China Digest

Economics and policy from China’s newspapers

Tuesday July 18, 2017

President Xi backs push toward an open economy

China should work to improve its investment and market environment, accelerate opening up to the outside world and lower operating costs, President Xi Jinping said at the meeting of the Central Leading Group on Finance and Economic Affairs. According to a Caixin report, Xi said the country should create a stable, fair, transparent and predictable business environment, and speed up efforts to build an open economy to promote sustainable development.

Standard and Poor’s downgrades Wanda Commercial

Ratings agency Standard & Poor’s put Hong Kong listed Wanda Commercial Properties, a Dalian Wanda subsidiary, on negative credit watch and downgraded it to BBB- on Monday, the Paper reported. The independent agency said abrupt and large transactions of hotel and tourism properties worth US$9.3 billion would harm the company’s stability and visibility.

Tax policy for 2022 Beijing Winter Games disclosed

The value-added tax currently being paid by the Beijing Olympic Organizing Committee will not be levied on the media, such as broadcasting, internet and television, the Economic Information Daily reported. In addition, foreign consultants, referee and technical officials that have been engaged by the organizing committee will also be exempt from the value-added tax and personal income tax.

Yuan funds for foreign exchange drops in June

The People’s Bank of China announced that funds for foreign exchange continued to decline, shrinking by 34.32 billion yuan (US$5.07 billion) in June, Caixin reported on Monday night. The funds measure how much foreign currency the central bank has bought in order to add funds to the domestic money market. Analysts say the decreases can signal increased pressure for capital flight and offer an indication of yuan liquidity.

Electricity usage rises 6.3% year on year

Electricity consumption, viewed as a proxy for the macroeconomy, increased 6.3% in the first half of 2017 from a year earlier, recording 2.9 trillion kilowatts, the Paper reported on Monday. The gain is mainly attributed to the growing usage of power in the manufacturing industry, indicating the overall stability of the economy.

Commercial housing sales hit US$874 million at mid-year

Commercial housing sales stood at 5.9 trillion yuan (US$874 million) nationwide in the first six months this year, a 21.5% year on year increase, the Economic Information Daily reported. Around 746.62 million square meters of commercial housing were sold, a 16.1% year on year increase, and transactions among third and fourth tier cities involved 75% of total deals.

Mortgage rules tighten in nation’s major cities

China’s major cities, including Beijing, Shanghai and Guangzhou saw a tightening in housing loan approvals, the Shanghai Securities Journal reported on Tuesday. The number of mortgages released by banks in the first half of 2017, only accounts for around 30% of the total housing loans given out in 2016. A report by CICC also said many banks have used up 70 to 80% of their loans issuing quota in the first half of the year.

Country Garden nets 25% share of CIMC housing subsidiary

Country Garden Holdings Co. Ltd., a Hong Kong real estate company, has bought a 25% share in CIMC City Development Group, a property developer in Shenzhen, for 926 million yuan (US$136.78 million), Caixin reported. The CIMC City Development Group is a subsidiary of China International Marine Containers Co., Ltd, a conglomerate active in containers, vehicles, energy and chemicals, ocean engineering, logistics and other sectors.

Disposable income per capita growth exceeds GDP growth

Personal disposable income per capita increased by 7.3% in real terms, overtaking the 6.9% growth rate of the gross domestic product in the first six months this year, Sina Finance reported, citing the National Bureau of Statistics. The economy grew 6.9% in the second quarter from a year earlier, the same rate as the first quarter.

Is Chinese cooked chicken bound for US safe?

China’s cooked chicken has found its way to the US market after 13 long years, the Paper reported. While the arrival of Chinese chicken in North America has aroused food safety concerns among some US consumers, Li Wei, a manager with Jiulian Group who is in charge of the export of the first batch of cooked chicken, said the entire process was reviewed by American officials no less than five times.