China Economy Forum

[TaiShang]

The services sector accounts for almost half of the economy and is the biggest employer in China.



China services PMI grows, new business rose fastest in 3 yrs

The services sector accounts for almost half of the economy and is the biggest employer in China.

THEBRICSPOST.COM

***
Now compare this with this:


India services sector growth dips to 13-month low

Indian Central Bank Governor Raghuram Rajan said on Tuesday that India's growth rate may be weaker than headline numbers suggest.

THEBRICSPOST.COM

 

[TaiShang]

Citi withdraws from metals financing in China after suspected fraud cases
Source:Reuters-Global Times Published: 2015-6-3 23:48:02

US bank Citigroup Inc said it has withdrawn from metals financing in China after suspected fraud that led to a web of lawsuits.

But while the bank retreated in that area, it still managed to achieve broad growth in commodities as others withdrew from the sector.

In May, Citigroup failed in a bid to win an order from a London court that would force trade house Mercuria to pay about $270 million in potential losses for metals financing deals in China hit by the suspected fraud.

"There's no question that when we look at a situation like that, we do a lot of analysis about who we are doing business with, where we're doing business and what kind of transactions we do," Jim Cowles, chief executive of the bank for Europe, Middle East and Africa (EMEA), told Reuters.

"That has led us to examine each one of those areas and we've made changes accordingly," he told Reuters.

Cowles did not give further details, but a spokesman said the bank no longer has any metals financing business in China.

The complex court case was one of a web of legal actions filed in the wake of a probe launched in May 2014 by Chinese authorities of suspected fraud at China's Qingdao Port, the world's seventh busiest, and nearby Penglai. Both cities are in East China's Shandong Province.

The alleged fraud is estimated to have stung Western banks and trading houses as well as Asian banks for more than $3 billion in total, according to industry sources.

Neither Citigroup or Mercuria Energy Trading Ltd is accused of fraud, but have been caught in the fallout from the probe.

Citigroup has expanded in commodities, moving as some rivals withdrew due to higher capital requirements and tougher regulation in the wake of the global financial crisis.

"If you look at what we had within the institutional business on commodities, we didn't have that much of a presence. We decided that we wanted to build that business and we're doing it at the same time our competitors had historic businesses that they had to get out of," Cowles said.

Citigroup's commodity revenue doubled in 2014 after soaring 230 percent in 2013.

The bank moved up to fourth in commodities revenues among top investment banks at the end of 2014 from ninth in 2012, according to financial sector consultancy Coalition.

"Given our footprint across the region, particularly in emerging markets, I think there's a lot to be done with the public sector as well as corporations in terms of different types of commodity products," he said.

 

[TaiShang]

KFC reports reveal Western media's bias
By Mike Bastin (China Daily) 09:42, June 04, 2015



Amid widespread reporting in the West, KFC launched lawsuits on Monday against three Chinese companies whose social media accounts allegedly made comments about the origins of the chicken used by KFC; including the claim that KFC chicken originates from chickens with eight legs.

But these recent reports and media coverage in the West generally represent thecontinuation of a stupendously hypocritical theme with contempt and mocking of China'ssocial media on one hand and on the other hand attempts to paint a picture of strictInternet regulations in China.

Clearly, the Western media cannot have it both ways.

Social media platforms in China, and these probably innocent and partially tongue-in-cheek comments about KFC, quite rightly allow users freedom of expression. Western media please note: No attempt at curtailing such comments has been made.

Of course these comments have also been reported in the Chinese media but not at all in the same KFC finger-pointing manner.

Furthermore, the Chinese public also appear not to attach serious importance to theseKFC postings, something also not reported in the Western media.

It is also noteworthy that recent Western media reports on KFC's extraordinary legalaction do not refer, even briefly, to the history of the infamous food safety scares associated with KFC in China.

In 2005 the toxic red dye Sudan 1 was found to have been used by KFC in its tomato sauce at KFC stores in China.

But even more recently, only last year KFC once again failed to earn the trust of the Chinese public with reports of contaminated chicken supplied to its stores in China.

Chinese consumers, who have traditionally flocked to such Western fast food chains as KFC because they were perceived to be safer to eat at, are now understandably wary.

The series of food safety scares in recent years has added to KFC's competitive decline too.

It is highly likely that this knee-jerk legal action launched by KFC is a result of the increasing competitive pressures it faces in China. Chinese competitors are growing stronger and stronger. And foreign brands have lost a certain mystique and adoration in the eyes of many Chinese consumers, not just in the food sector.

Some Western media reports appear to suggest that China should do more to protect foreign companies and that KFC has somehow been treated unfairly. Of course no reference is made to the profits KFC have enjoyed in China over many years while their market presence in most other countries has dwindled. Just where would KFC be without the China market?

Chinese leaders have reiterated that the government will continue to protect the lawful rights and interests of foreign companies operating in China, and it is the decline incompetitiveness experienced by KFC in China should be the real focus of attention.

The author is a visiting professor at the University of International Business andEconomics in Beijing and a senior lecturer at Southampton University.

 

[applesauce]

chrome man. You never seen rust on chrome rims?

Plus try putting a penny in coke and leave it in there for one day. See what happens to the penny.

chrome doesn't rust, the rust you see on chrome rims/bars etc. is from the metal under the chrome, usually iron or steel. also a (american)penny doesnt contain chrome, it contains zinc and a thin layer of copper

On average SOEs, have a far lesser degree of return on investments compared to the private sector, which means that they are not being invested efficiently.
Also, these large SOEs have created their own vested interest groups, one of the reasons behind the huge overcapacity in Steel, Cement sectors.
Also, these SOEs have many times failed to be efficient.

So much remains to be desired from an SOE.

depends on the field. for instance natural monopolies goes well with SOEs thus in fields like power or sewer lines, its best the government runs those, others are there because of political situations, for instance, banking, china mostly has state banking not because its more efficient or anything but because it works well with the current economic situation, it allows the government direct control over the economy allowing it to achieve very high growth rates while keeping inflation relatively low, china's 30 year rise has been remarkable smooth(no major crashes, consistent growth), its because the government has kept its hands in certain sectors of the economy. as it develops more though, it makes more and more sense to open the sectors up.

 

[cirr]

Xiaomi is the world's second largest wearable vendor

By: Tyler Lee  | ubergizmo | Posted: 06 Jun 2015, 00:37

When it comes to smartphones, Xiaomi appears to be catching up to giants such as Apple and Samsung which is impressive given that both Apple and Samsung have been in this game for a while, not to mention Xiaomi’s offerings are typically limited in Asia whereas Apple and Samsung are global.

However it looks like not only could Xiaomi potentially overtake Apple and Samsung in terms of mobile devices, but they could be on their way to conquer the wearables market. According to recent numbers released by IDC (via Android Central), it turns out that Xiaomi is actually the world’s second largest wearable vendor, mighty impressive if you consider that the company is also relatively new to the market.

The IDC puts the company’s market share as of Q1 2015 at 24.6% which puts them in second place behind the likes of Fitbit which has a market share of 34.2%. This corroborates an earlier report in which it stated that Fitbit was the leader in the wearables market, but at the rate Xiaomi is growing, we wouldn’t be surprised if they eventually caught up.

Once again it looks like the company is competing purely on price. While Fitbit, Samsung, and Garmin have wearables that cost around the $100 mark, Xiaomi instead competes by making them dirt cheap. Last year’s Xiaomi Mi Band was launched for only $13, making it a very compelling alternative.

 

[TaiShang]

Wheat starts enter into harvest season in China's Hebei, Shandong
(Xinhua) 16:15, June 05, 2015



Harvesters reap wheat in Cheng'an County, north China's Hebei Province, June 5, 2015. A total of 34.5 million mu (about 2,300,000 hectares) of wheat started to enter into the harvest season in Hebei recently. (Xinhua/Wang Xiao)



Harvesters reap wheat in Cheng'an County, north China's Hebei Province, June 5, 2015. A total of 34.5 million mu (about 2,300,000 hectares) of wheat started to enter into the harvest season in Hebei recently. (Xinhua/Wang Xiao)



A harvester reaps wheat in Nanshahe Town of Tengzhou, east China's Shandong Province, June 5, 2015. Summer wheat harvest has begun in Shandong, a major producing area of the crop. (Xinhua/Guo Xulei)

Harvesters reap wheat in Nanshahe Town of Tengzhou, east China's Shandong Province, June 5, 2015. Summer wheat harvest has begun in Shandong, a major producing area of the crop. (Xinhua/Guo Xulei)

 

[TaiShang]

CSRC to Crack Down 16 Cases of Spreading Rumors in Stock Market
2015-06-06 20:50:27 CRIENGLISH.com Web Editor: Wang

The screen grab shows China Securities Regulatory Commission spokesperson Zhang Xiaojun in a press briefing on June 5, 2015. [Photo: cctv.com]

China's securities regulator has launched a new enforcement campaign to crack down on market manipulation.

Zhang Xiaojun with the China Securities Regulatory Commission says 16 separate cases are already under investigation.

"The cases being investigated are those typically ones that involve the fabrication and spreading of false or misleading information."

The cases under investigation mostly involve articles written about the potential merger and acquisitions of listed firms, as well as false reports from investment consultants.

At the same time, regulators are also working on more specific rules to deal with margin trading.

Margin trading allows traders to borrow money for investments based on the value of their stock portfolio.

The trading technique has been exploding in popularity among traders in China, with the balance of margin trading doubling so far this year to some 2-trillion yuan.

However, margin trading has the potential to do significant damage to the market if left unregulated.

 

[cirr]

More interest rate cuts in the pipeline?

China's CPI up 1.2% in May

Jun 9, 2015 (China Knowledge) - China's Consumer Price Index (CPI) has increased 1.2% year on year or declined 0.2% month on month in May 2015, according to the latest statistics released by the National Bureau of Statistics.

Last month, the CPI in urban and rural areas rose 1.3% and 1.0% year on year respectively.

Food prices climbed up 1.6%, contributing to a 0.54% increase in the whole index. Prices of meat, fresh vegetable and grain went up 3.1%, 6.5% and 2.4% year on year, respectively.

The non-food index witnessed a year on year growth of 1.0% last month.

The prices of tobacco products, alcohol and related products increased 1.7% year on year, mainly due to a 3.7% growth in tobacco prices. The prices of household appliances and maintenance services went up 1.0% from a year earlier.

The prices of personal and health care products increased 1.8% year on year in May, and the price of clothing rose 2.8% year on year.

The prices of transportation and communications went down 1.3% from a year earlier, and there is an increase of 0.7% in housing costs that were driven by a 2.6% increase in housing rentals, 2.0% decrease in the prices of water, electricity and fuel, and a 0.2% growth in the prices of building and decoration materials.

In the first five months of this year, China's CPI rose 1.3% year on year.

China's CPI up 1.2% in May

 

[Beidou2020]

More interest rate cuts in the pipeline?

China's CPI up 1.2% in May

Jun 9, 2015 (China Knowledge) - China's Consumer Price Index (CPI) has increased 1.2% year on year or declined 0.2% month on month in May 2015, according to the latest statistics released by the National Bureau of Statistics.

Last month, the CPI in urban and rural areas rose 1.3% and 1.0% year on year respectively.

Food prices climbed up 1.6%, contributing to a 0.54% increase in the whole index. Prices of meat, fresh vegetable and grain went up 3.1%, 6.5% and 2.4% year on year, respectively.

The non-food index witnessed a year on year growth of 1.0% last month.

The prices of tobacco products, alcohol and related products increased 1.7% year on year, mainly due to a 3.7% growth in tobacco prices. The prices of household appliances and maintenance services went up 1.0% from a year earlier.

The prices of personal and health care products increased 1.8% year on year in May, and the price of clothing rose 2.8% year on year.

The prices of transportation and communications went down 1.3% from a year earlier, and there is an increase of 0.7% in housing costs that were driven by a 2.6% increase in housing rentals, 2.0% decrease in the prices of water, electricity and fuel, and a 0.2% growth in the prices of building and decoration materials.

In the first five months of this year, China's CPI rose 1.3% year on year.

China's CPI up 1.2% in May

I would cut the RRR first. China's RRR is way too high compared to other countries due to it being the preferred option in the past.

PBOC should use price tools rather than quantity tools for its monetary policy.

 

[TaiShang]

Welcome home

***

Police officers escort fugitive Sun Xin off a plane in Beijing on June 8.

The 46- year-old is the third suspect on a list of China’s 100 most wanted economic fugitives, issued in April by Interpol’s National Central Bureau of China, to be repatriated.
Sun, a former cashier at the Beijing press bureau, was arrested in Cambodia after seven years on the run. He is alleged to have embezzled tens of millions of yuan between 2004 and 2008, before fleeing to Thailand, and living under an assumed name across southeast Asia.

 

[cirr]

Datang Telecom intends to buy Marvell, grabbing 4G market

OFweek | Posted: 09 Jun 2015, 11:36

Since the end of last year, there were words on the street that Marvell would be merged. According to an informed source, Datang Telecom contacted Marvell for the first time in November, 2014. Both companies had a talk for about four months, yet they departed from each other unhappily because of the price. At early May of 2015, Datang Telecom dispatched a delegation to the headquarters of Marvell, the U.S. for negotiation again.

"At present, both parties are talking about the method of acquisition, joint-ventured or wholly-owned. It is beneficial to Datang Telecom in a wholly-owned way, which means that Datang Telecom will possess the 100 percent relevant patents and technologies. However, the risk will be smaller if the company buys it in a joint-ventured way," analyzed an industry insider.

Marvell is American chip manufacturer that is mainly engaged in three major businesses, storage, network and mobile wireless chip.

 

[TaiShang]

MAJOR MEASUREs TO ENCOURAGE MIGRANT WORKERS TO RETURN TO FARMING.

Li Keqiang has a major cabinet meeting and announcement for several policy initiatives related to creating microfinancing for individual, small and medium enterprises.

[1] Farm boys go home. What they are trying to do is multi-prongged. Firstly it is to encourage farming by special incentives, and making better financing availability to enhance farm community wealth creation in basis farming itself. But it also encourages farm individual or groups to start small businesses of their own to take advantage of the location-neutral world that the netizen world has created access for. So in fact a farm boy can go back to do farming while also conduct a business through alibaba. etc. The announcement even does into encouragement to form cooperatives in these farm communities.

[2] Electronics Export, Online Global Outreach. As if China has not dominatged the cellphone and electronics industries enough, the cabinet is issuing incentives for online businesses to sell directly to foreign markets. There are measures to cut out the middlemen so that online businesses can actually have incentive to lodge inventory in target countries for quick delivery. Example: orders taken by a farm boy in the remotest village of China, can be through one of the portals be delivered next day to Peoria, or 5th Avenue.

[3] No deposit, no guarantor credit. This is more elaboration of Li Keqiang's attempt to bring financial services down to the lowest level of society.

Original source:

李克强主持召开国务院常务会议-新华网

李克强主持召开国务院常务会议 --- 国务院总理李克强6月10日主持召开国务院常务会议，明确推进财政资金统筹使用措施，更好发挥积极财政政策稳增长调结构惠民生作用。

NEWS.XINHUANET.COM

 

[cirr]

FDI flows to China jumps to $53.83 bn in first 5 months

June 11, 2015 14:12 IST

China on Thursday said the foreign direct investment to the country jumped 10.5 per cent year on year in the first five months of 2015, settling at $53.83 billion with services industry getting a major chunk of it.

The pace slowed from 11.1 per cent increase registered in the January-April period but far exceeded the annual growth rate posted for 2014 of 1.7 per cent, the Ministry of Commerce said.

China approved 9,582 new foreign-funded companies in the first five months, up 9.6 per cent year on year.

Service industry FDI totalled $33.94 billion in the first five months, up 23.5 per cent year on year.

This accounted for 63 per cent of the all FDI during the period, state-run Xinhua news agency reported.

Some high-end manufacturing businesses saw fast investment growth. Investment climbed 4.8 per cent year on year in communications equipment, computer and other electric-facility manufacturing in the first five months.

Investment rose 4.4 per cent year on year in traffic-equipment manufacturing in the first five months.

 

[TaiShang]

Employment rate of college graduates rising steadily
June 12, 2015

(File photo)
The employment rate of college graduates has been rising steadily, with more graduates choosing to start their own businesses, according to the 2015 employment report released by My COS Research Institute on June 10, 2015.

The report shows that six months after graduation, the employment rate of 2014 college graduates was 92.1 percent, slightly up from the 91.4 percent of 2013 and 90.9 percent of 2012.

For undergraduate students of 2014, management science majors had the highest employment rate, while the employment rate of law majors was the lowest. And for associate-degree students, materials and energy majors had the highest employment rate, while the employment rate of resource development and mapping majors was the lowest.

More students are choosing to start their own businesses. The self-employment rate of 2014 college graduates was 2.9 percent, 0.6 percent up from that of 2013 and 0.9 up from that of 2012. It is estimated that around 191,000 college graduates of 2014 have started their own businesses.

 

[bobsm]

Bank of China joins gold auction as first Asian bank
Updated: 2015-06-17 01:09
By Zhang Chunyan in London(China Daily)

Bank of China formally announced its involvement and support by joining the gold auction which determines the London Bullion Market Association gold price, as the first Asian bank on Tuesday.

Industry insiders said that it further enhances the Chinese institutions' importance on global gold pricing and also demonstrates Bank of China's global markets trading and service capacity.

With long history, the London gold market has been accepted as the global spot gold pricing center. The LBMA gold price, which is accepted all over the world, is widely used in the settlement between producers, consumers and financial institutions，and is an important pricing benchmark for gold derivative contracts.

ICE Benchmark Administration Limited, the administrator for LBMA gold price, successfully launched a new, independently administered, transparent and electronic auction process in March, which replaced the London gold fix established in 1919.

"We are delighted to welcome Bank of China to the gold auction," said Finbarr Hutcheson, president of ICE Benchmark Administration.

"The growth in daily volumes of the gold auction coupled with the increase in participation from around the globe, demonstrates strong market support for the independent governance and oversight we have implemented to bring transparency and trust to the gold auction," Hutcheson said.

According to the Shanghai Gold Exchange, as the major participant in the domestic Chinese gold market, becoming a direct participant in the gold auction would allow Bank of China to be directly involved in the pricing process of the LBMA gold price, which could reflect the supply and demand of the Chinese market.

This will further reinforce that the Chinese gold market is stepping out into the global market and becoming more internationalized, which could improve the importance and contribution of China on the global gold market, insiders said.

"I am delighted to see the growth in the number of direct participants to the LBMA gold price auction process. In particular, I welcome the addition of Bank of China. As one of the LBMA's founding members, it is appropriate that they should be the first Chinese participant," Ruth Crowell, chief executive of LBMA said.

The LBMA is the pre-eminent body for the world's largest and most important market for gold and silver bullion.

Bank of China has participating in the gold trading business in London for over forty years. With experience obtained from the international market, it provides comprehensive gold products and service to clients in Chinese mainland.

Bank of China London branch was its first overseas branch. It joined the LBMA as an initial member in 1987, and had been the only Chinese bank with membership for the subsequent 20 years.

Bank of China joins gold auction as first Asian bank|Companies|chinadaily.com.cn