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为了了解世界对中国经济发展的看法，我准备在本论坛开设一个讨论专题∶国外主流媒体对中国经济发展的评价。借人家的镜子可以照照自己。
除涉及敏感问题外，我一般原文转载。在了解信息的同时，也一起学习英语。
衷心希望在这个论坛上有所收获。
[此贴子已经被鬼魅魍魉于2009-6-4 15:56:58编辑过]
BEIJING, Feb. 22 — The Chinese government, faced with rising inequality and unrest in the countryside, formally announced major initiatives this week to expand health, education and welfare benefits for farmers but left unresolved the fundamental issue of whether they should be allowed to buy or sell their land.
In recent days President Hu Jintao and Prime Minister Wen Jiabao have given speeches about the "new socialist countryside" initiative, and the National People's Congress, the Communist Party-controlled legislature, is expected to make the rural program the centerpiece of a new five-year plan during its annual meeting next month.
The program, which emerged in broad form in October, includes free education for many rural students, increased subsidy payments for farmers, new government financing for medical care and further government investment in rural public works. A specific price tag has not been announced, though rural spending is expected to rise significantly.
"The central government has changed direction to focus on uneven development," said Wen Tiejun, dean of the School of Agriculture and Rural Development at People's University here. "The economic gap is creating social conflict, and social conflict has become a more and more serious problem."
At a news conference on Wednesday morning, Chen Xiwen, the top government adviser on rural issues, outlined parts of the program and said the government must help defray the huge debts of rural governments as China enters "a new historical period" in which the central government can better balance economic development.
Mr. Chen said agriculture and rural savings had helped finance the boom in China's cities and coastal regions, so money now must be redirected into the countryside.
But he said the program did not include any immediate changes in rural land policy, an issue that many experts consider to be at the heart of the urban-rural inequality problem. Illegal land seizures have caused rising rural protests and violence in recent years as local officials have confiscated farmland and resold it to developers for fat profits. Farmers are often cheated and left with little compensation.
The resulting social instability has alarmed the government, and even Prime Minister Wen has warned that China must avoid a "historic error" over illegal land grabs.
Inequality has also widened in recent years, with rural residents each earning about $400 a year, less than a third of the incomes of their urban counterparts. But many researchers say the gap is actually far larger when health care and other social benefits provided to many urban residents are factored in.
Under the Chinese Constitution, farmland is collectively held by villages, so individual farmers, who hold leases, have limited control. Local governments have easily exploited the law to claim land for development projects.
Some experts say that government should be eliminated as a middleman in land sales and that farmers should be granted rights to negotiate and profit from selling land. In cities residents cannot own land, but they can own apartments, houses or commercial real estate that sit atop it. As a result, a real estate boom has helped city residents but largely bypassed the countryside.
Pointing into the indefinite future, Mr. Chen acknowledged that China would eventually need "to propose steadily reforming the land acquisition system itself." But he said any changes must happen slowly to protect the country's farming output.
Meanwhile, Mr. Chen said, farmers will be given more compensation after land confiscations. He suggested that urban social welfare benefits should be extended to peasants who were left landless.
He said China already had strict laws on land confiscations but conceded that the "implementation" of those laws had lagged. Indeed, violent protests by farmers trying to block local government land grabs recently erupted in Guangdong Province. At least four people were killed in the city of Dongzhou after the police fired on protesters.
Mr. Wen, the People's University scholar, said that land privatization alone could not ensure rural prosperity and noted that other developing countries with private land rights still suffered from widespread rural poverty. By turning its attention to the countryside, China is following the path taken by Japan and South Korea, which both bulked up rural development as their economies grew and social tensions arose, he said.
But he added that defusing social unrest is only one incentive for China to improve the rural economy. China's economy, now built largely on foreign trade, depends on expanding its consumer market, and rural areas represent a drag on domestic demand. Even though roughly two-thirds of China's 1.3 billion people are rural residents, the countryside accounts for only a third of retail sales for consumer products in China.
"If you can invest in rural areas and increase the cash income of people," Mr. Wen said, "you can increase domestic demand. China must increase domestic demand and not just depend on foreign trade."
Source: STRATEGIC FORECASTING
China: The Green GDP Debate
By Bart Mongoven
China's national assembly will soon open debate on whether the country should adopt a "green GDP." Officials in Beijing have talked of such a step for years, but it appears that discussions will be quite serious in the assembly session that opens March 5. If the measure is adopted, it would mean that China would begin to publicize its gross domestic product not only in traditional terms, which measure economic output, but also in the "green" sense, by subtracting from the gross domestic product (GDP) the costs of environmental damage and the toll that pollution takes on human health.
If China does begin to measure and publicize green GDP, there could be ramifications throughout the global economy. For one thing, the nation's buying habits and manufacturing priorities likely would shift in ways that reward efficiency, the reduction of pollution and improved land-use practices.
It is not clear exactly what this might mean for the world economy as a whole, but certainly the manufacturers of efficient and lower-polluting, or "clean," technologies would reap rewards. Moreover, the adoption of such a standard in China could encourage the industrialized world to adopt similar measures, particularly if the move gives China useful insights into what economic activities are beneficial or detrimental to the nation in the long term.
Green GDP has been held out for decades by environmentalists as a potentially powerful tool for exploring ways to "internalize external costs," -- or, in other words, to include the cost to "the commons" in the price of the product. Sen. Al Gore championed the concept in his 1990 book, "Earth in the Balance," and Norway has published a measure of green GDP since 1992.
The allure of the concept is clear: Policymakers long have wandered in the dark when faced with the difficulty of determining whether certain manufacturing or industrial practices were truly beneficial or detrimental to the economy, let alone to society. Traditional GDP measures one side of the equation -- production -- but fails to consider the benefits gained versus the resources used up or destroyed in the process of production.
To borrow the classic description of this conundrum, one could describe the act of throwing a rock and breaking a window as productive effort: Laborers would be needed to clean up the damage, glassmakers and manufacturers would make a new window, and workers would be employed to install it. The green GDP methodology, however, would subtract -- at minimum -- the resources used to extract the silica for the new glass and the energy used by manufacturers in shaping the window.
In a macroeconomic sense, China has been breaking windows with rocks for more than a decade.
A Credible Debate?
Beijing appears to be in the midst of a major international public relations push in general, and China's current discussions of publishing a green GDP should be viewed in this context. At the most cynical level, the discussion could be construed as a way for Beijing to buy itself some breathing room on the international front while it focuses on difficult economic and social reforms internally. However, China does have bona fide reasons to be concerned with environmental and health issues related to growth, and at least some of the discussion appears to be quite sincere.
It is impossible to predict precisely what Beijing might learn from a green GDP measure. If based on the most widely accepted models and principles, such a measure probably would show negative growth for the Chinese economy. It follows, then, that China's measure would not strictly follow widely accepted principles. Instead, it likely would be shaped to account primarily for resource usage (coal, oil and gas) and for resources that have clearly been destroyed or taken out of productive capacity for a long period of time (such as the Songhua River, which has been heavily contaminated).
Specifics aside, any measure adopted almost certainly would show that the 9 percent annual growth rate China claims for its economy is not benefiting its population nearly as much as a lower, more ecologically benign rate might. This dovetails nicely with Prime Minister Hu Jintao's recently announced five-year growth plan, which calls for slower, more managed economic growth than did the strategy of Jiang Zemin.
Such motivations notwithstanding, it is clear that China's energy system is woefully inefficient: Industry relies primarily on old, coal-burning technologies that contribute to smog, cause lung ailments and render drinking water toxic. In fact, air and water in some parts of China are so polluted that they can scarcely support life. This is a particular problem in the East, where pollution-related illness reduces worker productivity and shortens life expectancies.
In the rapidly industrializing sections of China, this dynamic has taken on political overtones as well. The term "pollution riot" has been coined to describe uprisings in small cities and villages, with residents protesting over chemical spills, leaks, eruptions and other mishaps. For example, a three-day riot last July in Xinchang, in Zhejiang province, led to the shutdown of a local factory that was dumping untreated effluents into the area's river. For locals in such places, pollution is about much more than smog or a ruined river. It is also a symbol of a greater and intensely personal set of complaints -- about corruption, inequality and social changes -- that has dramatically altered their lives and their views about their society, their country and the safety of their families. The "pollution riots" are not started by environmentalists, and they are not about the environment per se -- but pollution is a visible outgrowth of the issues that spark the protests, and it is quite tangible in these communities.
The local officials who are targets of the public's rage are viewed as consciously trading clean air and water for rapid economic growth and, by extension, their own personal prestige and wealth. Increasingly, Chinese citizens are letting it be known that they do not approve of this trade.
By taking up the issue of a green GDP, Beijing could address both the concerns of the public and some that are harbored, for different reasons, by the central government. A green GDP measure would help to establish a subtly different set of expectations for local government officials, who heretofore have been rewarded for finding the fastest path to economic growth, regardless of the costs to the community. By factoring in other considerations, local and regional leaders -- who, notably, have become difficult for the central government to control in some areas -- could be encouraged to work toward the long-term goals of slower-paced, cleaner industrial growth rather than lunging for short-term profits. And Beijing could begin to reassert its political authority over wayward government officials, with larger social and economic concerns in mind. The central government already has begun to consider environmental issues in reviewing the performance of local officials, and Beijing would like to add energy efficiency to that process as well.
There is yet another political motive for the green GDP discussion: China's global prestige would be boosted if it established itself as a pioneer in balancing and measuring the economic and environmental costs of development. At the very least, as the 2008 Olympics approach, Beijing feels the need not only to clean up the capital city's environment but also to keep the attention of reporters from around the world focused in key areas -- China's rapid growth and dedication to environmental responsibilities -- rather than the harm that growth has caused to the environment.
At this point, China is a pariah in sustainable-development circles around the world. But in adopting an effective green GDP -- one that could become a model for other industrialized countries -- it could repair its image in the eyes of the international community. This is particularly important as international negotiations continue toward a follow-on treaty to the Kyoto Protocol. If successful, the treaty would require dramatic reductions in greenhouse gas emissions across the globe. China could benefit from having some environmental credibility when these discussions get rough.
Implications of the Debate
Exactly how far China goes toward a green GDP will depend entirely on how well the move serves the central government's concerns about social and economic stability. That said, the ramifications of a move in this direction potentially would be vast. Certainly, if Beijing were able to address even half of the problems outlined above, the move likely would be seen in retrospect as helping to preserve stability in China. The effects also could be felt around the globe.
The first outsiders to benefit would be the companies that specialize in advanced, "clean" energy technologies, which otherwise might be beyond the purchasing power of Chinese municipalities. Manufacturers of various energy-efficient products would be in demand across China. Large technology and construction companies could face dramatic increases in demand for efficient technologies, as could smaller companies developing cutting-edge, efficient technologies.
This could bring new competitors, sensing an opportunity, into the "clean-tech" industry. Research into and development of cleaner technologies would increase, and a significant threshold in economies of scale might be reached. As they become less expensive, these technologies might generally outpace less efficient rivals throughout the industrialized world.
Viewed from an even higher level, increased economies of scale in the clean-tech arena could -- like the consumer reaction to $50 per barrel oil -- fundamentally alter the relationship between production and energy usage. Just as energy used per unit of GDP plummeted as a result of the Arab oil embargoes in the 1970s, a revolution in energy-efficient technology (particularly if combined with shifts in consumer demand) could further de-link energy usage and economic growth.
If the green GDP movement should be successful in China, other industrialized nations would have incentives to measure their own green GDP as well. Thus far, none of the major economic powers are pursuing such a move; doing it properly is a tremendous undertaking, from both a political and statistical research perspective.
China, however, has covered significant ground already on the theoretical side. Beijing has been working with many of the leading figures in the sustainable-development movement to determine how to build a measure of green GDP. There have been consultations with leaders in economics, finance, natural resources, industry and health. If this work bears fruit, a useful model will emerge.
China's model likely could not be applied directly to the United States or other countries, however. It would have to be modified to account for differences in the way the countries value certain resources.
In the United States, the greatest hurdle would be the political battles between federal government officials and members of Congress, who would have to agree on methods for quantifying values for natural resources. If the green GDP movement were to gain traction in the United States, it is more likely that indirect means would be used. For instance, a credible institution associated with a university or think-tank would build a model and release its findings at a time that coincided with the Commerce Department's annual announcement of GDP. This, by the way, is how Wall Street and economists currently measure consumer confidence (figures developed at the University of Michigan) and business outlook (a figure determined by the Conference Board).
If a green GDP measure proves over time to be an effective way of assessing a nation's economy, the market is likely to listen -- whether the U.S. federal government embraces the figure or not.
Source: STRATEGIC FORECASTING / Bart Mongoven
[此贴子已经被鬼魅魍魉于2008-11-7 9:39:48编辑过]
HONG KONG, Jan. 25 - The Chinese economy grew at an annual pace of 9.9 percent last year, the third consecutive year of roughly 10 percent growth, government statisticians in Beijing said on Wednesday morning.
The statistics, showing a national economic output of $2.26 trillion, sent China soaring past France, with which it was roughly tied in 2004, to become the world's fourth-largest economy, after the United States, Japan and Germany.
Some economists say the actual value of China's output has surpassed Germany's as well, after adjusting for the low value of China's currency and its low domestic prices.
Rising exports have helped lift China to an average annual growth rate of 9.6 percent over the last quarter century. But economists said that Wednesday's figures showed that domestic demand - particularly investment but also consumer spending - was becoming increasingly important as well.
Liang Hong, a Goldman Sachs economist, noted that retail sales in China climbed 12.5 percent last year. "We believe domestic demand will increasingly become a much more important driver for growth, and China will become a more positive force for global demand in the coming years," she wrote in a report.
Chinese Gov't to Spend More on Countryside
http://www.washingtonpost.com/wp-dyn/content/article/2006/02/21/AR2006022101139.html?sub=new
By JOE McDONALD
The Associated PressTuesday, February 21, 2006; 4:18 PM
BEIJING -- A Chinese government plan issued Tuesday promises to spend more on schools, health care and aid for farmers in the poor countryside, where communist leaders worry about potentially explosive unrest over poverty and other problems.The document, released by the Cabinet, is the first in a series setting out priorities for 2006. It comes as Beijing tries to assure rural China, home to 800 million people, that it is making progress in spreading prosperity to farmers, poor workers and others left behind by the nation's 26-year economic boom.
The plan "makes it clear that China is tilting fiscal investment to agriculture and farmers, and shifting the focus of infrastructure construction from cities to countryside," the official Xinhua News Agency said in announcing the plan.The effort reflects long-term party goals, in place even before President Hu Jintao took office in 2003, that call for shifting focus from China's booming eastern cities to the vast countryside.Capitalist-style reforms begun in 1979 have helped millions of Chinese lift themselves out of poverty. But many more have seen little change and are struggling with stagnant incomes, corruption and the seizure of farmland for redevelopment. Many families in the countryside get by on only a few hundred dollars a year.China's economy is expected to extend its streak of sizzling growth this year, expanding by more than 9 percent. But a sobering report in September by an official think tank warned that half of all income goes to the top one-fifth of the population, while the bottom one-fifth gets just 4.7 percent.Rural anger has ignited thousands of protests in areas throughout China. Some have turned violent, and at least four people were reported killed in recent months when police attacked protesters in villages in the southern province of Guangdong.The plan announced Tuesday is meant to put into effect a five-year economic development blueprint approved in October by the ruling Communist Party. That document called for more "social fairness" and said Chinese leaders want to "narrow the yawning gap between the rural and urban areas and promote social harmony."The latest plan was billed as an effort to "construct a `new socialist countryside.'"It promises the equivalent of at least $1.86 billion in farm subsidies, subsidized medical care and other aid, according to Xinhua and China Central Television. They said school fees would be eliminated this year in China's poor west and in other rural areas in 2007.The reports did not give a total figure for spending. The national budget is due to be issued during the annual session of parliament, which begins March 5."With these favorable policies, Chinese farmers are not far from enjoying a new life of tax-free farming, free education and cheap medication," said Ma Xiaohe, an agricultural expert with the Cabinet's State Development and Reform Commission, according to Xinhua.Foreign analysts say communist leaders are both alarmed by the political threat of rural unrest and genuinely dismayed by the plight of Chinese farmers, who formed the bedrock of the ruling party's 1949 revolution.The government already has promised to spend billions of dollars on roads, schools and other facilities for western China, home to restive Muslims and other ethnic minorities.Last year, the government eliminated the country's tax on farm production
[此贴子已经被作者于2006-3-23 10:55:29编辑过]
Not All Roads Lead to China
http://www.nytimes.com/2006/02/28/business/worldbusiness/28asia.html?pagewanted=2&_r=1
By WAYNE ARNOLD
Published: February 28, 2006 (New York Times)
SINGAPORE, Feb. 27 — From automobiles to semiconductors, China is fast catching up with the rest of the world in manufacturing prowess, making it a formidable competitor for exporters everywhere. But does its rise necessarily spell doom for Southeast Asia's big manufacturing centers?Not according to Teh Hok Peng, a manager at the Taiwanese electronics maker BenQ's factory in Penang, Malaysia.Four years ago, as high-tech factory jobs in Malaysia were shifting to China and obituaries were being written for Southeast Asia's electronics industry, Mr. Teh went with the trend: he packed up his wife and two small children and moved to Suzhou to manage BenQ's factory there as it began shifting production out of Penang.Since then, however, Southeast Asia's big economies have proved the doomsayers wrong. Instead of shutting their factories and relying on raw material exports as many pessimists predicted, the more prosperous countries — Malaysia, Singapore, Indonesia, Thailand and the Philippines — have generated a roughly $20 billion trade surplus with China in 2004, supplying it with sophisticated electronic components. For the first eight months of 2005, the surplus was $13.6 billion.In contrast, the United States trade deficit with China was $201.6 billion in 2005, while the European Union's was $70 billion.Today, Mr. Teh is back in Penang managing BenQ's factory, convinced that, while China may be closing the technological gap, it still has a long way to go to unseat Southeast Asia as a base for electronics exporters. "China remains attractive thanks to the size of its market," he said, "but the multinationals will never leave here completely." While Southeast Asia seems to have staved off the worst, a debate has arisen in the region: can China's southern neighbors remain strong exporters, feeding its appetite for components, or will China inexorably draw those industries inside its own borders?Trade figures indicate that China is fast gaining self-sufficiency in electronics parts, and that Southeast Asia's trade surplus may have peaked. Yet Southeast Asia's factories are still humming, suggesting that two electronics centers are emerging, somewhat interdependent, but rivals all the same."People are suddenly saying, 'We shouldn't be expanding in China at the exclusion of everything else,' " said Dharmo Soejanto, an analyst at Kim Eng Securities in Singapore. "They're taking a more balanced view of the world. China is not going to manufacture everything."In particular, manufacturers have found unexpected obstacles in China. Rampant technology piracy, resurgent nationalism and — surprisingly in a country of 1.3 billion people — a dire shortage of highly skilled labor are raising costs in China so fast that many manufacturers are looking back to Southeast Asia. Even as foreign investment continued to flood into China last year, anecdotal evidence suggested the pendulum might be swinging slightly to the south: Intel has applied to build a $605 million semiconductor factory in Vietnam. Infineon Technologies of Germany is building a $1 billion chip plant near Penang, and the Japanese company Matsushita Electric Industrial is planning a plant in Singapore to assemble plasma-display televisions.Others, however, believe China will prove a magnet, with its knockout combination of a huge market and low salaries. "It's just a reality of the business model," said Mario Morales, an electronics supply chain analyst at the market research firm IDC in San Mateo, Calif. "People are outsourcing a lot more, and China has established a pretty good infrastructure."That would be consistent with the trend of the last few years. The flood of investment into China since its entry to the World Trade Organization in 2001 has come largely at Southeast Asia's expense. Foreign direct investment into Southeast Asia has fallen by one-third since 1996. In 2004, Japan invested twice as much in China as it did in Southeast Asia. The impact was powerful. The Malaysian government estimates that almost 15 percent of Penang's manufacturing jobs were lost from 2001 to 2003. By 2002, pessimists were talking about a "huge sucking sound" of investment halting Southeast Asia's industrialization. But then something different happened: Southeast Asia experienced a boom in exports of electronics components to its supposed nemesis. In 2003, Southeast Asia's exports to China jumped by more than 50 percent, led by a 67 percent jump in electronics shipments. Many government officials and industry experts heralded this development as evidence that Southeast Asia was "climbing the high-tech ladder" ahead of China. But it was not long before Southeast Asia's component manufacturers started heading north too."The contract manufacturers, the component manufacturers, the guys that build the boards and the parts, followed their customers along to China," Mr. Soejanto at Kim Eng Securities said.
Published: February 28, 2006
(Page 2 of 2) This migration has created what some economists say is a worrying trend: shipments of electronic components to China are growing more slowly than China's own exports of electronic goods. Economists say that means manufacturers in China are buying more components at home. While some economists say the slowdown in components exports is a temporary product of China's efforts to slow its economy, others say it portends the long, inevitable decline predicted five years ago. As for Southeast Asia's hope of climbing the high-tech ladder, China may have an edge there, too. China's companies outspend most Southeast Asia companies on R.& D. And Beijing's carrot-and-stick approach to investment ensures that companies hold back only their very latest technology. "China can encourage investment and penalize those who don't import technology," said Xavier Chong, chief executive of the Singapore company Ellipsiz, which services semiconductor makers. China already accounts for nearly 12 percent of global chip production, according to IDC, and Chinese factories now verge on state of the art, according to Betty Lin, an analyst at IDC in Taipei. While Southeast Asia has failed to create a single major international brand, China is following in the footsteps of Japan and South Korea with brand electronics exporters of its own — TCL in televisions and Haier in home appliances.The outlook is not entirely negative for Southeast Asia, though. China's rise has hastened efforts by the Association of Southeast Asian Nations to lower tariffs and other barriers to create a common market of its own 544 million consumers.But a bigger factor in Southeast Asia's nascent revival are the disadvantages manufacturers face in China. China suffers power shortages, for example, while Singapore's top-notch infrastructure continues to draw investment: 3M, ASML, Hewlett-Packard and I.B.M. are just a few of the big names that have announced plans to build new factories in the island-state.Anti-Japanese riots last year convinced many Japanese companies, analysts say, that they need to offset their China risk with a presence in Southeast Asia. Some manufacturers have even begun to require that their suppliers in China have sources of supply outside, said Heng Huck Lee, executive director of Globetronics, a semiconductor company based in Penang.Weak intellectual-property protections are another problem, and many companies fear that competitors will steal their best product designs. But the most common frustration foreign investors face in China — and one of the biggest surprises — is the spiraling cost of increasingly scarce skilled labor, which on China's eastern seaboard can roughly approximate salaries in some of its Southeast Asian rivals. Indeed, executives say hiring an engineer in Guangdong already costs more than hiring one in Malaysia. The result, they say, is rampant job-hopping among highly skilled and factory-floor Chinese workers. At BenQ's factory in Suzhou, Mr. Teh said, four of every five employees were poached each year. Engineers are so highly prized that BenQ has to offer them interest-free housing loans. "I don't see a compelling reason to build there," said Mr. Chong at Ellipsiz. When Ellipsiz decided to build its own chip equipment plant in 2004, it chose Vietnam. Globetronics built two plants in China, and has been disappointed. While it plans to keep one of its China factories, Globetronics sold its chip-testing plant in Shanghai last year. Mr. Heng, Globetronics' executive director, commented: "Cost-wise, it's terrible. We didn't make anything back from the investment."
[此贴子已经被作者于2006-3-23 10:58:05编辑过]
March 12, 2006
The controversy has forced the government to shelve a draft law to protect property rights that had been expected to win pro forma passage, and highlighted the resurgent influence of a small but vocal group of socialist-leaning scholars and policy advisers. These old-style leftist thinkers have used China's rising income gap and increasing social unrest to raise doubts about what they see as the country's headlong pursuit of private wealth and market-driven economic development.
The roots of the current debate can be traced to a biting critique of the property rights law that circulated on the Internet last summer. The critique's author, Gong Xiantian, a professor at Beijing University Law School, accused the legal experts who wrote the draft of "copying capitalist civil law like slaves," and offering equal protection to "a rich man's car and a beggar man's stick." Most of all, he protested that the proposed law did not state that "socialist property is inviolable," a once sacred legal concept in China.
Those who dismissed his attack as a throwback to an earlier era underestimated the continued appeal of socialist ideas in a country where glaring disparities between rich and poor, rampant corruption, labor abuses and land seizures offer daily reminders of how far China has strayed from its official ideology.
"Our government only moves forward when it feels there is a strong consensus," said Mao Shoulong, a public policy specialist at Tsinghua University in Beijing. "Right now, the consensus is eroding and there is a debate over ideology, which we haven't seen for some time."
The divide does not appear likely to derail China's market-led growth. President Hu Jintao, in what Chinese political experts and party members said was a clear reference to the debate, told legislative delegates last week that China must "unshakably persist with economic reform."
China has generally stuck by its market-opening commitments to the World Trade Organization. Wen Jiabao, the prime minister, has allowed billions of dollars in foreign investment to flow into the once tightly protected financial sector.
Legislative officials insist that the proposed law, which has taken eight years to prepare and is intended to codify a more expansive notion of property rights added to the Constitution in 2003, will sooner or later be enacted, though possibly with some significant modifications.
But Mr. Hu and Mr. Wen wittingly or unwittingly invited the debate when they made tackling growing inequality a center of their propaganda efforts, political analysts say. The state-run news media are abuzz with calls to make "social equity" the focus of economic policy, replacing the earlier leadership's emphasis on rapid growth and wealth creation.
Since his rise to power in 2002, Mr. Hu has also tried to establish his leftist credentials, extolling Marxism, praising Mao and bankrolling research to make the country's official but often ignored socialist ideology more relevant to the current era.
He told party leaders in 2004 to study how Cuba and North Korea maintained political order, party officials say. And he has tried to distance himself from his predecessor, Jiang Zemin, who invited private businessmen to join the Communist Party and was viewed as permitting well-connected officials to enrich themselves with public property at the expense of the poor.
"Hu is himself a centrist who is not really pursuing one agenda or the other," observed a party official who said he could be punished for talking about leadership politics if he were quoted by name. "But he did pull us to the left to restore balance, and that gave the old guard an opportunity it has not had in years."
As a result, analysts say, the leadership may find it harder to pursue market-oriented solutions to some pressing problems, like providing health care to rural residents, grappling with rampant corruption in the state sector, expanding access to education and overhauling banks, insurance and securities companies.
Beijing's new plan to address its rural woes, labeled "building a new socialist countryside," promises an infusion of government cash for peasants and rural areas. But it steers clear of tackling some restrictions on economic activity, like a ban on private land sales in the countryside, that many pro-market economists say have left peasants economically disenfranchised.
"My impression is that allowing an expanded role for the market in education and health care is off the table," said Mr. Mao, the Tsinghua policy expert. "Rural land ownership is also too sensitive to consider now."
The tensions reflect rising concern that breakneck growth averaging nearly 10 percent annually over 20 years has left China richer but also dirtier and, by the standards of the one-party state, politically volatile.
Corruption, pollution, land seizures and arbitrary fees and taxes are among the leading causes of a surge in social unrest. Riots have become a fixture of rural life in China — more than 200 "mass incidents of unrest" occurred each day in 2004, police statistics show — undermining the party's insistence on social stability.
Many Western and some Chinese experts have argued that these problems stem from China's authoritarian political system, and that they will not easily go away until people have a greater say in how they are governed. But the Communist Party and many left-leaning scholars reject that view. They say the ills are caused by capitalist excesses and rising inequality, which they say requires that the government reassert itself in economic affairs.
One measurement of inequality, the gap between the average incomes of urban and rural residents, has risen to about 3.3 to 1, according to the United Nations Development Program, higher than similar measures in the United States and one of the world's highest. A study by the party's Central Research Office estimates that the ratio could rise to 4 to 1 by 2020 if current trends continue, a level some Chinese economists say could incite wider social turmoil.
Such political fears seemed to give an opening to critics who felt economic policies had strayed too far toward capitalism. The strength of leftist opposition had faded throughout the 1990's after Deng Xiaoping, who called economic development "hard truth," and later Mr. Jiang tolerated little ideological discussion of the direction of changes.
Liu Guoguang, a Marxist economist and a former vice director of the Chinese Academy of Social Sciences, stimulated an outpouring of opinions about inequality last summer when he gave a private talk that was transcribed and posted on the Internet. His talk supported the emphasis on growth and development but called for a much larger role for the government in managing economic affairs.
In a subsequent interview with Business Watch, a state-run magazine, Mr. Liu said, "If you establish a market economy in a place like China, where the rule of law is imperfect, if you do not emphasize the socialist spirit of fairness and social responsibility, then the market economy you establish is going to be an elitist market economy."
He has been joined by other scholars, including Mr. Gong, whose incendiary polemic on the property law prompted a succession of sympathetic essays and study sessions.
Also contributing to the response is the Hong Kong-based economist Lang Xianping, who has used a television show to pillory what he describes as raids on state assets by managers and foreign investors.
One top official who has come under scrutiny is Zhou Xiaochuan, the central bank governor and a promoter of market initiatives. Mr. Zhou attracted foreign investment to the financial sector, partly delinked China's currency from the United States dollar and steered the three biggest state-owned banks toward stock market listings overseas.
Mr. Zhou was attacked directly in a widely circulated Hong Kong newspaper article and indirectly by commentators in Beijing, who accuse financial officials of selling China's most valuable assets too cheaply.
Ji Baocheng, president of People's University in Beijing, criticized Mr. Zhou's banking changes in a public session of the legislature last week. He cited the big Hong Kong stock market listing of China Construction Bank, which was completed after the government injected billions of dollars to clean up its balance sheet.
Mr. Ji said the government priced shares in the bank too low, given the fresh infusion of capital, and he accused officials of "blindly sacrificing the interests of China and its people."
The government defends the overseas listings as a necessary step to raise capital, attract foreign experts to the boards and executive offices of the troubled banks and put the financial system on sounder footing.
Some pro-market economists, who seemed ascendant in the 1990's and early in this decade and now often sound defensive, have denounced the leftist revival as dangerous. Many also criticize the Hu-Wen administration for micromanaging investment and bank loans, tinkering with property and stock markets and declining to extend market-oriented policies to the countryside.
Zhou Ruijing, a retired newspaper editor associated with the pro-market camp, captured the sentiment in a January magazine essay.
"A widening gap between rich and poor is not the fault of market reforms," he wrote. "It's the natural result of them, which is neither good nor bad, but quite predictable."
Premier Says
Published:
BEIJING, Tuesday, March 14 — Prime Minister Wen Jiabao said Tuesday that China's rapid economic rise is being accompanied by a "high concentration of all kinds of acute problems," including official corruption by some officials who "have violated the rights of the people."Mr. Wen also said the government had "no surprise" revaluations planned for its currency this year.He described the "land issue" as the biggest problem facing hundreds of millions of farmers but suggested that government land policy would not change. Instead, he said enforcement of existing policy must be strengthened to protect farmers' rights at a time when illegal land seizures have fueled protests in the countryside.Mr. Wen's remarks came in a wide-ranging, nationally televised news conference that marked the close of the annual meeting of the National People's Congress, the legislature run by the Communist Party. Before the news conference, the Congress approved a new five-year economic plan that top leaders say represents a "historic" policy shift intended to close the income gap between urban and rural areas and create a "new socialist countryside."But one major rural issue — whether farmers can have more control over the sale of their leased farmland — seems unlikely to change in the near future. Government studies show that at least 40 million farmers have been left landless in recent years, often because of illegal seizures by local officials who exploit the current policy. That policy grants villages collective ownership over farmland, which is then leased to individual farmers. Corrupt officials often seize farmland and sell out to developers at a fat profit, while farmers get little compensation.Mr. Wen said more enforcement is needed to ensure that farmers' land rights are protected and that they are paid fair compensation when their land is confiscated. But he praised the current policy as a pillar of
[此贴子已经被作者于2006-3-23 10:34:33编辑过]
In China's Frontier, a Fortune Is Made
With 'Know-Who' and Financing, Yan Became Nation's Second-Richest Man
By Peter S. Goodman
Washington Post Foreign Service
Friday, February 17, 2006; Page A01
BAOTOU, China -- The Communist Party officials who run this grimy steel town on the grasslands of Inner Mongolia had big ambitions but little finance. So they called in one of China's most successful capitalists, Yan Jiehe, and let him handle almost everything.
Yan used the same plan he has applied across China's vast hinterland in amassing one of the country's largest personal fortunes: His company, China Pacific Construction Group, put up nearly all the money, hired workers and bought materials. On dark and muddy roads, workers added pavement and streetlights shaped like flowers. In the lonely center of the city, they inserted six public squares and statues of Genghis Khan. The city will pay in installments.
Yan's little-money-down financing has gained his company more than $50 billion in construction contracts since it was launched four years ago, elevating China Pacific into the largest private employer in the land, with more than 100,000 workers. Yan was recently ranked as China's second-richest man by analyst Hu Run, whose annual list of the wealthy has become a national event. Yan's personal assets were estimated at $1.6 billion, trailing only the $1.75 billion fortune amassed by Huang Guangyu, founder of Gome, a chain of discount electronics shops.
"I was going to be number one," Yan, 45, said in an interview. "I have villas and apartments in Nanjing and Shanghai. I drive a BMW. I have a Mercedes-Benz, a Cadillac, a Lincoln Town Car. I have everything. But in China, the bigger the tree, the more wind it catches. I knew being listed as the richest man would be asking for trouble, so I pushed to be ranked lower."
The turns by which the former schoolteacher rose to the ranks of the ultra-rich demonstrate the frontier nature of China's construction boom and the enormous sums being spent on highways, bridges and skyscrapers. They also show the hybrid nature of business in a land no longer communist yet not fully capitalist and the importance of cultivating ties with the local party officials who still determine what gets built.
"In China, it's not the know-how, it's the know-who," said David Chen, chief executive of MKA Capital Inc., an aircraft leasing and finance company based in Shanghai. "The government still controls lots of things. If you're a contractor or a real estate developer, you need a license. You need the land. You need to work with the government and you need people to be on your side. That's why all the nightclubs are full every night and why all the high-end restaurants have private rooms. People are in there talking business."
As word of Yan's wealth filtered into the Chinese press in recent weeks, he has tasted controversy. Critics assert that he built his fortune by exploiting the vanity of officials in backward places, sating their hunger for trophy projects when they should be investing in services for the poor.
"I hate businesspeople like Yan," said Zuo Dapei, a senior economist at the Institute of World Economics and Politics of the China Academy of Social Sciences in Beijing. "They are making fools of local government officials. In remote areas, many officials are unsophisticated, and their good intentions can be exploited by shrewd businesspeople. But others are just acting. When bribes are involved, they just pretend to be foolish."
Yan acknowledged that he targets "remote, underdeveloped provinces" lacking in finance and construction expertise. He said he fronts the costs because that allows him to make deals directly with local officials and avoid competition, enjoying average profit margins of 35 percent. "It makes the profit margin much higher when you have no competitive bidding," Yan said.
Yan made no apologies, portraying himself as a rainmaker able to spread urban development far from China's wealthier coastal areas.
"Local governments often don't have much capital, but they really want to build infrastructure," Yan said. "So my model is very popular. Before, I had to approach local governments. Now, they come to us."
In the past two years, the central government has limited investment to slow the pace of growth in China, fearing that a potentially disastrous real estate bubble is being fueled by loose credit. Beijing has frowned on Yan's approach, asserting that it finances roads to nowhere, fortress-like government buildings and other boondoggles. In January, the central government banned such financing.
The decree aims to curb the obsession with infrastructure projects," said Liu Fuyuan, deputy director of the Academy of Macroeconomic Research in Beijing, a unit of the state Development and Reform Commission, which guides economic policy.
Still, Yan expressed confidence that business would roll on. "I've secured all these contracts and they are going to be completed," he said. "China is so big that you cannot have one rule for all places. Americans have very strict laws, but China has very flexible laws. And where American companies focus on business issues, Chinese enterprises focus on personal relationships."
Yan was born in 1960 in the coastal province of Jiangsu, the youngest of nine children. His parents were schoolteachers. They occupied a comfortable brick house near the home of the premier and diplomat Zhou Enlai. But as the chaos of the Cultural Revolution exploded in the mid-1960s, Yan's family was sent to a poor village. There, they lived without enough blankets to cut the winter chill, subsisting on rice husks normally reserved for pigs.
"After all those hardships, I wanted to live a good life," Yan said in the interview, reclining in a leather-backed chair in the library of a five-star hotel in Shanghai. Trim and casual with slicked hair, he wore a zippered jacket, dark slacks and black leather loafers.
In his 20s, Yan was a schoolteacher on track to become an administrator at a high school in his hometown of Huaian. His wages were about $150 per month, plus health insurance and a pension. But in 1986, with China early in its economic transformation, he joined those "jumping into the sea," relinquishing the stability of the state system for the new business world.
He took a job as a clerk at a local cement factory, earning a mere $10 a month. His relatives fretted. But three months later he was appointed manager, securing $500 a month and a perch from which he would amass an empire.
Yan expanded into the construction-materials business by taking over a bankrupt state-owned collective. In 1992, he won a $1 million road-building contract in Nanjing, the provincial capital. The following year, he got the rights to build a section of a new highway linking Shanghai to Nanjing. He launched his first private business in 1995, Jiangsu Pacific Engineering Ltd., a construction company focused on projects in the province.
The business model that would make Yan rich took shape in 2002 with the launching of China Pacific. Yan took control of 17 state-owned companies with assets exceeding $750 million, according to the state press. In many instances, he bought them without putting up any cash by packaging successful operations with bankrupt factories, relieving local officials of having to pay pensions to retirees and compensate fired workers.
In China, many private businesses have been launched with assets from state-owned firms. Yan declined to detail where he got his capital.
"When one project succeeds, I invest the winnings in a bigger project," he said.
In Baotou, a broad city laid out on a grid where the grasslands yield to the desert, Yan found a willing customer. The area has substantial precious metal deposits. Officials want to develop roads to attract investment. They had in mind a concrete overpass linking the regional highway to their downtown.
"It's our grand entranceway," said an official in the city's Ministry of Transportation, who spoke on condition that he not be identified, citing rules barring unauthorized contact with foreign journalists. "The overpass gives visitors the impression that we are a civilized city."
Baotou first put the project out for bid, awarding a contract to a state-owned company. But capital controls deprived that firm of needed bank finance, opening the way for Yan.
Since setting up an office here in the spring of 2004, Yan and his representatives had feasted with local officials inside traditional Mongolian yurts, toasting with porcelain cups of horse-milk liquor and dining on such local delicacies as stewed camel's foot. In the fall of 2004, Yan's company landed a $23 million contract to build the overpass. The job was finished last July.
Next, Yan's firm renovated a boulevard known as "Corruption Street," its sidewalks lined with karaoke lounges and massage parlors. It built a 10-lane strip of concrete linking City Hall to the railway station, then added lights and a grand entrance to the government center. This year, China Pacific plans to put in a riverfront promenade.
For Yan and his company, the isolated city is now the source of contracts worth as much as $1.5 billion.
Honest money, Yan said. "All the Chinese media has been questioning whether I've gotten my contracts through closed-door dealing. But the prosecutor has never come to look for any trouble. Everything is transparent."
Special correspondent Eva Woo contributed to this report.
[此贴子已经被作者于2006-3-23 10:49:53编辑过]
China to Tax Luxury Goods
The Associated Press
Wednesday, March 22, 2006; 7:57 AM
SHANGHAI, China -- China has announced several new sales taxes, on goods ranging from disposable wooden chopsticks to luxury items such as yachts, citing a need to protect the environment and redress the gap between rich and poor.
The Finance Ministry announced the change in policy, which takes effect April 1, on Tuesday, the official Xinhua News Agency reported.
China on Wednesday announced plans to impose a 5 percent consumption tax on disposable wooden chopsticks, in an effort to discourage consumption of items that are blamed for wasting scarce timber resources. China makes about 15 billion pairs of throwaway chopsticks a year, consuming some 2 million cubic meters (71 million cubic feet) of wood. The new tax takes effect on April 1.
Buyers of yachts, golf balls and golf clubs will face a 10 percent tax, while luxury watches will be taxed at a rate of 20 percent, it said.
The change reflects the communist leadership's goals of countering the widening gap between rich and poor and of protecting the environment, which has been ravaged by more than two decades of industrialization.
The current tax on skin care and hair care products such as shampoo will end on April 1, the report said. That tax was imposed in 1994, when such products were still considered luxuries. Thanks to China's rising level of affluence, they are now viewed as daily necessities.
The 5 percent taxes on disposable wooden chopsticks and on wooden floor panels are intended to discourage consumption of items that are blamed for wasting scarce timber resources, the ministry said.
China makes about 15 billion pairs of throwaway chopsticks a year, consuming some 71 million cubic feet of wood, the report said.
To discourage waste of petroleum products, the government will levy taxes on solvents, lubricants and aviation fuel, the ministry said. But the taxes will be only partially imposed to help cushion the impact on industries already facing price hikes due to rising crude oil prices.
The report did not say if taxes on other products would also change. They include cigarettes, alcohol, jewelry, fireworks, gasoline, diesel, vehicle tires, motorcycles and compact cars.
China Can't Afford Higher Iron Ore Prices
By ELAINE KURTENBACH
The Associated Press
Friday, March 17, 2006; 2:21 AM
SHANGHAI, China -- China cannot afford to pay higher prices for iron ore this year, officials say, signaling Beijing's determination to wield more leverage in negotiations for key strategic commodities.
"Chinese steel and iron enterprises are facing many problems so China cannot accept another price rise. The companies' costs keep increasing while their profits drop," said a statement issued by the Ministry of Commerce and the National Development and Reform Commission, China's main planning agency.
State-owned steel makers would not be able to accept an increase in iron ore prices this year, following a 71.5 percent price hike in 2005, said the statement, seen Friday on the Commerce Ministry's Web site.
China's iron ore imports from Australia, Brazil and other producers rose 37 percent last year amid high demand for steel for manufacturing and building.
The ministry earlier had warned it would take unspecified measures to protect its steel makers if talks with foreign suppliers of iron ore fail to produce reasonable prices.
"This is the first step by China to limit commodity prices. We believe China will likely develop a comprehensive strategy to deal with commodity prices," Andy Xie, an economist at Morgan Stanley in Hong Kong wrote in a report released Thursday.
Chinese buyers, led by Shanghai-based Baosteel Group, are in the midst of price negotiations with leading suppliers BHP Billiton Ltd. and Rio Tinto Group of Australia and Brazil's Companhia Vale do Rio Doce.
Those suppliers reportedly are seeking price increases of 15 percent to 20 percent, to take effect from April 1.
Last year's jump in iron ore prices prompted a round of complaints over China's apparent lack of bargaining power in the negotiations, despite the fact that last year it imported 275 million tons, or about 43 percent of total worldwide production.
Chinese analysts say the country's huge demand for resources such as oil, iron ore and nonferrous metals should give it more say in the prices it pays for such commodities. Many manufacturers are being squeezed because prices for their products are failing to keep pace with rising costs for key industrial supplies.
The government's statement accused unnamed international suppliers of exploiting their position to "reap high and unreasonable monopoly profits" and violate free trade.
"Stable prices benefit establishing a fair international economic order and will realize a win-win cooperation for both resource producing and consuming countries," it said.
Although China's market reforms have transformed its major steel makers into modern, international corporations, the government still plays a key role in regulating the strategically important industry.
"The government's role is necessary for big deals; foreign parties are monopolies while Chinese parties are diversified and do not have significant bargaining power," the state-run newspaper China Daily quoted Mei Xinyu, a Commerce Ministry researcher, as saying.
Late last year, the country's major steel industry association demanded that companies cut back on output to help prevent a glut that could lead to damaging price cuts.
This year, the government intends to control steel output by closing down inefficient, low-quality iron and steel factories, keeping output at around 400 million tons. Last year's total output was 385 million tons according to the Brussels-based International Iron & Steel Institute, or about 30 percent of total worldwide output.
The cuts are expected to reduce China's total iron ore demand by 60 million tons, according to the National Development and Reform Commission.
这些材料很不错。本来我想对每份材料做一个点评，可是时间有限，我就简单说明。政策向农村倾斜是中央的一项战略措施，农村经济的发展直接关系着我国的内需，这是相互制约的，进而影响长远发展。这些措施是没有问题的，然而土地是一个不可回避的问题，农民最根本的是土地。在我国这样一个有着8亿多农民的过度，如果仅靠想城市流动是不可能解决问题的，城市也有城市的问题，农民进城镇也会给城市带来很多问题，如交通、居住、医疗卫生、教育等问题，建设社会主义新农村是必须的。土地基础设施是农村经济的载体，厂房设备都需要在土地上展开，因而土地在农村扮演了一个很重要的角色。然而，土地自由买卖只会使我们回到土地革命，如果要中国再走一边资本主义制度变革的历程，是不可能的，也是行不通的。所以产权改革并不是万能的，我们的改革一有问题就爱提产权不明晰，只有产权明晰，才能发展。所有权和使用权的问题在我个人认为应该规范化，而不是所有权的私有，我们是社会主义国家，尤其是农村经济是集体经济。而现在的问题是集体经济成了某些人的经济。很多农村都是这种情况，原因就是不规范，缺乏制度的硬约束和监督的无效，而且还存在不少黑势力。所以农村并不是产权能够解决的，因为我们的农民8亿多，就算城市转移3亿，5亿也是不小的数字。城市又出现了新的问题。中央推进城镇化建设是明智的，只是应该进一步规范。同时也提到内需问题，进出口贸易占据了内需的很大一部分，投资、出口、消费是拉动消费的三架马车，然而正如文中所述，出口是比例很大的贡献，投资次之，消费则只占很小比例，这就与农村联系起来了。关于教育问题，这是一个很不好处理的问题，教育投资原意上要拉动消费，可结果并不如人意，拉动富有人群消费方面作用不大，引起了信用教育投资，又把银行牵扯进了。这些问题越说就是整体了，从农村的发展可窥见我国经济的发展，毕竟城市不是先天就存在的。我说这么多，当然上面的材料并没有一一细看，但是很不错，希望大家讨论，如果有很好的理论水平和实践基础，也可以讨论政策建议，国家兴亡，匹夫有责。感谢版主！如有时间，其他条件也具备，我会做更详细规范的讨论。因为我们关注的是发展经济的问题。
这些材料很不错。本来我想对每份材料做一个点评，可是时间有限，我就简单说明。政策向农村倾斜是中央的一项战略措施，农村经济的发展直接关系着我国的内需，这是相互制约的，进而影响长远发展。这些措施是没有问题的，然而土地是一个不可回避的问题，农民最根本的是土地。在我国这样一个有着8亿多农民的过度，如果仅靠想城市流动是不可能解决问题的，城市也有城市的问题，农民进城镇也会给城市带来很多问题，如交通、居住、医疗卫生、教育等问题，建设社会主义新农村是必须的。土地基础设施是农村经济的载体，厂房设备都需要在土地上展开，因而土地在农村扮演了一个很重要的角色。然而，土地自由买卖只会使我们回到土地革命，如果要中国再走一边资本主义制度变革的历程，是不可能的，也是行不通的。所以产权改革并不是万能的，我们的改革一有问题就爱提产权不明晰，只有产权明晰，才能发展。所有权和使用权的问题在我个人认为应该规范化，而不是所有权的私有，我们是社会主义国家，尤其是农村经济是集体经济。而现在的问题是集体经济成了某些人的经济。很多农村都是这种情况，原因就是不规范，缺乏制度的硬约束和监督的无效，而且还存在不少黑势力。所以农村并不是产权能够解决的，因为我们的农民8亿多，就算城市转移3亿，5亿也是不小的数字。城市又出现了新的问题。中央推进城镇化建设是明智的，只是应该进一步规范。同时也提到内需问题，进出口贸易占据了内需的很大一部分，投资、出口、消费是拉动消费的三架马车，然而正如文中所述，出口是比例很大的贡献，投资次之，消费则只占很小比例，这就与农村联系起来了。关于教育问题，这是一个很不好处理的问题，教育投资原意上要拉动消费，可结果并不如人意，拉动富有人群消费方面作用不大，引起了信用教育投资，又把银行牵扯进了。这些问题越说就是整体了，从农村的发展可窥见我国经济的发展，毕竟城市不是先天就存在的。我说这么多，当然上面的材料并没有一一细看，但是很不错，希望大家讨论，如果有很好的理论水平和实践基础，也可以讨论政策建议，国家兴亡，匹夫有责。感谢版主！如有时间，其他条件也具备，我会做更详细规范的讨论。因为我们关注的是发展经济的问题。
学术角度同意～～^_^
these articles are really good because we know what China is in foreigners' eyes. Hope more foreign media coverage about China, which shows about the development of China and we can think the questins foreign media asked and try to find some measures to address these issues.
Thanks Lou Zhu!
China’s Central Bank Raises Rates in Latest Effort to Slow the Economy
HONG KONG, Aug. 18 — China’s central bank raised interest rates on Friday evening, the latest in a series of moves by the government to choke off a binge in speculative lending and investment that threatens to saddle the country’s banks with more bad loans if the economy slows.
The People’s Bank of China raised interest rates for one-year bank loans and bank deposits each by 27-hundredths of a percentage point. Economists had been predicting an interest-rate increase, China’s second this year, after government statisticians announced last month that economic growth reached a torrid 11.3 percent in the second quarter.
The government has already increased restrictions on bank lending policies, raised bank reserve requirements and even reprimanded regional officials who pursue speculative construction projects in defiance of Beijing’s instructions. Chinese officials have hinted at further brakes on the economy in the months to come.
“It’s still too little,” said Qu Hongbin, HSBC’s chief China economist. The People’s Bank of China said in a statement that the rate increases were intended to “curb demand for long-term loans and the overly rapid expansion in fixed-asset investment.”
The interest rate increase came despite announcements over the last week that consumer prices had fallen in each of the last three months and that growth slowed last month for industrial production and for investments in factories and other fixed assets. The latest data somewhat reduced the pressure on China’s central bankers to act.
“I don’t think they are desperate — this is a pre-emptive policy; I don’t think the economy is overheating,” said Ben Simpfendorfer, a currency strategist and economist in the Hong Kong office of the Royal Bank of Scotland.
The People’s Bank of China has been much slower than the Federal Reserve to raise interest rates over the last two years. Keeping interest rates low has made it a little less attractive to invest in China. This has slowed a flood of speculative money that poured into the country last year and threatened to force China to allow its currency to rise more quickly against the dollar.
The relatively low interest rates have also, however, reignited a frenzy of construction of apartment buildings and factories. Investors have borrowed heavily from state-owned banks in the hope of reaping large profits if the economy continues to expand rapidly. If economic growth falters, these loans could be added to the banks’ already large portfolios of bad debts.
The central bank raised the benchmark rate for one-year bank loans to corporations to 6.12 percent on Friday
Friday’s rate increase comes despite a series of signs over the last week that rapidly rising investments have not yet caused the broader economy to overheat.
Annual growth in industrial production slowed sharply last month, to 16.7 percent from 19.5 percent in June. Even the annual growth in investment in office towers, shopping malls and other urban fixed assets dropped last month to 27.4 percent from 33.5 percent in June.
After rising early this year, the consumer price index fell steadily through May, June and July, and was just 1 percent higher in July than a year ago. That suggested the Chinese economy has not yet run into shortages of labor, transportation and other bottlenecks that could drive prices sharply higher.
By contrast, prices surged in 2004, the last time the Chinese economy experienced an investment frenzy that prompted the government to hit the brakes. Inflation jumped then from nine-tenths of a percent in August 2003 to 5.3 percent a year later as railroads proved unable to ship enough goods, power stations failed to keep up with electricity demand and other shortfalls appeared.
While industrial and price statistics for July gave some sign that problems are under control this year, bank lending and the money supply continued to rise last month. That prompted many analysts to predict that China could face higher inflation and loan defaults in the future if not enough is done to tackle the investment boom now.
In another sign that the central bank is more worried about speculative investment than a broader overheating of the economy, the People’s Bank of China took two steps on Friday that appeared to be aimed at helping consumers.
The central bank gave regulatory approval for commercial banks to offer bigger interest rate discounts for home buyers seeking mortgages. And the central bank raised the interest rate that banks can pay on one-year deposits to 2.52 percent from 2.25 percent.
Higher interest rates on deposits will probably help households, who save up to half their incomes these days and put most of their savings in banks because the country’s stock markets have a poor image and bonds are very hard to trade.
The government has also not resorted to potentially its biggest weapon for slowing the economy: allowing faster appreciation of the currency, known as the yuan or renminbi. This would make Chinese goods more expensive overseas, slowing demand for them and curbing the growth of China’s enormous export sector. The United States, the European Union and Japan have periodically made requests for a currency adjustment.
Having used two tools, raising bank reserve requirements and interest rates, central bank officials “don’t want to add a third one into the mix, particularly one that’s unpredictable,” Mr. Simpfendorfer said.
Associated Press
Friday, August 25, 2006; Page D05 Washington Post
SHANGHAI, Aug. 24 -- Wal-Mart, capitalist retailer for the masses, now has its first Communist Party branch.
Wal-Mart Stores Inc., a bastion of private business, has fought efforts to form unions elsewhere in its worldwide operations. But in recent weeks it has agreed to work with the state-sanctioned labor federation to allow unions at its outlets in China, where it has 30,000 employees.
Earlier this month, a party branch, a Communist Youth League branch and a labor union were set up at a Wal-Mart outlet in China's northeastern rust-belt city Shenyang, a staff member in the store's communications department said Thursday, confirming Chinese media reports.
As is typical of many media-shy Chinese, she gave only her surname, Liu. She would not discuss further details.
Repeated phone calls to the public relations department of Wal-Mart's China headquarters in the southern city of Shenzhen were not answered Thursday afternoon.
The All-China Federation of Trade Unions, reportedly at the behest of Chinese President Hu Jintao, has been campaigning for several years to set up party-controlled unions in Wal-Mart branches, as well as with other companies with partial foreign ownership.
Wal-Mart, which has 60 stores in 30 Chinese cities, resisted for two years before employees in the southeastern city of Quanzhou voted to set up a union in late July.
Shenyang Wal-Mart has two party members and 16 Communist Youth League members out of its 389 employees, according to the official New China News Agency, which carried the news as an "urgent" bulletin.
It is not clear exactly how the party branch would operate. The news agency report stressed that its function would be to promote better business.
The party and youth league branches "will encourage members to play an exemplary role in doing a good job and that will be helpful to business development," it quoted Chen Lie, a Communist Party district leader in Shenyang, as saying.
Chen said the groups would not interfere with management or operations of the retailer, which is based in Bentonville, Ark.
Since July, employees of at least 16 other Wal-Marts in China have formed unions, according to the trade union federation, an umbrella group permitted by the communist government. Overall, China aims to unionize employees at 60 percent of its foreign companies by the end of this year.
China does not allow independent labor organizations. Unions usually represent the workforce of a single company or outlet, rather than an industry, and they have traditionally been allied with management.
The Communist leadership has sought to preserve the party's influence in the business sector despite sweeping capitalist reforms and a huge influx of foreign capital and management.
Once a thriving industrial hub of China's planned economy, where factory workers enjoyed elite status and cradle-to-grave benefits, Shenyang has experienced massive layoffs in recent years.
Reuters
Sunday, August 20, 2006; 11:18 PM
By Washington Post
BEIJING (Reuters) - China's one-child policy has led to an aging population and labor shortages that could undermine a key basis for the country's economic growth -- its seemingly endless supply of cheap workers, a newspaper said on Monday.
Family planning policies started since the late 1970s have prevented the birth of hundreds of millions of people, but incomes have not risen fast enough to support pensioners, the China Youth Daily cited a government report as saying.
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"In the not too distant future there will be a day when there is an end to the unlimited labor supply," the state newspaper said. "It is this that had been one of the most basic advantages of China's recent economic development."
The report, produced by the Chinese Academy of Social Sciences, a top government think tank, said industry had yet to face up to this fact despite factories in economic heartlands in Guangdong and near Shanghai already finding it hard to get workers. "Although China wants to change the proportion of manufacturing industry (in the economy), it will take a long time, and today there are no signs or motion toward this adjustment happening," it said. "The labor force is doubtless the most basic support of economic development."
According to a United Nations study released last year, the number of people aged 60 or over is expected to rise to 31 percent of the population in 2050, or more than 430 million people, from just 10.9 percent last year.
That would be well above the projected world average of 21.7 percent in 2050.
The report said the appearance of an aging population in a developing country where per capita GDP has only just exceeded $1,000 was "unprecedented."
"The country is unique in the world in that is it aging first without becoming affluent," it said.
Since China began opening up to the outside world almost 30 years ago, millions of people have flooded to cities from the countryside looking for work, and have helped turn the country into the world's factory, making everything from shoes to cars.
Analysts have warned that China faces a "pension time bomb" from its aging population.
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