China's economy structural reform progressing ...

[TaiShang]

Recently SOE are beginning to show profit in China. Reforms are working.

Exactly. Strategic sectors and infant industries would be in jeopardy unless they are publicly controlled/regulated.

***

SOE reforms prove profitable
By Zhong Nan and Ren Xiaojin | China Daily | Updated: 2017-04-14

A worker checks molten steel at an iron and steel plant in Dalian, Liaoning province. Central State-owned enterprises saw their total revenues surge 19.2 percent to reach 6 trillion yuan in the first quarter of the year. [Photo by Liu Debin/For China Daily]


China's central State-owned enterprises saw their net profits surge 26.5 percent year-on-year to 226.4 billion yuan ($32.9 billion) in the first quarter of this year, thanks to measures including mixed ownership reform, the nation's top SOE regulator said on Thursday.

Shen Ying, chief accountant of the State-Owned Assets Supervision and Administration Commission, said the government will tighten State capital supervision, enhance risk control and deepen SOE reform, especially by carrying out reforms in steel and coal industries this year.

"SASAC will also support central SOEs' participation in the development of the newly announced Xiongan New Area in Hebei province, and central SOEs certainly can find a number of growth opportunities in the new area," said Shen.

A total of 91 central SOEs achieved a rise in revenue during the first quarter, with 54 of them, including defense-related industries, construction materials, pharmaceuticals and modern services, witnessing a rise of 10 percent or more, and sectors such as oil, steel and coal experiencing an increase in revenue of at least 40 percent. Central SOEs saw their total revenues surge 19.2 percent to reach 6 trillion yuan in the first three months.

"The reform will be applied to different SOEs based on their situation. Private companies are also encouraged to participate," Shen said.

Shen said the SASAC will accelerate the pace of cutting the number of "zombie companies" and reduce production capacity, and improve efficiency by streamlining the administration of SOEs.

"Zombie companies" are economically unviable businesses, usually in industries with severe overcapacity, kept alive only with aid from the government and banks.

"Overcapacity has become a major problem for both the public and private sectors. The difference is that private enterprises are more market-conscious, reacting through downsizing, shutdowns or bankruptcy when they are unable to generate a profit," said Shen.

Last year, more than 110,000 workers were affected by SOE reform measures such as capacity reductions, and they have received appropriate compensation, according to the SASAC.

"Unsuccessful action against zombie companies poses a major threat to China's economic structure. China therefore is resorting to SOE mergers to create more global powerhouses and avoid cut-throat competition, in addition to restructuring redundant industries to aid supply-side reform," said Nie Huihua, an economics professor at Renmin University of China in Beijing.

Nie said the central government's reforms aim to explore new State-owned asset management models focused on the management of capital rather than the companies, find effective methods for a mixed-ownership economy, and improve the corporate governance structure.

Contact the writers through zhongnan@chinadaily.com.cn

 

[ahojunk]

GDP growth at 6.9% in first quarter
By Xin Zhiming (China Daily) 10:26, April 17, 2017

A worker at a plant in Xingtai, North China's Hebei province, Jan 25, 2017. [Photo/Xinhua]

China's economy got off to a strong start in the first quarter, with GDP growing at 6.9 percent year-on-year, according to data released by the National Bureau of Statistics on Monday. Improvements in industrial production, investment and exports have combined to bolster the economy in that period, the bureau said.

GDP growth in the first three months remained steady at 0.2 percentage point higher than a year ago, showing a stabilizing trend in the economy, analysts said.

Although consumption growth dropped slightly, increasing at 10 percent in the first three months, down by 0.4 percentage point compared with the whole of 2016, an uptick in infrastructure investment and a higher export growth have contributed to the stable growth. Fixed-asset investment expanded at 9.2 percent year-on-year in the January-March period while export growth was 14.8 percent.

Improvement in industrial production is also a major contributor to the stable growth in the first quarter, according to the NBS.

The slight drop in consumption growth is attributable to falling vehicles sales as a result of the phase-out of preferential policies and the high base in the same period last year, according to research by the Bank of China Institute of International Finance.

Data in March showed that the economy remains resilient, Xie Yaxuan, analyst of the China Merchants Securities, said. He cited the Purchasing Managers Index (PMI), coal consumption by power-generating firms, and crude steel and cement output.

China's manufacturing PMI, which indicates vitality of manufacturing activities, was 51.6 in March, 0.2 higher than in February and above the contraction-expansion demarcation of 50.

Analysts predicted the economy will continue to grow in a stable manner in the second quarter, despite some unfavorable factors.

Due to its tightening measures in recent months, China's real estate investment may continue to cool in the coming months, affecting consumption of related products, such as furniture, electric household appliances and building materials, Lian Ping, chief economist of Bank of Communications, said.

"Uncertainties also come from the international markets," he said.

 

[ahojunk]

3.34 mln new jobs created in first quarter
(Xinhua) 13:41, April 17, 2017

BEIJING, April 17 (Xinhua) -- China created 3.34 million new jobs in the first quarter of the year, an official said Monday.

"The figure was 160,000 higher than the number created in the same period last year," said Mao Shengyong, spokesperson for the National Bureau of Statistics, at a press conference.

China's employment situation was generally good in the first quarter this year, with the unemployment rate in 31 major Chinese cities staying under 5 percent at the end of March, according to Mao.

"Meanwhile, more workers from rural areas found jobs in urban areas in the first two months, an increase of 2.7 percent year on year," Mao said.

China aims to create more than 11 million jobs this year, 1 million more than last year's target, according to this year's government work report.

The country added 13.14 million jobs in 2016, and the registered urban jobless rate stood at 4.02 percent at the end of the year.

 

[TaiShang]

China aims to create more than 11 million jobs this year, 1 million more than last year's target, according to this year's government work report.

The country added 13.14 million jobs in 2016, and the registered urban jobless rate stood at 4.02 percent at the end of the year.

The expansion of service industries will definitely provide employment opportunities as China continues urbanization drive and economic restructuring.

 

[ahojunk]

Supply-side reform reaps healthy return
By Xin Zhiming (China Daily) 08:40, April 18, 2017

China has made new progress toward carrying out supply-side structural reform in the first quarter of the year, the National Bureau of Statistics said on Monday. Analysts said a balance should be struck between pushing forward reform and achieving stable economic growth.

Supply-side structural reform－as measures to raise efficiency, including cutting overcapacity, reducing inventories, deleveraging, lowering costs and strengthening weak links－have made much headway in the first three months of this year, said NBS spokesman Mao Shengyong.

The capacity use rate of major industrial firms, which measures the efficiency of corporate operations, rose 2 percentage points from the fourth quarter of last year to 75.8 percent in the January-March period, while coal output dropped 0.3 percent year-on-year, the NBS said. The amount of unsold commercial housing space fell by 6.4 percent year-on-year, 3.2 percentage points higher than at the end of last year, it added.

The asset-liability ratio of industrial enterprises dropped by 0.6 percentage point year-on-year to 56.2 percent in the first quarter. And the country's fixed-asset investment in ecological system protection, public utilities, agriculture, and water conservancy management increased by 48.1 percent, 27.4 percent, 24.6 percent and 18.3 percent, respectively, in the same period. All were higher than the overall fixed-asset investment growth of 9.2 percent.

"Supply-side structural reform has played a role in boosting the stable growth of the national economy," said Zhang Siping, founder of the Innovation and Development Institute, a Shenzhen-based independent think tank. "The relationship between stable growth and structural reform should be properly handled."

Central and local governments should better coordinate cost reductions when carrying out supply-side structural reform, said Feng Qiaobin, an economics professor at the Chinese Academy of Governance.

For example, in cutting taxes, local governments should have access to stable fiscal revenue sources so that they would not take other reform-offsetting measures to replenish the local coffers after their fiscal revenues decrease.

China's economic structure has also become balanced and new drivers for growth are posting a stronger presence in the first quarter, according to NBS data.

The nation's industrial structure is increasingly dominated by the services sector and consumption, shifting away from the previous reliance on investment.

In the first quarter, the added value of the tertiary sector accounted for 56.5 percent of GDP, 17.8 percentage points higher than that in the secondary industry.

 

[TaiShang]

IMF upgrades China's growth forecast in 2017 and 2018
Xinhua | Updated: 2017-04-19

File photo shows high-speed rail in China. [Photo/Xinhua]

WASHINGTON — The International Monetary Fund (IMF) on Tuesday upgraded its forecast for China's economic growth in 2017 and 2018, reflecting the stronger-than-expected momentum of the Chinese economy in 2016.

In its latest World Economic Outlook, the IMF expects the Chinese economy to grow 6.6 percent in 2017 and 6.2 percent in 2018, 0.1 percentage point and 0.2 percentage point higher than its forecast in January.

The upward revision reflects the stronger-than-expected momentum of the Chinese economy in 2016 and the anticipation of continued policy support, said the IMF.

With the strong outlook for the Chinese economy, the global growth forecast for 2017 was also raised. The IMF expects the global economy to grow 3.5 percent this year, up 0.1 percentage point from its January projection.

"This improvement comes primarily from good economic news for Europe and Asia, and within Asia, notably for China and Japan," IMF chief economist Maurice Obstfeld said.

China's rebalancing process continues, as seen in a declining current account surplus and an increasing share of services in its gross domestic product (GDP), said Obstfeld.

However, the IMF suggested China take measures to address the growing vulnerabilities associated with the rapid credit expansion.

It also warned that protectionist measures adopted by advanced economies could lead to a broader tightening of financial conditions in China, possibly exacerbated by capital outflow pressure, which could have an adverse impact on the Chinese economy.

 

[ahojunk]

Economic Watch: China's economy growing beyond growth
(Xinhua) 20:30, April 19, 2017

BEIJING, April 19 (Xinhua) -- While some say that China still relies on its traditional growth boosters for its strong results, the world' s second largest economy is making strides far beyond its expectation-beating growth.

Taking a closer look at China's 6.9-percent economic expansion in the first quarter, it is the increasing role of the consumption and service sectors, rather than infrastructure spending and credit growth, that deserves attention.

First-quarter GDP growth accelerated from 6.8 percent in the previous quarter, and 77.2 percent of it was driven by consumption, 12.6 percentage points higher than the 2016 level, according to official data.

Meanwhile, the service sector rose 7.7 percent year-on-year in the first quarter, outpacing a 3-percent increase in agriculture and 6.4 percent in the secondary industry. It accounted for 56.5 percent of the overall economy.

The Chinese economy has not only been able to avoid a "hard landing," but is stabilizing and improving with better structure and more jobs, according to Chinese Premier LiKeqiang Tuesday.

Mao Shengyong, a spokesperson with the National Bureau of Statistics (NBS), said the Chinese were spending more on services, and the domestic wave of innovations and entrepreneurship had brought in new businesses and new methods of consumption.

Innovation and start-ups are also a steady source of new jobs and income increase, with 3.34 million new jobs created in the first quarter and the surveyed unemployment rate staying under 5 percent.

The per capita real disposable income of Chinese nationwide increased 7 percent year on year in real terms, outpacing the GDP growth rate in the period, while that of rural residents rose at a faster pace of 7.2 percent.

The pickup in China's economic growth was not a result of short-term monetary stimulus, but rather increasing demand triggered by urbanization and supply-side structural reform, said Zhang Liqun, a researcher with the Development Research Center under the State Council.

Xu Hongcai, economist with the State Information Center, said the highlight of the first-quarter data was a pickup in private investment, which climbed 7.7 percent year-on-year, a significant increase from the 3.2 percent growth in 2016.

The reforms and other measures taken by the government to encourage private investment since the second half of 2016 have paid off, he said.

China has shifted away from pursuing breakneck expansion to facilitate further reforms as the government trimmed this year's growth goal to around 6.5 percent from a range of 6.5 to 7 percent for 2016.

At the same time, the country has set ambitious targets regarding structural adjustment such as creating 11 million new jobs and slashing steel production capacity by around 50 million tonnes and coal by at least 150 million tonnes.

China must speed up replacing old growth drivers with new ones to transform and upgrade the economy, said Premier Li, citing a challenging world economic recovery and relatively heavy downward pressure in the domestic economy.

The World Bank said in a report last week that China's transition to slower but structurally rebalanced growth had continued, and it expected the Chinese economy to slow gradually as it rebalanced toward consumption and services.

"Chinese policymakers will manage the balancing act," which means that they will continue with long-term structural reforms, support new growth engines and facilitate the economy transitioning towards services and high value-added products, said Sudhir Shetty, chief economist of the World Bank's East Asia and Pacific Region.

Mao said it was "no big deal" if economic growth slipped by a few tenths of a percentage points in the near future, noting that China's economic growth rate had become less volatile in recent years, with 6.9 percent for 2015, 6.7 percent for 2016 and 6.9 percent for the first quarter of 2017.

Other than spurring growth, the priority for China's economic policies must now be given to furthering supply-side structural reform to lay a solid foundation for medium and long-term development, said Zhang Liqun.

 

[ahojunk]

Premier Li urges Shandong to foster new growth drivers
(Xinhua) 09:15, April 23, 2017

Chinese Premier Li Keqiang(C) inspects Weihai Port in Weihai City, east China's Shandong Province, April 19, 2017. Li visited Shandong from Wednesday to Friday. (Xinhua/Yao Dawei)


BEIJING, April 22 (Xinhua) -- Chinese Premier Li Keqiang has urged Shandong Province to quicken efforts to foster new growth drivers to replace old ones and support the firming trend in the broader economy.

In a tour of Shandong from Wednesday to Friday, Li acknowledged the region's economic and social achievements and asked local authorities to adopt new growth concepts under the leadership of the Communist Party of China Central Committee with Xi Jinpingas the core.

At the port of Weihai, Li learned about export and import growth there and urged regulators to boost capacity to facilitate China's central and western regions, as well as small and micro businesses to tap the global market.

"As a big trading nation, China will stick to opening-up to the world," Li stressed.

While visiting medical equipment producer Wego Group and garment company Dishang Group, Li underscored the role of innovation in creating high-quality products and fostering new business models.

He urged Wego to capitalize on the opportunities presented by the government's "Made in China 2025" strategy and encouraged Dishang to transform business models to boost product quality and brand to higher levels.

After being briefed on the capacity-cut progress at Jinan Iron and Steel Company, Li told employees that the drive needs support from both central and local authorities, and the government will ensure that workers made redundant in the process will be reassigned for other jobs.

Visiting a shantytown in Jinan city, the premier demanded greater efforts to speed up renovation as the project is an important part of China's new type of urbanization.

Li also went to a township health center where he urged further efforts to make medical services more easily accessible to the public.

Other issues Li has stressed during the tour include further streamlining of government administrative power and the development of modern agriculture.

Chinese Premier Li Keqiang (1st R) visits senior people at a hospital in Weihai City, east China's Shandong Province, April 20, 2017. Li visited Shandong from Wednesday to Friday. (Xinhua/Yao Dawei)

Chinese Premier Li Keqiang (C) inspects the growing of wheat at a wheat field in Qujia Village of Jinan, capital of east China's Shandong Province, April 20, 2017. Li visited Shandong from Wednesday to Friday. (Xinhua/Yao Dawei)

 

[ahojunk]

Basically, China is interested in importing high quality stuff.

========
Li: High-quality imports needed to address the trade imbalance
By HU YONGQI (China Daily) 09:05, April 21, 2017

Li Keqiang visited Weihai, a port city in Shandong province on April 19, 2017.[Photo/china.com.cn]

Premier Li Keqiang called on Wednesday for greater balance in foreign trade not only through promoting exports but also importing more high-quality goods. Li spoke at the start of his two-day visit to Weihai, a port city in Shandong province.

"As a major trading country in goods, China wants a balanced foreign trade instead of intentionally pursuing a trade surplus," he said at the Port of Weihai.

Li said the country must expand exports as well as imports of high-tech products and other high-quality goods that give consumers more choices and stimulate domestic companies to produce better products and services.

The call is in line with the premier's vow to push improved quality and efficiency by deepening reform and expanding opening-up, which he made during a panel discussion with National People's Congress deputies from Shandong on March 6.

Last year, international demand shrank amid the sluggish world economic recovery. But things are improving, as shown by the Chinese economy stabilizing and having achieved 6.9 percent in GDP growth in the first quarter. The year's first three months saw trade in goods increase by 21.8 percent to 6.2 trillion yuan ($899 billion) year-on-year, according to figures released by the General Administration of Customs last week.

Local officials reported to Li that Weihai's exports in the first quarter far exceeded imports.

According to the province's customs officials, Shandong's imports and exports exceeded 419 billion yuan last year, an increase of 28.9 percent year-on-year, which was also the highest among the nation's coastal provinces.

Weihai, in northeast Shandong, has been significant in trade with South Korea, Japan, the United States and other foreign markets. In the first quarter, the city's exports of food and agricultural goods grew quickly. Exports of vegetables and related products increased by 37.8 percent during the first three months, compared with the same period in 2016.

Additional opening-up has quickened the pace of development in eastern China and kept ports busy, Li said.

The Port of Weihai, which handles exports of goods made in coastal areas, should use its geographic advantages to unleash its potential to serve not only eastern areas but to extend its services to central and western parts of the country, he added.

Li also visited Sunjiatong Hospital; the Dishang Group, a clothing manufacturer; and the local market regulatory office.

.

 

[TaiShang]

Signs of recovery appear in China's rustbelt
Xinhua, April 21, 2017

The economy of China's rustbelt province of Liaoning is showing signs of recovery, expanding 2.4 percent year on year in Q1, compared with negative growth in 2016.

Liaoning was the only local economy in China to contract last year. The province's leadership hopes now catch up with the pace of national growth this year.

Local authorities attributed the improvement partly to steel and coal prices that have returned to reasonable levels after overcapacity reductions.

In addition, emerging industries, for example, Siasun, a robot-maker based in the provincial capital of Shenyang, saw Q1 output value rising 41 percent.

"Liaoning's economy is stabilizing and improving," said Su Jianjun, deputy director of the provincial development and reform commission. "We expect even better performance later in the year."

Su also welcomed the preferential policies granted to Liaoning by the central government, including a free trade zone that opened this month.

Northeast China -- Liaoning, Jilin and Heilongjiang provinces -- have been struggling for growth following the decline of their traditional heavy industries.

Liaoning also experienced extraordinarily hard times due to a series of scandals.

In 2016, China's top legislature disqualified 45 National People's Congress deputies from Liaoning for vote buying and bribery during the 2013 election.

In mid-January, Liaoning admitted in its annual report at the plenary meeting of provincial lawmakers that economic statistics had been falsified from 2011 to 2014.

 

[TaiShang]

Urgent: More jobs created in China, jobless rate falls
Xinhua, April 25, 2017

China's quarterly job report delivered a positive message Tuesday as 3.34 million new jobs were created in the first quarter and the unemployment rate fell to 3.97 percent.

http://www.china.org.cn/china/Off_the_Wire/2017-04/25/content_40686548.htm

@AndrewJin , @Jlaw , @Shotgunner51 , @ahojunk

 

[AndrewJin]

Urgent: More jobs created in China, jobless rate falls
Xinhua, April 25, 2017

China's quarterly job report delivered a positive message Tuesday as 3.34 million new jobs were created in the first quarter and the unemployment rate fell to 3.97 percent.

http://www.china.org.cn/china/Off_the_Wire/2017-04/25/content_40686548.htm

@AndrewJin , @Jlaw , @Shotgunner51 , @ahojunk

That's a hell lot of jobs in one quarter!

 

[TaiShang]

China industrial profits maintain double-digit growth in March
Xinhua | Updated: 2017-04-27

BEIJING — China's major industrial firms continued to post double-digit growth in March, adding to signs of a stabilizing Chinese economy, official data showed Thursday.

The companies reported a 23.8-percent year-on-year profit growth last month, down from 31.5 percent in January and February but much faster than the 8.5-percent increase in 2016, according to the National Bureau of Statistics.

 

[TaiShang]

China's manufacturing activity expands for 9th straight month
Xinhua | Updated: 2017-04-30

File photo: Workers work at the Liaoning section of a high-speed railway in northeast China's Liaoning Province, April 11, 2017.[Photo/Xinhua]

BEIJING -- China's manufacturing sector continued to expand in April, though at a slower pace, said the National Bureau of Statistics (NBS) on Sunday.

The country's manufacturing purchasing managers' index (PMI) came in at 51.2 in April, lower than the 51.8 recorded in March, according to NBS data.

The reading fell short of market expectations but still stayed above the boom-bust line of 50 for the ninth straight month.

The slower expansion was in part due to sluggish growth in both market demand and supply, said NBS senior statistician Zhao Qinghe.

The sub-index for production stood at 53.8 in April while the sub-index for new orders came in at 52.3, both down from the level a month ago.

"While both the production and the new orders indices are still in the expansion territory, the gap between them has widened, which needs to be closely watched," Zhao said.

The lower-than-expected expansion was also a result of contraction in the high energy-consuming industries, lower price at factory gate, and slower expansion in both imports and exports, Zhao said.

On a positive note, equipment manufacturing and high-tech manufacturing continued robust growth, with the sub-indices coming in at 52.1 and 53.4 respectively, well above the 51.2 registered for all manufacturing industries.

Consumer goods manufacturing also rose to 52.2, indicating an increasingly important role it plays in the economy, Zhao said.

 

[TaiShang]

China's trade surplus widens in April
Xinhua, May 8, 2017

China's foreign trade surplus widened in April as import growth decline outpaced that of exports, customs data showed Monday.

Exports in yuan-denominated terms rose 14.3 percent year on year to 1.24 trillion yuan (179.8 billion U.S. dollars), down from the 22.3-percent increase in March.

Imports expanded 18.6 percent to 979.1 billion yuan, compared with a 26.3-percent increase a month ago.

That leaves a trade surplus of 262.3 billion yuan, up 0.6 percent year on year. The surplus widened from 164.3 billion yuan seen in March.

In the first four months, total trade volume added up to 8.42 trillion yuan, up 20.3 percent year on year.

While the April trade growth fell short of expectations, customs data reflected improved trade structure.

In the first four months, general trade expanded 21.6 percent year on year to 4.75 trillion yuan, accounting for 56.5 percent of the total trade volume.

Trade of private enterprises grew 21.7 percent to 3.17 trillion yuan in the first four months, accounting for 37.6 percent of the total, and 0.4 percentage points higher than the same period last year.

Despite rising protectionism and anti-globalization sentiment, China's imports and exports with major trade partners remained strong.

During the first four months, trade with the European Union gained 15.5 percent year on year to 1.24 trillion yuan, accounting for 14.8 percent of the total. Trade with the United States expanded 20.3 percent to 1.18 trillion yuan, making it China's second largest trade partner.

Customs data also showed that a leading indicator for China's exports rebounded from 40.2 to 40.7 month on month in April, signalling positive potential in exports.