China's economy structural reform progressing ...

[ahojunk]

Measures planned to develop exports
2017-01-13 08:46 | China Daily | Editor: Feng Shuang

A worker inspects toys at Dongsheng Toy Company in Ganyu, Jiangsu province. The company is an exporter to the European and U.S. markets. (Photo by Si Wei/For China Daily)

China will adopt fresh measures－such as encouraging more multinational Chinese companies to be formed and actively managing any friction created over trade－to help its exports in the current year, the Ministry of Commerce said on Thursday.

The ministry said that the development of more Chinese multinational companies is part of the overall push for corporate China to go global and stimulate trade.

The ministry also said the country has decided not to pursue high growth in foreign trade in 2017.

Ministry spokesman Sun Jiwen said as global demand for goods remains low and sentiment backing trade protectionism continues to rise, the outlook for China's foreign trade in the current year faces downward pressure and uncertainties.

"We have acutely noticed that labor, land and resource costs have all surged," Sun said.

The ministry said it has made plans to strengthen the integration between trade and industrial policies and build global companies such as Huawei Technologies Co Ltd, China Railway Rolling Stock Corp and Gree Electric Appliances Inc, to further compete with their global rivals.

Trade volumes between January and November in 2016 dropped 1.2 percent from a year earlier to 21.8 trillion yuan ($3.15 trillion), while the trade surplus shrank 5.8 percent to 3.1 trillion yuan, data from the General Administration of Customs showed.

With Chinese companies having already established a footprint in overseas markets, Sun said China will make further progress in two-way investment.

This will stimulate trade and help in the formulation of international trade and investment rules which are in the companies' interests, Sun added.

It will also accelerate the strategy of sealing more free trade agreements with more partners in the current year.

"China's exports are highly likely to be affected by the new trade policies from the United States in the first half of this year," said Xue Rongjiu, deputy director of the Beijing-based China Society for WTO Studies.

Xue said, however, that because most of their trade is complementary, any policy changes are unlikely to lead to long-term business losses on either side.

China will open another seven pilot free trade zones－the third batch－including Sichuan and Henan provinces soon.

It is expected that these will create new growth points for both trade and investment.


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Very good plan and governance by China's government.
When they say it, they will do it.
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[TaiShang]

China's FDI inflow rises 4.1% in 2016
Xinhua, January 14, 2017

Foreign direct investment (FDI) in the Chinese mainland maintained steady growth last year on the back of strong investment in the service industry.

FDI rose 4.1 percent year on year to reach 813 billion yuan (around US$118 billion) in 2016, the Ministry of Commerce (MOC) said in an online statement.

Growth slowed from the 6.4-percent gain in 2015. In December alone, the FDI inflow went up 5.7 percent.

Foreign investment in the service industry rose 8.3 percent year on year to 572 billion yuan and accounted for 70.3 percent of all FDI.

FDI in high-tech services was particularly strong, up 86.1 percent from a year earlier to reach 95.6 billion yuan.

The MOC attributed the steady momentum to government action such as easing restrictions in free trade zones (FTZs) and simplified procedures for investment entry.

Last year, FDI to FTZs in Shanghai, Guangdong, Tianjin and Fujian jumped 81.3 percent to 88 billion yuan.

FDI from the United States rose 52.6 percent, while that from the European Union went up 41.3 percent.

FDI from Japan edged up 1.7 percent in 2016, reversing two years of falls.

The number of newly-established foreign companies with investment of over 100 million U.S. dollars exceeded 840, with businesses covering many emerging and high tech industries.

To attract more foreign investment, Chinese authorities are considering revising guidance for entry to the market, cutting the number of restrictive measures from 93 to 62.

 

[ahojunk]

Northeast set for accelerated reform
2017-01-13 09:10 | Global Times | Editor: Li Yan

Implementation of policies is key: expert

The nation's top economic planner said on Thursday that it will actively drive pilot reform programs to accelerate growth in the private sector in Northeast China, which has seen a significant drop in private-sector investment in recent years.

In the first nine months of 2016, total private-sector investment in the three Northeastern provinces of Heilongjiang, Jilin and Liaoning stood at 1.59 trillion yuan ($230 billion), down 30.5 percent from the same period in 2015, said Zhao Chenxin, a spokesman for the National Development and Reform Commission (NDRC) at a press conference in Beijing.

The rate of decline was quite significant, given that the national average figure for private-sector investment still inched up 2.5 percent year-on-year in the same period, according to Zhao.

He noted that the decline in the Northeast was caused by a mix of factors including slower national GDP growth, downward pressure faced by the three provinces and weak investor confidence.

Zhao said that the government will actively promote pilot programs to boost the development of private-sector activity and create a benign investment environment.

Concrete steps include enhancing policy support and reducing tax burdens for private companies; using a negative-list approach to project management; accelerating the establishment of private banks in the Northeast; nurturing new industries and improving traditional industries, encouraging private companies to go abroad, and offering incentives for technological talent.

Twelve cities in the three provinces are involved in the pilot programs, and seven of them have listed Public-Private Partnerships (PPPs) among their objectives.

Sun Zhiming, an expert at the Jilin Provincial Academy of Social Sciences, held a cautiously optimistic view about the development of PPPs.

"Private capital will only be interested when a project has good returns, which will reduce the number of viable projects, and the total investment will be limited. On the other hand, PPPs are definitely a new growth point," said Sun.

"Effective and thorough, grass-roots level implementation of policies rolled out earlier should be given sufficient attention, as deepening these reforms such as tax and fee cuts will directly affect private-sector growth," Sun told the Global Times on Thursday.

Northeast China was the cradle of many industries in China, and the area formerly accounted for much of the country's manufacturing activity.But it has faced resource depletion and a brain drain in recent years.


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Yeap, the government is helping the NE.

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[TaiShang]

Chinese state-owned aluminum giant returns to profit
Xinhua, January 16, 2017

China's largest aluminum producer returned to profit last year as its bold downsizing helped relieve the burden from loss-making "zombie" subsidiaries.

Aluminum Corporation of China (Chinalco) raked in nearly 1.9 billion yuan (around 276 million U.S. dollars) in operating profits in 2016, the best performance since the 2008 global financial crisis, with its cash flow at 12 billion yuan.

The gains were in sharp contrast with a loss of around 2.7 billion yuan in 2015.

"The substantial improvement came as the results of solid reforms in the past two years," Chinalco spokesperson Nie Zhen said.

In 2016, the state-owned enterprise (SOE) successfully dealt with 10 zombie subsidiaries, shut down 50 companies for consolidation, and set up an asset operation branch to eliminate inefficient assets and production capacity.

Thanks to the measures, Chinalco saw a falling debt-to-asset ratio, growing net assets, and abundant cash flow.

Weighed on by plunging aluminum prices, the world's second-largest producer suffered from continuous losses. Its listed subsidiary, in which Chinalco owns a controlling stake, reported its biggest-ever loss of 16.2 billion yuan in 2014.

Chinalco said it will likely remain profitable in 2017, a year Nie described as "a critical period" of revival for the company. Nie added that more reform measures are in the pipeline.

Chinalco is typical of the country's ongoing reorganization and consolidation of torpid SOEs. The government also pushed for mixed SOE ownership, encouraged M&As, and opened more industries to private capital.

 

[TaiShang]

China to improve government service for new economy
(Xinhua) 15:32, January 21, 2017

BEIJING, Jan. 21 -- China will improve its services for the new economy to accelerate new growth, according to a government document.

China will continue to enhance administrative efficiency to better serve rapidly-growing emerging industries and upgrade old ones, said the document of the State Council, made public on Friday.

To reduce restrictions on the new economy, China will step up the process of approving, revising and abolishing laws and regulations, and allow local authorities to implement their own rules to test new business models in low-risk sectors, including logistics, education and tourism.

Support for innovation and business registration will also be strengthened.

Regulators responsible will take a more inclusive attitude to encourage innovation, while ensuring fair and open market entry, strengthening risk control, and improving the social credit system.

The government will also promote effective flows of knowledge, technologies, information and data resources, and push for more rapid translation of scientific results into productivity.

In the face of economic downturn pressure, China's policymakers have pinned high hopes on the new economy to drive up growth, and carried out an array of measures to boost innovation and stimulate market vitality.

 

[ahojunk]

Domestic consumption remains key driver
2017-01-21 10:50 China Daily Editor: Feng Shuang

China's domestic consumption has remained a strong contributor to the economy, helping drive it as the country has undergone economic restructuring in recent years－but last year it flagged, according to the latest official statistics released in Beijing on Friday.

Data released by the National Bureau of Statistics showed that in 2016, domestic consumption contributed 64.6 percent to growth in GDP, dipping 1.8 percentage points from a year ago.

From 2012 to 2014, consumption contributed around 50 percent to GDP growth, and the rising ratio has indicated a solid growth in consumer spending and improvement in industrial structures, analysts said.

"The consumption sector has been a strong area of the Chinese economy, which has been dragged down by slowing exports and investments," said Zhao Ping, deputy director of the Chinese Academy of International Trade and Economic Cooperation, under the Ministry of Commerce.

Currently, China is pushing to stimulate growth by focusing on supply-side reform, which aims to cut low-end industrial capacity, increase high-tech production, encourage online shopping and stimulate the service sector.

Last year, GDP grew 6.7 percent year-on-year, the slowest expansion in more than two decades, but still within a reasonable range, the statistics bureau said.

In 2016, total retail sales climbed by 10.4 percent year-on-year to 33.23 trillion yuan ($4.83 trillion), staying flat with the growth rates of the first three quarters last year. During the same period, catering sales reached 3.58 trillion yuan, rising 10.8 percent year-on-year, the bureau announced at a news conference on Friday in Beijing.

Online sales remained strong last year, surging 26.2 percent from a year ago to 5.16 trillion yuan－and sales of physical goods online accounted for 12.6 percent of total retail sales.

On Nov 11 last year, China's e-commerce giant Alibaba smashed its sales record once again during its annual Singles Day festival, with consumers spending 120.7 billion yuan, during the 24-hour shopping frenzy on the company's e-commerce portals such as Taobao.com and Tmall.com.

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[TaiShang]

China's rustbelt shows signs of economic recovery
Xinhua, January 21, 2017

China's northeastern region is showing signs of economic recovery since the traditional heavy industries lost shine, figures released at the annual provincial sessions show.

By seeking new growth engines in services, high-tech manufacturing and other sectors, the economy of Jilin Province expanded 6.9 percent last year, exceeding the national average for the first time since 2014.

Technology was a major engine driving the economy, contributing 53.6 percent of the growth, according to the provincial government report.

A three-year plan that began last year to establish and develop emerging industries helped achieve 7.7 percent growth in those industries, such as high-speed train manufacturing and satellite operations, acting governor Liu Guozhong said in the report.

More revenue was also seen in service sector in 2016. An international ice and snow tourism expo was inaugurated in Jilin Province last year, bringing a 25 percent increase in revenue and 17 percent in raw tourist numbers, he said.

The province set its growth target at 7 percent in 2017.

Neighboring Heilongjiang Province reported 6.1 percent growth in 2016, 0.4 percentage points higher than the year before.

At the provincial legislative session that ended on Friday, Governor Lu Hao said the agricultural and service sectors were expected to secure growth rates higher than national averages.

The "Internet+" concept has stimulated agricultural revenue, with a total of 27,000 rural e-sellers contributing a transaction value of 13.5 billion yuan (2 billion U.S. dollars), double previous years. Online sales of rice, beans and side crops exceeded 3 billion yuan, said Lu.

More than 3,000 hi-tech companies were registered in the province last year, and the total number of hi-tech companies with annual revenue of more than 5 million yuan exceeded 1,000.

Figures of Liaoning have not been released yet, but the province is expected to see an economic rebound in 2017, compared with negative growth in 2016.

In the first three quarters, the Liaoning economy contracted by 2.2 percent, the only provincial area with negative growth in the period. But the annual fiscal revenue in 2016 turned from contraction to growth, up 3.4 percent year on year to nearly 220 billion yuan.

For decades, northeast China relied on heavy and chemical industries, energy resources, raw materials and a large number of state-owned enterprises before its economic growth model hit the buffers. This double-digit GDP growth plummeted as capacity was slashed in high-polluting industries, the region's lifeblood.

According to the National Development and Reform Commission, the region's economy grew 2.2 percent in the first half of 2016, much lower than the 7.6 percent, 7.8 percent and 8 percent for the east, central and western regions of the country.

Qiao Jun, an official with the provincial government, believes major new projects in the real economy will drive up growth in 2017.

The environmental protection law enacted last year toughened scrutiny on polluters and 11,000 companies in Liaoning were forced to suspend operations in 2016. "By the year end, over 8,000 projects had resumed operations after environmental evaluation and approval," said Qiao.

These projects represent a total annual output of over 260 billion yuan.

Major projects at a total cost of 670 billion yuan are planned for this year, including a BMW Brilliance assembly line and a high-speed rail link between Beijing and provincial capital Shenyang.

"A total of 830 industrial projects costing of over 50 million yuan have been settled in the province," Qiao said.

Zhou Jianping, from the National Development and Reform Commission, said central government policy put in place last year will help Liaoning bottom out.

Revitalizing the region has been among the top agendas for the central government, which rolled out a series of measures last year.

In November, the government issued a plan to rejuvenate the northeast featuring industrial investment funds, a three-year plan to cultivate emerging sectors and fiscal support.

In December the banking regulator approved five new private banks, two of which will be headquartered in the northeastern region. The Liaoning free trade zone, approved last year, is under construction.

"With beneficial policies plus its own fundamentals, I believe the area will have a better economic prospect this year," said Zhou.

@AndrewJin , @cirr

 

[ahojunk]

China's national economic performance
(People's Daily Online) 11:29, January 23, 2017

 

[TaiShang]

China beats target by creating 13m urban jobs
China Daily, January 24, 2017

China created 13.14 million new jobs for urban residents last year, exceeding the official target, but the country faces challenges this year to create jobs for a historic high of almost 8 million university graduates.

University graduates attend a job fair in Shanghai early this month.[Photo/Xinhua]

The registered unemployment rate in Chinese cities stood at 4.02 percent at the end of last year, down from 4.04 percent three months earlier, Lu Aihong, an official with the Ministry of Human Resources and Social Security, told a news conference on Monday.

He said the country has "obtained obvious achievements" in promoting entrepreneurs to create jobs through the construction of incubation bases, and the government has also encouraged migrant workers to start businesses in their hometowns.

The government pledged to keep the whole-year registered unemployment rate below 4.5 percent and create at least 10 million jobs last year.

According to the Ministry of Human Resources and Social Security, China created 13.12 million jobs in 2015, and the registered unemployment rate in cities stood at 4.05 percent.

"The employment situation this year is stable, but there is also something to be worried about," Lu said.

Though the Chinese laboring population has been declining since 2012, some laborers entered the market comparatively late due to educational reasons, which will keep the demand for jobs high in cities this year, and the rural laborers who are entering cities for work also increase the demand, he said.

He said employment pressure also comes from the task of re-employing workers laid off from a reduction in capacity and the downward pressure on the economy.

Meanwhile, Lu said he is expecting more jobs to be created as the country reforms its economy amid the acceleration of urbanization and the promotion of the Belt and Road Initiative.

This year, there will be 7.95 million university graduates－300,000 more than last year.

Lu said the ministry will encourage graduates to work in grassroots organizations and encourage them to start their own businesses.

Chen Yang, 27, a senior postgraduate at the School of Government, Nanjing University, said he thinks the employment situation this year will be "not that bad".

"As far as I am concerned, one-third of the 2017 graduates have guaranteed themselves a job, though they are still several months away from graduating," he said.

Chen, who hasn't found a job yet, doesn't show much interest in working for grassroots organizations, though it's "possible" that there might be good opportunities there, he said.

 

[TaiShang]

More listed Chinese companies forecast rising profits
Xinhua, January 23, 2017

More than three in four Chinese listed companies forecast higher profits for 2016 compared with a year earlier, providing further evidence of improvement in the country's macroeconomic environment.

Among 1,731 companies that had filed performance estimates to stock exchanges by Sunday, 1,311 companies -- 75.7 percent of the total -- said their unaudited profits rose year on year, according to Wind Info, a Shanghai-based financial information provider.

The proportion is higher than the 65.3 percent of listed companies that reported year-on-year profit rises in the first three quarters of 2016.

Another 20.9 percent of companies said their 2016 profits may drop from a year ago, while the remainder said the changes would be uncertain, Wind Info said.

The stronger profitability coincides with the stabilization of China's economy. The National Bureau of Statistics said Friday that China's GDP expanded by 6.8 percent in the final quarter of 2016, higher than the 6.7 percent for the previous three quarters.

China's producer price index (PPI), which measures costs for goods at the factory gate, jumped 5.5 percent year on year in December to reach a five-year high, showing the country's economy enjoyed steadier footing.

Profit forecasts are issued by listed companies to investors through stock exchanges based on unaudited accounting figures before releasing their audited annual reports between January and April.

 

[TaiShang]

1st Ld: China industrial firms post profit rise in 2016

Xinhua, January 26, 2017

China's major industrial firms ended their days of profit losses and reaped good returns in 2016 on the back of a construction boom, the National Bureau of Statistics (NBS) said Thursday.

Those companies reported an 8.5 percent profit increase in 2016, reversing a 2.3 percent decline registered in 2015, the NBS said in a statement.

NBS statistician He Ping said industrial firms showed remarkable improvement in performance, featuring a rise of 5.97 percent in their profitability.

In December, their profits grew 2.3 percent year on year, slowing down by 12.2 percentage points from the November figure.

 

[ahojunk]

Industrial profits up most in 3 years
2017-01-27 12:04 China Daily/Agencies Editor: Li Yan

Increase in prices of raw building materials fuels growth, data show

Profits for China's industrial firms rose the most in three years in 2016 as a construction boom fueled a rally in prices of building materials from steel to cement, the National Bureau of Statistics said on Thursday.

Strong profit growth of 8.5 percent last year suggests there may be a solid pickup in industrial investment in 2017, although analysts expect China's overall economic growth to cool to about 6.5 percent, down from 6.7 percent in 2016.

A narrower loss for the mining sector, and stronger profit growth in equipment and high-tech manufacturing, contributed to the overall 2016 earnings turnaround, the bureau said.

But part of the reason for the strong numbers last year was largely due to a weak base of comparison from the previous year, while the foundation for further improvement in the industrial sector was not stable, it added.

"Average profit growth over the past two years has not kept up with output growth," the bureau said. "An unreasonable demand structure, difficulties collecting funds and high costs are a drag on corporate profits."

Profits in December rose 2.3 percent year-on-year to 844.4 billion yuan ($122.8 billion), according to data released by the bureau on Thursday, a sharp slowdown from growth of 14.5 percent in November.

The bureau said the slower profit growth in December was due to volatility in oil prices and adjustments by some firms to their product structure.

But the earnings recovery remained uneven across the industrial sector, with coal miners and processors such as steel mills and oil refiners continuing to see sharper gains than other firms.

Profits in the coal mining sector surged 223.6 percent in 2016, while those for iron and steel producers rose 232.3 percent.

Baosteel Group said last week it expected its net profit to rise 770 percent in 2016 from a year earlier. The company is taking over rival Wuhan Steel to create the world's second-largest steelmaker. China's stock market investors have cashed in on the industrial revival. An index tracking the industrial sector has risen about 22 percent since June and reached a 10-and-a-half-month high in November.

 

[ahojunk]

China's nominal GDP growth to accelerate in Q1: report
2017-01-30 08:14 Xinhua Editor: Mo Hong'e

China's nominal GDP growth is expected to accelerate in the first quarter of the year due to signs of improving economic activity and low bases, according to a Chinese investment bank.

The nominal GDP growth, which is calculated without adjusting for inflation, will be 9.5 percent or even higher in the first quarter, said

China International Capital Corp. Ltd. (CICC) in a research report.

Official data put China's nominal GDP growth at 8 percent in 2016, while the real GDP growth with inflation taken out was 6.7 percent.

The CICC attributed its upbeat projection to steady investment, increasing consumption and an expected recovery of exports at the beginning of 2017.

Industrial output will accelerate markedly in January and February partly due to a low base in the same period of last year, said the CICC.

It also predicted higher inflation in the first quarter, citing the low base and an earlier arrival of the Chinese Lunar New Year, when Chinese consumers tend to spend big.

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[TaiShang]

China's steel sector back in the black
Xinhua, January 25, 2017

China's steel sector swung back into the black last year as capacity reduction pushed up steel prices, the top economic planner said on Wednesday.

The profits of 373 steel companies are expected to reach 35 billion yuan (around 5.1 billion U.S. dollars) in 2016, compared with a loss of 84.7 billion yuan in 2015, according to the National Development and Reform Commission website.

Major coal companies will likely see profits more than double to 95 billion yuan last year.

China has been reducing capacity since the beginning of 2016, shutting down inefficient mines and factories, and stopping new projects.

Steel and coal, the two most troubled sectors, made great strides in cutting capacity. A large number of zombie coal mills were shut down. Two major steel companies -- Baosteel, and Wuhan Iron and Steel -- merged into a more competitive corporation.

By the end of October, a total of 45 million tonnes of steel and 250 million tonnes of coal capacity had been cut, meeting annual targets ahead of schedule.

From 2016 to 2020, steel capacity will be cut by 100 to 150 million tonnes, with coal capacity will cut by about a half billion tonnes.

 

[TaiShang]

China starts year of rooster with robust growth momentum
Xinhua, February 3, 2017

China's tourism industry raked in 423.3 billion yuan (61.7 billion U.S. dollars) in revenue during the Lunar New Year holiday. (Xinhua/Wang Xin)

The year of rooster started with a resonant crow for China with impressive economic performances.

As the key engine of the world's second largest economy, consumption posted strong growth in the past week as Chinese people spent more on shopping, dining, travelling and movie-going.

Shops and restaurants across China reported robust sales from Jan. 27 to Feb. 2, with sales in the catering and retails sectors reaching 840 billion yuan (120 billion U.S. dollars), up 11.4 percent year on year, official data showed.

Sales of traditional festival-related goods, jewelry, household appliances and digital products saw rapid growth. Major jewelry stores in Gansu, Hebei and Anhui provinces reported double-digit sales growth, with rooster-themed accessories most favored by consumers.

The week-long Lunar New Year holiday also saw record box office as more Chinese people became movie-goers.

About 3.3 billion yuan (480.5 million U.S. dollars) were taken at the box office from Jan. 27 to Feb. 2, up 10 percent year on year, according to Maoyan.com.

Travel is also popular. During the seven-day holiday some 344 million visitor trips were made, up 13.8 percent from the same period last year, of which about 6.15 million were overseas trips, up 7 percent year on year.

Tourist ventures took 423.3 billion yuan (60 billion U.S. dollars) in revenue during the period, up 15.9 percent.

Behind the spending are changing preferences and ways Chinese people consume. Chinese consumers now want high-quality, personalized and varied products and services.

In addition to strong consumption, the manufacturing sector also expanded. The manufacturing purchasing managers' index (PMI) came in at 51.3 in January, staying in expansionary territory for the sixth month, pointing to a stabilizing economy.

A separate survey of the service sector showed steady growth, with non-manufacturing PMI up 0.1 to 54.6.

Financial, insurance and Internet and software information technology were among the fastest growing service sectors, while transportation, catering and property sectors reported contractions.

Supported by consumer spending and the service sector, China's GDP grew 6.8 percent in the fourth quarter of 2016 and the full-year GDP growth stood at 6.7 percent, well within the target range.