Archives for: January 2018

01/19/18

Permalink 03:16:10 pm, by dacare, 615 words, 16 views   English (US)
Categories: News of China

China's economy accelerates for 1st time in 7 years

China's economy expanded 6.9 percent in 2017, picking up pace for the first time in seven years.

GDP totaled 82.7 trillion yuan (about 13 trillion U.S. dollars) in 2017, up from around 41.3 trillion yuan in 2010, when China first overtook Japan.

But it's not only the speed or quantity of growth that may make China a sustained engine for global economic growth. With policymakers reiterating the importance of "high quality growth," China's economy is entering a new era.

BEATING FORECAST

"Major macroeconomic indicators all beat market expectations, pointing to economic stabilization," said Ning Jizhe, head of the National Bureau of Statistics (NBS).

While exceeding market consensus of around 6.8 percent, the 6.9-percent growth rate in 2017 was also well above the official target of around 6.5 percent, and 6.7 percent in 2016.

Wang Hanfeng, an analyst with China International Capital Corporation, said that the pick-up signaled that China's economy has entered a new phase of development.

"The acceleration added to evidence that the economy passed a turning point in 2016 and continued upward on the back of industrial and consumption upgrades," Wang said.

Growth in the fourth quarter came in at 6.8 percent, unchanged from the rate seen in the third quarter, NBS data showed.

The Q4 data was driven by a robust expansion of the service sector, as it continued to benefit from China's economic rebalancing, Nomura said in a research note.

"Given these stronger-than-expected Q4 GDP data, we have decided to raise our 2018 growth forecast by 0.1 percentage point to 6.5 percent," it said.

BETTER STRUCTURE

The new era's basic feature is a shift from high-speed growth to high-quality development, according to a statement issued after the Central Economic Work Conference in December.

A breakdown of economic data Thursday showed a better economic structure, with new growth drivers emerging and outdated capacity fading.

New-energy vehicles, industrial robots, solar power and integrated circuit outshone most other industries in terms of output, growing 51.1 percent, 68.1 percent, 38 percent and 18.2 percent, respectively, year on year, contributing to a pick-up in industrial output growth in 2017.

On the other hand, mining and cement sectors saw their output decline 1.5 percent and 0.2 percent, while the textile and coal industries only grew 4 percent and 3.2 percent.

"New growth drivers are increasingly important for the economy, contributing more than 30 percent of growth and 70 percent of new jobs," said Tang Jianwei, an analyst with the Bank of Communications.

Bright spots such as retail sales in rural areas create future growth potential, analysts said.

The private sector is also showing vitality as the government pushes market reforms and improves business environment.

Private investment reached 38.15 trillion yuan, up 6 percent year on year, 2.8 percentage points faster than the previous year, accounting for 60.4 percent of the total investment.

HARD-WON RESULT

The growth came despite government measures to contain risk, which should have dampened growth.

Data Thursday showed a delicate balance between defusing risks and maintaining growth.

In 2017, stricter rules were adopted to curb pollution, local government debt, housing speculation and financial irregularities. All these "reductions" add up to a more sustainable growth model.

"The fact that the economy rebounded despite pollution controls and deleveraging showed that the real economy is improving, leaving room for risk control in 2018," said Liu Dongliang, an analyst with China Merchants Bank.

Chinese authorities said the country would continue to seek solid progress in preventing major risks, targeted poverty alleviation and pollution control in 2018, or the so-called "three tough battles."

When asked if such battles would weigh on growth in 2018, Ning hinted that he would not worry too much.

"When we talk about keeping the economy running within a proper range, we should not only look at the growth pace but also employment, income growth and improvement in the environment. After all, that's what economic development really means," Ning said.

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01/15/18

Permalink 05:00:16 pm, by dacare, 245 words, 129 views   English (US)
Categories: News of China

China's catering industry revenue to reach nearly 4 trillion RMB in 2017

Revenue of China's catering industry in 2017 is expected to reach 3.9 trillion RMB ($607 billion), according to a report by China's Cuisine Association (CCA) on the country's food consumption.

The revenue stood at 3.23 and 3.58 trillion RMB in 2015 and 2016, respectively. The continuous rise of the figure indicates the industry's growing impact on the general consumption market.

CCA President Jiang Junxian noted that the growth of China's catering industry has been maintained within a reasonable range, predicting revenue of over 5 trillion RMB in 2020.

According to the report, dining environment was selected by 19.2% of the consumers as the most important factor that influenced their choices of restaurants. A total of 17.8% of them considered taste as the most important.

Chinese cuisines took 57% of the catering market, possessing a dominant position. The figure was 55% in mega cities and 63% in small- and medium-sized ones.

A total of 92% of the people born between 1970 and 1979 marked Chinese food as their priority, while the proportion was only 19% among those born in the 1990s.

Hotpot was the most favored food of Chinese consumers in 2017, for which food safety, price, and environment were all criteria for their choices, especially those born between 1980 and 1989.

In addition to the dominant Chinese cuisines, snacks were another major contributor to catering industry growth in 2017, accounting for 16% of the sector. The proportion was even 18% in major cities.

CCA statistics indicate that salty taste was the most popular among Chinese consumers in 2017, favored by 23.3% of them. Spicy food ranked second, with a percentage of 17.2%.

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01/12/18

Permalink 04:05:07 pm, by dacare, 208 words, 120 views   English (US)
Categories: News of China

China's mobile games market posts $15b revenue in 2017

Mobile games revenue in the Chinese market in 2017 reached $14.6 billion, beating the United States market, which recorded $7.7 billion revenue, CBN Daily reported Friday, citing a whitepaper released on the China Digital Entertainment Industry Annual Summit.

China's gaming industry leader Tencent saw its online games revenue in the third quarter of 2017 grow by 48 percent to 26.8 billion yuan ($4.14 billion), which reflected contributions from smartphone games, including existing titles such as Honour of Kings, and new titles such as the China version of Contra Return and Legacy TLBB Mobile, according to the tech giant's website.

Another major play NetEase reported a net revenue of 8.11 billion yuan in the third quarter, up by 23.5 percent year-on-year, according to tech.163.com, NetEase's online news portal.

Japan and South Korea followed with a revenue of $6.51 billion and $2.07 billion respectively, according to the whitepaper.

Mobile games revenue reached $46.1 billion worldwide, up by 12.5 percent year-on-year. The North American region saw a revenue of $82.6 billion year-on-year, up by 5 percent, while the Asia-Pacific recorded a revenue of $27.54 billion year-on-year, up by 13 percent.

The fastest growing region was the Middle East and African market, which saw $2.32 billion yuan in revenue, up by 46 percent. The second-fastest growing market was the Latin American, which saw a revenue of $1.71 billion, up by 24 percent.

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01/10/18

Permalink 04:40:16 pm, by dacare, 224 words, 104 views   English (US)
Categories: News of China

China's producer prices dip in December

China's producer price inflation eased in December on government restrictions for polluting industries, official data showed Wednesday.

The producer price index (PPI), which measures costs for goods at the factory gate, rose 4.9 percent year on year in December, said the National Bureau of Statistics (NBS).

It was down from growth of 5.8 percent recorded in November, according to the bureau. On a monthly basis, it was up 0.8 percent.

For the whole year of 2017, PPI climbed 6.3 percent from one year earlier, compared with a 1.4-percent drop in 2016, ending the declining trend for the past five years.

As northern China enters its winter heating season, the government has increased efforts to tackle smog, asking steel mills and smelters to halt production to curb pollution. Those measures cooled demand for industrial raw materials.

Compared with a month ago, factory-gate prices increased at a slower pace in oil and natural gas developers, while ferrous metal producers and the coal mining industry saw prices drop. Costs increased in gas production and supply industries, NBS senior statistician Sheng Guoqing noted.

Compared with a year ago, prices in oil and natural gas extraction increased by 20.1 percent, followed by 18.5 percent for ferrous metal smelting and 12.3 percent for oil processing.

The PPI figures came alongside the release of the consumer price index, which rose 1.8 percent year on year in December, up from November's 1.7 percent.

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01/09/18

Permalink 04:17:37 pm, by dacare, 119 words, 84 views   English (US)
Categories: News of China

China's passenger vehicle sales up slightly in 2017

China's passenger vehicle sales edged up slightly in 2017 and are expected to grow faster this year, according to an industrial association Tuesday.

About 24.2 million passenger vehicles were sold last year, up 1.5 percent year on year, according to the China Passenger Car Association (CPCA).

In December, about 2.8 million passenger cars were sold, up 0.6 percent year on year, while over 100,000 new energy vehicles were sold, marking a month-on-month increase for 11 months, CPCA data showed.

The association expected sales of passenger vehicles to pick up in 2018 to reach about 4 percent year-on-year growth.

China is the world's largest auto market and also the fastest-growing market for new energy vehicles, thanks to the government's preferential policies to boost clean energy use to curb pollution.

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01/05/18

Permalink 02:02:31 pm, by dacare, 294 words, 164 views   English (US)
Categories: News of China

China’s services activity rises fastest in 4 years

New businesses gave a boost to China's services activity which expanded in December by the quickest momentum in four years, a private report showed yesterday.

The Caixin China General Service PMI rose to 53.9 at the end of the year from 51.9 in November, according to the survey conducted by financial information service provider Markit and sponsored by Caixin Media.

It said the growth in services activity was due to a greater volume of new business.

The PMI showed services companies posted the strongest upturn in new orders since May 2015 as around 14 percent of monitored companies noted an increase.

Services companies continued to increase their payroll numbers at the end of the year amid reports of rising business requirements.

Released on Wednesday, the Caixin manufacturing PMI rose to a four-month high of 51.5 for December from November's 50.8 to confirm steady economic growth in 2017.

"The December readings of the Caixin PMI surveys point to improving economic sentiment," said Zhong Zhengsheng, director of macroeconomic analysis at CEBM Group. "Expansion in total new orders and new export business revealed that manufacturers and service providers are optimistic over the business outlook for 2018."

Meanwhile, the official non-manufacturing PMI released last week edged up to 55 for December from 54.8 in November.

The official non-manufacturing PMI survey covers 4,000 large and small companies, while the Caixin service PMI measures over 400.

The services sector contributed to more than half of China's gross domestic product in recent years as the country is in the midst of transforming its economy from investment-driven to consumption-driven.

The Bank of Communications wrote in a report yesterday that China's GDP may have grown 6.8 percent in 2017, above the government target of 6.5 percent.

The bank's economists expect GDP this year to dip to 6.7 percent, with growth of tertiary industries continuing to outpace the industrial sector.

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01/04/18

Permalink 03:17:11 pm, by dacare, 520 words, 97 views   English (US)
Categories: News of China

China speeds up introduction of property tax


As part of the plan to contain housing price, China vows to step up housing system reform and create a long-term market mechanism.

When and how a property tax will be levied has long been a public concern.

China's finance minister Xiao Jie has published his policy statement on People's Daily, the Communist Party of China (CPC)'s flagship newspaper.

What have been specified?

Xiao outlined that property tax will be levied on industrial and commercial properties, as well as personal residential houses, based on their "appraised value". He also suggested the legislation work would be completed by 2019, which would lay the foundation for its enforcement in as early as 2020.

Experts believe it has sent out signals for the speeding up of China's introduction of property tax.

"The article shows that the authorities now have clearer thinking on the levy of property tax, as substantial questions have been specified, especially how the taxes will be collected," said Yan Yuejin, senior researcher of the Shanghai-based E-house China R&D Institute.

Yan noted that "appraised value" means a comprehensive assessment of the original and current value of the property, while also taking into account affecting factors such as the real estate market situations and the price of similar property in surrounding areas. "It's a rather fair and reasonable way to do it," Yan added.

It would require the establishment of an appraising system by each city, according to Zhang Dawei, chief analyst of Beijing-based Centaline Property, a leading property agent company. In Xiao's article, he also confirmed that local governments would obtain enough authorization in the process.

"That means local governments are allowed to run pilot policies based on their specific circumstances, so as to map out practical schemes that suit local development," said Jiang Zhen, research fellow with Chinese Academy of Social Science, "and their experiences drawn from the pilot programs will become important reference for property tax legislation, which will be pressed ahead steadily."

Why is property tax put on China's legislation agenda?

"Housing is for people to live in, not for speculation," this has been the tone-setting slogan for China's real estate market since it was first brought up by Chinese president Xi Jinping on the Central Economic Work Conference in December 2016. The long-awaited property tax is a key measure to reduce the appeal of houses as speculative investment, and bring the development of China's housing market to the right direction.

China's property price has been rocketing for over a decade, partly due to Chinese investors' preference for houses as investment and the resulting speculations. Bloomberg estimated that 25 percent of China's housing demand is out of speculations.

At present, taxes are only levied when houses are bought or sold, which leaves multi home owners with no extra financial burdens. The planned introduction of property tax may not only deter future speculators, but also drive existing multi home owners to sell extra ones before the enforcement of the new tax, thus increasing housing supply in the market.

But it's all up to the release of further details on how the property tax will be rolled out step by step.

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01/03/18

Permalink 03:28:18 pm, by dacare, 420 words, 64 views   English (US)
Categories: News of China

China to optimize business environment

The State Council made arrangements to optimize the business environment to stimulate market vitality and social creativity, at an executive meeting Wednesday.

Premier Li Keqiang, who chaired the meeting, called for universal use of a negative list of sectors and businesses off limits to foreign investment to control market entry.

Optimizing business environment would help productivity and competitiveness, he said.

The business environment is the foundation for developing a modern economy and ensuring high-quality development, the premier said.

Greater efforts should be made in streamlining administration, compliance oversight and offering better services. An internationally competitive business environment would have equal treatment for domestic and foreign enterprises and stimulate market entities and social creativity," he said.

China was ranked the 78th in ease of doing business, according to a 2017 report by the World Bank, up from the 96th place in 2013.

The government will cut red tapes, reduce taxes and slash fees for enterprises.

It was decided at the meeting that more efforts will be made to slash or cancel fees paid by enterprises, including operational and service fees and fees charged by sectoral associations and chambers of commerce. Costs for customs clearance will be lowered.

The government will further simply the procedures of administrative review and speed up approval procedures for business start-up, tax payments, application for construction permit and water, electricity and gas services, and real estate registration. The slashing of electricity price will also be a priority.

A new oversight mechanism characterized by integrity and information disclosure will be established at a faster pace. A unified punishment mechanism for breaches will be improved. An evaluation mechanism for business environment will be established, and rolled out nationwide over time. Special sectoral measures will be unveiled to facilitate the application for construction permits and cross-border trade.

"There is still much more that we can do to streamline administration, enhance compliance oversight and improve services. We should foster a more enabling business environment to incentivize a visible improvement in the ease of doing business for entrepreneurs, market entities and the general public," Li said.

A series of measures have been taken by the current government to cut red tape, reduce corporate burdens and improve the business environment. It has canceled or delegated administrative approval by the State Council bodies on 697 items, which account for 45 percent of the total.

The government also shortened the list of intermediary services for administrative approval by 323 items, or 74 percent of the total, and canceled professional qualification and certification requirements for 434 items, more than 70 percent of the total.

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