China Economy - News & Updates

[grey boy 2]

3G network construction drives 589 bln yuan domestic investment in 2009 - People's Daily Online

The Ministry of Industry and Information Technology (MIIT) said January 20 that the business revenues of China's telecom industry did not rapidly rise along with the popularity of the 3G business in 2009, and is expected to rise by only 4 percent. Meanwhile, the construction of 3G networks has indirectly boosted domestic investment by 589 billion yuan and directly increased consumption by 36.4 billion yuan.

China's 3 telecom enterprises completed investments totaling 160.9 billion yuan in 3G network construction, with 325,000 3G base stations built. Following the completion of large-scale networks, the growth in the number of 3G users has accordingly accelerated, with the number of users expected to exceed 15 million.

According to Lu Xinjie at the Market Operation Research Department of the China Academy of Telecommunication Research, this marks a change in the mode of contribution by the telecom industry to China's economic development, shifting from the previous "direct contribution" by increasing revenues to the current "indirect contribution" by enhancing China's economic development quality.

According to the initial estimate by MIIT, the construction of 3G networks in 2009 has indirectly boosted domestic investment by 589 billion yuan, and directly increased consumption by 36.4 billion yuan and indirectly by 14.1 billion yuan. It has also directly increased GDP by 34.3 billion yuan and indirectly by 141.3 billion yuan, and has directly created 260,000 new job opportunities and indirectly created 670,000 new opportunities.
At the same time, 3G services have also facilitated the deployment and innovation in IT, communications, commerce, finance, culture and entertainment, and have promoted the development of emerging industries such as mobile Internet and e-commerce.

MIIT holds that the low operating revenues in China's telecom enterprises relate to the operation structures of these enterprises. In 2009, 3 telecommunication companies focused on personal mobile device users and all of China's telecom operators did not show interest in enterprise users.

Lu holds that many factors can be attributed to insufficient innovation in China's telecommunication operators, but the most important factor is that a market situation of effective competition had not formed in 2009. In 2008, China Mobile's prime operating revenue accounted for 52.3 percent of China's total. Between January 2009 and November 2009, China Mobile's prime operating revenue accounted for 55.4 percent of China's total, an increase of 3.1 percentage points. This shows that China Mobile's status in China's telecommunication market has improved since the restructuring of China's telecom industry.

By People's Daily Online

 

[oct605032048]

 

[grey boy 2]

Beijing's GDP hits 1.18659 trillion yuan in 2009 - People's Daily Online Jan 25 2010

Beijing has achieved a remarkable success in coping with the global financial crisis and its GDP reached 1.18659 trillion yuan in 2009, an increase of 10.1 percent over the previous year, Guo Jinlong, Mayor of Beijing, said to the opening session of the Third Session of the Thirteen People's Congress of Beijing Municipality on Monday.

Guo added that the per-capita GDP of the city had surpassed 10,000 U.S. dollars.

Also, the capital city's fiscal revenue last year reached 202.68 billion yuan, a 10.3 percent growth over the previous year.

By People's Daily Online

 

[grey boy 2]

Tourism to exceed 1.44 trillion yuan in 2010 - People's Daily Online Jan 26 2010

China's tourism industry will grow by 12 percent to exceed 1.44 trillion yuan ($210 billion) in 2010 and employ 500,000 more people in the industry, according to a nationwide tourism meeting today, reported by xinhuanet.com.cn.

Shao Qiwei, head of China's National Tourism Bureau, is hopeful that the inbound tourism will resume this year and the outbound tourist flow remains stable.

"We will focus on the domestic tourism this year and change the mode of tourism development," said Shao.

The national tourism administration urged some provinces to be experimental in the industry and speed up the development of local tourisms.

"We will release a guidebook on national tours to promote people to do traveling more," Shao was quoted as saying.

Source:chinadaily.com.cn

 

[hero]

Tourism to exceed 1.44 trillion yuan in 2010 - People's Daily Online Jan 26 2010

China's tourism industry will grow by 12 percent to exceed 1.44 trillion yuan ($210 billion) in 2010 and employ 500,000 more people in the industry, according to a nationwide tourism meeting today, reported by xinhuanet.com.cn.

Shao Qiwei, head of China's National Tourism Bureau, is hopeful that the inbound tourism will resume this year and the outbound tourist flow remains stable.

"We will focus on the domestic tourism this year and change the mode of tourism development," said Shao.

The national tourism administration urged some provinces to be experimental in the industry and speed up the development of local tourisms.

"We will release a guidebook on national tours to promote people to do traveling more," Shao was quoted as saying.

Source:chinadaily.com.cn

Is it domestic or international tourism?

 

[grey boy 2]

IMF says Chinese economy to grow 10% for 2010 - People's Daily Online January 27, 2010

The International Monetary Fund (IMF) said Tuesday the Chinese economy will expand 10.0 percent this year and 9.7 percent next year, much better than previous forecasts.

Source: Xinhua

 

[oct605032048]

Is it domestic or international tourism?

. combined

 

[abdul1]

interesting:

China's runaway growth train on a dangerous course

Professor Yu Yongding says he is ''one of 50 well-known Chinese economists in China''. Some respected market economists say he has a better grasp of China's macro-economy than anybody else, full stop.

"When a country has an investment rate over 50 per cent [of] GDP and rising, you say this country is not suffering from overcapacity! … are you serious?"

Yu has elaborated further on his views. He believes China is trapped in a cycle where constantly rising growth in investment is constantly increasing China's supply, but consumption has conspicuously failed to grow fast enough to absorb it. And so China is forced to increase investment in order to provide enough demand to absorb the previous round of increased supply, thus creating ever-widening cycles of oversupply. In this manner, the investment share of gross domestic product has increased from a quarter of GDP in 2001 to at least half. "There is sort of a chase - demand chasing supply and then more demand is needed to chase more supply," he says. "This is of course an unsustainable process."

From 2005 China's overcapacity problem had been "concealed" by ever-increasing net exports - but that strategy was interrupted by the financial crisis. Then came last year's globally unprecedented stimulus-investment binge, which might not have been so worrying if it were delivering things that people needed. But the Government's hand in resource allocation has grown heavier since the crisis without reforms to make officials more responsible for what they spend. "As a result of the institutional arrangements in China, local governments have an insatiable appetite for grandiose investment projects and sub-optimal allocation of resources," as Yu previously said, in his Richard Snape lecture for the Productivity Commission in November.

So there are now airports without towns, highways and high-speed railways running parallel, and towns where peasants are building houses for no reason other than to tear them down again because they know that will earn them more compensation when the local government inevitably appropriates their land. It's great for Australia in the short term, because we supply the materials, but it's unsustainable. One day China's overcapacity problem will become real.

That will be the Wile E. Coyote moment: when the resource-exporting world falls off a cliff.

 

[oct605032048]

China supply the world with goods people needs. That it. Even last year world import declined 30%, but China's export declined only 20% and made China overpass Hans as world No.1 exporter.

 

[grey boy 2]

China's local governments strive to house average people - People's Daily Online Jan 29 2010

Local governments nationwide are vowing to house average people whose dreams of owning a private residence are fading amid reckless property price surges.

The resolutions were made public when home prices topped the agenda at annual sessions of local legislative bodies that opened in January.

China's real estate market showed signs of overheating in the second half of 2009 despite the global financial crisis. DTZ, one of the world's leading real estate advisors, said China's average home price in 2009 was estimated at 4,518 yuan per square meter, up 30 percent from 2008.

Beijing would rein in property price hikes through persistent crackdowns on illegalities, including delaying the launch of projects and leaving construction land idle to drive up prices, said Mayor Guo Jinlong at the full session of the Beijing Municipal People's Congress.

In 2010, the government would build or purchase 134,000 welfare houses, including houses for rent and affordable houses for people with low income.

It also planned to invest 100 billion yuan (14.7 billion U.S. dollars), or almost 10 percent of Beijing's GDP in 2009, in land development to stabilize the real estate market.

Last year, Beijing saw the per capita disposable income of urban residents increase 9.7 percent to 26,738 yuan, and the average price of most new homes jump 50 percent, according to a survey conducted in mid-December by the Beijing News newspaper.

Despite lofty prices, residential properties of 18.8 million square meters were sold in Beijing in 2009, up 82.3 percent year on year, said the municipal bureau of statistics earlier this month.

"The ongoing property craze suggested potential bubbles. We have limited land resources, but I heard someone owned 100 houses in Beijing," said Qiu Ganqing, a deputy to the Beijing Municipal People's Congress.

The southern island province of Hainan also faces property bubble concerns after the central government announced a plan this month to build the island into a top international tourist destination by 2020.

The government would curb the speculative bubbles, as well as build more welfare houses for low income families, said Luo Baoming, provincial governor at the full session of the Hainan Provincial People's Congress.

In Shanghai, home price growth saw an 87.4-percent rise in 2009, DTZ said.

The Shanghai government would further curb investment-led demand in the housing market, and build 700,000 welfare houses by 2012, said Yu Zhengsheng, secretary of the Shanghai Municipal Committee of the Communist Party of China, at the annual full session of the Shanghai Municipal People's Congress.

"Shanghai faces a tight land supply. So our residential properties should mainly benefit inhabitants, not investors," Yu said.

"Driven by high property prices, the cost of home rents has also soared," said Yin Baoxing, a deputy to the Shanghai Municipal People's Congress.

China had made several moves to stop the bubble in an early stage, including reimposing a sales tax on homes sold within five years of their purchase from this year and increasing the down payment requirement for land purchases to at least 50 percent of the total price.

The measures would crack down on speculation and lead to stable house prices, said Liu Hongyu, head of the real estate research center of Tsinghua University.

But DTZ said since it takes about a year to finish construction projects, the supply of commodity residential homes should peak in 2011 when the imbalance of demand and supply is expected to be addressed.

Source: Xinhua

 

[grey boy 2]

China's exports benefit people around the world - People's Daily Online Jan 28 2010

Workers at Ningbo Rifeng Electric Appliance Company have been working extra hours in recent days.

"We make all kinds of flashlights, headlights that are sold to Europe, America, Middle East and Africa. The demand for our products began to surge in late 2009, we have too many orders to manage," Zhu Changqing, the general manger of the company said.

Countless made-in-China products are shipped to the world, making contributions to improving people's lives. In 2009, China surpassed Germany to become the world's biggest exporter.

"The increase of China's exports is a win-win result, benefiting people around the world," analysts indicated.

Made-in-China makes life more enjoyable

U.S. journalist Sara and her family tried to live without China-made products. In her one-year experiment, she put much energy and time into looking for substitutes of China-made goods, which resulted in higher costs in daily life. "It is better to co-exist with Chinese products," Sara concluded at the end.

"China enables western countries, in particular the U.S. to enjoy services and commodities at low prices," said Yu Xiaohua, associate professor with Georg-August-Universität Göttingen, who believes China-made products help the masses maintain their life quality.

"Western countries rely on the cheap products from China to subsidize their low-income groups," Yu said. To some extent, Chinese products serve as a stabilizer of their society. This is more evident after the outbreak of the global financial crisis.

Yao Jian, spokesperson of China's Ministry of Commerce, stated: "China played a critical role in combating the financial crisis, by providing people in other counties with a large quantity of quality and less expensive daily necessities."

"Collaborative manufacture" profit sharing

Ordinary people are not the only group benefiting from China exports. Many multinational companies and foreign companies are also sharing the benefits of "China exports", as "made in China" is transforming to "made with China".

"The import and export volume of foreign-invested companies account for 60 percent of total volume in China," said Yu Xiaohua. "They earned remarkable profits from the transactions". Benefiting from China's manufacturing bases and population advantage has already become a significant strategy of multinational companies.

Swedish company Sandvic is one such example. Last September, Sandvic built its largest mining machine center in Shanghai which targets the global market. Foreign companies and individuals sales to application have all benefited from "China exports".

Boosting imports, more China opportunities

Experts say a huge amount of imports brought about by exports is worth paying attention too. "In the global market system, a country's ability to import is dependant on its ability to export. The increase of China's exports means new markets and opportunity," Mei Yuxin, a research fellow affiliated to the Ministry of Commerce said.

Prior to the accession to the WTO, the western media hyped up China's grabbing of ASEAN's export. The fact is China became the fastest growing export market of the ASEAN. "Without the tangible benefits, can the China-ASEAN FTA be realized so quickly?"

"Many countries' exports to China are better than to other counties." Yao Jian's statistics show, the EU's export dipped 30 percent in first half of 2009, but its export to China only declined 16 percent; the U.S. export dropped 22 percent by October, in contrast export to China declined 9 percent. In 2009, European and American exports to China fell by just half of the overall decline.

"This shows China's market is open and conducive. It reins in their decrease of exports. China's foreign trade is active and conducive to the global economy," Yao Jian concluded.

By People's Daily Online

 

[grey boy 2]

China's gold output ranks 1st in world for 3rd year - People's Daily Online
Jan 29 2010
According to the latest statistics from the China Gold Association, China's gold output reached 313.98 tons in 2009, up 11.34 percent year-on-year. This was the first time that China's gold output had exceeded 300 tons, setting a new record.

So far, China's gold output has been first in the world for 3 consecutive years. In 2009, the industrial output value of China's gold industry reached 137.53 billion yuan, up 18.56 percent year-on-year. China's top 5 provinces by gold output are Shandong, Henan, Jiangxi, Fujian and Yunnan, and the gold output of these 5 provinces account for 59.48 percent of China's total. At present, more than 500 counties produce gold, and the gold industry has become the pillar industry in more than 100 counties.

By People's Daily Online

 

[grey boy 2]

China's PCT application volume enters global top 5 - People's Daily Online February 02, 2010

Reporters learned from the director-generals conference held by the State Intellectual Property Office that China received 977,000 patent applications in 2009, up 18 percent year-on-year.

The application volume of China's domestic invention patents reached another high-level, and accounted for 73 percent of the total invention application volume. The amount of patent cooperation treaty (PCT) applications from China reached 8,000, ranking among the top-5 in the world. Chinese enterprises are gradually becoming owners of intellectual property inventions and China's intellectual property invention ability has strengthened greatly.

Reporters also learned that the 11th Patent Awards of China winners were announced in Beijing February 2, including 15 gold award winners and 170 outstanding award winners.

By People's Daily Online

 

[grey boy 2]

China's military-industrial group listed in world's top 500 - People's Daily Online Feb 03 2010

China South Industries Group Corporation (CSG) realized a revenue of 197.1 billion yuan in 2009, up by 29.6 percent year on year. With 186.2 billion yuan total assets (an increase of 16.1 percent), CSG is listed in the world's top 500 enterprises for the first time.

As a giant state-owned enterprise directly under the administration of China's Central Government and an investment institution authorized by the State Council, CSG possesses more then 40 industrial enterprises and 23 research & development centers.

It has established production bases & marketing institutions in over 30 countries and regions with products distributed to more than 100 countries all over the world.

Engaged in the four main fields of special products including military products, auto-vehicles, new resources of energy and equipment manufacture, CSG has been playing a very important role in China's national economic development. It plans to achieve net profits of 20 billion yuan which will double 2009's profits.

By People's Daily Online

 

[oct605032048]

China's Efforts Narrow Gap Between The Rich And Poor
China's Efforts Narrow Gap Between The Rich And Poor-»ª¶û½ÖÈÕ±¨

The increase in inequality in China has leveled off in recent years and could be less severe than previously thought, the Organization for Economic Cooperation and Development says, suggesting that Beijing is starting to make progress in tackling one of its biggest social problems.

The OECD, in its economic survey of China published Tuesday, said more welfare spending in rural areas and increased migration to cities helped to arrest a widening of the income gap. The Paris-based organization urged China to lower what is still a fairly high level of inequality by further boosting social programs and eliminating discrimination against rural residents.

The report is the OECD's second major study of China, which isn't a member of the organization. China's economy is on pace to surpass Japan this year as the world's second-biggest after the U.S. The OECD urged China to take a range of measures to liberalize its economy, such as freeing up interest rates to encourage banks to lend more to small companies, and privatizing state-owned enterprises. It also said that allowing the currency to appreciate would help the government manage the economy better.

China's breakneck economic growth of the past three decades has pulled hundreds of millions of people out of poverty. But the incomes of people at the top have risen much faster than the rest, creating new divisions in a once-egalitarian society. Tensions between property developers and dispossessed farmers, and between factory bosses and their rural work force, are often a flashpoint for social conflict. That has pushed China's government to narrow the gap, and officials have repeatedly said they will do more to boost incomes of the worst-off.

'We've already seen, in the last five years, a stabilizing of the disparities,' said Richard Herd, a senior economist at the OECD, told a press briefing in Beijing. Much of that is due to an enormous movement of rural people off farms and into urban jobs, a change which allows them to raise their incomes significantly. 'You've had a major adjustment in the labor market since the mid-1990s,' he said.

China's income inequality as measured by the Gini index -- a scale on which zero is perfect equality and 100 is perfect inequality -- was at 49.6 in 2005, already greater than the U.S., according to the Chinese Academy of Social Sciences. But the OECD, using what it says are better estimates of price changes and the ranks of undocumented rural migrants in cities, puts the Gini index for 2005 at 41, and says the measure of inequality edged down to 40.8 by 2007.

The OECD's numbers indicate that inequality remains higher in China than in the U.S. and most other developed countries. But China's inequality remains less severe than that of South Africa, Brazil, Chile, Russia or Mexico. Many domestic commentators have urged China to narrow the income gap and avoid the so-called Latin Americanization of its economy, a reference to the region's wealth disparities.

Chinese officials often focus on the gap between the country and cities. Last year, per-capita annual income in urban areas was about $2,500, more than three times the $750 in rural areas -- a ratio that has risen over the past decade.

But that comparison doesn't take into account the growing number of rural migrant workers in urban areas, or the fact that prices for most things are cheaper in rural areas. After adjusting for those factors, the OECD says, average urban incomes are actually closer to two times rural ones, not three.

Much of the remaining gap between urban and rural incomes comes from urban workers having more education than rural ones, Mr. Herd said. He urged China's government, which has already cut school fees, to make 12 full years of education universally available in the countryside.

Andrew Batson