China - Economic Data & News 16 (May 17 - Dec 18)

Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby behappyalways » Wed Feb 21, 2018 11:41 am

China's 2015 GDP puffed up by fake economic data: Bloomberg Economics
http://www.businesstimes.com.sg/governm ... -economics
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby winston » Wed Feb 21, 2018 6:36 pm

While Washington Spends, China Moves to Cut Its $30 Trillion Debt Load

Beijing's campaign against profligacy has shut down expensive projects and led to talk of painful diets—even bankruptcy—for state-owned enterprises.

So far, the focus has been on excessive lending by shadow banks and acquisitive private conglomerates such as the Dalian Wanda Group and Anbang Insurance Group Co.

Xi’s quest to restrain borrowing by local governments and the nation’s behemoth state-owned enterprises. Last year he called curbing SOE leverage “the priority of priorities” and warned local officials they’d be held accountable “for a lifetime” for building up regional debt.

China’s debt of $30 trillion, roughly 259 percent of GDP, has been powered primarily by massive borrowing by state companies.

State companies command about 40 percent of China’s industrial assets and create almost 20 percent of urban employment.

Domestic deposits of $27 trillion almost equal outstanding debt.


Source: Bloomberg

https://www.bloomberg.com/news/articles ... aretheview
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby winston » Mon Feb 26, 2018 3:16 pm

‘Emperor Xi Jinping’? – China gambles on return to lifetime rule

by Laurent Thomet

Giving all the levers of power to one man could further erode human rights, unsettle other nations and even set up traps for Xi’s rule at home.

His vision of a rejuvenated China with global clout, a prosperous society, a revived Silk Road trade route and a powerful military.

“One is the risk of making bad decisions while surrounded by sycophants,” Shirk said.

“One of the bad decisions is to control information and to control civil society to an extreme extent that the Chinese talent and the middle-class ultimately will find incompatible with their ambitions for their children.”

Xi could get bad advice at a time when China is asserting its territorial claims in the South China Sea and East China Sea, which several Asian nations contest.

“It’s a risk because of China’s international overreaching, more aggressive actions in the South China Sea or handling crises in a way that’s immoderate”.



Source: HK Free Press

https://www.hongkongfp.com/2018/02/26/e ... time-rule/
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby behappyalways » Mon Feb 26, 2018 7:21 pm

The bribe factory

Lessons from China’s rust belt

Debate about how to revive it has implications for the whole country


MAO ZEDONG called China’s three north-eastern provinces—Heilongjiang, Jilin and Liaoning—the country’s “eldest son”. In the Chinese tradition the family’s future rests on that child’s shoulders. But this one is failing in his duties. Debate rages over what has gone wrong and what to do. Many experts conclude that the regional economy needs to be run a different way. Their analysis has lessons for the national economy, too.

Mao made the north-east the centre of heavy industry. It still contains many of China’s largest makers of cars, aircraft and machine tools. In 1978, on the eve of Deng Xiaoping’s economic opening, Liaoning, the most populous of the trio, had the third-largest economy among mainland China’s 31 provinces. Its GDP was 20% bigger than that of Guangdong, the southern province with the biggest population.

But 40 years of rapid national growth have left the north-east lagging behind. By 2016 Liaoning had fallen to 14th among provinces by income and had only one third of Guangdong’s GDP. In 1978-2016 its share of China’s output fell by more than half.

As long ago as 2003 a worried national government drew up a plan “to revitalise the old north-east industrial bases”. It did so by vastly increasing state investment, which jumped from 30% of regional GDP in 2000 to 60% five years later. Even this was not enough. In 2016 the government ladled out another vast dollop of money.

Three unusual features account for some of the region’s problems. First, Maoist planning left it more dependent on state-owned enterprises (SOEs) than other areas. In China as a whole 17% of industrial jobs are in SOEs. In Liaoning the share is 40%; in Heilongjiang 55%.

These firms are inefficient and many are unprofitable. Houze Song of the Paulson Institute, a think-tank, calculates that the return on assets of Liaoning’s SOEs fell from 3% in the mid 2000s to minus 1% in 2015—ie, they were losing money (see chart).

Second, the region, which has 109m people, is ageing fast, even by Chinese standards. At 39.2 years, Liaoning’s median age (the point at which half the population is older, half younger) is the oldest in the country.

The north-eastern provinces have a fertility rate—a measure of how many children women are likely to have—below one. The only other provincial-level areas that have such ultra-low fertility are the cities of Beijing, Shanghai and Tianjin.

The north-east is losing its best and brightest. Jiang Ping graduated in 2015 from the prestigious Number 3 High School in Harbin, the capital of Heilongjiang. She, along with 19 of her 47 classmates, left for universities in Beijing. All of them expect to stay in the capital when they graduate.

In contrast, all but one of her father’s high-school classmates live and work in Harbin. The Harbin Institute of Technology is one of China’s top engineering universities. Only 3% of its alumni stay in the province.

Third, the north-east has an unusually strong collectivist tradition. Song Changtie manages a textile firm in the coastal province of Jiangsu, having lived in the north-east for 30 years. He wrote last year that Chinese people from other regions “cannot imagine how accustomed” north-easterners are to government control. History, he says, explains the difference. The north-east was a puppet state of Japan in 1932-45 and endured autocratic planning for a generation longer than elsewhere.

Still, it is possible to exaggerate the region’s peculiarities. Other provinces have failing SOEs. Half a dozen have declining populations. The region is not, on average, poor (see map). And although it is near the bottom of China’s league table of growth, the north-east is growing fast by the standards of rust belts globally.

According to official figures, its GDP expanded by almost 7% a year in 2011-16, though the Liaoning provincial government admitted to falsifying its accounts for 2011-14, so the official statistics are suspect.

The national interest

All of which makes the question of how to revive the region more than a parochial one. It is, says Andrew Batson of Gavekal Dragonomics, a research firm, “a proxy debate about the future of China: should there be more interventionist industrial policy or more free-market solutions?”

Controversy flared last August with the publication of a 500-page report on Jilin, commissioned by the province from a well-known Chinese economist, Justin Yifu Lin, who was the World Bank’s chief economist in 2008-12. Mr Lin argued that Jilin is a bit like a poor developing country, and that it should take the path followed by successful emerging economies elsewhere.

He said that would require investment in agriculture, pharmaceuticals and industries such as textiles, home appliances and electronics. Mr Lin noted that this is what China’s southern provinces had done, and such industries there were now being displaced by high-tech firms. He said this was giving Jilin (and the north-east generally) a chance to grab them.

His proposal was received politely in official circles, and by a storm of criticism everywhere else. Zhao Gang of the government’s main planning agency said Mr Lin had shown that “it’s not a problem to develop textiles or technology in Jilin.” But Guo Qiang of the Central Party School in Beijing replied that scholars who advise governments are “most unreliable” when they suggest which industries to develop.

Sun Jianbo, the founder of China Vision Capital, a fund-management company, was even more to the point. “The north-east’s problem,” he wrote, “is not industrial structure but institutions and culture.”

Mr Sun argues that it is wrong to regard the north-east as a poor developing area. He says it is a moderately rich stagnant one. Lacking cheap labour, it cannot compete with, say, Bangladesh in attracting low-cost industries. More important, he argues, the north-east has a lethal combination of corruption and political meddling which makes it hard to attract investment of any kind. Investors shy away, he says, “because business scams, government interference and constantly changing policies are universal in the north-east.”

Corruption is indeed rife. It can cost 300,000-500,000 yuan ($47,500-79,000) to buy a job as a nurse at a state hospital in Harbin. That is roughly eight years’ salary, but the bribe is judged worthwhile because a state pension is secure and the job comes with opportunities for kickbacks. In 2016, 45 deputies from Liaoning to the National People’s Congress (China’s parliament) and 523 members of the province’s own assembly were thrown out for bribery.

The prime minister, Li Keqiang, complains that entrepreneurs need 200 stamps or licences to start a business in the north-east, a huge number. Xu Long, a trader in Harbin, sums it up: “Elsewhere the crooks steal baby chicks but fatten them up before killing them. In the north-east they kill the chicks right away and then wonder why no one has enough to eat.”

Political interference produces arbitrary, even disastrous decisions. Take Dandong, on the border with North Korea. The town is best known as a place to watch for sanctions-busting by the regime in Pyongyang. But it enjoys another distinction, as China’s largest private port.

In 2005 the municipal government sold most of its stake in the facility. The new owners began cautiously expanding it. The city fathers, however, soon threw caution to the wind. Ignoring the fact that they no longer owned the port, they announced in 2011 that “the whole city” would support its development. They showered the owners with tax breaks and cheap land.

There followed a period of breakneck growth in spending on the project, financed by easy money from government-owned banks. Investment by the private firm quadrupled in 2011-15 compared with the previous four years. But the debt ballooned as the port’s main business (shipments of coal and steel) collapsed.

With new loans drying up, the company ran out of cash and defaulted on two repayments. Some staff have not received wages for more than a year. “Private”, in this case, did not mean efficient, or even independent.

The massive increase in the central government’s investment in the region has given local officials more economic influence. A car company in Liaoning, called Brilliance Auto, shows what can happen. In 2002 the provincial government took over what was then a thriving concern. It pushed out the founder, cancelled plans to open a new plant near Shanghai and forced the company to buy steel from a steelmaker it itself owns.

Three-quarters of Brilliance’s revenue comes from domestic sales of sedan cars. But its models have lost money since 2002. The sedan division is mired in debt, a remarkable feat in China’s booming car market.

Local governments in the north-east mollycoddle their industrial champions by giving them preference in procurement contracts. But their protectionism has not helped. The Paulson Institute’s Mr Song has looked at sales within China of 36 types of industrial products from Liaoning. He finds that their market share has fallen in 30 of them since 2000, most by between a third and two-thirds.

In the late 1990s exports from the province were growing at roughly the national rate. Since then, they have been growing only two-thirds as fast. There has been a decisive shift away from openness and trade towards local autarky.

There are a few bright spots. JD.com, one of China’s largest delivery companies, is investing 20bn yuan in Harbin, and has put its data-analytics division there. But the broader lessons of the north-east are sobering. It is a place where political connections are more important than efficiency, where local governments have wasted vast quantities of money, and investment-led growth has encouraged local protectionism.

At the national level, Mr Xi is making politics paramount, protecting SOEs and keeping government investment high. The moral of the north-east’s woes is that these policies do not help to sustain economic prowess.

Source: The Economist
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby winston » Thu Mar 01, 2018 7:05 pm

China Expands Risk Crackdown

Feb.28 -- China plans to expand its unprecedented crackdown on financial risk to money-market funds by capping how much investors can redeem in a day, people familiar with the matter said.

Source: Bloomberg

https://finance.yahoo.com/video/china-e ... 41516.html
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby behappyalways » Sun Mar 04, 2018 4:52 pm

Back to zero

China starts unwinding Anbang, its would-be financial giant

The nationalisation of Anbang makes for good regulation but murky politics


“WHEN it comes to the meaning of life, we will all return to zero one day.” So philosophised Wu Xiaohui, a Chinese tycoon, as he reflected on his success in 2015. Little did he realise how soon his words would be proved true.

He founded his firm, Anbang, as a small car-insurance company just over a decade ago. By 2017 it ranked among the world’s biggest insurers, with some $300bn of assets, including stakes in hotels and financial firms in America, Europe and Asia.

But then, even more vertiginous than its ascent, came its fall. On February 23rd China’s government said it had taken over Anbang and would prosecute Mr Wu for economic crimes.

Rarely in corporate history has a giant grown and collapsed so quickly. But Anbang’s tale is also interesting for what it reveals about China’s economic landscape. It is the clearest demonstration that regulators are serious about defusing debt risks that have built up in recent years.

And it reveals the murky political waters running through the financial system. As Xi Jinping, China’s president, consolidates his grip on power, these seem to be getting rougher.

On the surface, nationalising Anbang is a case of smart, preventive regulation. The insurance watchdog said it intervened because illegal operations had “seriously endangered” Anbang’s solvency. It did not spell out Anbang’s alleged offences, but two features of its business were problematic.

The first was its method of raising cash. It sold high-yielding, short-term investment products disguised as insurance, turning what should have been the safest part of the financial system, the insurance sector, into one of the most dangerous.

The second was what it did with that cash. It was an aggressive, some say foolhardy, investor overseas. It paid $2bn for New York’s Waldorf Astoria hotel and $6.5bn for hotels owned by Blackstone Group, the world’s largest private-equity firm. When Mr Xi last year called for a crackdown on “financial crocodiles”—companies destabilising the economy with reckless borrowing and investment—Anbang’s misery deepened. The regulator blocked its overseas deals, reined in its insurance business and detained Mr Wu.

Beneath the surface, though, there are political currents. The overseas investments of other high-flyers, notably HNA and Wanda, two of China’s biggest private conglomerates, have also faced close scrutiny. They, too, are racing to sell assets to repay debts. But none has come under as much pressure as Anbang.

That may be because Anbang lacks defenders in high places. State-owned banks are some of the main creditors to HNA and Wanda, whereas Anbang has relied more on premiums from insurance sales. For a time, Mr Wu was backed by powerful princelings, as the descendants of revolutionary leaders are known. He was married to the granddaughter of Deng Xiaoping, China’s revered former leader.

Chen Xiaolu, the son of a military commander under Mao, was listed as a company director. Mr Wu was also reputed to have a close relationship with Xiang Junbo, the top insurance regulator during Anbang’s rise.

But under Mr Xi, these connections appear to have frayed. In 2015 Caixin, a Chinese financial magazine, reported that Deng’s granddaughter had separated from Mr Wu. Mr Chen distanced himself as well, saying he was merely an adviser. He died this week of natural causes. And early last year Mr Xiang, the regulator, was detained for corruption.

There will be three things to watch in the coming months. The first is whether regulators can limit the collateral damage as they unwind Anbang’s excesses. The stated goal is to manage the firm for one year, stabilise its operations and return it to private hands. The real goal, according to two executives with other insurers, is to pay off policy-holders and honour its debts by selling its assets.

Although Anbang might have overpaid on its international forays, it bought into domestic banks and property developers when they were priced more cheaply. Its stakes in Minsheng Bank and China Merchants Bank, two of the country’s top lenders, will be sought after by other insurers.

The second is the impact on the financial sector. With its reliance on short-term debt and undisciplined deal-making, Anbang’s business model was inherently unstable. Closing the loopholes it exploited should put China’s economy on a more stable footing.

Credit Suisse, a bank, says that Anbang’s rush to expand generated “irrational competition” in the insurance sector. Its takeover will help stop that.

Finally, there is the political backdrop. Mr Xi has warned many times that no one is immune from his crackdown on corruption. But princelings have, for the most part, been less affected.

The question is whether Mr Wu’s takedown is a sign that all tycoons, no matter how well connected, are now vulnerable—or whether his protection had simply evaporated.

Source: The Economist
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby behappyalways » Sun Mar 04, 2018 6:07 pm

2018.03.03【文茜世界周報】獨家專訪包道格 解析中共取消任期意涵
https://www.youtube.com/watch?v=P0VC7T6 ... wMSAU&t=0s
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby behappyalways » Wed Mar 07, 2018 8:32 pm

China is 'fully confident' in fending off systemic debt risks
https://www.cnbc.com/2018/03/06/china-i ... risks.html
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby behappyalways » Mon Mar 12, 2018 7:59 pm

Xi Jinping: What if Xi is president for life?
http://www.bbc.com/news/av/world-asia-c ... t-for-life


2018.03.10【文茜世界周報】習近平若終身執政 將終結中國特色 步上危險?
https://www.youtube.com/watch?v=-aSPnlG ... -pKgdwMSAU
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Re: China - Economic Data & News 16 (May 17 - Dec 18)

Postby behappyalways » Mon Mar 19, 2018 8:22 pm

2018.03.17【文茜世界周報】大陸百姓的日常 萬物聯網科技感十足
https://www.youtube.com/watch?v=GlHLh-G ... -pKgdwMSAU
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