More Venture Capital Abroad to Hog Keeping

December 24th, 2008

Asian Agri-Group, New Asian Capital Foundation and China Growth Opportunity Fund jointed hands to form an investment group in Sichuan Province by signing draft agreements with more than 100 farmer households on livestock industry, and the immediate investment with contract value of RMB70 mil. will go to hog,cattle and pisciculture etc, however, the venture investor said that they would pour some RMB200 mil. into the relevant projects in next two years.

Policies on Seven Sectors to Help Big Nine Industries

December 24th, 2008

China has released more favorable policies recently to back up nine industries, which include overall reform of VAT, adjustment of import/export tax rates, establishment of special fund to support technical renovation of industries, enlargement of loan scale to tackle hardship of cash-flow among MSEs, marketing promotion of industrial products by expanding governmental purchase, increase of strategic inventory of vital raw materials, reform of pricing mechanism for oil, gas, chemical fertilizer etc., supporting merger and restructuring of enterprices to encorage them to “go out” for exploring global market.

Negetive rate since seven years

December 12th, 2008

China’s export business dropped to the lowest point in November 2008 since 1999. Export was $114.99 billion, hitting -2.29%, while import was $74.89 billion, fell to -17.9%. It made $40.1 billion trade surplus,  52.5% increased.

Although Chinese government rolled out prompt policies by tax rebate to export businesses, reduce VAT, and business tax, and even to adjust RMB exchange rate, for stimulating exporting, it will not be an effective solution.  For maintaining GDP at 8%, as one of the most priority tasks in 2009, to launch domestic consumption is expected a major measure to save China’s crisis. According to World Bank’s estimate, China’s GDP in 2009 might below 8%, possibly reach 7.5%.

FDI figures

From Jan to Nov, FDI was $86.42 billion. In November it was $5.32 billion, took -36.52% decline continued in five months.

China cuts tax

December 10th, 2008

China’s top policymakers ponder ways to ensure GDP growth of at least 8 percent next year, the government is “very likely” to initiate cuts in business tax to add impetus to the slowing economy. The officials Monday began the three-day annual Central Economic Work Conference in Beijing, which sets the tone for policies next year. The authorities may soon cut business tax for enterprises by 1 percentage point from the current 5 percent, a source close to policymakers told China Daily, without mentioning a timeframe.That would amount to 120 billion yuan ($17.5 billion) worth of tax cuts given annual business tax revenues of more than 600 billion yuan ($87.6 billion) last year.Business tax – distinct from enterprise income tax and value added tax – is levied on enterprises and individuals that provide labor services, transfer intangible assets or sell immovable property in China.It was also reported earlier that policymakers would discuss raising the threshold of personal income tax from 2,000 yuan to 3,000 yuan a month to spur domestic consumption.The government, which announced a massive $586 billion stimulus package on Nov 9, wants at least 8 percent growth to provide employment opportunities to the roughly 10 million people entering the job market each year.Policymakers at the economic conference are expected to reach a consensus on how to implement the stimulus plan in a coordinated manner.“The economic conference this week may be mostly about fine-tuning these stimulus measures and thinking ahead to what next,” said David Dollar, the World Bank country chief for China.“I think the stimulus will be enough to keep China growing at a healthy rate so the focus now should be on good implementation.”“They (policymakers) will be laying out just how big the kitchen sink has to be to re-invigorate the economy,” said Stephen Green, senior Standard Chartered Bank economist in Shanghai. “All the data suggests the economy has further skidded into the fourth quarter.”“How to co-ordinate all that, how to judge its effectiveness, and what is next in terms of policy will likely all be discussed at the conference,” Green said.The major task at the conference is for policymakers to take concerted steps to keep the economy from being derailed by the global financial crisis and economic slowdown.“Above all else, the aim of the meeting will be to get everyone on the same page – growth, above all else,” he said, adding that the effect of the stimulus policies would surface in the second quarter of next year.The nation’s economic growth dropped to 9 percent in the third quarter, compared with 11.4 percent last year. The global economic slowdown may even drag down China’s growth to 7.5 percent in 2009, the lowest in two decades, the World Bank forecast earlier.The Chinese Academy of Social Sciences, however, was more upbeat in a report last week, tipping growth of around 9 percent next year.

Paving Road for Southwest

December 6th, 2008

More than 13 state projects for express way of 1,600 km should have been completed by 2012 in Sichuan Province, Panda hometown and the total length of express way will surpass 3,500 km, hopefully, even up to 3800 km in the province, and by then 12 well-pasted express ways will link Sichuan with its neighboring provinces. At the same time, about 115,000 km of country high way are also to finish.

December 6th, 2008

Car park workers remove wheels to thwart thefts (Chongqing Morning News)

Attendants of an open-air car park in suburban Chongqing began removing car tires in a bid to deter thieves who had been targeting the area.

Li, one of the attendants, says felons had long targeted cars temporarily detained by traffic police overnight.

He also complained that he once had to pay 1,640 yuan for the loss of several number plates during his first eight days on the job.

Li’s boss applauded the measure and keeps an eye on the stock of removed tires until the car owners arrive to collect their cars.

The 5th China-US Strategic Economic Dialogue (China Daily)

China should prepare for the worst and take “timely and effective measures” to overcome the global financial crisis and maintain growth and stability, the central bank governor said on Thursday.

Speaking at the fifth China-US Strategic Economic Dialogue (SED), Zhou Xiaochuan, however, expressed confidence that China would sustain its growth and financial stability. Nevertheless, policymakers “need to prepare for the worst,” Jin Qi, head of the bank’s international department, quoted Zhou as having said.

“Excessive consumption in the US and over-reliance on debt are the key reasons behind the (global financial) crisis,” Zhou, said, urging the US to increase savings and reduce its budget and trade deficits.

“For China, the key to maintaining stable growth is increasing domestic demand,” Zhou said. “We should use the crisis as an opportunity to increase consumption and expedite the transformation of China’s development pattern.”

The country’s economy has been slowing down over the past few months, largely because of a slump in the property market and shrinking overseas demand.

On the global front, things do not look like improving in the near future because major economies such as the US, Japan and many European Union countries have entered into recession.

The country’s GDP growth dropped to 9 percent in the third quarter of this year, the lowest in five years.

The forecast for next year does not look brighter either because the World Bank has slashed it to 7.5 percent, the lowest in almost two decades. Government authorities, though, have said the country could have a growth rate of 9 percent next year.

“China has announced a series of measures to spur domestic demand, which is a significant move for world economic and financial stability,” Vice Premier Wang Qishan said in his opening speech at the SED Thursday. “We hope the US takes necessary steps to stabilize the financial market and the economy.”

Apart from the $586-billion stimulus package, the government will also use further interest rate cuts and other necessary measures to maintain ample liquidity.

The announcement came on Wednesday, a day before the European Central Bank cut its benchmark lending rate from 3.25 to 2.5 percent, the steepest rate cut in the past decade.

The sudden fall of the yuan against the US dollar has triggered speculation over further revaluation of the Chinese currency. The yuan recorded its highest one-day fall against the dollar on Monday, and has being sliding since. It closed at 6.88 to a dollar on Thursday, down from its peak of 6.80 on Sept 23.

Commerce Minister Chen Deming, however, said at the SED that the yuan’s movement this week was normal and its fall can be attributed to the rise of the dollar against other currencies.

A top US Treasury official said at a media briefing at the SED on Thursday that “China’s currency reform has progressed well in the past two years” and the “Chinese leadership” is committed to the reform.

“Our focus is still on the long term,” the official said when asked about the yuan’s sudden fall. “We’ve seen a continued rise of the yuan over time.” 

  • 9% GDP growth tipped for next year (China Daily)

China could next year notch up growth of 9 percent, or even above, as the world’s fourth-largest economy pulls out all stops to stimulate investment and consumption, the nation’s top think tank said on Tuesday.

“I think China can achieve 9 percent GDP growth, or even higher,” said Wang Tongsan, a senior economist at the Chinese Academy of Social Sciences (CASS), at a news conference releasing the academy’s annual economic forecast, or Blue Book.
“The possibility is quite high – it could be at least 70 percent possible that GDP growth reaches 9 percent next year.”

The economic forecast research team said in an article in the CASS blue book that next year, economic growth could reach 9.3 percent, compared with this year’s estimated 9.8 percent.

Zheng Jingping, an official at the National Bureau of Statistics, also said in an article for the CASS book that growth would be about 9 percent next year.

The forecasts are higher than those made by international organizations.

The World Bank said last month that China’s growth may slow to 7.5 percent next year, the lowest since 1990. Though the bank expects 9.4 percent growth this year, it said the global financial crisis would take a greater toll in 2009.

An Organization of Economic Cooperation and Development report said China’s growth next year could be 8 percent, while the International Monetary Fund put it at 8.5 percent.

The CASS’ Wang said the government’s forceful stimulus moves would make a big difference next year. “We believe the pro-active policies to stimulate domestic demand will work and the effect will be impressive,” Wang said, referring to the country’s $586 billion stimulus plan announced on Nov 9.

Local governments have also pledged to follow suit to help prevent the national economy from sliding further after it registered an annualized 9 percent growth in the third quarter of this year, compared to nearly 12 percent for last year.

The central bank slashed the benchmark interest rates by 1.08 percentage points last week, the steepest cut in 11 years, to reduce borrowing costs for enterprises and individuals, and bolster confidence.

More supportive fiscal and monetary policies are believed to be in the pipeline, analysts said.

Given the serious global financial turmoil and economic slowdown, China would not be unscathed but “we should be confident in China’s stable economic growth, or relatively high growth”, Wang said.

He said there are two prerequisites for the GDP to grow by at least 9 percent: The US economy does not significantly worsen and China’s pro-growth economic policies are well implemented.

The CASS team also forecast that China’s consumer price index (CPI), the key gauge of inflation, could drop to 4.3 percent next year from more than 6 percent this year.

“The falling trend of CPI is entrenched,” said Wang, adding it would not rebound in the coming months.

Zheng from the NBS put CPI growth much lower for next year, at around 3 percent.

The urban jobless rate, meanwhile, could rise to 4.5 percent next year from this year’s 4 percent, according to a forecast by Fan Jianping, an economist from at the State Information Center.

Favor policies for farmers

December 6th, 2008

 Rise up Corps Purchase Price

China has decided to raise the bottom purchase price for crops to promote farmers’ income, and tried hard to eliminate the bottleneck of consumption by broading more fields for expenditure in order to stablize car,housing and stock markets. All those measures including turning investment into consumption will enhance consuming capabilites among middle or lower class and the consuming aspiration of upper class so as to enlarge the demand for light industry, textile, real estate, cars etc,which,indirectly, will trigger the demand for business to be invested. China has recently released 10 tangible measures to restore its economy. All relevant policies will effectively promote domestic demand, enthusiastically help to rectify eco-structure to run its economy on stable and yet quicker tracks.

Paving Roads for Southwest

December 6th, 2008
  • Paving Roads for Southwest

More than 13 state projects for express way of 1,600 km should have been completed by 2012 in Sichuan Province, Panda hometown and the total length of express way will surpass 3,500 km, hopefully, even up to 3800 km in the province, and by then 12 well-pasted express ways will link Sichuan with its neighboring provinces. At the same time, about 115,000 km of country high way are also to finish.