China Headlines: Beijing holds breath for effective smoking ban

China Headlines: Beijing holds breath for effective smoking ban

BEIJING, June 1 (Greenpost) — A downtown hotpot restaurant was the first business to get an official warning for breaking Beijing’s toughened smoking ban, as inspectors swooped to enforce the new regulation on Monday.

On the first day of the ban, which prohibits smoking in all indoor public places, workplaces, and on public transport, authorities sent more than 1,000 inspectors to government agencies, hospitals, schools, hotels, restaurants and entertainment venues to ensure it is being followed.

The inspectors found cigarette butts in the hotpot restaurant’s washroom on Monday morning, with the restaurant also failing to publicize the smoking complaint hotline 12320 on its no-smoking posters.

Inspectors said they will visit again in two days to check the restaurant’s compliance, and warned of a fine up to 100,000 yuan (1,614 U.S. dollars) if it fails to comply.

The new ban was passed by Beijing’s municipal legislature in November. Individuals caught smoking in public places may be fined 200 yuan (32 U.S. dollars), while businesses will have to pay up to 100,000 for failing to discourage smoking on their premises.

As the world’s largest tobacco maker and consumer, China has more than 300 million smokers, almost the size of the U.S. population, and another 740 million people are exposed to second-hand smoke each year.

Ma Yongsheng, who runs a restaurant in Beijing, canceled a wedding banquet reservation on Monday, as a guest insisted on smoking during the meal.

“If we continue to host guests who smoke, we’ll surely be fined,” Ma said.

At Beijing Capital International Airport, people gathered at two designated outdoor smoking areas to have a last puff as indoor smoking rooms in the airport’s three terminals have all been closed.

While regulators has vowed strict implementation, some still doubt the feasibility of the new ban and fear authorities’ resolve to curb smoking could taper over time and leave the ban as ineffective as its predecessors.

Beijing has had smoking bans in place since as far back as the 1990s, and stepped up the campaign before the 2008 Olympics, but the bans have always been weakly enforced.

A Xinhua reporter spotted people smoking indoors in a downtown hospital on Monday.

“I hope the government’s momentum to curb smoking can last this time,” said someone with the screen name “@skywalker” on microblog Sina Weibo. “Just don’t let this ban become another barely-enforced policy nobody remembers after six months.”

At a bus stop during the morning rush hour, a volunteer asked scores of people to finish smoking elsewhere before lining up.

“Most stub out their cigarettes at our request but that’s the most we can do,” the volunteer said. “We are not authorized to fine those who refuse to obey the ban.”

The World Health Organization (WHO) suggested mobilizing the public to help enforce the ban.

“If you see someone smoking in a restaurant, tell them to stop! Talk to the manager or owner, or call the national health hotline 12320 to complain,” said WHO China Representative Bernhard Schwartlander.

China signed the WHO Framework Convention on Tobacco Control (FCTC) in 2003.

“Beijing’s ban on smoking indoors is consistent with China’s commitment to the FCTC of protecting the health of non-smokers through enhanced legal support,” said Wang Qingbin, a professor with China University of Political Science and Law who helped draft the new smoking ban.

The new ban also serves as a test case for a similar move nationwide. Draft legislation for a national ban has been published to solicit public opinions.

In April, China’s top legislature adopted an amendment to the Advertisement Law, banning tobacco advertising in mass media, in public places, public vehicles and outdoors.

China also raised consumption tax on cigarettes at the wholesale level on May 10, a move expected to cut cigarette consumption by 4 to 5 percent and add 100 billion yuan to annual tax revenue.

Data from local price monitoring departments across the country shows the tax rise has largely been passed on to consumers. Cigarettes priced under 20 yuan per pack have seen a price hike of between 0.5 and one yuan. Those priced above 20 yuan have generally been subject to a price rise of around two yuan.

Angela Pratta, who leads the WHO’s Tobacco Free Initiative in China, has urged the government to lead by example in enforcing the ban.

“Strong enforcement is critical to ensuring the effectiveness of smoke-free laws, so too is leadership. Senior officials and leaders in government offices need to lead the way by setting an example and supporting enforcement efforts,” Pratta said. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

China Focus: China ramps up public cyber security awareness

China Focus: China ramps up public cyber security awareness

BEIJING, June 1 (Greenpost) — China on Monday officially kicked off its second Cyber Security Week, part of the country’s effort to raise awareness amid growing Internet users and rising cyber attacks.

Jointly held by top state level departments, including the Cyberspace Administration of China (CAC), the ministries of education and public security, the event intends to help the public better understand Internet security risks and enhance their ability to protect themselves.

This year’s event aims to cultivate cyber security awareness among teenagers in particular, said head of the CAC Lu Wei.

“Cyber security isn’t just about national security and national development, but also concerns the immediate interests of every Internet user,” he said.

Lu’s words are in line with a recently released white paper on China’s military strategy, which said “cyberspace has become a new pillar of economic and social development, and a new domain of national security.”

He also urged the public to raise their cyber security awareness, voluntarily resist online pornography and groundless rumors and abide by the law on the Internet.

The week-long event came after a series of cybersecurity incidents and Internet service outages that stoked concern among the public about online data safety.

Alipay, China’s largest online payment platform, reported anomalies on Wednesday, which were found to be linked to optical fiber glitch. The next day, Ctrip.com, China’s largest online travel agent, scrambled to fix a service outage problem after its website and mobile platform went down Thursday morning.

Though both companies claimed that no user data was compromised, the incidents still put Chinese Internet companies’ security measures to the test. Many Internet users have urged Chinese Internet companies to improve their data security since the incidents.

Lyu Lisheng, director of domestic Internet security firm Keen, said Chinese Internet companies would prefer to expand their user scale and market share first, while ignoring cyber security measures.

The opening event also released a report on Chinese netizens’ cybersecurity awareness. According to Hong Jingyi, who surveyed 254,000 people, Chinese Internet users may fall victim easily to cyber attacks, online malwares and online security breaches.

The survey found that some 81 percent of netizens seldomly change their passwords, 76 percent use the same password for multiple online accounts while 44 percent use birthday and phone numbers as their passwords. In addition, some 16 percent use the most common passwords such as “123456” or “abcabc.”

In terms of making transactions via public Wi-Fi, the report said 83 percent are vulnerable to be taken advantage of by hackers.

With China’s new “Internet plus” strategy and encouragement for people to start their own business, cyber security is of ever more importance, said some experts.

“Without cyber security, there is no way the ‘Internet Plus’ strategy can be successful,” said Li Yuxiao, a professor on Internet governance from Beijing University of Posts and Telecommunications. Enditem

Source   Xinhua

Editor  Xuefei Chen Axelsson

China Focus: Golden decade expected for IT application in China’s medical care industry

China Focus: Golden decade expected for IT application in China’s medical care industry

 

BEIJING, June 1 (Greenpost) — Stock prices of many Shanghai and Shenzhen listed companies with the concept of information technology application in medical care sector has more than doubled and outperformed the market since February this year. This is a reflection of investors’ expectation for great growth potentials in China’s medical care informatization drive.

Indeed, along with implementation of the nation’s new medical reform scheme, concrete policies in favor of the industry’s development have followed, such as a five-year plan for informatization in the medical and health sector.

Aside from governmental support, social investment in the sector is expected to warm up quickly.

A China Securities Journal report on Monday predicts that the total investment in this field is expected to hit 34 billion yuan in 2016 and the coming decade will be a golden period for the industry’s development.

The medical information construction includes tele-medical information systems, regional medical information platforms, and hospital intelligent management systems, and the former two are fully supported by the government.

The National Development and Reform Commission (NDRC) has appointed five regions, including Ningxia, Yunnan, Inner Mongolia, Guizhou and Tibet, as telemedical information pilot zones. And each will be given 120 million yuan or 200 million yuan as supportive funding by the Ministry of Finance.

Both the government and grassroots medical organizations have more rigid demands on the development of regional medical information platforms. The current investments in such platforms are much less than the average of developed countries.

Confident in the outlook of regional medical information platforms, investors on the domestic capital market have begun to pay attention to companies related to the field.

Nearly 50 institutional investors recently visited Chongqing Adtech Co Ltd, one of the leading companies in regional medical information for market research.

Analysts say that, as a main shareholder of Adtech, Hainan Haiyao Co Ltd (000566.SZ) can get the whole medical data of Chongqing local people.

Since February the share prices of many medical information concept stocks such as Hainan Haiyao (000566.SZ), WinningSoft (300253.SH), and Wonders Informaiton (300168) have more doubled. (Edited by Bai Jiechun, baijc@xinhua.org)

Source Xinhua

Editor  Xuefei Chen Axelsson 

Interview: Formal signing of China-S.Korea FTA to enhance economic cooperation

IN-DEPTH

 

Interview: Formal signing of China-S.Korea FTA to enhance economic cooperation

 

SEOUL, June 1(Greenpost) — The formal signing of the China-South Korea free trade agreement (FTA) will further enhance economic cooperation between the two neighbors as the free trade accord will facilitate a productive competition, experts here said.

Chinese Commerce Minister Gao Hucheng and his South Korean counterpart Yoon Sang-jick formally signed the bilateral FTA in central Seoul Monday, three years after the two countries began talks on the deal in May 2012.

After Chinese President Xi Jinping’s state visit to Seoul in July 2014, negotiations on the free trade pact made fast progress. President Xi and his South Korean counterpart Park Geun-hye announced the conclusion of substantive negotiations on the deal in Beijing in November 2014, and the two nations initialed the FTA three months later.   “The formal signing means a signal flare to more deepened economic cooperation between the two nations,”Han Jae-jin, senior research fellow at the Hyundai Research Institute, said in an interview.

Han said South Korea seemed to have joined all China-led global projects for economic integration, including the Asian Infrastructure Investment Bank (AIIB) as well as the bilateral FTA, to go together with the Chinese economy, one of the world’s fastest growing economies.

The implementation of the FTA was expected to intensify competition between companies of the two countries as China has been changing its focus from labor-intensive industries to technology-innovative ones. Competitiveness of Chinese manufacturers was forecast to advance at a fast pace in terms of technology, management and finance.   “China’s attention is moving from low value-added industries to high value-added ones like IT and chips where competition will get fiercer between South Korean and Chinese companies,”said Han.

The researcher, however, said that the two economies can advance together, while competing with each other, as” opportunities will come together with the crisis.”

China’s Xiaomi, Huawei and Lenovo were increasingly eroding the market shares in the global smartphone market of Samsung Electronics and LG Electronics, South Korea’s tech giants. There were many Chinese companies going global and competitive such as the Alibaba Group.

After the bilateral FTA comes into force, Chinese firms could make inroads into the South Korean market through mergers and acquisitions (M&A) to secure higher technological competitiveness and brand value of South Korean companies.

South Korean firms can take the free trade pact with China as an opportunity for making a foray into the world’s largest consumer market. The FTA would further open Chinese markets, and South Korean firms would face eased regulations.   “South Korean companies should see the Chinese market as a place where they compete with Chinese and global companies in high-tech industries, not as a place where they can manufacture products with low labor costs,”said Han.

The researcher said that South Korean companies could succeed in the world’s No.1 consumer market only when preparing for the changing trend in China toward high value-added, innovative industries and consumer demand for higher-quality products.

Jee Mansoo, research fellow at the Korea Institute of Finance ( KIF), said that the formal signing of the bilateral FTA drove China and South Korea into a closer relationship economically, but he cautioned that benefits from the deal may be lower than expected given the narrower width of liberalization and the slower pace of opening compared with other free trade accords.

Under the accord, South Korea will eliminate tariffs on 92 percent of all products from China within 20 years after the FTA implementation in return for China abolishing tariffs on 91 percent of all South Korean goods.

Other free trade deals tend to eliminate tariffs on as much as 99 percent of all products within five years after the implementation.

Jee, however, noted that the low-level of FTA between China and South Korea would reduce possible damages to farmers and industries of both countries, adding that it would be affordable FTA for people of the two nations. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

China expects bumper summer crops

China expects bumper summer crops

BEIJING, June 1 (Greenpost) — Favorable weather conditions and an increase in cultivated land will see large grain harvests this summer, the Ministry of Agriculture (MOC) said Monday.

Sweeping rainfall across most parts of China in April, an important period in the wheat growth cycle, and summer-crop farmland increasing by 1 million mu (66,667 hectares) to 415 million mu had been good for crops, the MOC said.

The ministry is upbeat of the outlook for harvests this summer as long as favorable weather conditions continue and there are no natural disasters in the coming weeks.

Harvests of wheat and early-season rice begin around the end of May and continue until the beginning of July.

China’s summer-crops yield grew 3.6 percent from a year ago to 136.6 million tonnes in 2014, nearly a quarter of which came from central China’s Henan Province. Enditem

Source  Xinhua

Editor   Xuefei Chen Axelsson

China to make Silk Road documentary

China to make Silk Road documentary

BEIJING, June 3 (Greenpost) — China National Documentary Film Group (CNDF) announced on Wednesday that it will shoot a TV documentary about countries along the Silk Road.

The documentary, named “The Silk Road in a New Century”, will focus on history, culture and the economies of more than 10 countries along the ancient route.

A crew will set out in July to travel about 16,000 kilometers across Asia and reach its final destination of Italy in September.

“Cultures along the Silk Road are colorful, and economic potential in this region is great. I hope Chinese people can understand these countries better through a lens,” said CNDF board chairman Gao Feng.

In history, the Silk Road served as a business and cultural link between Asia and Europe. It has regained attention since Chinese President Xi Jinping proposed an economic belt of countries along the route in September 2013. Enditem

Source  Xinhua

Editor  Xuefei Chen Axelsson

Three million jobs created in EU due to trade with China: study

Three million jobs created in EU due to trade with China: study

 

BRUSSELS, June 1 (Greenpost) — About three million Europeans have jobs because of export from the European Union (EU) to China, according to a study released on Monday here by EU institutions.

The share of employment supported by EU export increased from 9.3 percent in 1995 to 13.6 percent in 2011, said the study on impact of extra-EU trade on income and jobs, which was jointly published by the Joint Research Centre (JRC) and the Directorate General for Trade of the European Commission.

In total, over 31 million jobs in the EU depend on exports.

Citing the data from the World Input-Output Database (WIOD), the study found that 10 percent of EU export related employment was driven by the sales of goods and services to China in 2011, or three million jobs was given to Europeans in all EU member states due to trade with China in that year.

Though the United States is taking a lead in trade with the EU by now, China is taking ground from it, figures indicated.

Compared with 1995, the share of EU employment supported by EU-China trade went up to 10.1 percent in 2011 from 2.29 percent. Meanwhile, the U.S.-related figures in the same period dropped from 20.5 percent to 14.6 percent.

According to the report, among the EU member states, Germany, Britain and Italy created the highest number of jobs in EU exports to the rest of the world.

In 2011, Germany created some 7.1 million export related jobs domestically, of which 15.1 percent were driven by its sales of goods and services to China, said the report.

Meanwhile, in Finland and the Netherlands more than 15 percent of the employment supported by EU exports was dependent on the Chinese market. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

Beijing’s largest coal-fired boiler house retired

Beijing’s largest coal-fired boiler house retired

BEIJING, June 3 (Greenpost) — The largest coal-fired boiler house in urban Beijing was shut down on Tuesday, as part of the government’s plan to cut pollution in the capital city.

The boiler house, which has four boilers with a total capacity of 80 tons of vapor per hour, accounts for over a fifth of the total coal-fired boiler capacity in urban Beijing and provides heating for a rail equipment manufacturing company and 20,000 local residents.

The boiler house, located near the famous Marco Polo bridge in Fengtai District, will be replaced with three gas-fired boilers before November, when the city’s centrally controlled heating is turned on for the winter.

The boiler house used 40,000 tons of coal and emitted 54 tons of sulfur dioxide, 57 tons of nitric oxide, 45 tons of dust and 1 ton of volatile organic compounds per year.

Beijing plans to close all coal-fired boilers in urban areas by the end of this year, according to a government work plan released in April.

Of the four major coal-fired power plants in Beijing, three have been closed so far and the last is scheduled to be closed next year. They will be replaced with four gas-fired power plants.

Beijing is aiming to limit annual coal consumption to 15 million tons in 2015 and 10 million tons in 2017. Enditem

Source  Xinhua

Editor  Xuefei Chen Axelsson

China, Central and Eastern Europe make breakthroughs in infrastructure cooperation

China, Central and Eastern Europe make breakthroughs in infrastructure cooperation

 

Stockholm, June 3 (Greenpost) — Chinese enterprises and their partners in Central and Eastern European (CEE) countries have made new breakthroughs in infrastructure cooperation in recent years. The Chinese enterprises have actively followed up and participated in the projects of bridge, power station, highway and flood control in those countries, said Xu Xiaofeng, deputy head of Department of European Affairs under Ministry of Commerce (MOC) on Wednesday.

Chinese enterprises have participated in construction of projects such as Belgrade’s Danube-spanning bridge and the Kostolac power plant in Serbia, Serbia’s E763 highway, highway projects in Macedonia, thermal power plants in Bosnia and Herzegovina, etc.

China is the largest trade partner of the 16 CEE countries in Asia, while Poland, Czech Republic and Hungary are the top three trade partners in the CEE for China.

In recent years, the bilateral trade between China and CEE countries has grown steadily.

According to Chinese customs statistics, the bilateral trade increased to 60.2 billion US dollars in 2014 from 52.1 billion US dollars in 2012, representing a rise of 15.6 percent.

In the first four months of 2015, their bilateral trade value amounted to 17.6 billion US dollars, down 6.4 percent year on year. Enditem

Source  Xinhua

Editor  Xuefei Chen Axelsson

Consumption contributes more to China’s GDP growth

Consumption contributes more to China’s GDP growth

Stockholm, June 3 (Greenpost) — Consumption contributed more to China’s economy last year, while investment growth declined.

Consumption contributed 50.2 percent to China’s gross domestic product (GDP) growth in 2014, 0.2 percentage points more than the previous year, data from the National Bureau of Statistics (NBS) showed on Wednesday.

Investment contributed 48.5 percent, down from 54.4 percent in 2013, and net exports contributed 1.3 percent to 2014 GDP growth, up from the negative 4.4 percent contribution rate the previous year.

China’s economic growth over the past two decades relied heavily on capital investment and exports. To steer the economy onto a more sustainable track, the government has been trying to encourage more domestic consumption, rather than over relying on investment and exports.

GDP last year was 64.08 trillion yuan (10.47 trillion U.S. dollars), up from 58.97 trillion yuan in 2013.

Consumption amounted to 32.83 trillion yuan, up from 30.1 trillion in 2013.

GDP grew 7.4 percent last year, the weakest annual expansion in 24 years. The official growth target was set at around 7 percent for 2015 by the Chinese government in March at the annual session of the National People’s Congress. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

China Focus: Chinese firms sail on int’l capacity cooperation boat

China Focus: Chinese firms sail on int’l capacity cooperation boat

BEIJING, May 25 (Greenpost) — Chinese enterprises are gaining a stronger presence abroad off the back of motions to deepen international industrial capacity cooperation, while this effort is creating a new domestic economic growth engine.

State Grid Corp. of China (SGCC), the world’s largest utility company, last week in Brazil witnessed a groundbreaking ceremony of an ultra-high voltage electricity transmission project at the Belo Monte Hydroelectric Dam, which was attended by visiting Chinese Premier Li Keqiang and Brazilian President Dilma Rousseff.

This was SGCC’s first overseas transmission project. It will help provide safe and reliable energy and support social development in Brazil.

Global industrial cooperation is a priority for China against the backdrop of a slower domestic growth pace and unsteady global economic recovery. The creation of jobs and the identification of new growth engines are on top of many governments’ agendas, experts said.

Li, a proponent of industrial capacity cooperation, signed trade agreements worth 27 billion U.S. dollars during his visit to Brazil.

The Belo Monte project is testimony of the nation’s “going global” drive. Advanced equipment produced by SGCC subsidiaries have found their way to more than 80 countries including the United States and Germany, with total export volume surging to 3 billion yuan (490 million U.S. dollars) last year, up 29 percent from 2013.

China is now the world’s largest manufacturing exporter, with total goods export volume reaching 14.4 trillion yuan last year. Mechanical and electrical equipment and high-tech products amount for 56 percent and 29 percent respectively.

There is also a pressing need for the going global of high-end industrial capacity to support growth, as the competitiveness of certain traditional industries is waning due to rising operational costs for exporters, said Zheng Yuesheng, spokesperson for the General Administration of Customs.

China is strengthening industrial capacity cooperation worldwide, moving production lines abroad, which creates jobs in other countries while boosting China’s exports, analysts said.

The government has issued a list of prioritized sectors in which it wishes to enhance such cooperation, including steel, non-ferrous metals, construction materials, railways, electric power, chemicals, textiles, automobiles, telecommunications and machinery.

“Proactive efforts to further open up have paved the way for manufacturers to go global,” Vice Minister of the Ministry of Industry and Information Technology Liu Lihua wrote in a recent article.

Against the background of industrial upgrades, companies should aim to increase exports of products with high added-value, relabeling themselves as service exporters rather than just goods exporters and creating globally renowned brands, Liu said.

China should get used to its shifting role to capital exporter from capital importer, while Chinese firms should tap into foreign markets and hone their competitiveness, said Zhou Mi, a researcher with the Ministry of Commerce.

The country became a net capital exporter for the first time last year when outbound direct investment (ODI) outnumbered capital inflows. ODI grew 14.1 percent year on year in 2014, sharply eclipsing the 1.7 percent growth recorded for foreign direct investment. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

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Interview: China-EU cooperation to help China’s fast growing digital economy: expert

   Interview: China-EU cooperation to help China’s fast growing digital economy: expert

 

BRUSSELS, May 26 (Greenpost) — The director general of BusinessEurope said in a recent interview with Xinhua that China-EU cooperation can help realize growth potential in China’s digital economy.

Markus J. Beyrer, director general of BusinessEurope, an association of enterprises in 33 European countries, said the digital industry is a game changer for the global economy and will have a huge impact on EU competitiveness.

Intelligent, interconnected systems now seamlessly support industrial activities along the entire value chain, he added.

Europe will have to reap the benefits of this huge potential, putting in place a real strategy to digitize all sectors of the economy.

He noted that by 2025, Europe’s manufacturing industry would gain a gross value worth 1.25 trillion euros (1.36 trillion U.S. dollars). However, he warned if Europe fail to turn the digital transformation to their advantage, the potential losses can be up to 600 billion euros by 2025 or over 10 percent of Europe’s industrial base.

Talking about China’s digital economy, Beyrer said China’s internet industry is growing fast, but until now it has largely been consumer-driven rather than enterprise-driven.

Large e-commerce firms have driven sales and transformed retailing, but small and medium sized enterprises still lag behind in using the internet for procurement, sales and marketing purposes, he said.

“It is clear that there is a lot of potential for growth in China’s digital economy too, China needs to liberalize its market to encourage new innovations and robust competition would accelerate China’s productivity,” said Beyrer.

Beyrer underlined that European companies have the required expertise and can help China realize its potential by engaging the Chinese market on commercial terms. Enditem

Source   Xinhua

Editor  Xuefei Chen Axelsson

 

China Focus: Chinese capital market accelerates deploying offshore RMB business

China Focus: Chinese capital market accelerates deploying offshore RMB business

 

BEIJING, May 27 (Greenpost) — Shanghai Stock Exchange (SSE), China Financial Futures Exchange (CFFEX) and Deutsche Bourse Group signed a strategic agreement on Wednesday to jointly initiate an offshore RMB financial instrument trading platform in Frankfurt, Germany, SSE said in a statement Wednesday.

Prior to this, the People’s Bank of China (PBOC), the central bank, just expanded its pilot of RMB qualified foreign institutional investors (RQFII) to Chile on Monday, granting it a quota of 50 billion yuan (8 billion U.S. dollars).

Further more, officials from China’s securities regulator also disclosed that China will officially launch the Shenzhen-Hong Kong stock connect program in the second half of this year.

All signs show that China’s domestic capital market is speeding up deploying the offshore RMB business.

According to the strategic cooperation agreement of the three parties, they will incorporate a joint venture in Germany as the operator for the platform, said the statement.

The SSE, CFFEX and Deutsche Bourse will hold a stake of 40 percent, 20 percent and 40 percent in the new company, respectively.

The main functions of the company are to make R&D for offshore RMB-denominated securities and derivatives products and provide trading spot for these products, it said.

The new company is expected to start operation in the fourth quarter of 2015.

Dr. Gui Minjie, president of the SSE, expressed that the establishment of the platform will help promote the two-way opening up of China’s capital market, enrich investment tools for offshore RMB markets, and promote the RMB internationalization.

As a matter of fact, this is not the first time for China’s domestic capital market to cast its eye on massive offshore RMB markets.

In early 2012, a number of RQFII funds made their debut in Hong Kong and offered a back-flow channel for offshore RMB there, which marked the start of RQFII program.

The RQFII program keeps expanding, having lured 13 countries and regions to pilot the business after Chile’s entrance, with investment quota topping one trillion yuan.

On November 17, the Shanghai-Hong Kong stock connect program was officially kicked off, and over half of the 300-billion-yuan quota for the program has been used.

The launch of similar program in Shenzhen means the RMB will have a smoother investment and backflow channel.

Notably, the size of offshore RMB posted about a ten percent drop from a year earlier in the first quarter of this year due to the strong performance of the US dollar, which will not last long in the view of experts.

A report by the Deutsche Bank predicts the size of offshore RMB deposits will rebound as from April, will reach 3.25 trillion yuan by the end of this year, up 30 percent year on year.

Some scholars hold that RMB internationalization has become a key strategy for the opening up of China’s economy and financial industry.

Besides accumulating offshore RMB pool via trade and investment, desirable investment products and places are also needed for offshore RMB.

Therefore, China domestic capital’s deployment of offshore RMB markets will help further improve RMB’s international position. Enditem

Source Xinhua

Editor   Xuefei Chen Axelsson

China Focus: China makes challenging transition, RMB not undervalued: IMF

   China Focus: China makes challenging transition, RMB not undervalued: IMF

 

By Xinhua Writers Jiang Xufeng, Han Jie

Beijing, May 27 (Greenpost) — The International Monetary Fund (IMF) is closely following steps taken by China to promote the free use of its currency as the country undergoes a “challenging and necessary” economic transformation, a senior IMF official has said.

 

QUALITY GROWTH

Commenting on the country’s economic development over the past year, IMF first deputy managing director David Lipton said Chinese policymakers are pursuing a “quality-growth” strategy.

“They are not trying to achieve the fastest possible growth, but rather the fastest sustainable growth,” he said in an exclusive interview with Xinhua during a visit to Beijing.

“That means allowing the economy to slow, if that’s necessary, to work through some financial vulnerabilities that have built in areas like the property sector and excessive lending to state-owned enterprises.”

“Growth in China is moderating — a slowdown that is not a goal unto itself but a by-product of moving the economy away from the unsustainable growth pattern of the past decade.”

The Chinese economy grew 7.4 percent in 2014, the weakest annual expansion in 24 years. The government further lowered this year’s growth target to approximately 7 percent, stressing quality and innovation-driven growth.

On Tuesday, the IMF projected the Chinese economy would grow 6.8 percent this year, consistent with its April prediction in the flagship World Economic Outlook (WEO) report.

The world’s second largest economy is transitioning to a new normal, aimed at “safer and higher-quality” growth, and other economic reforms are underway including a new budget law, deposit interest rate liberalization, the creation of a deposit insurance scheme and a whole agenda for capital account liberalization, Lipton said.

“These are all items put in the ‘Third Plenum Blueprint’ and they are all being put into motion. Those measures will further help promote high-quality growth,” he said.

The Chinese labor market has remained resilient despite slower growth, which, in turn, has supported household consumption. Inflation is expected to end the year at around 1.5 percent, according to a statement issued after the IMF’s 2015 Article IV Consultation with China.

The Article IV Consultation is an annual economic and financial check-up between the IMF and its member countries. A mission from the IMF visited China from May 14 to 27 to conduct discussions on the annual review of the Chinese economy, and Lipton joined the mission’s final policy discussions.

If the Chinese economy slows a lot more,   fiscal policy should be used to bolster growth and boost household income and spending, so China can simultaneously reduce financial vulnerabilities and tap the potential of the “untapped growth engine”– household consumption, said Lipton, adding that rebalancing is the biggest challenge facing the Chinese economy.

The global economic recovery is “weak and uneven” and the economic slowdown is affecting developing countries in general as countries like China, to some extent, depend on advanced economies for exports, said Lipton, a former senior official at the White House.

 

RMB NOT UNDERVALUED

“While undervaluation of the renminbi (RMB) was a major factor causing the large imbalances in the past, our assessment now is that the substantial real effective appreciation over the past year has brought the exchange rate to a level that is no longer undervalued,” Lipton said after meeting with high-ranking Chinese officials.

This signaled a change of tone in the IMF’s judgment on

this issue after maintaining for a long time that RMB was “moderately undervalued”. Many experts believed that the value of RMB has reached equilibrium.

The value of RMB has been a source of tension between China and some trading partners, as they accuse China of keeping it artificially low to gain an unfair competitive advantage, which Beijing refuted.

Lipton stressed that it is a judgment “about this moment” and may change in the future.

“However, the still-too-strong external position highlights the need for other policy reforms–which are indeed part of the authorities’ agenda–to reduce excess savings and achieve sustained external balance,” Lipton said at a Tuesday press conference.

“We believe that China should aim to achieve an effectively floating exchange rate within 2-3 years,” he added.

China has adopted a steady pace in raising the yuan’s daily trading limit against the U.S. dollar, from 0.3 percent in 1994 to 0.5 percent in 2007 and 1 percent in 2012 to the latest 2 percent, in an effort to enhance the floating flexibility of the RMB exchange rate.

 

RMB’S SDR INCLUSION

Lipton said Chinese authorities have stated publicly their interest in including the renminbi in the IMF’s Special Drawing Rights (SDR) basket, a move that has been highly anticipated.

“We welcome and share this objective and will work closely with the Chinese authorities in this regard,” he said.

The IMF has launched its five-year review of the SDR basket, an international reserve asset that currently includes the U.S. dollar, Japanese yen, British pound and the euro. Whether to add the yuan to the basket is a major issue for this year’s assessment.

The review process will take a majority of this year, and “we are looking at the progress that’s been made in internationalization of renminbi and we are following very closely the steps that the People’s Bank of China (PBOC) is making and plans to make in order to promote the free use of renminbi internationally,” he told Xinhua.

“We hope that when we have done all that analysis and when the PBOC has undertaken these reforms, we will get to a proper conclusion,” Lipton added.

RMB has overtaken the Canadian and Australian dollars since November 2014 to enter the top five world payment currencies, trailing only the Japanese yen, British pound, euro and U.S. dollar, according to the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

“As the Managing Director of the IMF has said, RMB inclusion is not a matter of ‘if’ but ‘when’,” Lipton stressed. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson

China adjusts personal imports tariffs to spur consumption

China adjusts personal imports tariffs to spur consumption

BEIJING, May 25 (Xinhua) — The Ministry of Finance on Monday announced adjustments on the tariffs levied on the import of personal items to stimulate domestic consumption.

Starting from June 1, import tariffs on suits and sneakers will be trimmed from 14-23 percent to 7-10 percent, and 22-24 percent to 12 percent, respectively, the ministry said in a statement.

According to the adjusted policy, import tariffs on cosmetics and diapers will be cut from 5 percent to 2 percent, and 7.5 percent to 2 percent, respectively.

The adjustments are an important step to stabilize economic growth through benefiting imports, promoting domestic consumption and spurring industrial upgrade, said the ministry.

Economic growth slowed to 7 percent in the first quarter this year, down from 7.3 percent the previous quarter, and retail sales in April grew 10 percent from a year ago, slightly lower than the 10.2 percent posted in March, indicating more easing measures may be needed to prop up growth. Enditem

Source Xinhua

Editor Xuefei Chen Axelsson