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China economy under downward pressure: finance minister

08/04/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 29 (Greenpost) — The country’s economy is stabilizing and recovering, but still facing significant downward pressure, Chinese Finance Minister Lou Jiwei said on Wednesday.

Speaking at a national financial work conference, Lou said the ministry will continue to ensure funds to the construction of major projects to offer fiscal support, while cutting tax and administrative fees to lower companies’ costs.

China’s economy posted a better-than-expected growth of 7 percent in the second quarter of the year. The growth, though unchanged from the first quarter, was its lowest level since the global financial crisis.

Lou said the ministry will continue to promote a public-private partnership (PPP) model for investment, regulate local government debt and promote “market-oriented transformation” of local government financing vehicles in order to turn these local government-backed investment bodies into independent entities.

He also urged further advances in the country’s tax reforms, which includes replacing turnover tax with value-added tax and implementing consumption tax and resource tax reforms. Enditem

“The bid alone will boost participation in winter sports across the country,” Zhang said. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

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News Analysis: Information Silk Road brings regional enterprises closer

07/29/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 19 (Xinhua) — When Damir Karcas, who markets drinks from Serbia, came to southeastern China to promote his products a month ago, he knew little about selling on Chinese e-commerce sites, an increasingly popular venue for food and beverage sales.

“I paid little attention to market information in this field before, but it seems necessary to keep yourself tuned in to changing market conditions in China,” said Karcas.

As infrastructure development progresses steadily along the China-proposed Belt and Road, a trade and infrastructure network that connects Asian, European and African countries, breaking invisible barriers of information asymmetry stands out as a key task.

Failures haunt many firms that venture overseas due to misunderstandings with local stakeholders and ignorance of the local regulatory and cultural environment.

Information asymmetry has become the top issue facing overseas investment by businesses as many firms are ignorant of possible risks, according to Jia Huai, deputy head of the economic information department of the China Council for the Promotion of International Trade.

“It is reality that information and communication gaps create differences among individuals, groups and countries and misunderstandings about specific issues or projects when there is little or incorrect information,” said Aman Ullah Khan, Chairman of the Pak-China Business and Investment Promotion Council.

Jia suggested that enterprises at home and abroad establish an information exchange platform to develop trade and investment strategies according to the target country’s political, economic, cultural and social conditions.

An open and sound information-sharing mechanism should be based on big data and include databases, business connection platforms, consulting services as well as information collection, publication, screening and other customized services to help investors gain insight and expand their influence in their targeted markets.

Chinese government organizations and media groups are working to bridge the information gap and build an Information Silk Road. The State Information Center is constructing databases of countries involved in the initiative, and Xinhua News Agency rolled out a new line of information products to help global investors form better partnerships under the Belt and Road Initiative.

China’s bilateral trade with countries along the Belt and Road Initiative remained robust amid downward economic pressure and reached close to three trillion yuan (490.2 billion yuan) in the first half of 2015, about one-fourth of total trade volume.

“To avoid misconceptions and misunderstandings and to increase trust among stakeholders, partners, and investors, there should be fair and accurate flow of information. With the passage of time, economic and financial information will be as important as investment and other projects,” Khan added. Enditem

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Interview: Chinese economic data true to facts: vice FinMin

07/29/2015 北欧绿色邮报网 Leave a comment

LONDON, July 20 (Xinhua) — China’s economy posted 7 percent growth year on year in the second quarter of 2015, Chinese Vice Finance Minister Zhu Guangyao told Xinhua in a recent interview here, emphasizing the data was realistic and serious.

Analyzing the data released by China’s National Bureau of Statistics (NBS), Zhu pointed out that China’s economic growth was 7.4 percent last year, and the growth rate remained above 9 percent in the past for a long time. Therefore, the 7-percent growth rate shows China’s economy is facing pressures, he said.

On the international side, China is in a severe external economic environment, including a divided trend of monetary policies in different developed economies and geopolitical risks. Zhu said the complex external environment has a negative impact on China’s economy.

On the domestic side, China has to deal with the slowdown in economic growth, making it difficult to make structural adjustments, and absorb the effects of previous economic stimulus policies.

Besides, the 7-percent growth rate also reflects China’s adjustment measures are being gradually put in place, Zhu stressed. The most important thing is to adhere to the proactive fiscal policy and a prudent monetary policy.

Zhu noted that China’s report on the work of the government showed four key factors that constitute proactive fiscal policy:

Firstly, the government budget deficit for 2015 will increase modestly, which means the deficit to gross domestic product (GDP) ratio will rise from last year’s 2.1 percent to this year’s 2.3 percent.

Secondly, the government will continue to make structural tax reductions and cut fees across the board so as to further lighten the burden on enterprises, particularly small and micro businesses.

Thirdly, the government will improve the mix of budgetary spending, redouble its efforts to put government funds on hand into use, and strengthen the effectiveness of government spending.

Fourthly, the supply of public goods and services will increase.

As to the prudent monetary policy, Zhu indicated that the key is to stabilize renminbi’s (RMB) value, control inflation, and support the real economy. The RMB exchange rate has reached a balanced level, and China’s balance of payments is in an appropriate range. “We have made significant progress,” he said.

Zhu told Xinhua that in the first half of this year, China’s consumer price index (CPI) edged up 1.3 percent y-o-y, fixed-asset investment grew 11.4 percent y-o-y, retail sales of consumer goods rose 10.4 percent y-o-y, urban employment increased by 7.18 million, and the contribution of consumption toward economic growth rose to 60 percent.

“This is indeed very healthy data,” said Zhu.

Furthermore, the value added of the service sector increased to 49.5 percent of the GDP in the first half of this year, suggesting China is making progress in economic structural adjustment.

Zhu has full faith in China’s economy. “With strong macroeconomic policies, we are confident to achieve 7-percent growth target this year and keep the potential growth between 7-8 percent during the 13th five-year plan,” noted Zhu.

According to the latest forecast from the International Monetary Fund (IMF), global economic growth is projected at 3.3 percent in 2015. China’s contribution to the global economy is expected to reach 28.5 percent this year, said Zhu. Enditem

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Xinhua Insight: A wave of startups raises tide of entrepreneurship

07/29/2015 北欧绿色邮报网 Leave a comment

Xinhua Insight: A wave of startups raises tide of entrepreneurship

BEIJING, July 20 (Xinhua) — Guo Xin, 23, an undergraduate at Nankai University, feels no pressure from China’s economic slowdown. Instead, he sees positive changes encouraging startups.

“The economy is facing great downward pressure, but for entrepreneurs, the business environment has never been better,” Guo told Xinhua.

Guo is CEO of a an Internet finance company and has established a start-up each year for the past three years.

Like Guo, hundreds of thousands of young Chinese have started their own companies or projects in the past year or two as a startup frenzy grips the nation. Partly thanks to serious reforms, especially business registration reform, it is easier than ever to start a business.

China is entering a new stage of slower but more resilient growth, which President Xi Jinping has called the “new normal.” The essence of the “new normal” is an improved economic structure that relies on services, consumption and innovation.

STARTUPS SHOOT UP

China’s GDP growth held steady at 7 percent in the first half this year, but another figure — the number of newly registered enterprises — is even more impressive. New registrations jumped 19.4 percent from a year ago to 2.1 million in H1.

“Creative, entrepreneurial spirit has been stoked by business reform,” said Yu Fachang with the state administration for industry and commerce (SAIC).

By the end of June, there were around 74.2 million businesses in China, including agricultural concerns and individual traders, up 7 percent from the end of 2014, SAIC data showed.

The number of new firms registered in the service sector accounted for 80.3 percent of the increase, or 1.6 million during the first six months, 22.6 percent more than in the same period last year.

This, Yu said, reflects a better economic structure, with the service sector playing its prescribed “bigger role” in growth and job creation. The sector has become the biggest driver of growth, expanding 8.4 percent in H1 and accounting for 49.5 percent of GDP.

Wang Bao’an, head of the National Bureau of Statistics, believes that a new wave of mass entrepreneurship and innovation is in the offing, given the huge success of many startups. The drive for mass entrepreneurship and innovation along with repeated cuts to red tape are feeding creativity and market vitality, Wang told the People’s Daily last week.

CONTINUOUS REVOLUTION

Premier Li Keqiang has repeatedly promised that the government will revolutionize itself to promote mass entrepreneurship and innovation.

In streamlining business registration since 2014, China has removed minimum capital requirements, replaced annual company inspections with a reporting system and loosened site requirements for businesses. Last month, the government announced that those wishing to start their own business would only need to apply to one office for the three essential business certificates, rather than the current regime of visits to three different offices. Business licenses, tax registration certificates and organization code certificates will all now be issued by the SAIC.

Guo Xin already feels the better business environment. “Entrepreneurship and innovation are state policies and there are many new government business incubators to assist new firms or projects,” he said, adding that other changes included easier financing, clearer procedures for starting a business, a much larger number of new entrepreneurs and an easier get-out processes for those who fail.

“Encouraging mass entrepreneurship and innovation has activated hundreds of thousands of cells in the market, which helped macroeconomic stabilization,” Premier Li told a conference earlier this month.

THE FOURTH WAVE

Economist Gu Shengzu believes that lowering the threshold for starting businesses, removing restrictions and the rise of the Internet economy may have created a “perfect storm” of entrepreneurship in China.

“Entrepreneurship and innovation are twins. To the Chinese economy, they mean not only a better today, but a better tomorrow and the day after tomorrow,” Gu told Xinhua.

The innovative power of the Chinese people is an important engine for stable growth and a smooth transition to the new normal, he said, calling this “the fourth wave” of mass entrepreneurship in nearly 40 years.

The first wave began in 1978 when reform and opening-up began, with farmers setting up township enterprises and urban dwellers starting small businesses. The second wave swept China after 1992, with about 100,000 public servants resigning from their “jobs for life” to go into business for themselves. The third came when China joined the World Trade Organization in 2001.

The past three waves gave rise to numerous top Chinese entrepreneurs who rose from nobodies to tycoons, including Alibaba founder Jack Ma, Tencent’s Pony Ma and smartphone manufacturer Xiaomi’s CEO Lei Jun.

Gu said the difference between the first three waves and this fourth wave is that the government has actively worked to bring about the arrival of the fourth through aggressive policies.

Wang Bao’an, the statistics chief, wants future reform to focus on four areas: price controls, market entry, R&D and invigorating State-owned firms. He maintains that only more reforms will guarantee future growth. “The policy goals of stabilizing growth, restructuring the economy and achieving innovation-driven growth can be reached only through more reform… The key is to leave the market to allocate resources,” he said. Enditem

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China Voice: Chinese economy on slow, steady track to target growth

07/29/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 21 (Xinhua) — China has handed in its economic performance sheet for the first half of 2015. While it seems lackluster at first glimpse, a closer look reveals encouraging signs.

China’s headline GDP growth stayed flat at 7 percent in Q2 — not an impressive performance compared with the first half of 2014, leading to concerns of continuous slowdown and a possible hard landing.

However, these concerns have mischaracterized the current state of the Chinese economy.

The economy, which is in a “new normal” stage of slower but steadier growth, is showing signs of bottoming out.

The property sector, a key contributor to economic growth, saw its sales grow strongly in June and Q2, and infrastructure investment accelerated in June for the first time in three months.

Another happy surprise has been the growing role of the services sector. It expanded 8.4 percent in H1 and accounted for 49.5 percent of GDP, an outstanding sign of the country’s success in restructuring the economy and fostering new growth engines.

Chinese President Xi Jinping reassured local governments last week that the economy still enjoys a promising outlook despite downward growth pressure, and the leadership’s confidence is well-grounded.

The economic fundamentals are still sound with stable employment, prices, grain output and income growth.

High-end industrialization and urbanization remain two major drivers to power future growth as China aims to transform itself from the world’s factory into a more sophisticated manufacturer and urbanize rural areas with a current population of about 200 million.

Meanwhile, economic activity is likely to be more robust as the government’s efforts to offer policy and funding support for infrastructure, ease local governments’ financing pressures and loosen monetary and credit conditions gradually pay off in the second half of this year.

Last but not least, the optimism comes from increasing market confidence itself. China’s manufacturing PMI figures have been above the expansion/contraction threshold for the last four months and the industrial entrepreneur confidence index also remained in expansion range in Q2.

All these signs suggest the country’s GDP growth target of about 7 percent is attainable as growth picks up in the second half of this year.

The short-term outlook may still indicate structural slowdown as the economy works through a painful process of adjustment and deleveraging, but as the country’s market-oriented reform, public entrepreneurship and innovation gather steam, the Chinese economy is heading toward its target growth at a slow and steady pace. Enditem

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China Voice: Why does a market-oriented China need a plan?

07/29/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 21 (Xinhua) — The 18th Central Committee of the Communist Party of China has just decided to hold its fifth plenary session in October. High on the agenda is the 13th five-year plan for national development (2016-2020).

Neo-liberals claim that economic planning is a key characteristic of centralized economies and runs counter to the market. Why then, is the world’s second largest economy, already pledged to let the market play a “decisive” role, still clinging to such a national plan?

China’s five-year plans are basically a series of social and economic development initiatives that came into being along with the socialist regime in the middle of the last century. Concerned mainly with government development priorities and growth targets, the plans are a guide for Chinese regulators.

For market economy die hards, a government cannot “plan” an economy, and especially cannot plan how enterprises and the market will operate, but in today’s world, where the concept of free market is considered sacrosanct, no economy functions without intervention.

China has relied on a strong government steering its economy for over 60 years, so it would be unwise not to draw on a tradition that has proven effective in the last few decades, especially with the economy at a crux of upgrades and changes of emphasis.

Critics of economic planning fear that government intervention erodes efficiency, but the market is not right all the time, although it is right most of the time. The free market itself can be a cause of low efficiency, as shown by the number of modern economic recessions. If we countenance government help when the economy needs rescuing, we should, in the same light, acknowledge government support during the good times.

When we eventually see the new five-year plan, we may be pleasantly surprised. The approach may be an inheritance from the age of planning, but it will be no meticulous description of every nut and bolt.

An economic plan does not mean a backing-off from the market economy nor stronger intervention by the state. Rather than a script, it is an extensive agenda of support. The plan may be more micro and specific than the goals set by European and American governments, but such an approach suits the developing economy.

The five-year plan offers investors, home and abroad, a chance to see the government’s priorities and make better plans themselves.

As one of China’s most prominent economists and most active reform advocates Fan Gang put it, the plan “puts forward the development vision and roughs out what the government’s [rather than the market’s] tasks are.” Enditem

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China FDI growth to pick up amid challenges: vice minister

07/29/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 18 (Xinhua) — Foreign direct investment (FDI) in China will rebound in 2015 on the back of a robust expansion in the first six months, Vice Commerce Minister Wang Shouwen has said.

Wang expected the FDI in China for the whole 2015 to grow around four percent to 125 billion U.S. dollars, compared with a 1.7-percent expansion recorded in 2014.

Official data showed on Friday that the FDI rose eight percent in the first half of the year to 68.4 billion U.S. dollars, accelerating sharply from 2.2 percent in the same period last year.

Wang attributed the improvement to China’s continued efforts in widening pilot reforms in free trade areas, fewer government restrictions and active promotion of opening up in certain industries and inland areas.

However, he warned that FDI growth will probably drop in the latter half mainly due to a slow economic recovery in major FDI sources and the tapering of U.S. quantitative easing.

China became a net capital exporter for the first time in 2014 when the FDI was outnumbered by outbound direct investment (ODI).

In the first six months of 2015, China’s ODI grew 29.2 percent to 56 billion U.S. dollars, a higher speed but less volume than that of the FDI. Enditem

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PBOC allows qualified foreign institutions to trade, after filing, interest rate swap on interbank market

07/19/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 15 (Greenpost) – Chinese central bank – the People’s Bank of China (PBOC) released late Tuesday a circular permitting qualified foreign institutions to trade, after filing, interest rate swap and other products on the domestic interbank market.
The decision was made to further boost foreign institutional investors’ investment in domestic interbank market.
Upon publication of the circular, such foreign institutions as foreign central banks, international financial organizations, and sovereign wealth funds are approved to file for recording to the PBOC before trading cash bonds, bond repos, bond lending, bond forwards, interest rate swap, forward rate agreements and others PBOC allows.
What’s more, foreign institutions are free to decide their investment size, according to the PBOC circular. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

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China central bank regulates overseas action in interbank market

07/19/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 14 (Xinhua) — The People’s Bank of China (PBOC), the central bank, issued a notice on Tuesday regulating overseas investment in the country’s interbank market.

Institutional investors, including foreign central banks or monetary authorities, international financial institutions and sovereign wealth funds, are now required to register with the PBOC before investing in the interbank market.

After registration, investors can trade bonds in spot and forward markets, conduct interest rate swaps, and trade forward rate agreements. They will be free to decide on the size of their investment.

“Overseas institutions should be long-term investors and conduct business in China’s interbank market based on the reasonable need to preserve and increase the value of assets,” said the PBOC. Enditem

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China’s electroplating industry to embrace standard management

07/19/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 15 (Xinhua) — Chinese authorities have formulated standards for the domestic electroplating industry and are now collecting public opinions on the standards, according to the Ministry of Industry and Information Technology (MIIT) on Tuesday.

The enterprise scale will be a rigid threshold for access to the electroplating industry, which will help enhance market share of leading enterprises, say analysts.
According to the standards, electroplating enterprises are required to build qualified wastewater treatment facilities and the waste water processed by those enterprises and enterprises with electroplating facilities has to meet environmental standards.
Meanwhile, the total amount of the bath solution should be no less than 30,000 liters during the production process. In addition, annual output value of the electroplating enterprise should be more than 20 million yuan. Enditem

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China to stick to prudent monetary policy: PBOC

07/19/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 14 (Greenpost) — The People’s Bank of China (PBOC), the central bank, on Tuesday announced it “will continue to implement the prudent monetary policy, and improve the financial system’s capability to serve the real economy”.
The PBOC did not change its monetary policy stance after the latest quarterly meeting of its monetary policy committee, saying China will pursue a “prudent and balanced” monetary policy with more attention to striking a balance between tight and loose.
China’s economic and financial developments are stable on the whole, but the complexity of economic and financial operations should not be underestimated, the PBOC said in a statement.
The central bank will use multiple monetary policy tools in a flexible manner and maintain moderate liquidity in the market to ensure loans and social financing register reasonable growth.
The PBOC said it will work to improve reform of the financial system, enhance the system’s operational efficiency, improve the structure of financing, increase the proportion of direct financing, and reduce the cost of social financing.
High financing costs for Chinese enterprises, smaller firms in particular, has held back growth, experts said.
It also called for continued market-oriented interest rate reform, and for the renminbi’s exchange-rate reform to keep it stable.
The global economy is undergoing profound adjustments after the financial crisis, with major economies staging divergent performance, noted the statement.
The United States has witnessed more positive economic signs, while the European and Japanese economies are showing mild recoveries with deflationary risks, but some emerging markets face difficulties, said the PBOC.
The central bank said it will follow global economic and financial developments and the behavior of capital flows.
The quarterly meeting was chaired by PBOC governor Zhou Xiaochuan, also the chairman of the committee, and attended by senior government officials and economists.
China’s economy grew 7.4 percent in 2014, the slowest rate for 24 years. The PBOC has moved to combat the economic slowdown, cutting benchmark interest rates four times since November and lowering banks’ reserve requirement ratio twice since February. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

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China nods local gov’nt bonds to be collaterals for banks’ Treasury cash deposits

07/19/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 14 (Greenpost) – China has put local government bonds into the qualified collaterals pool for banks’ term deposits of Treasury cash on June 30, according to a circular released by the Ministry of Finance and the central bank Tuesday.
As the document says, bonds issued or to be issued by any Chinese local governments can be taken by banks as collaterals for their term deposits of Treasury cash from both the central government and local governments.
However, Chinese banks are required to pledge an amount of local government bonds whose par value is equal to 115 percent of the value of their Treasury cash term deposits to rein in risks.
Analysts held that Chinese regulators took the move to increase the relatively poor liquidity of local government bonds, issues of which was set to boom to at least 1.6 trillion yuan in 2015.
In future, MOF and the Chinese central bank will adjust the scale and proportion of collaterals for products to manage Treasury cash to guarantee safety of Treasury cash. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson

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More firms established in H1 amid improving business environment

07/19/2015 北欧绿色邮报网 Leave a comment

BEIJING, July 15 (Greenpost) — The number of newly registered enterprises in China continued to rise in the first half of 2015, official data showed Wednesday, indicating growing enthusiasm for innovation and entrepreneurship.
The number of new firms jumped 19.4 percent from a year ago to 2.1 million in the first six months, according to data released by the State Administration for Industry and Commerce (SAIC).
“This growth shows that a creative, entrepreneurial spirit has been stoked by business reform,” said Yu Fachang, a SAIC spokesperson.
By the end of June, there were around 74.20 million business in China, up 7 percent from the end of 2014, data showed.
The number of new firms registered in the service sector accounted for 80.3 percent of the total, or 1.607 million during the first six months, the SAIC data showed. This is a 22.6 percent increase compared to the same period last year.
Yu said this reflected improvement in China’s economic structure, with the service sector playing a bigger role in growth and job creation.
Amid an economic slowdown, China has been improving business registration processes since last year, removing the minimum capital requirements, replacing annual company inspections with a reporting system and loosening site requirements for businesses.
Easier market access and an improving environment for businesses also boosted employment at privately-owned enterprises.
A total of 264 million people were working in the private sector as at the end of June, an increase of 14.54 million from the end of 2014. Enditem

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