China Economy Forum

[TaiShang]

The second largest economy in the world is still a developing country with a large population

Exactly so. The fact that China is a developing nation with an enormous task cannot be lost to people and the government.

Like this statement from yesterday:

"China is still the largest developing country. Although China is the world's second-largest economy, the country's per capita GDP, urban and rural regional development and its social welfare still lag far behind developed countries and regions, and the realization of China's modernization still has a long way to go," Shen told a press conference in Beijing on Thursday."

--Shen Danyang, spokesman of the Ministry of Commerce (MOFCOM).

One trap we must avoid most is not be urged or prompted to be savior of others before we save (develop) ourselves. "China is a charity" understanding must be avoided.

 

[AndrewJin]

The second largest economy in the world is still a developing country with a large population

We are still a developing country, which will remain so for at least another half a century.

Urbanisation rate in China is still small, it will increase from 50% to 70-80% 2-3 decades later.

 

[Dungeness]

Very bad news for those cross their fingers and waiting for "Imminent China Collapse" to happen.

 

[GeraltofRivia]

China is and should always be a developing country, which means it always in the state of transformation and improvement. I am not sure where steady state is but hope it will never reach it.

As noted by Peter Howitt (Canadian economist): "Economies that cease to transform themselves are destined to fall off the path of economic growth. The countries that most deserve the title of “developing” are not the poorest countries of the world, but the richest. ". Let's work hard and continue developing China...

 

[TaiShang]

Economic Watch: The "new economy" takes off in China
(Xinhua) November 25, 2016

Buying a car will soon be as much a waste of money as buying a horse.

This is how Li Guangdou, founder of consulting and branding firm Wondersee, predicts China's urban transport will be revolutionized by online mobility on-demand services such as Didi.

"Wherever you want to go, a ride is just a few taps away," he said during a forum on China's sharing economy, part of the "new economy" that is reshaping the country's economy.

While old engines such as manufacturing, real estate and exports lose steam, China has seen new growth drivers emerging, thanks to new technology, innovative business models and expanding domestic consumption.

China's leading e-commerce platform Alibaba is witness to the power of the new economy. Two weeks ago consumers spent more than 120 billion yuan (17.4 billion U.S. dollars) on its online stores as part of the Singles' Day shopping spree.

The scale of spending on that day alone was equal to the nation's entire annual online spending for 2009. It now takes just two days for China to generate demand for 1.5 billion packages, the annual amount for 2009, according to Jin Jianhang, president of Alibaba Group.

"The Singles' Day shopping spree was a vote of confidence from consumers in China's new economy," Jin said.

Ma Jiantang, executive vice president at the Chinese Academy of Governance and former chief of the National Bureau of Statistics, said the new economy has become a bright spot for China.

The value-added output of new industries, new forms of commercial activities and new business models now accounts for more than 15 percent of China's GDP, Ma told the forum.

A slew of data testifies to the trend -- in the first three-quarters of 2016, the number of patents granted in the country surged 44.3 percent year on year; high-tech manufacturing output rose 11 percent year on year, contributing to more then 20 percent of overall industrial growth; high-tech services output increased 11 percent; online retail sales expanded 26.1 percent, outpacing overall retail sales by 15.7 percentage points.

New technologies such as the Internet of things, smartphones and cloud computing better connect Chinese suppliers with the country's vast market and propels domestic consumption.

Such technologies also transformed traditional sectors, with smart manufacturing and customized production being applied to factories, Ma said.

China is pinning hopes on the new economy as quartely GDP is at its lowest since the global financial crisis. The government plans to double GDP from 2010 levels and build an all-round moderately prosperous society by 2020.

However, the new economy remains small in comparison to China's total economy, and more support from authorities is required, Ma said.

Despite impressive growth in the new economy, China's industrial output has slowed for six years in a row, while the contribution of fixed-asset investment to GDP growth fell by 16 percentage points between 2010 and 2015.

China has many advantages in developing the new economy, especially the sharing economy, due to its huge market scale, but the government needs to reduce restrictions for access to new industries, said Shen Minggao, chief executive officer and chief economist of think tank Caixin Insight Group.

To inject more energy into the new economy, the government should cede more power to the market and avoid excessive taxation and administration, said Liu Yanhua, a counsellor of the State Council.

 

[TaiShang]

China is and should always be a developing country, which means it always in the state of transformation and improvement. I am not sure where steady state is but hope it will never reach it.

As noted by Peter Howitt (Canadian economist): "Economies that cease to transform themselves are destined to fall off the path of economic growth. The countries that most deserve the title of “developing” are not the poorest countries of the world, but the richest. ". Let's work hard and continue developing China...

Very good point and fits perfectly well with the Marxist idea of dialectics which never stops. History may have frozen for some "developed" countries, but for China, it should be a never ending flow...

 

[onebyone]

Profit at industrial companies in China accelerated last month as prices recovered.

Industrial profits rose 9.8 percent in October from a year earlier to 616.1 billion yuan ($89 billion), the National Bureau of Statistics said Sunday. That was faster than the 7.7 percent increase in September. Earnings in the first 10 months climbed 8.6 percent to 5.26 trillion yuan.

Increasing profit and stronger producer-price inflation may help industrial companies gain ground in paying down debt. The recovery comes amid steady economic growth that endured the imposition of government rules to cool property market speculation.

More from Bloomberg.com: Clinton Recount Plan Draws Sore Loser Jibe From Team Trump

“The recovery in profits is welcome,” Alessandro Theiss, a senior economist at Oxford Economics Ltd., wrote in a report before the data was released. “If sustained, it should somewhat alleviate the need for fast credit growth.”

http://finance.yahoo.com/news/china-industrial-profits-accelerate-factory-015954717.html

 

[AndrewJin]

Industrial profit, industrial production, etc, are all on the rise....
With China exporting more and more high-end machinery, electronics, drones, trains, electric buses, etc, such trend is unstoppable and will be more manifest in pursuit of Made-in-China 2025.

 

[TaiShang]

Yuan has 'characteristics of stable, strong currency'
By XIN ZHIMING (China Daily) November 28, 2016

An employee at a bank counter in Nantong, Jiangsu province, counts renminbi and dollars. [Photo/China Daily]

Yi Gang, deputy governor of the People's Bank of China, the central bank, told Xinhua News Agency late Sunday that the yuan remains a stable and strong currency in the global monetary system, and it cannot be ruled out that the US dollar could drop.

Yi said the yuan's depreciation against the dollar is quite limited compared with other currencies and it has risen significantly against a basket of major currencies in recent years, thus "presenting the characteristics of a stable and strong currency in the global monetary system".

He also said that in the future, it is absolutely possible that the yuan's exchange rate would "remain relatively stable at a reasonable and balanced level".

 

[ahojunk]

China's Sansha island draws world's largest companies
2016-11-25 08:15 | Xinhua | Editor: Mo Hong'e

Sansha, China's southernmost island city, has drawn 16 of the world's 500 largest companies to register on the island, according to Feng Wenhai, deputy mayor of Sansha, while giving a presentation on the city's government work report recently.

With a registered capital of over 3 billion yuan (434 million U.S. dollars), 157 registered enterprises in Sansha paid taxes totalling more than 1.53 billion yuan (221 million U.S. dollars), Feng said.

The companies operating on the island cover a range of sectors, including agriculture, tourism, aviation, transport and culture.

There are also several financial institutions, such as the Industrial and Commercial Bank of China and the Bank of China, which have opened branches on the island. Other institutions, include China Development Bank and the Agricultural Bank of China, which have entered into strategic partnership with the city government.

Sansha aims to attract more companies in the next five years by providing supportive fiscal and tax policies, and further simplifying business registration. It also welcomes enterprises to start innovation and research centers on the island, Feng said.

Sansha City was officially established in 2012 to administer the Xisha, Zhongsha and Nansha islands, and their surrounding waters in the South China Sea.

 

[ahojunk]

Renminbi gains strength against the U.S. dollar
2016-11-29 08:52 | China Daily | Editor: Xu Shanshan

The central parity rate of the yuan against the U.S. dollar strengthened on Monday after Yi Gang, vice-governor of the central bank, said on Sunday that the currency remained strong and stable in the global monetary system.

The People's Bank of China set the central parity rate of the yuan versus the dollar at 6.9042, ticking up from the 6.9168 on Friday, after the currency slid to an eight-year-low against the dollar in the past week.

The jump came after Yi's remarks on the yuan's exchange rate on Sunday, when he fended off concerns over the strength of the yuan and pressure for depreciation.

In an interview with Xinhua News Agency, Yi reaffirmed that the currency remained strong among major currencies.

Yi attributed the yuan's recent depreciation to external factors, including the impact of Britain's expected exit from the European Union, a likely interest hike in the near future in the United States and signs of improving U.S. economic fundamentals.

"The yuan did not weaken much compared with other currencies in the emerging markets," said Yi.

Since a more floating exchange rate system for the yuan was adopted in August last year, the market should observe the yuan's fluctuation against a basket of currencies instead of focusing on its change against the dollar, according to Yi.

He sees long-term stability for the currency under the flexible floating plan, because, he said, the yuan has "strong and stable characteristics". He noted that in the past five years, the yuan's China Foreign Exchange Trade System index and its index against the Special Drawing Rights currency basket appreciated by 10.9 percent and 4.4 percent, respectively.

Yi's comment eased some concerns amid market expectations of a short-term depreciation of the yuan, according to Zhao Xueqing, an economist with the International Research Institute of the Bank of China.

The downward pressure on the yuan, mainly driven by a strong dollar, may continue next year, but the yuan will not depreciate at a drastic pace, according to Zhao.

"If it does identify outflow reaching a level that would spark a major financial crisis, the government will take necessary steps to fend off the risks," she said.


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Comparing the RMB against a basket of currencies such as the SDR will give a more accurate picture.
.

 

[TaiShang]

China's foreign service trade deficit narrows
(Xinhua) November 29, 2016

China's foreign service trade deficit narrowed in October while the trade volume dropped, data from the State Administration of Foreign Exchange (SAFE) showed Monday.

The deficit stood at $20.9 billion last month, down from $23.3 billion in September and $25.4 billion in August.

Income from trade in services stood at $22.3 billion last month, down from $23 billion in September. Meanwhile, expenditures totaled $43.2 billion, less than September's $46.3 billion.

Distinct from merchandise trade, trade in services refers to the sale and delivery of intangible products such as transportation, tourism, telecommunications, construction, advertising, computing and accounting.

China's service trade volume grew from $362.4 billion in 2010 to $713 billion in 2015, doubling the average international growth speed in the sector. The country is aiming to increase its service trade volume to over $1 trillion by 2020.

The State Council has pledged measures to improve the development of services trade, including gradually opening up the finance, education, culture and medical sectors.

SAFE began releasing monthly data on service trade in January 2014 to improve the transparency of balance of payments statistics. Since the beginning of 2015, it has also included monthly data on merchandise trade in its reports.

In October, China saw a surplus of $49.9 billion in foreign merchandise trade, up from $44 billion in September, according to SAFE.

 

[ahojunk]

China gives the nod for Shenzhen-Hong Kong Stock Connect to commence on December 5

Hong Kong and international investors can trade in 881 Shenzhen-listed stocks, while mainland investors can deal in 417 Hong Kong stocks

Enoch Yiu
PUBLISHED : Friday, 25 November, 2016, 6:51pm
UPDATED : Friday, 25 November, 2016, 11:31pm

Green light: The Shenzhen-Hong Kong Stock Connect programme will go live on November 21, allowing international investors access to 880 Shenzhen stocks, and Chinese investors access to 417 Hong Kong-traded stocks. Photo: AP


China will commence the Shenzhen-Hong Kong Stock Connect programme on December 5, in a much-anticipated liberalisation of the Chinese financial system that gives global capital greater access to Asia’s largest and third-largest equity markets.

The programme allows overseas investors to trade in 881 stocks on the Shenzhen Stock Exchange, while giving mainland Chinese brokers access to execute transactions in 417 stocks in Hong Kong, according to a joint announcement by the China Securities Regulatory Commission and Hong Kong’s Securities & Futures Commission.

“The expanded trading link will further strengthen mutual access between the Mainland and Hong Kong stock markets,” SFC chairman Carlson Tong said. “Similar to the arrangements for Shanghai-Hong Kong Stock Connect, the two regulators have established mechanisms to protect the integrity of both markets under Shenzhen-Hong Kong Stock Connect.”

The latest move, coming on the second anniversary of the first Shanghai-Hong Kong Stock Connect programme, is another step in China’s strategy to liberalise its financial markets. Under that first scheme, international investors got a taste of trading in about 600 of Shanghai’s A shares, while the city’s brokers got access to 318 Hong Kong stocks for mainland investors.

A daily quota will be imposed on the Shenzhen link on international investors who can trade up to 13 billion yuan a day of A-shares in Shenzhen stocks, while mainland investors can trade up to 10.5 billion yuan a day of Hong Kong stocks.

The limits are the same as the Shanghai-Hong Kong link, effectively meaning the total amount of cross border trading should double after the launch of the new scheme.

The Shenzhen Stock Exchange building in the city. Photo: EPA


There will be no total quota for the new scheme. The total quota of a combined 550 billion yuan (HK$643.9 billion) for the Shanghai-Hong Kong link was removed in August when Premier Li Keqiang announced the State Council had approved the new connect.

The Shenzhen-Hong Kong link was initially expected to launch last year but the mainland stock market rout last summer led to a delay.

The official start date had been widely expected by brokers, after Hong Kong Exchanges and Clearing chief executive Charles Li Xiaojia last month had said the launch would be on a Monday after mid-November.

Christopher Cheung Wah-fung, the lawmaker for Hong Kong’s financial services sector, said the Shenzhen-Hong Kong Stock Connect would attract investors who like to trade in good quality, smaller sized companies.

“Many Shenzhen listed companies are start-ups or innovative firms which have high growth potential. Likewise, the new connect has added in almost 100 smaller size Hong Kong stocks for mainland investors to trade,” Cheung said.

“Another cross border trading scheme will boost Hong Kong stock market turnover by attracting more mainland investors to trade Hong Kong stocks,” he said.

Cheung hopes the next stock connect to be launched will be for initial public offerings (IPO) to allow international investors to subscribe to newly listed A-shares, while mainlanders could subscribe to IPO in Hong Kong.

“An IPO connect would widen the investor pool for new issuances in Hong Kong, Shanghai and Shenzhen. It would also enhance Hong Kong’s attractiveness for international firms to list here, and attract more mainland investors,” he said.

 

[ahojunk]

European market offers new opportunities for China's online sellers
2016-11-28 15:57 | Xinhua | Editor: Mo Hong'e

European countries, including France, Italy and Spain, are buying more goods from China's cross-border e-commerce retailers.

In a report released Sunday, eBay revealed that its Chinese sellers saw average sales annual growth of 300 percent in France, Italy and Spain during the past three years.

As issues related to marketing, logistics and languages are no longer weighing down sales, many Chinese sellers are shifting their attention to the European market, according to Zhou Haiying, director of the eBay Chinese mainland international trade department.

Specifically, European buyers are interested in China-made electronic communication products, clothing, home decoration supplies, computers and industrial instruments

According to the report, the number of Chinese eBay retailers selling to France, Italy and Spain has increased by 45 percent from July 2015 to June 2016, with the quantity of products increasing by 65 percent.

There are 259 million online buyers among the 530 million Internet users in Europe. The B2C e-commerce market in Europe is predicted to be worth 625 billion euros by the end of 2016, according to Ecommerce Europe.


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I wonder when the Chinese eCommerce giants are going to get a share.
.

 

[艹艹艹]