Posts tagged ‘China’

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24/07/2013

Consumer optimism hits a high

China Daily: “Income growth and willingness to spend more are main driving forces

Consumer confidence in China has topped that in other major economies to equal a record high, and economists are saying this signals that consumption will support the world’s second-largest economy, where growth is slowing.

A survey by global information company Nielsen shows China’s consumer confidence index, based on its market research, rose to 110 in the second quarter from 108 in the first, indicating increased willingness to spend on consumer goods and services.

It also reached 110 in the second quarter of last year.

Zhang Monan, an economist at the State Information Center under the National Development and Reform Commission, said domestic demand, especially consumption, will become crucial to supporting economic growth in the second half of the year.

Tao Libao, vice-president of media research at Nielsen Greater China, said, “With the industrial transformation, consumption will become the growth engine.”

The central government has pledged to promote structural reforms, shifting from investment-driven to consumption-oriented development, while ensuring stable economic growth and secure employment.

The Nielsen Global Consumer Confidence Index, released on Tuesday, rose to 94 in the second quarter, compared with 93 in the first.

A reading below 100 means that consumers are pessimistic about the outlook, while a reading above 100 signals optimistic expectations.

Nielsen said consumer confidence declined in 14 of 29 European countries as government budget cuts, tax rises and high unemployment continued.

Consumer confidence improved in the United States, along with increasing employment opportunities, higher home prices and a rising stock market, the company said.

In the second quarter, China had the fifth-highest reading of indices among 58 countries based on surveys covering more than 29,000 global respondents.

Fast growth of disposable income and people’s willingness to spend more on improving quality of life, especially in large cities, was the main driving force behind this, the company said.

The average disposable income of urban Chinese residents was 13,649 yuan ($2,201) in the first half of the year, up 9.1 percent from a year earlier, while the disposable income of rural residents rose to 4,171 yuan, up 13 percent year-on-year, according to the National Bureau of Statistics.

Retail sales of consumer goods rose by 12.7 percent in the first six months to 11.08 trillion yuan, compared with a 12.4 percent growth rate in the first quarter, the bureau said.

Beijing, Shanghai and Guangzhou, with 7 percent of China’s population, contributed about 25 percent of the country’s spending on consumer products and services, Nielsen said.

As urbanization speeds up and consumers pursue a better quality of life, they will have a deeper understanding of consumption, said Yan Xuan, president of Nielsen Greater China.”

via Consumer optimism hits a high |Economy |chinadaily.com.cn.

Posted in China alert, Consumer, Economics | Leave a Comment »

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23/07/2013

China to expand imports from ASEAN members

Is this action based on genuine economic reasons or is it partly to diffuse China‘s tension with many ASEAN countries involved with the on–going maritime territorial disputes?

China Daily: “China pledged to increase its imports from the Association of Southeast Asian Nations as bilateral trade started to favor China in the second half of 2012, Vice-Minister of Commerce Gao Yan told a news briefing on Tuesday.

Emblem of ASEAN

Emblem of ASEAN (Photo credit: Wikipedia)

China will enhance trade facilitation through cooperation with ASEAN members in areas including customs and quality checking while sending purchasing groups for agricultural products from ASEAN members, Gao said.

In addition, exhibitions, including the 10th CAEXPO to be held September 3-6 in Nanning, Guangxi Zhuang autonomous region, will serve as opportunities for ASEAN exporters to expand their sales to China, she added.

China is the biggest trade partner of ASEAN and bilateral trade hit $400.1 billion in 2012, with Chinese exports totaling $204.3 billion and imports of $195.8 billion, leaving a trade surplus of $8.5 billion. China previously had a trade deficit with ASEAN, Gao said.”

via China to expand imports from ASEAN members |Economy |chinadaily.com.cn.

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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.

Posted in austerity, China alert, Construction, Economics | 1 Comment »

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23/07/2013

China’s Smartphone Generation

BusinessWeek: “Every day at noon, workers spill out through the red gates of the Xue Fulan garment factory on the outskirts of Beijing to enjoy one precious hour of lunchtime freedom. They are mostly in their late teens or early 20s, living in no-frills dormitories within the factory complex. Most saunter out on a hot summer day with a water bottle in one hand and a smartphone in the other.

Commuters use their phones riding a Metro train in Shenzhen City, China

While personal computers are rare inside the factory, many of these young migrant workers—who are just climbing onto the lowest rung of the urban economic ladder—are now on the Internet daily. With 12-hour workdays, their free hours are scarce, but they still find time to use social media and dating apps, play video games, and read lifestyle and news sites, where they can catch a glimpse of the upscale urban life they aspire to.

Last week the government-affiliated China Internet Network Information Center reported that 591 million people in China now have Internet access; that’s 45 percent of the population. Just six years ago, only 16 percent of China’s population was online. Among the drivers of the steep rise in Internet penetration: the rapid adoption of Internet-enabled mobile devices, especially among groups that previously lacked regular connectivity, including China’s migrant workers. More than three-quarters of China’s netizens (464 million people) now use a mobile Internet device—instead of, or in addition to, a laptop or PC.

Kantar Media, a U.K.-based global consumer research and consulting firm, polled nearly 100,000 Chinese Internet users about their online habits and preferences in 2012 and just released its analysis of the study: 59 percent of respondents said that online chat and dating were their favorite uses of the mobile Internet, while 43 percent described themselves as “frequent” users of social media. Notably, the number of Chinese netizens who claimed they had visited a social media site in the past day was higher among mobile Internet users (32 percent) than among all netizens (26 percent). Weixin (“WeChat”), Tencent’s (700:HK) popular social-media app, is almost exclusively used on smartphones and tablets.

Megacity commutes are also correlated with more time online. In 2012, Chinese commuters who travelled more than one hour to work were three times as likely to go online daily as those whose commutes were under a half hour. As China’s large cities sprawl, traffic jams proliferate as well. Shen Ying, a general manager at CTR Media, Kantar Media’s joint-venture partner in China, believes that the “fragmentation of ‘social’ time created by longer commutes” goes hand in hand with the “desire for social networking.” Fortunately for China’s lonely subway passengers, Internet access on Beijing’s subway is more stable than on New York City’s.”

via China’s Smartphone Generation – Businessweek.

Posted in China alert, Consumer, Economics, Internet, Migrant workers, social media | 1 Comment »

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23/07/2013

First U.S. citizen detained as China pharma probe spreads

First crackdown on party members and officials, now on commercial organisations.  China‘s anti-corruption campaign gathers pace.

Reuters: “The first U.S. citizen has been detained in China in connection with probes sparked by an unfolding corruption scandal in the drugs industry, as China widens the range of international firms and staff under the spotlight.

A Chinese national flag flutters in front of a GlaxoSmithKline (GSK) office building in Shanghai July 12, 2013. REUTERS/Aly Song

Police have also questioned two further Chinese employees from drug maker AstraZeneca in Shanghai, after a local sales representative was taken away for questioning earlier.

And China’s health ministry said 39 hospital staff would be punished for taking bribes from drug companies.

The unnamed American is the first U.S. citizen to be detained in connection with the investigations, and the second foreign national, after a British risk consultant linked with GlaxoSmithKline was held last week.

GSK has been accused by China of funneling up to 3 billion yuan ($489 million) to travel agencies to facilitate bribes to doctors and officials.

“We are aware that a U.S. citizen has been detained in Shanghai. We are in contact with the individual and are providing all appropriate consular assistance,” U.S. embassy spokesman Nolan Barkhouse said on Tuesday, when asked about the involvement of U.S. citizens in the widening probe.

He declined to say which company the individual was associated with.

The latest moves by Chinese officials underline the country’s tough stance on corruption and high prices in the pharmaceutical industry, as it unrolls wider healthcare access and faces an estimated $1 trillion healthcare bill by 2020.

“Momentum is gathering and if you are a big international firm, then you’re a good example to be held up. This is a wake-up call for the rest of the industry,” said Jeremy Gordon, director of China Business Services, a risk management company focusing on China.

AstraZeneca said that the Shanghai Public Security Bureau had asked on Tuesday to speak with two line managers linked to the sales representative questioned earlier.

“The Public Security Bureau is describing this as an individual case. We have no reason to believe it is related to other investigations,” the company said in the statement.

via First U.S. citizen detained as China pharma probe spreads | Reuters.

Posted in corruption, Economics, Politics, Uncategorized | Leave a Comment »

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22/07/2013

Knife attacks and bomb threats follow Beijing airport explosion

SCMP: “Several incidents of violence have been reported in Beijing in the aftermath of the attempted suicide by an aggrieved petitioner at the capital’s international airport on Saturday.

screen_shot_2013-07-22_at_2.22.12_pm.png

On Monday, a man armed with a knife went on a rampage at a Carrefour shopping centre, in Beijing’s western district, wounding at least four people. Police have arrested a Beijing-native surnamed Wang, born in 1963 at the scene, local police said in a statement.

One child was among those wounded, Beijing News reported on its microblog. The report did not say what triggered the attack.

Last Thursday, a knife-yielding man stabbed two people, including one US woman, to death, in a similar incident.

In two unrelated incidents, Beijing police arrested two men for “threatening to carry bombs and attempting to disturb social order” in the capital.

Four hours after petitioner Ji Zhongxing caused an explosion at Beijing Capital International Airport on Saturday, a 39-year-old man surnamed Wang from Beijing’s Miyun county threatened to set off explosives at a Beijing airport to protest against land seizures, according to a statement by Beijing police.

Only one hour later, a 31-year-old man surnamed Liu from Jiangsu province, threatened to detonate explosives at a video arcade, police said. Both men have since been arrested.

Many Chinese netizens blamed a “butterfly effect” and criticised the government for failing to address petitioners’ grievances. “If the government continues in its corrupt ways, everybody will become Ji Zhongxing,” said one Weibo user. “Using lives to protest is the last way for ordinary people to seek changes,” wrote another.

via Knife attacks and bomb threats follow Beijing airport explosion | South China Morning Post.

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22/07/2013

To Remain Tops in Innovation, the U.S. Needs Immigration Reform

BusinessWeek: “As China’s economy catches up with America’s in pure size, it’s worth asking whether China will eventually assume the top spot when it comes to innovation as well. The U.S. retains a strong global lead in research and new inventions, in large part because the U.S. continues to attract innovators from the world over—including from China. But to stay on top, the U.S. needs immigration reform that makes it easier for scientists and technology developers to come and stay in the country.

China is producing ever more science and technology graduates and climbing the global rankings in patent applications

China is churning out ever more science and technology graduates and climbing the global rankings in patent applications. By 2004 it was the fifth-largest producer of academic scientific publications—behind only the U.K., Germany, Japan, and the U.S. And in 2011, China’s ZTE (000063:CH) alone made 2,826 international patent filings—the most of any company in the world.

More global innovation is a good thing for everyone—so there’s no reason to fear China’s increasing technological heft. Regardless, that heft is still a fraction of America’s. According to the World Intellectual Property Organization (WIPO), the U.S. is still first by a big margin in terms of widely cited articles—a measure of the quality of research. China ranks 17th. Per dollar of gross domestic product, the U.S. produces more than six times China’s number of patents that are filed in at least three different countries, which is an indicator of marketable innovation.

In 2012, China earned $1 billion in foreign royalty and license payments—this for intellectual property the country had created that was being exploited by companies elsewhere. Meanwhile, it paid $18 billion in royalty and license payments to foreign firms, for a total deficit of $17 billion. Compare that with the U.S., which ran a $82 billion surplus.

A new paper co-authored by Carsten Fink, chief economist of WIPO, suggests one big reason for the U.S.’s continued lead: The country remains a magnet for global innovators. Fink’s paper studies patent applications filed under WIPO’s Patent Cooperation Treaty, which records more than half of all international applications and lists the residence and nationality of the inventors of more than 4 million patents. Using that data, Fink and his colleague Ernest Miguelez found that in 2010 about 10 percent of inventors worldwide lived outside their country of nationality when making their international patent application. The proportion of international patent applications made from the U.S. by non-nationals was twice as high—around 20 percent. That proportion approximately doubled from 1985 to 2010, and it’s the highest share out of any large economy. It compares with a non-national share of international patent applications of about 2 percent in Japan and closer to 5 percent in Germany and France.

The U.S. is by far the biggest global net beneficiary of innovator migration. Between 2001 and 2010, 14,893 inventors with U.K. nationality applied for international patents while residing in the U.S., for example. And there were three times as many Chinese inventors in the U.S. than British ones. That illustrates the U.S. has done particularly well in attracting innovative talent from the developing world—more than half of the U.S. non-national innovator population comes from countries outside the Organisation for Economic Co-operation and Development club of rich countries.

Still, recent trends are disturbing. Duke University’s Vivek Wadhwa reports that the proportion of high-tech startups founded by Chinese and Indian immigrants in Silicon Valley dropped from 52 percent in 2005 to 44 percent in 2011, in part because more and more Indian and Chinese graduates of U.S. universities are returning home rather than dealing with the hassle of American immigration procedures. The U.S. is becoming less attractive to the very people who help power the U.S. innovation economy.

via To Remain Tops in Innovation, the U.S. Needs Immigration Reform – Businessweek.

See also: https://chindia-alert.org/prognosis/how-well-will-china-and-india-innovate/

Posted in China alert, Economics, innovation, Technology | Leave a Comment »

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21/07/2013

China starts construction on ‘world’s tallest building’

SCMP: “China has embarked on the construction of an 838-metre-tall building in Changsha that is billed as the “world’s tallest”.

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Developer Broad Group on Saturday held a ground-breaking ceremony in the capital city of central province Hunan to start building the 208-storey tower, the Xiaoxiang Morning Herald newspaper reported on Sunday. Upon completion, the building would be about 10 metres taller than the Burj Khalifa in Dubai, currently the world’s tallest.

The Changsha project, carried out by China Construction Fifth Building, is expected to be completed in April 2014, said Zhang Yue, founder and chairman of the Broad Group. It was slated to open in May or June next year.

The skycraper will contain a total area of 1.05 million square metres and will cost a whopping 5.2 billion yuan (HK$6.5 billion) to build, government-run news portal voc.com.cn reported.

Named “Sky City”, the mega building is designed to house various public facilities so the “building can serve as a city”, the developer said. It would house schools, an elderly care centre, hospital, offices in lower levels, while apartments and hotels would make up the upper levels.

Changsha-based technology enterprise Broad Group was founded in 1988. Its products include energy-saving electronic equipment and quake-proof construction materials.

China is home to five of the world’s top-10 tallest buildings, according to a list in Forbes magazine last year.”

via China starts construction on ‘world’s tallest building’ | South China Morning Post.

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21/07/2013

Hauling New Treasure Along the Silk Road

NY Times: “AZAMAT KULYENOV, a 26-year-old train driver, slid the black-knobbed throttle forward, and the 1,800-ton express freight train, nearly a half-mile long, began rolling west across the vast, deserted grasslands of eastern Kazakhstan, leaving the Chinese border behind.

Dispatchers in the Kazakh border town of Dostyk gave this train priority over all other traffic, including passenger trains. Specially trained guards rode on board. Later in the trip, as the train traveled across desolate Eurasian steppes, guards toting AK-47 military assault rifles boarded the locomotive to keep watch for bandits who might try to drive alongside and rob the train. Sometimes, the guards would even sit on top of the steel shipping containers.

The train roughly follows the fabled Silk Road, the ancient route linking China and Europe that was used to transport spices, gems and, of course, silks before falling into disuse six centuries ago. Now the overland route is being resurrected for a new precious cargo: several million laptop computers and accessories made each year in China and bound for customers in European cities like London, Paris, Berlin and Rome.

Hewlett-Packard, the Silicon Valley electronics company, has pioneered the revival of a route famous in the West since the Roman Empire. For the last two years, the company has shipped laptops and accessories to stores in Europe with increasing frequency aboard express trains that cross Central Asia at a clip of 50 miles an hour. Initially an experiment run in summer months, H.P. is now dispatching trains on the nearly 7,000-mile route at least once a week, and up to three times a week when demand warrants. H.P. plans to ship by rail throughout the coming winter, having taken elaborate measures to protect the cargo from temperatures that can drop to 40 degrees below zero.

Though the route still accounts for just a small fraction of manufacturers’ overall shipments from China to Europe, other companies are starting to follow H.P.’s example. Chinese authorities announced on Wednesday the first of six long freight trains this year from Zhengzhou, a manufacturing center in central China, to Hamburg, Germany, following much the same route across western China, Kazakhstan, Russia, Belarus and Poland as the H.P. trains. The authorities said they planned 50 trains on the route next year, hauling $1 billion worth of goods; the first train this month is carrying $1.5 million worth of tires, shoes and clothes, while the trains are to bring back German electronics, construction machinery, vehicles, auto parts and medical equipment.

DHL announced on June 20 that it had begun weekly express freight train service from Chengdu in western China across Kazakhstan and ultimately to Poland. Some of H.P.’s rivals in the electronics industry are in various stages of starting to use the route for exports from China, freight executives said.

The Silk Road was never a single route, but a web of paths taken by caravans of camels and horses that began around 120 B.C., when Xi’an in west-central China — best known for its terra cotta warriors — was China’s capital. The caravans started across the deserts of western China, traveled through the mountain ranges along China’s western borders with what are now Kazakhstan and Kyrgyzstan and then journeyed across the sparsely populated steppes of Central Asia to the Caspian Sea and beyond.

These routes flourished through the Dark Ages and the early medieval period in Europe. But as maritime navigation expanded in the 1300s and 1400s, and as China’s political center shifted east to Beijing, China’s economic activity also moved toward the coast.

Today, the economic geography is changing again. Labor costs in China’s eastern cities have surged in the last decade, so manufacturers are trying to reduce costs by moving production west to the nation’s interior. Trucking products from the new inland factories to coastal ports is costly and slow. High oil prices have made airfreight exorbitantly expensive and prompted the world’s container shipping lines to reduce sharply the speed of their vessels.

Slow steaming cuts oil consumption, but the resulting delays have infuriated shippers of high-value electronics goods like H.P’s. Such delays drive up their costs and make it harder to respond quickly to changes in consumer demand in distant markets.”

via Hauling New Treasure Along the Silk Road – NYTimes.com.

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20/07/2013

China frees up lending rates in major reform

Reuters: “China’s central bank removed controls on bank lending rates, effective Saturday, in a long-awaited move that signals the new leadership’s determination to carry out market-oriented reforms.

An employee counts money on the last workday of the week at a bank in Taiyuan, Shanxi province in this June 28, 2013 file picture. China's central bank announced long-awaited interest rate reforms on July 19, 2013, scrapping the previous floor on the rates that banks charge clients for loans. Picture taken June 28, 2013. REUTERS/Jon Woo

The move gives commercial banks the freedom to compete for borrowers, a reform the People’s Bank of China said on Friday will help lower financial costs for companies. Previously, the lending floor was 70 percent of the benchmark lending rate.

However, the PBOC, in a statement, left a ceiling on deposit rates unchanged at 110 percent of benchmark rates, avoiding for now what many economists see as the most important step Beijing needs to take to free up interest rates.

The latest step underscores Beijing’s resolve to start fixing distortions in its financial system and the economy more broadly as it tries to shift from export- and investment-led growth to more consumption-led activity.

Some analysts said cheaper credit could help support the economy, which has seen year-on-year growth fall in nine of the last 10 quarters.

“This is a big breakthrough in financial reforms,” said Wang Jun, senior economist at China Centre for International Economic Exchanges, a prominent government think-tank in Beijing.

“Previously, people had thought the central bank would only gradually lower the floor on lending rates. Now they scrapped the floor once and for all.”

The Australian dollar rose modestly on the news on hopes cheaper credit will lead to more demand from Australia’s biggest export market.

The announcement provided some support to weak stock markets in Europe .FTEU3 and a timely reminder to the world’s top financial leaders meeting in Moscow of China’s intention to rebalance its economy.

A Group of 20 draft communiqué will urge China to encourage more domestic demand-driven growth as part of wider efforts to rebalance the world economy, G20 sources said.

The United States welcomed the move, saying China promised to let markets play a bigger role in allocating credit during the U.S.-China Strategic and Economic Dialogue in Washington last week.

“This is a welcome further step in the reform and liberalization of China’s financial system,” Holly Shulman, a spokeswoman for the U.S. Treasury, said in an email.”

via China frees up lending rates in major reform | Reuters.

Posted in China alert, Economics | 1 Comment »

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