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ECONOMY

By Niu Mujiangqu and Zhao Runhua / May 17, 2019 05:04 PM / Economy

Photo: VCG

Photo: VCG

With summer approaching, China’s housing markets are getting warmer too, according to April data released by the National Bureau of Statistics (NBS) Thursday.

Prices of new homes Beijing, Shanghai, Guangzhou, and Shenzhen rose 0.5%, 0.3%, 1.1%, and 0.4% from the previous month respectively. Meanwhile, the average price of new homes increased by 0.8% in the 31 second-tier cities surveyed by the NBS and 0.5% in 35 third-tier cities.

The Bureau also reported price increases in existing homes in many of the 70 cities it surveyed, some of which were hit by a slew of tightening measures targeting the industry.

Liu Jianwei, a senior statistician at NBS, said the price increases were within a “stable” range.

While loosened monetary policies were a major factor, local policies including housing discounts for qualified “talent” may also have contributed to heating up urban markets, chief analyst Zhang Dawei from real estate broker Centaline Property told Caixin.

Related: Jump in One Lower-Tier City's Land Prices Hints at Sharp Real Estate Recovery

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ECONOMY

By Teng Jing Xuan / May 17, 2019 01:00 PM / Economy

Photo: VCG

Photo: VCG

Don’t “overestimate” the impact of African swine fever on inflation, China’s top economic planner says.

The deadly virus, which has spread across the country since last August and has sent live pig and pork prices soaring, will not have a major impact on consumers due to the stable supply of other protein sources including poultry, aquaculture products and eggs, National Development and Reform Commission (NDRC) spokesperson Meng Wei said Friday.

The NDRC predicts that China’s consumer price index will become more stable later in the year, with inflation for the whole year “remaining within the expected target range,” Meng said.

Consumer inflation in China hit a six-month high in April, driven mainly by a 6.1% year-on-year increase in food prices, according to recent figures from the National Bureau of Statistics.

Read more: Slaughterhouse Test Blitz Ordered to Stem China's Pig Contagion

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By David Kirton / May 15, 2019 07:27 PM / Economy

Photo: VCG

Photo: VCG

Beijing is drawing up plans for a new "safeguard mechanism" to guarantee minimum levels of regional renewable energy consumption, in a bid to stop so much of the country’s solar, wind and hydropower from going to waste.

China leads the world in solar and wind capacity, but much of the power generated never gets used due to a lack of coordinated planning with the power grid and provincial-level governments, which are often under pressure to support other local generators such as coal plants.

The government will reduce the waste, known as curtailment, by setting levels of renewable energy consumption for the country’s provinces and regions, according to a notice from the National Energy Administration and state planner the National Development and Reform Commission.

Local energy authorities must come up with a plan for increasing their renewables consumption, which Beijing will then start assessing from the beginning of 2020, according to the notice.  

The government has been mulling such a "safeguard mechanism" for around a decade, but the country’s complex and fragmented energy system, where authority is shared by a number of influential bodies, has produced opposition and frequent delays. That appears to be changing.

China wasted 2.7%, or 1.24 billion kilowatt hours (kWh), of the solar power it generated, and 4%, or 4.35 billion kWh, of wind-generated power, in the first quarter of this year. Yet this marks substantial progress, with curtailment down 1.7 percentage points and 4.5 percentage for solar and wind respectively from a year earlier.

Related: China Is Wasting Less Solar and Wind Power

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By Zhao Runhua / May 15, 2019 04:32 PM / Economy

Photo: IC Photo

Photo: IC Photo

China’s much-anticipated new economic zone — the Xiongan New Area — formally began acquiring land from local residents on Tuesday, state-run Xinhua News Agency reported.

The still-under-construction area, about 100 kilometers (62 miles) southwest of Beijing, just turned two years old. It will serve to help the region around Beijing develop, and will take on some of the capital numerous non-essential duties.

The government is now acquiring land to complete infrastructure projects where residents’ houses and farmlands are currently located. China released some details of the compensation agreements.

Starting from the first batch of two villages, residents involved can choose to receive either cash compensation or new accommodations — the specifics of which were not published.

Residents who dispute the compensation or relocation offers can appeal to a local government bureau, publication The Paper cited a local notice as saying.

Related: Beijing Regional Integration Is Lagging Behind Peers

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By Liu Jiefei / May 15, 2019 11:09 AM / Economy

Growth in China’s retail sales has slumped to its lowest level since May 2003.

Retail sales, which include spending by governments, businesses and households, increased 7.2% year-on-year in April, down significantly from 8.7% growth in the previous month, according to official data released Wednesday.

Fixed-asset investment — a key driver of domestic demand — grew 6.1% year-on-year in the first four months of this year, down from 6.3% growth in the first quarter, according to data released by the National Bureau of Statistics. The reading missed the median forecast of a 6.4% increase by a Bloomberg survey of economists.

Government-driven infrastructure investment rose 4.4% year-on-year in the first fourth months of the year, the same as the increase in the first quarter.

Investment in real estate development rose 11.9% year-on-year in the same period, edging up from an 11.8% increase in the first quarter of the year.

Value-added industrial output, which measures production at factories, mines and utilities, increased 5.4% year-on-year last month, down from an 8.5% increase in March but up from 5.3% growth in the first two months of this year.

Check Caixin Global's homepage today for a deeper analysis of these breaking figures

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By Jing Xuan Teng / May 14, 2019 12:36 PM / Economy

Photo: VCG

Photo: VCG

There are some things money can’t buy — and in Shanghai, an apartment can sometimes be one of them.

Migrants from other cities without a Shanghai hukou, or household registration, have 90% lower odds of owning homes in the city compared to Shanghai natives, even though they’re more likely to be higher earners, according to a recent study of city residents in their 30s published in the Journal of Ethnic and Migration Studies. Rural migrants fare slightly worse, and have 92% lower odds of owning a home than locals. 

China’s hukou system ties every registered citizen to a particular location, and affects where they’re able to access social services, education and the housing market. In a major city like Shanghai, where the promise of jobs and wealth has attracted millions of migrants, it’s difficult for new arrivals to obtain the coveted local hukou unless they marry a local or meet special education or occupation requirements.

“Those with access to hukou move on to accumulate more wealth,” according to the report’s authors Zhenchao Qian of Brown University, Yuan Cheng of Shanghai’s Fudan University, and Yue Qian of the University of British Columbia. “Rural and other migrants are forever outsiders, working for their dreams, engaging in essential jobs, but unwelcome and unable to integrate in Chinese cities.

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By Zhang Yu and Denise Jia / May 10, 2019 04:02 AM / Economy

Photo:Ministry of Commerce

Photo:Ministry of Commerce

China has never changed its stance on being trustworthy and keeping its promises, even though the U.S. administration recently accused it of “backtracking” and “reneging” on promises, China’s Commerce Ministry spokesman Gao Feng said Thursday.

Gao told reporters in Beijing at a routine press briefing that it was normal for parties to have disagreements during negotiations, a process of exchanging opinions and reaching consensus. He emphasized China’s clear sincerity and good intention over the past year to push the trade talks forward.

The ministry spokesman called for the two sides to meet halfway and resolve problems through dialogue rather than unilateral actions. He also warned that China is fully prepared and capable of defending its interests and that China will not succumb to pressure.

The comments came after U.S. President Donald Trump threatened to raise tariffs on $200 billion of annual Chinese imports to 25% from 10%, saying China was backtracking on earlier commitments. U.S. Trade Representative Robert Lighthizer Wednesday confirmed the tariff increase starting as soon as Friday.

China’s Vice Premier Liu He is leading a delegation set to resume trade talks with the U.S. in Washington Thursday and Friday. Gao said the decision to send the delegation to Washington as planned despite the tariff threat demonstrated China’s “utmost sincerity.”

Related: Ahead of New Trade Talks, China Vows to Retaliate If U.S. Levies New Tariffs


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By Liu Jiefei / May 09, 2019 10:34 AM / Economy

Things aren't looking good for budget-conscious Chinese consumers.

Consumer inflation in China hit a six-month high in April, mainly driven by rising food prices, official data showed Thursday.

China’s consumer price index, which measures the prices of a basket of consumer goods and services, rose 2.5% year-on-year in April, a high not seen since an identical growth rate last October, according to the National Bureau of Statistics (NBS). The reading was up from a 2.3% rise the previous month, which was already a five-month high.

The producer price index, which tracks the prices of goods circulated among manufacturers and mining companies, inched up 0.9% year-on-year, the highest in four months, NBS data showed. That compared with a 0.4% increase in March.

Check caixinglobal.com throughout the day for further analysis on the newly released data.


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By Han Wei / May 09, 2019 01:47 AM / Economy

Photo: VCG

Photo: VCG

China will take necessary countermeasures if the United State moves to increase tariffs on Chinese products, the country’s Ministry of Commerce said in a brief statement late Wednesday.

The U.S. is set to raise tariffs from 10% to 25% on Chinese products worth $200 billion annually starting Friday, according to a Wednesday filing by the U.S. Trade Representative’s office for the Federal Register. In December, U.S. President Donald Trump and Chinese President Xi Jinping agreed during a meeting in Argentina to postpone the tariff increases, which were originally planned to take effect in March, for the two countries to negotiate a deal.

Officials from both sides have held ten rounds of meetings since then, and the next one is scheduled for later this week when Chinese Vice Premier Liu He arrives in Washington. But tensions mounted after Trump criticized the bilateral negotiations for moving “too slowly” and threatened to increase additional tariffs in tweets during the weekend.

“The escalation of trade friction is not in the interest of both countries and the world. China is deeply regretful,” the commerce ministry said in the statement.

Related: Vice Premier Liu He to Head to U.S. for Trade Talks


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By Liu Jiefei / May 08, 2019 11:46 AM / Economy

Photo: IC Photo

Photo: IC Photo

China’s exports of goods dropped 2.7% year-on-year in dollar terms in April, according to data released Wednesday by the General Administration of Customs.

The reading missed a median forecast of a 3% increase in a survey of economists by Bloomberg.

Imports rose 4% year-on-year last month, beating a forecast of a 2.1% decrease. The overall trade surplus stood at $13.8 billion, down 47.2% year-on-year.

Related: Shipping Giant COSCO to Acquire Five China Units of Singapore Rival

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By Tanner Brown / May 06, 2019 09:51 AM / Economy

China stocks plunged on Monday, the first day of trade after a long holiday, following reports that trade talks with the U.S. had taken a negative turn.

The Shanghai Composite Index opened down 3.04% at 2,984.73, while the Shenzhen Component Index started the day 3.98% lower than its previous close, at 9,289.74.

Shenzhen’s tech-focused ChiNext was down 4.44% at 1,551.72.

The market’s dour opening comes after U.S. President Donald Trump threatened China with higher tariffs, with Bloomberg citing a lack of progress in trade talks.

Related: Chart of the Day: Stock Investors Borrow More in the Bull Market

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By Sun Lizhao, Sun Liangzi and Tang Ziyi / May 02, 2019 11:36 AM / Economy

Photo: China News Service

Photo: China News Service

China’s national rail operator has reported its best annual performance ever.

China Railway Corp. (CRC) brought in net profit of 2 billion yuan ($300 million) last year, an increase of 12.4% year-on-year. Revenue rose 7.89% to 1.1 trillion yuan.

The majority of the revenue came from transportation services, with freight business rising 11.5% to 352 billion yuan, while gains from the passenger business grew at a similar rate to 357 billion yuan, CRC said in its earnings report released on Tuesday.

The strong performance is in line with its surging annual freight volume, which saw an increase of 9.1% to 4 billion tons in 2018, according to an earlier company report.

CRC had been stuck in a sluggish freight demand between 2012 and 2016. However, the company’s luck picked up in 2017 after authorities began pushing for companies to use rail transport in some northern regions more so than road transport, as part of an effort to curb air pollution.

Related: Cost of Moving Coal, Ore by Rail Slashed in Northern China

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By Zhang Yu and Wu Gang / Apr 27, 2019 05:24 PM / Economy

A new-energy car plant in Sanmenxia, Henan province on April 20. Photo: IC Photo

A new-energy car plant in Sanmenxia, Henan province on April 20. Photo: IC Photo

China’s industrial profits grew 13.9% in March year-on-year, the highest rate since August last year, in a fresh sign that the Chinese economy is stabilizing.

The upturn compared with a drop of 14% year-on-year in the first two months of 2019, the steepest fall since October 2011 when such data first became available. 

The National Bureau of Statistics said profit growth was mainly helped by accelerating production and sales, stabilizing prices of industrial products and the lowering of the value-added tax.

Analysts with Everbright Securities said the rebound of infrastructure and property investment, as well as the tax cut, will boost industrial firms’ profits in the short term. But as the prospects of China’s trade and housing market are still not very promising, they predict the 2019 growth of industrial profits will be weaker than last year’s gain of 10.3%.

China’s economic growth stabilized at 6.4% in the first quarter, data released on April 17 showed. 


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By Han Wei / Apr 25, 2019 03:13 AM / Economy

Photo: Xinhua

Photo: Xinhua

China welcomes more international institutions to take part in the Belt and Road initiative and jointly provide better public services and goods for countries along the route, President Xi Jinping said Wednesday.

Xi made the remark during a meeting with Christine Lagarde, managing director of the International Monetary Fund (IMF), in Beijing before the Second Belt and Road Forum for International Cooperation starting Thursday.

Xi said China appreciates Lagarde’s efforts to promote cooperation between the IMF and China and her support to the Belt and Road initiative. China is looking forward to deeper cooperation with the fund, the president said.

Lagarde said the Belt and Road Initiative is an important manifestation of China's leadership in international affairs and lauded China’s role in supporting multilateralism.

China will host 37 heads of state and government for the second Belt and Road Forum April 25-27 in Beijing.

Related: Gallery: Beijing Prepares for Second Belt and Road Forum


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By Zhang Yu and Liu Jiefei / Apr 24, 2019 03:41 PM / Economy

Photo: IC

Photo: IC

Most of China’s province-level regions have met or outperformed their full-year growth targets in the first quarter of this year, the latest sign that downward pressure on China’s economy is easing.

Out of the 23 province-level regions that have released their regional gross domestic product (GDP) growth data for the first quarter as of Wednesday, 18 met or beat the annual target they had set earlier for the whole of 2019, including the municipalities of Tianjin and Chongqing.

However, the provinces of Hainan, Qinghai and Shaanxi, as well as the autonomous regions of Guangxi Zhuang and Inner Mongolia, failed to catch up with their full-year target in the first quarter.

China’s economy grew 6.4% in the first quarter of this year, beating analysts’ median expectation of a 6.3% rise, snapping a slowing streak in the past three consecutive quarters.

Stay tuned for further coverage.

Related: Chinese Economy Grows at 6.4%, Outstripping Estimates

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By Zhao Runhua / Apr 23, 2019 03:03 AM / Economy

Photo:IC

Photo:IC

The China-backed Asian Infrastructure Investment Bank (AIIB) approved membership requests from four new countries: Côte D’Ivoire, Guinea, Tunisia and Uruguay, the bank said Monday.

After the countries complete final domestic procedures and pay their first membership funding to AIIB, the memberships will be formally activated, the state-run Xinhua News Agency reported. AIIB’s total membership will increase to 97.

Established in 2016 with China as a leading funding member, the multilateral development bank specializes in investing in infrastructure projects in Asia.

Related: AIIB Chief Says Investing in More Chinese Projects Would Improve Asset Quality


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By Han Wei / Apr 19, 2019 11:36 PM / Economy

Photo: VCG

Photo: VCG

China will continue policies to support the economy as downward pressures and external challenges remain, the ruling Communist Party’s top policymaking body said Friday.

Macro policies will continue to focus on promoting high-quality growth and stimulating market vitality, the Politburo said. China will further improve the effects of proactive fiscal policy while keeping monetary policy prudent, neither too tight nor too loose, according to a statement released by the official Xinhua News Agency after a Politburo meeting chaired by President Xi Jinping.

The statement came shortly after China reported better-than-expected first-quarter growth of 6.4%, indicating a stabilizing economy and reviving market confidence.

Despite signs of improvement, the Politburo warned that difficulties and problems in economic operations remain. “The external economic environment is generally tightening, and the domestic economy is under downward pressure,” the Politburo said.

To bolster the economy, China will step up measures to promote development of the advanced manufacturing sector while pushing forward industrial upgrades, further support private-sector financing and growth, continue to contain housing market speculation, ensure healthy development of financial markets while encouraging innovation, and expand market access for foreign investors, the Politburo said.


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By Han Wei / Apr 18, 2019 02:59 AM / Economy

Photo: VCG

Photo: VCG

The State Council, China’s cabinet, vowed again Wednesday that it will continue to help small businesses get cheaper credit but will not resort to “flood-like” stimulus amid rising international concerns that China’s pro-growth policies could reverse its years-long progress toward deleveraging the economy.

China will continue implementing a prudent monetary policy and will flexibly use monetary policy tools to expand credit via relending and rediscount, according to a statement released after a regular cabinet meeting chaired by Premier Li Keqiang.

The cabinet said it will set up a policy framework to allow small and medium-sized banks to be subject to lower reserve requirements to encourage their lending to the private sector and small businesses.

The government will make bigger cuts to financing costs for small and micro enterprises this year compared with the cuts of last year, the cabinet said.

Related: International Warnings Mount Over Potential Impact of China Stimulus

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By Fran Wang / Apr 17, 2019 10:12 AM / Economy

China’s economic growth in the first quarter of this year was unchanged from the last three months of 2018 at 6.4%, official data released Wednesday showed.

The rate was slightly ahead of the median forecast of a gain of 6.3% for the period by economists polled by Bloomberg.

Developing...

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By Qu Hui and Han Wei / Apr 17, 2019 03:35 AM / Economy

Photo: VCG

Photo: VCG

Chinese machinery traders have started feeling the pain of tariffs and the unsettled trade disputes between China and the U.S. with sharp business declines in the first quarter.

Several traders at the iconic Canton Fair, which opened Monday, told Caixin that their first-quarter orders and shipments declined between 10% and 30% because of the trade frictions.

Machinery is the biggest catalogue of China’s foreign trade, covering a wide range of products including mechanical and electronic products. Machinery products accounted for 52% of China’s total exports last year and 59% of total imports.

The U.S. is the biggest customer for China’s machinery exports with about 20%, followed by the European Union, official data showed. Machinery products have also been the main targets of the tariff fight between the two countries since the trade war escalated last summer.

Analysts said traders rushed to deliver orders during the second half of 2018 to avoid potential new tariffs, pushing up last year’s machinery exports by 10.6%. The industry has since started to feel the pinch as the effects of the tariffs take hold.

Related: China’s Exports Recover in March, Growing at Fastest Pace in Five Months


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