China's economy structural reform progressing ...

[TaiShang]

Changing labor demand shows China manufacturing hub upgrade
Xinhua | Updated: 2017-02-24

GUANGZHOU - In the busy spring recruitment season in China's manufacturing hub of Guangdong, job vacancies in the traditional manufacturing sector decline, but the demand for technical personnel increases.

The general demand for labor in manufacturing has been surpassed by other sectors and tends to decline further, according to a local major recruitment agency.

"I thought it would be good if my son found work as a manager in a factory in Guangdong but, unexpectedly, he tried jobs as a courier and a seller of phones and even real estate," said Liu Guangli, a migrant worker from Central China's Hunan province.

To the father's growing astonishment, the son then resigned from his job in Guangdong and went back to Hunan to start his own business with friends.

Development of China's central and western regions is one factor in the dwindling flow of migrant workers into Guangdong, as there are now many opportunities in their home provinces. Some manufacturers have moved inland to reduce costs.

Another factor is the growing demand for technical personnel and declining need for unskilled or semi-skilled workers, a result of the use of robots, automated assembly lines and the growth of high-tech companies.

"We automated about 70 production lines, which means 60 to 70 percent fewer workers," said Liu Jiwen, vice president of a Shenzhen producer of phone parts. Liu's company once experienced labor shortages, which prompted him to invest heavily in reducing his demand for assembly workers.

Dongguan city, also in Guangdong, is in the same boat. In December 2015, the city's enterprises employed an average of 31 workers each, or 5.3 million workers in total. By December 2016, that average had fallen to around 27.

High-tech firms need high-quality staff. The number of high-tech companies in Guangdong's Pearl River Delta region, a manufacturing center, reached 18,880 in 2016, up 78.8 percent over 2015.

Vacancies for skilled and technical personnel accounted for 18.2 percent of the total in the province last year, up from 15.5 percent in 2015.

Thanks to transformation, the proportion of skilled workers in factories in Hengli township of Dongguan, jumped from 15 percent in 2013 to 35 percent last year, said Liu Yingqiang, deputy head of the local human resources bureau.

Companies are doing more to keep workers happy in order to prevent job-hopping.

"Compared with 2016, the salaries of unskilled workers are almost unchanged, but intermediate technical workers see salaries rise," said Li Hanzhang, director of the Guangzhou human resources market service center.

 

[ahojunk]

Infographic: China's industrial and ICT sectors in 2016
(People's Daily Online) 16:54, February 21, 2017

 

[ahojunk]

'Toughest year' ahead for work to cut capacity
2017-02-27 09:33 | China Daily | Editor: Feng Shuang

Target to eliminate excess production from steel, coal sectors will pose a major challenge in 2017

China will further reduce excessive steel and coal capacity this year, building on the progress it made in 2016, when it cut 45 million metric tons of steel and 250 million tons of coal.

The government will unveil its 2017 capacity reduction target soon, according to Xin Renzhou, deputy director of industrial policy for the Ministry of Industry and Information Technology.

The Government Work Report, to be presented by Premier Li Keqiang on Sunday, is also likely to review the efforts to eliminate excess capacity last year, he said.

Xin said supply-side structural reform will continue to be a priority for the steel sector - as well as a hot topic at this year's meetings of the National People's Congress, the top legislature, and the Chinese People's Political Consultative Conference, the top political advisory body - as the country presses ahead with major economic reforms amid downward pressure.

The mission to cut overcapacity in the steel and coal sectors remains a big challenge, he added.

By 2020, China aims to cut overall steel capacity by 150 million tons and coal capacity by 800 million tons, with most of that done by the end of this year.

The National Energy Administration earlier set a goal for the coal industry to cut capacity by 50 million tons, down by 80 percent on the 2016 target of 250 million tons.

State-owned enterprises managed by the central government have promised to cut excess steel and coal capacity by 5.95 million tons and 24.73 million tons respectively this year, according to the State-Owned Assets Supervision and Administration Commission.

The government also plans to scrap 300 loss-making enterprises as well as 500 enterprises that have been in long-term difficulty.

Provincial governments have published capacity reduction targets, too, including Hebei, Shandong and Shanxi provinces and the Inner Mongolia autonomous region.

Hebei, for example, has said it will cut steel capacity by 31.86 million tons and coal capacity by 7.42 million tons as well as close four "zombie" enterprises, which are economically inviable businesses that survive only because of financing from governments or banks. Last year, Hebei cut about 33 million tons from its steel capacity.

"2017 will be our toughest year for capacity reduction," said Zhang Qingwei, the governor of Hebei, which produces one-fourth of China's iron and steel.

Xin said companies should focus on eliminating substandard steel.

Xu Lejiang, the vice-minister of industry and information technology, said at a recent news conference that China will not waver in its resolve nor slacken its efforts to implement the strategy.

To get steel companies to further cut capacity, the central government is encouraging them to sign long-term contracts with coal and downstream steel consumers while improving the quality of their products.

The measure, set out in a document issued by five ministry-level bodies, is aimed at stabilizing steel prices, which have seen fast increases of late, and further cutting industrial overcapacity.

Despite rises in the spot and future prices of steel in the short term and a recent recovery in output and sales, steel companies should make further efforts to cut capacity to support economic growth, according to a report by the National Development and Reform Commission, the top economic planner, and four ministries.

The report said China's oversupplied steel sector has seen years of plunging prices and factory shutdowns due to the sluggish economy.

Jiang Zhimin, president of the National Coal Industry Association, said the goal for the coal sector may look lower this year, but in reality the challenge is even more daunting.

"Unlike last year, when many mines were shut down and no longer producing, or were about to be closed, this year's capacity reduction target is aimed at a great number of coal mines that are still in operation," Jiang said.

Five target areas

Power: The central government has said it is essential to further reduce excess capacity in this sector. The average annual utilization rate of the nation's power-generation equipment fell last year to the lowest level since 1964.

The China Electricity Council has forecast that the growth rate in power consumption will decrease this year.

"Power enterprises will face an overall loss this year," according to Qiao Baoping, president of China Guodian Corp, one of the five major power enterprises. The company has pledged to reduce its investment in thermal power (it has canceled six projects) to cut production and increase investment in clean energy.

Nonferrous metals: China aims to cut surplus capacity of nonferrous metals like aluminum. In a plan drafted by the Ministry of Environmental Protection to tackle air pollution, one target is to cut the total aluminum production capacity in Hebei, Shandong, Henan and Shanxi provinces by 30 percent, 21st Century Economic Herald reported.

The four provinces account for one-third of the total national capacity. The main types of nonferrous metals are aluminum, copper, brass, silver and lead.

Oil refining: Like with steel and coal, growth in capacity in this sector has continuously outpaced growth in demand in China. Analysts expect the glut in refined fuels could last for years, partly because of the slowing demand domestically and a surfeit of refining capacity. Cutting overcapacity remains the biggest challenge for refiners, according to Li Li, director of energy research at Independent Chemical Information Service China. The nation has issued quotas of 81.93 million metric tons of crude oil to 22 refineries to tackle the problem.

The crude oil processing capacity reached 521 million tons in 2015, operating at only 75 percent of full capacity, well below the global operating rate, said Su Jun, a general manager at China National Petroleum Corp.

Cement: A fund is expected to be launched this year to encourage cement producers to cut capacity, as the nation attempts to reduce overcapacity in the building materials sector.

Kong Xiangzhong, head of the China Cement Association, told China Securities Journal the fund will be used to reward manufacturers that cut capacity. The industry, which faces a glut of supply and low market concentration, needs to explore market-oriented methods to carry out supply-side reform, Kong said.

Data from the National Bureau of Statistics show China produced 2.4 billion metric tons of cement last year, up by 2.5 percent on 2015. Yet the output from Beijing and nine other provincial regions decreased year-on-year.

Shipbuilding: The Ministry of Industry and Information Technology set out a plan in January to cut excess capacity and push industrial transformation in this sector.

It states that small and medium-sized shipyards that have low manufacturing skills and poor supervision should be weeded out, while competitive manufacturers should be encouraged to expand through reorganization or mergers and acquisitions.

Li Zhengjian, deputy secretary-general of the China Association of the National Shipbuilding Industry, said companies who do not meet safety and environmental standards or have high accident rates should be targeted in efforts to cut overcapacity.

Chongqing has said it is planning to cut capacity by 20,000 dead weight tons over the next three years.

 

[TaiShang]

China's manufacturing activity expands for 7th month
Xinhua, March 1, 2017

China's manufacturing sector expanded for the seventh month in a row, adding evidence that the world's second largest economy is stabilizing amid uncertain global outlook.

The country's manufacturing purchasing managers' index (PMI) came in at 51.6 percent in February, 0.3 percentage points higher than that recorded in January, according to data released Wednesday by the National Bureau of Statistics (NBS).

A reading above 50 indicates expansion, while a reading below 50 reflects contraction.

NBS statistician Zhao Qinghe said February's reading remained above 51 percent for five months in a row and pointed to steady expansion of the manufacturing sector.

The sub-index for production was 53.7 percent, 0.6 percentage points higher than that recorded in January.

The sub-index for new orders was up 0.2 percentage points to 53 percent.

Zhao attributed the acceleration of production and new orders to the recovery in market demand and robust production activities.

In addition, the sub-index for equipment manufacturing sector expanded to a three-year high of 53.3 percent, 1.7 percentage points higher than the overall manufacturing industry.

 

[ahojunk]

China creates over 13 million new urban jobs for 4 consecutive years
By Li Yan (People's Daily Online) 15:28, March 01, 2017

China creates over 13 million new urban jobs for 4 consecutive years​

The latest figures from the Ministry of Human Resources and Social Security (MHRSS) show that China managed to create more than 13 million urban jobs for four consecutive years, despite downward pressure and industrial restructuring in the Chinese economy.

The registered unemployment rate in Chinese cities was relatively low over the past four years, according to Yin Weimin, head of MHRSS, at a press conference held by the State Council Information Office on March 1. The stable employment situation can be attributed primarily to four factors, Yin said.

First is sustained economic development, which lays a foundation for stabilizing and expanding employment. Last year, China saw a 6.7 percent GDP growth and a total economic volume exceeding 74 trillion RMB ($10.8 trillion), Yin pointed out.

The second reason, according to Yin, is that the industrial structure is constantly being optimized. The tertiary industry can create on average 20 percent more jobs than the secondary industry. Last year, the tertiary industry’s contribution to China’s GDP was as high as 51.6 percent, 11.8 percent higher than that of the secondary industry.

Reform, the third factor, has continuously yielded large dividends over the past few years. The current government has deepened administrative reform and transformed government functions, and launched a series of business reforms in addition to cultivating mass entrepreneurship and innovation. With the emergence new technologies, new types of business, and new growth impetus, current forms of employment have consequently been diversified. Entrepreneurs have also created jobs.

The implementation of positive employment policies and a public employment service system at all levels of government contributes to the stable employment situation as well, Yin noted.

 

[TaiShang]

China creates over 13 million new urban jobs for 4 consecutive years
By Li Yan (People's Daily Online) 15:28, March 01, 2017

View attachment 380961
China creates over 13 million new urban jobs for 4 consecutive years​

The latest figures from the Ministry of Human Resources and Social Security (MHRSS) show that China managed to create more than 13 million urban jobs for four consecutive years, despite downward pressure and industrial restructuring in the Chinese economy.

The registered unemployment rate in Chinese cities was relatively low over the past four years, according to Yin Weimin, head of MHRSS, at a press conference held by the State Council Information Office on March 1. The stable employment situation can be attributed primarily to four factors, Yin said.

First is sustained economic development, which lays a foundation for stabilizing and expanding employment. Last year, China saw a 6.7 percent GDP growth and a total economic volume exceeding 74 trillion RMB ($10.8 trillion), Yin pointed out.

The second reason, according to Yin, is that the industrial structure is constantly being optimized. The tertiary industry can create on average 20 percent more jobs than the secondary industry. Last year, the tertiary industry’s contribution to China’s GDP was as high as 51.6 percent, 11.8 percent higher than that of the secondary industry.

Reform, the third factor, has continuously yielded large dividends over the past few years. The current government has deepened administrative reform and transformed government functions, and launched a series of business reforms in addition to cultivating mass entrepreneurship and innovation. With the emergence new technologies, new types of business, and new growth impetus, current forms of employment have consequently been diversified. Entrepreneurs have also created jobs.

The implementation of positive employment policies and a public employment service system at all levels of government contributes to the stable employment situation as well, Yin noted.

This means roughly 60 million new jobs created over the past four years. Quite an achievement given global economic situation. More than the population of many countries and despite the ongoing deep, structural reforms that include closing down of inefficient factories and reemploying thousands of old industry workers.

 

[TaiShang]

 

[TaiShang]

 

[TaiShang]

Nation is balancing reforms and risks: NDRC
China Daily, March 20, 2017

Vice-Premier Zhang Gaoli delivers a speech on Saturday at the opening session of the three-day China Development Forum in Beijing. [Photo/China Daily]

China will continue to deepen its supply-side structural reform to address economic imbalances while holding the bottom line to contain risks in the financial and property markets, the head of the top economic planner said on Sunday.

He Lifeng, minister of the National Development and Reform Commission, warned about the tendency of capital abandoning real economic activities and engaging in financial speculation, as well as excessive funds flowing into the property sector.

"The excessive capital has resulted in surging housing prices in some key cities and pushed up the costs for the real economy," he said in a speech at the China Development Forum in Beijing.

Policymakers will use prudent monetary policy, targeted industrial policy and better regulatory coordination to properly dispose of nonperforming assets and to ensure systemic financial risks are avoided, the minister said.

He also vowed to strictly control excessive credit from flowing into the property sector, saying that the government will make efforts to ensure the stable and healthy development of the market by using tailored policies and a long-term mechanism.

In addition, he said, China will continue to cut excess industrial capacity, dispose of loss-making "zombie" companies, and reduce corporate burden and leverage as part of the ongoing supply-side reform to address economic imbalances.

Kristalina Georgieva, chief executive of the World Bank, said at the forum that China's supply-side structural reform is an important and timely move.

"The reform is essential to accelerate growth and create jobs," she said. "It is timely because the effort to stimulate growth is becoming more pressing ... as stagnant global trade, low investment and heightened policy uncertainties made 2016 another difficult year."

She added that more than 30 percent of global growth last year came from China, which was a major achievement.

Jose Vinals, chairman of Standard Chartered, said it was wise for the Chinese authorities to lower their growth target for this year to around 6.5 percent, as it will create more leeway for the reform to focus on internal economic rebalancing.

"Accepting lower growth in the short term, but rebalancing the economy with a better policy mix such as less expansionary monetary policy and more expansionary fiscal policy, will lead China into a more sustainable growth prospect," he said.

"All of the reforms, including reining in corporate leverage, reforming State-owned enterprises and putting more weight on the new economy industries, will pay off in the future high growth."

 

[TaiShang]

China industrial companies post rapid profit growth
(Xinhua) 10:53, March 27, 2017

BEIJING, March 27 -- China's major industrial firms registered a robust profit growth in the first two months, fresh evidence of a stabilizing economy, the National Bureau of Statistics (NBS) said Monday.

The companies reported a 31.5 percent profit increase in January and February from one year earlier, the NBS said in a statement.

 

[TaiShang]

1.88m new jobs created in first two months
Xinhua | Updated: 2017-04-08


BEIJING - China created 1.88 million new jobs in the first two months of the year, a Chinese official said Friday.

"The figure was 160,000 higher than the number created in the same period last year," said Zhang Yizhen, vice minister of human resources and social security, at a press conference.

China's employment situation was generally stable in the first quarter this year, with the unemployment rate in 31 major Chinese cities stable at around 5 percent in January and February, according to Zhang.

China aims to create more than 11 million jobs this year, 1 million more than last year's target, according to this year's government work report.

China added 13.14 million jobs in 2016, and the registered urban jobless rate stood at 4.02 percent at the end of the year.

 

[ahojunk]

China's GDP likely to grow 6.8 percent in Q1: Goldman Sachs
(Xinhua) 11:06, April 09, 2017

BEIJING - China's economy is likely to remain solid in the first quarter of this year, growing 6.8 percent from a year earlier, Goldman Sachs forecast.

The bank said in a research report that purchasing managers' index (PMI) readings from both official and private surveys have implied firm activity growth overall. It expected China's GDP growth to reach 6.6 percent for 2017.

Goldman Sachs expected China's industrial production to rise 6.4 percent in March, slightly higher than the 6.3 percent growth for January and February.

Fixed asset investment growth is likely to remain strong, expanding 8.9 percent in the first three months of the year, unchanged from that in the first two months, according to Goldman Sachs.

It expected weaker auto sales to continue weighing on the country's retail sales, which may increase 9.4 percent in March, slowing from the 9.5 percent growth registered in the first two months.

The bank said growth of the country's consumer price index (CPI), a main gauge of inflation, may rebound to 1.3 percent in March from 0.8 percent in February as distortions from the Chinese New Year effect disappeared.

In the fourth quarter of 2016, China's economy grew 6.8 percent year on year. The Chinese government has targeted growth of around 6.5 percent this year.

The country is scheduled to release its first-quarter economic data, including GDP growth, fixed asset investment, industrial output and retail sales, on April 17.

 

[TaiShang]

Profits show real economy recovery
By Wu Yiyao in Shanghai | China Daily | Updated: 2017-04-10

Vistors check out the booth of Agricultural Bank of China at the 12th International Financial Expo in Beijing. [Photo by A Qing/For China Daily]


Transportation and logistics, food and beverages, and infrastructure-related sectors reported profit surges in 2016, according to annual results filed by companies listed in Shanghai and Shenzhen, showing China's real economy is recovering, and is shifting to the consumption-driven growth model.

By early April, 1,195 companies had released their annual results for 2016, among which 1,142 reported profits.

High-tech companies and the manufacturing sector are expected to perform better in 2017, benefiting from upgraded and expanding consumption trend across the nation, said analysts. Annual results of companies in these sectors are recovering, as shown in their 2016 annual results.

Banks, as usual, are among the profit leaders in the 2016 A-share market. The top five most profitable companies of all A-share listed companies are Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, and Bank of Communications, with combined profit of more than 530 billion yuan ($77 billion).

Analysts said that banks' annual results showed that consumption-related loans are growing fast, reflecting the overall trend of China's economic growth pattern which is shifting from intensive investment-driven to consumption driven.

"For example, personal consumption loans, such as for cars, will expand soon," said a research note from Haitong Securities.

Sheng Laiyun, spokesman with the National Bureau of Statistics, said last month that major indexes from the beginning of the year show that the real economy is getting more "active", and profits are growing.

He said in 2017, as supply-side reform deepens and pro-real economy market conditions improve, there will be more demand for industrial output.

For banks, lending to enterprises, particularly manufacturers, are likely to reach higher levels than in 2016, according to Bank of Communications.

Transportation and logistics companies also reported fast growing profits in 2016. Shanghai International Port Group reported net profit of 6.94 billion yuan, a 5.74 percent year-on-year increase and Nanjing-Shanghai High Way reported profit of 3.35 billion yuan, a 33.49 percent year-on-year increase.

The top 100 most profitable entities in the A-share market also included several food and beverage companies and pharmaceutical and healthcare companies.

Yili Dairy reported a 5.6 billion yuan profit, a 22.24 percent year-on-year increase and Chinese white liquor maker Wuliangye reported 6.79 billion yuan in profits, a 9.85 percent year-on-year increase.

Shanghai Pharma's net profit in 2016 was 3.2 billion yuan, accounting for 11.1 percent year-on-year growth, and Fosun Pharma's net profit was 2.8 billion yuan, a 14.05 percent year-on-year increase.

According to Fan Gang, Chinese economist and member of the monetary policy committee of the People's Bank of China, the central bank, consumption-driven growth will contribute a larger portion to overall economic growth.

"Currently most consumption in China is focused on products, such as food, garments and healthcare products and there is little consumption for services, showing that China's consumption growth is still in its initial stage, with considerable room for growth," said Fan.

In the first quarter of 2017, the A-share benchmark index, the Shanghai Composite Index, grew 3.43 percent and the Shenzhen component index grew 1.68 percent year-on-year, despite volatility.

"In the second quarter, opportunities weigh over risks as consumption, the Belt and Road Initiative and deepened State-owned enterprises reforms will further take effect, bringing benefits to the overall A-share market, attracting more capital to the market and improving liquidity," said a research note from Everbright Securities

@Shotgunner51 , @Jlaw

 

[TaiShang]

**
Chinese SMEs post 26.3% rise in net profits last year
Xinhua, April 10, 2017

China's small and medium-sized enterprises saw rising net profits for 2016, despite slowing growth in the world's second-largest economy.

Average net profit of 1,598 SMEs listed on the National Equities Exchange and Quotations hit 21.05 million yuan (US$3 million) last year, up 26.29 percent year on year.

The SMEs, which delivered their annual reports at the end of March, posted an average annual business revenue of 212 million yuan in 2016, up 25 percent, according to NEEQ.

Total assets of each company averaged 464 million yuan at the end of 2016, up 23.9 percent year on year.

SMEs ramped up their spending on research and development, which climbed 8.25 percent to 11.58 billion yuan in 2016, with strategic emerging industries investing a total 4.03 billion yuan, up 58.59 percent year on year.

NEEQ, also known as the New Third Board, was launched in Beijing in late 2012 to supplement the main Shanghai and Shenzhen bourses. It is seen as an easy financing channel for small businesses with low costs and simple listing procedures.

 

[Jlaw]

Profits show real economy recovery
By Wu Yiyao in Shanghai | China Daily | Updated: 2017-04-10

Vistors check out the booth of Agricultural Bank of China at the 12th International Financial Expo in Beijing. [Photo by A Qing/For China Daily]


Transportation and logistics, food and beverages, and infrastructure-related sectors reported profit surges in 2016, according to annual results filed by companies listed in Shanghai and Shenzhen, showing China's real economy is recovering, and is shifting to the consumption-driven growth model.

By early April, 1,195 companies had released their annual results for 2016, among which 1,142 reported profits.

High-tech companies and the manufacturing sector are expected to perform better in 2017, benefiting from upgraded and expanding consumption trend across the nation, said analysts. Annual results of companies in these sectors are recovering, as shown in their 2016 annual results.

Banks, as usual, are among the profit leaders in the 2016 A-share market. The top five most profitable companies of all A-share listed companies are Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, and Bank of Communications, with combined profit of more than 530 billion yuan ($77 billion).

Analysts said that banks' annual results showed that consumption-related loans are growing fast, reflecting the overall trend of China's economic growth pattern which is shifting from intensive investment-driven to consumption driven.

"For example, personal consumption loans, such as for cars, will expand soon," said a research note from Haitong Securities.

Sheng Laiyun, spokesman with the National Bureau of Statistics, said last month that major indexes from the beginning of the year show that the real economy is getting more "active", and profits are growing.

He said in 2017, as supply-side reform deepens and pro-real economy market conditions improve, there will be more demand for industrial output.

For banks, lending to enterprises, particularly manufacturers, are likely to reach higher levels than in 2016, according to Bank of Communications.

Transportation and logistics companies also reported fast growing profits in 2016. Shanghai International Port Group reported net profit of 6.94 billion yuan, a 5.74 percent year-on-year increase and Nanjing-Shanghai High Way reported profit of 3.35 billion yuan, a 33.49 percent year-on-year increase.

The top 100 most profitable entities in the A-share market also included several food and beverage companies and pharmaceutical and healthcare companies.

Yili Dairy reported a 5.6 billion yuan profit, a 22.24 percent year-on-year increase and Chinese white liquor maker Wuliangye reported 6.79 billion yuan in profits, a 9.85 percent year-on-year increase.

Shanghai Pharma's net profit in 2016 was 3.2 billion yuan, accounting for 11.1 percent year-on-year growth, and Fosun Pharma's net profit was 2.8 billion yuan, a 14.05 percent year-on-year increase.

According to Fan Gang, Chinese economist and member of the monetary policy committee of the People's Bank of China, the central bank, consumption-driven growth will contribute a larger portion to overall economic growth.

"Currently most consumption in China is focused on products, such as food, garments and healthcare products and there is little consumption for services, showing that China's consumption growth is still in its initial stage, with considerable room for growth," said Fan.

In the first quarter of 2017, the A-share benchmark index, the Shanghai Composite Index, grew 3.43 percent and the Shenzhen component index grew 1.68 percent year-on-year, despite volatility.

"In the second quarter, opportunities weigh over risks as consumption, the Belt and Road Initiative and deepened State-owned enterprises reforms will further take effect, bringing benefits to the overall A-share market, attracting more capital to the market and improving liquidity," said a research note from Everbright Securities

@Shotgunner51 , @Jlaw

Recently SOE are beginning to show profit in China. Reforms are working.