Category: Announcements


Permalink 12:16:33 pm, by dacare, 447 words, 422 views   English (US)
Categories: Announcements, News of China, Manufacturing & Industry

Production to slow down: HSBC

Workers assemble heavy equipment at a factory in Qingzhou, Shandong province. A preliminary reading of the Purchasing Managers' Index for the manufacturing industry edged down to 50.5 in December from 50.8 in November, the lowest level since October, HSBC Holdings Plc said in a report.

Preliminary manufacturing PMI shows weaker growth in December

China's manufacturing sector will likely see the slowest expansion in three months in December because of lower output growth, HSBC Holdings Plc said on Monday.

A preliminary reading of the Purchasing Managers' Index for the manufacturing industry edged down to 50.5 in December from 50.8 in November, the lowest level since October, the bank said in a report.

The production output sub-index slipped to 51.8 in December from 52.2 in November, pressuring the index.

Meanwhile, the new orders sub-index hit a nine-month high of 51.8 in December, compared with 51.7 in November, while the new export orders sub-index rose to 50.3 from 50.2 last month, suggesting stable market demand.

A reading above 50 indicates expansion, while one below that level signals contraction.

The official PMI data for December will be released on Jan 1 by the National Bureau of Statistics and the China Federation of Logistics and Purchasing. HSBC will release its final PMI data on Jan 2.

Qu Hongbin, chief economist in China at HSBC, said that although December's preliminary manufacturing PMI reading slowed marginally from November's final reading, it still stands above the third quarter's average reading of 49.7.

The latest reading implies that the manufacturing sector's recovery, which started in July, is still holding up, Qu said.

He believes that China's GDP growth will stabilize at about 7.8 percent year-on-year in the fourth quarter.

Zhang Zhiwei, chief economist in China at Nomura Securities Co Ltd, said that the slowdown in the PMI data "suggests that growth momentum has started to weaken".

"This trend is likely to continue in the first half of 2014, as market interest rates keep rising and pushing up financing costs for enterprises," said Zhang.

Figures from the central bank showed that new loans came in at 625 billion yuan ($103 billion) in November due to stronger retail and short-term corporate loans, rebounding from 506 billion yuan in October. Off-balance sheet lending saw a broad-based recovery to 377.9 billion yuan in November from 184 billion yuan in October but was still below the August-September levels.

A report from Barclays Capital said that short-term bill issuance has increased, as rising funding costs have probably led companies to rely more on short-term financing.

According to the NBS, industrial output growth in November slowed to 10 percent year-on-year from 10.3 percent in October, which may indicate that the GDP growth rate in the last quarter may be at 7.6 to 7.8 percent, compared with 7.8 percent in the third quarter and 7.5 percent in the second, analysts said.

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Permalink 09:24:44 am, by dacare, 353 words, 539 views   English (US)
Categories: Announcements, News of China

Agency releases 2014 holiday plan

The national body responsible for deciding China's holiday dates has released the national holiday schedule for 2014, provoking mixed reactions from the public.

The schedule, issued by the General Office of the State Council on Wednesday, links official holiday periods with weekends, thus extending the number of consecutive days workers can take off.

The new arrangement means that Spring Festival and National Day holidays will be extended to seven-day breaks. Meanwhile, the Chinese Tomb Sweeping Day, Labor Day, Dragon Boat Festival and Mid-Autumn Festival will become three-day holidays. However, New Year will be celebrated as a one-day holiday.

Excluding the attached weekends, there will be 11 official days of holiday through 2014, a figure similar to previous years.

"I was hoping the total number of national holidays would increase. It is really disappointing that it didn' t go up at all," said Cheng Jia, 30, from Beijing.

Another Beijing resident, Wei Bo, 59, said: "I do not see much difference between the schedule for 2014 and previous years, except for the arrangement for Spring Festival holidays. According to the new schedule, we will still have to work on Chinese Lunar New Year' s Eve — the time we are supposed to have our family reunion. This is so inhumane."

Also on Wednesday, the State Council released amendments to the National Annual Leave and Memorial Days regulation dealing with national holidays. Enacted in 1949 and amended several times, it stipulates the specific days and lengths of national holidays.

This year' s amendment changed the Spring Festival to the first three days of the first lunar month of each year. According to a previous amendment to the regulation made in 2008, the three-day Spring Festival started on the last day of the lunar year.

Cai Jiming, director of the Center for Political Economy at Tsinghua University, who leads a team researching holiday system reform, was also involved in the 2008 amendment.

He said the change will bring inconvenience to people who are asked by employers to work till the last minute.

His team had proposed to expand the Spring Festival from three days to four days, but the proposal was not adopted by the government.

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Permalink 09:30:09 am, by dacare, 480 words, 585 views   English (US)
Categories: Announcements, News of China

Taiwan asked to cooperate with free trade zone

The mainland and Taiwan adopted 19 joint proposals at the Ninth Cross-Straits Economic, Trade and Culture Forum, one of which encourages the island to cooperate with the new Shanghai Free Trade Zone.

The proposal, announced by John Chiang, vice-chairman of the Kuomintang, calls for cooperation between a pilot free economic area in Taiwan and the Shanghai Free Trade Zone as well as with three other pilot economic areas in eastern Fujian and Jiangsu provinces.

The free economic zones established by the two sides should cooperate and learn from each other to achieve common development, according to the proposal.

The Shanghai Free Trade Zone, which began operating in late September, is a 28.78-square-kilometer district billed as a test site for deepening market-oriented reforms.

Wu Poh-hsiung, KMT honorary chairman, said during his speech at the closing ceremony on Sunday he was delighted that both Taiwan and Shanghai have planned or established free trade zones and pilot free economic areas.

"We anticipate that the mainland and Taiwan will also consider cooperation opportunities in this field to give us more power to create a prosperous future," he said.

The forum, a key platform for communication between the mainland and Taiwan, ended on Sunday in Nanning, Guangxi Zhuang autonomous region.

With closer cross-Straits economic cooperation, the two sides should explore ways to keep pace with the Asia-Pacific region's economic integration, participants at the forum said.

The 19 proposals, which also cover cross-Straits cooperation in technology, finance, agriculture, education and tourism, are important and achievable, said Zhang Zhijun, the mainland's Taiwan affairs chief. The proposals reflect an urgency from both sides of the Taiwan Straits to stay competitive within international economic and scientific fields. The proposals will also provide a useful reference point for policymakers, said Zhang, head of the State Council Taiwan Affairs Office.

Zhang said both sides should seize opportunities to cooperate in order to increase advantages in global economic, scientific and technological competition.

"I truly hope relevant authorities from both sides turn these proposals into feasible policies and measures," Yu Zhengsheng, chairman of the National Committee of the Chinese People's Political Consultative Conference, said at Sunday's closing ceremony.

Yu urged both sides to overcome difficulties and seek opportunities to promote the peaceful development of cross-Straits ties and realize China's rejuvenation through cooperation.

Sun Zhaolin, deputy head of the Department of Taiwan, Hong Kong and Macao Affairs under the Ministry of Commerce, said it's advisable for the mainland and Taiwan to first reach a consensus on cooperation within the free trade zones before discussing details of cooperation.

In the proposals, participants urged both sides to expand financial cooperation by further opening their financial markets, jointly maintain stability in markets and build financial institutions on both sides to enhance exchanges. Participants also called on the two sides to promote cooperation in such sectors as culture, film, publishing, education, agriculture, medicine, as well as tourism and youth exchanges.

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Permalink 02:04:17 pm, by dacare, 636 words, 439 views   English (US)
Categories: Announcements, News of China

Shanghai elderly open to house-for-pension plan

More than 70 percent of elderly people in Shanghai are open to a house-for-pension program, a survey showed, despite a recent public outcry against the idea raised in a central government document.

According to the Shanghai investigation team under the National Bureau of Statistics, the program was supported by 73 percent of respondents as a possible means to ease the burden on elderly people in an aging society where people are choosing to have fewer or no children.

Under the program, an elderly person who owns a property could deed the house to an insurance company or bank, which would determine the value of the property and the applicant's life expectancy, and pay out a fixed amount of money every month.

The survey of 2,248 residents aged from 60 to 79 who have lived in Shanghai for more than one year found only 27 percent of respondents were firmly against the idea, the bureau's investigation team said in a report.

Those against the program cited various reasons including the possibility of family disputes, and that they don't need the program because their children will care for them in their old age.

Respondents in rural areas said the program is impossible because the land used for building rural houses cannot be traded.

Earlier this month, the State Council, China's cabinet, issued a document promising a complete social care network for people over the age of 60 by 2020.

The house-for-pension program, together with other policies such as encouraging private investment in elder care services, is dedicated to serving the world's largest population of elderly.

But the proposal drew wide criticism, with many suggesting that it shows the government is preparing to pay less attention to elder care services.

Experts said those respondents who said yes to the idea would not necessarily utilize the program.

"Intuitively, it is impossible to have such a high rate of people accepting the idea," said Feng Jin, a professor at Fudan University's Economics School.

"If you casually ask them, they may say yes to the program. But when they are requested to make the decision to mortgage their houses for a pension, it will be a different thing," she added.

In the United States, where a similar program has been in place for more than 20 years, only 2 percent of people aged 65 or above have mortgaged their houses for a pension, according to Feng.

In Hong Kong, only 11 percent of property owners accepted the idea, based on a survey in 2000 of 1,867 Hong Kong residents aged between 49 and 59.

A pilot program to test the idea by China Citic Bank in Shanghai proved unsuccessful because it did not comply with market demand, Feng added.

Yang Lei, founder of Huoban Jujia Homecare Service, said some elderly people showed interest in the program when she raised it.

All were childless or had children who had settled overseas, she said. "They accept the idea because they don't have a person to inherit their property," she added.

It is reasonable therefore that some oppose the idea in order to leave their house to their children, she said.
Wang Xiuzhen, 64, a retired worker, said a clear no to the proposal. "We are not Westerners. Asian culture promotes that you need to leave some heritage for your children."

The Shanghai survey also found 87.5 percent of respondents agreed with the concept of "raising sons to help in old age", and 67.3 percent supported the traditional concept of the family supporting its elderly members.

The respondents expected the authorities to provide more beds at care centers, improve community-based caring services and enhance the service level of those engaged in the sector, the survey found.

By the end of 2012, Shanghai had 3.67 million people aged 60 or older, accounting for 25.7 percent of its total registered population, according to Shanghai Civil Affairs Bureau. Shanghai also has millions of migrants who are not registered in the city.

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Permalink 09:52:10 am, by dacare, 779 words, 8201 views   English (US)
Categories: Announcements, News of China

Ministry of Human Resources and Social Security Seeks Comments on Regulating Labor Dispatch

China’s Ministry of Human Resources and Social Security issued provisions that align closely with recent changes to the PRC Labor Contract Law in order to help standardize labor dispatch in the country. The draft calls for a clearer definition of auxiliary positions, which will affect employers that historically employ a large amount of dispatched employees. However, a grace period is also provided so that employers can adjust their employment models in China.

On 7 August 2013, the Ministry of Human Resources and Social Security of the People’s Republic of China promulgated “Several Provisions on Labor Dispatch (Draft for Comments)” (the Draft) to solicit public opinion on how to regulate the labor dispatch in the country. This effort is intended to echo the Decision of Amendment of the Labor Contract Law (the Decision), effective from 1 July 2013, for the purpose of detailing the rules for labor dispatch and providing implementation guidance.


Union Involvement

The Draft echoes the Decision’s recommendation that labor dispatch shall only apply to positions of temporary, auxiliary and substitutive nature (Three Characters). In addition to the established definitions that a temporary position applies only to a position lasting no longer than six months, and a substitutive position applies to a position vacated for off-work studies, time off, etc., the Draft specifies that an employer shall propose the list of auxiliary positions in line with industry features and business operation needs, and confirm the list upon consultation with a labor union or employee representative meeting before making it public.

The Draft further reinforces the supervisory function of the labor union in that if an employer violates the provisions—especially regarding Three Characters—or the maximum ratio of dispatched employees, the labor union is entitled to raise concerns and ask for corrective actions.

Maximum Ratio of Dispatched Employees

The Draft mandates 10 per cent as the maximum ratio for dispatched employees among the total employee pool of an employer. That said, an employer cannot unlimitedly set auxiliary positions and should be limited to the ratio ceiling at 10 per cent. Such limitation would have a great impact on companies that have a large amount of dispatched employees, and certain adjustments would be accommodated in order to comply with the law, as well as optimize the benefits for the business.

Expanded Coverage of Labor Dispatch Services

According to the Draft, if an employer subcontracts certain business operations to a third-party contractor but still takes direct control and management of the employees of the said contractor, such subcontracting behavior shall be regarded as labor dispatch, and therefore subject to the regulations on labor dispatch.

This expanded definition of labor dispatch is meant to prevent an employer from taking advantage of the subcontract to circumvent the restrictions and limitations for labor dispatch, including, but without limitation to, the maximum ratio of dispatched employees. Therefore, it requires special attention and due consideration when an employer intends to adopt the subcontracting model for certain parts of its business operations.


The penalty for violating the rules on labor dispatch is RMB 5,000 to RMB 10,000 per person. It is worth noting, however, that if an employer violates the relevant rules on labor dispatch, especially those of “Three Characters” and the ratio ceiling of auxiliary positions, and makes no rectification within one month of being given administrative penalty, the dispatched employees will be deemed to have established an employment relationship with the employer, and the employment contract will be deemed to take effect one day after the end of the one-month period after receiving the penalty.

Grace Period

The Draft provides a grace period for employers to be compliant. That said, any labor dispatch duly established prior to 1 July 2013, when the Decision took effect, shall continue to be in force until the expiration of the term period, which is up to two years. If the existing labor dispatch does not follow the "Equal Pay for Work of Equal Value" principle, it is further proposed that the amendment shall be made accordingly and immediately. Further, for any employer that has a large amount of dispatched employees exceeding the 10 per cent ratio ceiling, it shall not recruit any new dispatched employees, even for auxiliary positions.


To summarize, the Draft calls for clear identification of the auxiliary positions through participation in either a labor union or employee representative meeting followed by the strict 10 per cent ratio ceiling for all auxiliary positions in any event. This gives little room for an employer to maneuver if such employer historically has had a large amount of dispatched employees. However, the Draft also provides for a grace period so that an employer could take time to consider and adjust its employment model in China.

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Permalink 04:28:54 pm, by dacare, 848 words, 438 views   English (US)
Categories: Announcements, News of China

Plight of Chinese hawkers highlights impact of downturn

Every year the scorching Chinese summer brings throngs of unlicensed vendors out on to the streets, hawking everything from pirated DVDs to watermelons.

Given their lowly and illegal status they are often treated poorly by the authorities, but this year has been particularly bloody for this army of mobile shopkeepers.

Two weeks ago, Deng Zhengjia, a 56-year-old watermelon vendor, was killed and his wife knocked unconscious after they were attacked by the local “chengguan” – an auxiliary police force tasked with keeping city streets clean and orderly.
Since then there have been a dozen similar incidents reported across China in which “melon-peasants” (as they are referred to in Chinese), street hawkers, journalists and even police officers have been beaten up by locally-employed chengguan.

Chengguan brutality is not new, but experts say rising unemployment, particularly in the low-end export-orientated manufacturing sector, is driving up the number of vendors and prompting many more confrontations on the streets.

“The economic downturn has caused an increase in the unemployed and low-income populations and they have to return to the labour market which inevitably increases the conflict between chengguan and street vendors,” says Qiu Jianxin, an expert on the chengguan at Nanjing Aeronautics and Astronautics University.

Official Chinese unemployment data are virtually meaningless as they do not count the country’s hundreds of millions of migrant workers. According to a government manufacturing sector survey published on Thursday, however, employment in the sector has contracted for 13 months. A separate survey published by HSBC showed that the number of workers in the manufacturing sector shrank in July at its fastest pace since March 2009, with expectations of further job cuts.

The government has said 7.25m jobs were created in the first half of the year. But another survey from the Ministry of Human Resources and Social Security found that the number of new urban jobs fell by 5.7 per cent in the second quarter from the same period a year earlier.

“The employment situation is weakening in China,” says Zhu Haibin, chief China economist for JPMorgan. “The service sector is creating some jobs to hold up the overall labour market conditions but low-skilled manufacturing employment is particularly weak.”

A researcher at a government think-tank, who asked for anonymity, estimated that in some export-orientated manufacturing zones in south China one-third of migrant workers were still employed in factories, another third had switched to employment in the services sector while the final third had returned home to the countryside.

This balancing effect means China has not yet seen widespread net lay-offs despite three years of steadily slowing growth – from almost 12 per cent expansion in early 2010 to 7.5 per cent growth in the second quarter this year.

Without the pressure of massive unemployment the government has been unwilling to launch a major stimulus package to boost the economy as it did in late 2008 in the face of the global financial crisis. But the overall employment figures disguise the shifts that are occurring in the labour market and the potential dangers for China’s stability-obsessed government.

As news of Deng’s death in central China spread on social media, it caused outrage throughout the nation that was even expressed in official media outlets.

Local government officials in charge of the chengguan initially claimed he had “suddenly fallen to the ground and died”. But Beijing soon ordered the arrest of the officers involved and arranged for his family to receive a large payout.

“The government paid off the family quickly to shut them up because they are very worried this incident could spark wider protest or some sort of popular movement,” says Yang Jisheng, deputy editor at the reformist magazine Yanhuang Chunqiu.

Apart from there being fewer available jobs in the manufacturing sector there is also a mismatch between the jobs available and the skills and ambitions of those entering the workforce.

“There are studies that show a connection between unemployment and the number of street vendors in China,” says Ye Tan, a popular columnist who has written extensively about the chengguan. “But for many vendors the problem is not that they can’t find a job, but that they are unwilling to work long hours in high-risk manufacturing jobs.”

Because street vending is the main source of income for many of these migrants, the stakes are high when they are caught by chengguan, who regularly confiscate all of their wares and income. The chengguan often ask for protection money from vendors and regularly conduct street raids that can sometimes turn violent.

Just one day after Deng was killed, another melon vendor in northeast China was beaten up by chengguan in his city, in an incident that was captured on camera phones by witnesses. The footage was replayed by a regional state-controlled TV station whose journalists were themselves attacked by chengguan on camera when they went to the chengguan’s offices to check the facts of the case.

A week later, a police officer was reportedly beaten and had his pistol grabbed by a group of chengguan in western China after he was called to an incident in which the chengguan were attacking people.

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