, the torch relay and all other segments of the national games, we strive to create, hopefully, a fresh fashion of organising big events in a thrifty manner,” said He Min, deputy director of the organising committee.

Along with cancelling a series of conferences and exhibitions on the sidelines of the games, the number of invited foreign guests has also been reduced by half. Those foreigners who do make the guest list will have to endure relative privation. There will be “neither welcome banquets nor souvenirs for them”, the official Xinhua news agency reported.

The shift to austerity falls in line with a tone set by Mr Xi since his first days in office late last year as head of the Communist party. He banned flower displays at official events and ordered that banquets should be pared back, demanding that government spending should be less wasteful.

These demands have intensified in recent months as the Chinese economy has slowed and after Mr Xi launched a new campaign against “hedonism and extravagance” among other ills.

The finance ministry this week ordered all units of the central government to reduce general expenditures such as car purchases and overseas travel.”

via Austerity threatens to take gloss off China’s national games – FT.com.

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