That is a "leg pulling" move. In that sense, I agree it is related, not only Trump's trade war, but Obama's "rebalancing in Asia Pacific", TPP, SCS and the ongoing NK nuclear issue (since Clinton) are all the same kind. I am sure there will be new tricks after the current trade war and after Trump's term.
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Chinese Economics Thread
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Jura The idiot
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Thursday at 7:21 AM
Economic Watch: China's new tax cuts to benefit the real economy
Xinhua| 2018-04-01 13:10:29
nownow I read
China to roll out new tax cuts to boost high-quality development
Xinhua| 2018-03-28 23:02:52
Economic Watch: China's new tax cuts to benefit the real economy
Xinhua| 2018-04-01 13:10:29
China's new value-added tax (VAT) reform measures are expected to reduce the burden on a range of sectors in the real economy, analysts said.
China will cut VAT rates as part of a tax reduction package amounting to 400 billion yuan (about 63.6 billion U.S. dollars) this year, according to a decision made at a State Council executive meeting Wednesday.
Starting from May 1, the tax rate will be lowered from 17 percent to 16 percent for manufacturing and some other industries, and from 11 percent to 10 percent for transportation, construction, basic telecommunication services, and farm produce.
While it will be only a one percentage point cut in each tax bracket, the reduction will impact a wide range of sectors in the real economy, according to Li Xuhong, a researcher with Beijing National Accounting Institute, a government think tank.
It was estimated that the reduction of taxes from lower VAT rates could reach 240 billion yuan. Li said the estimate was rather conservative, as tax reduction in the manufacturing sector alone could reach that amount.
VAT tax cuts in the transportation industry will lower the logistics costs for the real economy, Li said.
Investment bank China International Capital Corporation (CICC) estimated that firms in the two tax brackets will see their VAT tax burden decline by 6 percent and 9 percent, respectively.
"We believe that lower VAT rates will help reduce the prices of products and services in a number of competitive sectors, benefiting households and other sectors," CICC said in a research note.
In addition to the VAT rates cut, the reform also offers tax incentives for some hi-tech companies, a measure that analysts said is aimed at supporting innovation-driven growth.
Eligible enterprises in advanced manufacturing, modern services, and electric utilities will receive a lump-sum refund for their input VAT payments yet to be deducted.
The measure will have a "far-reaching impact," said Li, as it could free capital previously frozen on companies' balance sheets.
However, successful implementation of the refund policy depends on advanced tax collection measures and the overall level of honesty of taxpayers across society, Li noted.
The reform also includes measures to unify the standard for small-scale taxpayers, as it raises the threshold of taxable annual sales volume for industrial and commercial enterprises from 500,000 yuan and 800,000 yuan, to 5 million yuan.
"Raising the revenue ceiling to 5 million yuan for industrial and commercial sectors will help level the playing field and support the growth of medium and small firms in all sectors," CICC said.
With all these measures, this year's VAT reform is more intensive than last year, CICC said.
The VAT reform was first piloted in Shanghai before it was rolled out nationwide. It has delivered a total tax cut of 2.1 trillion yuan over the past five years.
"We expect the reform to support China's economic growth in not only second quarter of 2018, but also the whole year and the first four months of 2019," CICC said.
For Li, a more challenging job yet to be accomplished is to further reduce VAT brackets from three to two. In 2017, China streamlined its VAT brackets from four to three.
China aims to reduce taxes on businesses and individuals by more than 800 billion yuan this year, according to a government work report released in March.
While the VAT reform will help accomplish almost half of the target, policies to cut the remaining 400 billion yuan of taxes will be released soon, said Wang Jianfan, an official with the Ministry of Finance.
Jura The idiot
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Interview: City of London to facilitate smart future of China's planned new metropolis
Xinhua| 2018-04-01 23:27:24
Interview: City of London to facilitate smart future of China's planned new metropolis
Xinhua| 2018-04-01 23:27:24
The City of London is willing to share its knowledge and expertise with China in building a smart, green Xiongan New Area -- a planned extra-large metropolis in north China, City of London Lord Mayor Charles Bowman has said recently in a joint interview here.
Bowman, leading a business delegation to Shenzhen, Hong Kong, Shanghai and Beijing, recently visited Xiongan New Area, a new economic zone in what is now part of north China's Hebei Province which is some 100 km southwest of Beijing.
The dialogue with local officials of Hebei Province was "productive," he said, adding that the City of London has significant strength and expertise in smart city development, particularly in designing, researching and financing of engineering services which could be helpful to Xiongan. It is the packing up and delivery of this integrated group of services where Britain "has the real potential to add value," he noted.
Canary Wharf Group, the developer behind London's new financial center east of the City of London, signed a memorandum of understanding in January with Xiongan New Area during Prime Minister Theresa May's state visit to China, according to Bowman.
The City of London's expertise and knowledge in the development of green and smart cities, together with China's infrastructure capabilities and talents, will make the Xiongan project a successful model for cooperation, Bowman said, adding that the new area will also serve as an innovative green finance role model to other Chinese cities as well as to those along the Silk Road Economic Belt and the 21 Century Maritime Silk Road (Belt and Road).
A year has passed since the Chinese government announced the establishment of Xiongan New Area on April 1, 2017. It is the third new area of national significance after the Shenzhen Special Economic Zone and the Shanghai Pudong New Area.
The Chinese government has said that the area welcomes foreign investment that meets its functional requirements. Experts believe that capital and expertise from foreign investors are needed in Xiongan to meet its goal of becoming a low-carbon, intelligent, livable and globally influential city where people and nature co-exist in harmony.
The Xiongan project is also the first pilot project of a newly-launched UK-China Green Finance Center, Bowman said. The center is created by the City of London's Green Finance Initiative following commitments in the 8th and 9th UK-China Economic and Financial Dialogues.
It aims to create innovative green finance products and facilitate smart city development globally with its long-term partner -- China Green Finance Committee, and will consider incubating green-tech and fin-tech companies in the future.
The launch of this center was "another hugely exciting step" to make green finance more mainstream and the start of a new era of strategic cooperation between the two sides, said the lord mayor.
Calling Britain and China "global leaders" in green finance, Bowman said the two partners have been making significant contributions to tackling global challenges such as carbon reduction and climate change. They also demonstrated their strong commitment to sustainable development and transition to an environment-friendly growth model, he added.
An objective Bloomberg article about the realities of Chinese investment in Australia. These investment restrictions remind me of "Yellow Peril" 2.0 ...
Anti-China Tilt in Australia Is Shortsighted
Chinese investment is small, but feels large. That's a reminder of why data should drive policy.
By
Daniel Moss
April 4, 2018, 4:00 PM CDT
From all the hysteria Down Under, you might think Australia is at risk of invasion -- by Chinese cash.
China's economy certainly is increasingly influential, but the regulatory backlash from Canberra has all the makings of a self-inflicted wound.
Australia has announced on foreign purchases of power utilities and land. In case anyone missed the message, the man who led the nation's top spy agencies was appointed head of the Foreign Investment Review Board last year. (He's also a former ambassador to Beijing.)
The restrictions are shortsighted -- though luckily, likely to fail. The acquisitiveness of Chinese companies is only going to grow as the country's capital markets expand. Asia's economic superpower is increasingly the region's political superpower -- if not yet its dominant military power.
Emotion and political expediency, rather than data, seem to be driving the bus. Should ownership rules in Australia be rigorous and subject to review as circumstances change? Sure. But there was never much of a problem when buyers came from familiar places like the U.S., the U.K., Western Europe and, to an extent, Japan. China is right to feel singled out.
While Chinese investment is growing significantly, it's by America and Britain. The U.S. accounted for about 27 percent of foreign investment in Australia in 2016, and the U.K. another 16 percent. China was 2.7 percent and Hong Kong 3.2 percent, according to the Department of Foreign Affairs and Trade.
The numbers parallel what Australian companies are doing abroad. Despite decades of rhetoric about , most Australian firms prefer … you guessed it: America and Britain.
A study last year from PriceWaterhouseCoopers, the Institute for Managers and Leaders, and Asialink Business showed the top destinations for Australian in 2015 were the U.S. with 19.4 percent, the U.K. at 15 percent, New Zealand at 11.2 percent and Singapore at 3.9 percent. Papua New Guinea, Germany and China tied for fifth.
Given the weight of money and where it's actually going to and coming from, it's hard to see a China threat. Perhaps the most startling thing is that despite the ascent of China, generally, how little it seems to figure in hard investment numbers.
It's true that China shapes Australia's economic and strategic neighborhood in ways that this type of math doesn't capture. Just look at the map and consider how China's demand for raw materials helped Australia dodge the Great Recession. Chinese tourists buoy the local economy, and Chinese students swell the coffers of Australian universities.
David Irvine, the former spymaster who now leads the Foreign Investment Review Board, appears relatively sanguine about it all: "Having a largest economic partner who is not a traditional ally, that’s I think one of the big challenges of Australian foreign policy," he my colleague Michael Heath. "It’s a fact of life. We will adapt to it."
Investment numbers, as opposed to emotions, ought to prevail.
Jura The idiot
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China Focus: Free trade zone sets example for streamlined procedures
Xinhua| 2018-04-05 10:41:20
China Focus: Free trade zone sets example for streamlined procedures
Xinhua| 2018-04-05 10:41:20
On the day of their wedding ceremony, Zhou Yichen and Meng Jiakang welcomed their first "baby" -- a trade company registered in the free trade zone (FTZ) of northeast China's Liaoning Province.
Zhou, a native of Liaoning's Yingkou City, met his bride at university in Singapore. After graduation, they worked in Singapore until the ceremony in Zhou's hometown.
After the wedding, they toured the FTZ service center in Yingkou, which offers a streamlined application process and cross-border yuan trade settlement -- strong draws for the newlyweds.
"We just decided to register a company named after us, and the business license was obtained in only half an hour," said Meng, the bride.
Zhou found a QR code on the new business license, which led to a big data service platform and online government department services.
China announced its third group of FTZs last April -- in Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan and Shaanxi -- bringing the total number of FTZs to 11.
FTZs are areas that enjoy preferential policies, easier customs clearance, favorable taxes and simpler business applications.
Liaoning was among the first regions in China to be industrialized, and it has relied largely on heavy industry, energy resources and a large number of state-owned enterprises.
However, the investment environment in northeast China was daunting, largely because of high costs and low efficiency caused by government bureaucracy.
According to a popular saying, "investment does not go beyond Shanhaiguan Pass," referring to a traditional geographical division separating the northeastern region from the rest of China.
While the central government has rolled out measures to revitalize the old traditional base, the Liaoning FTZ has served as a testing ground to cut bureaucracy and increase government efficiency.
Over the past year, Yingkou City has combined 46 required business certificates into one, enabling applicants to clear all procedures within two days. It used to take 50 days for a business to be approved for operation.
A circular on reforming official management issued by the city put forward a performance evaluation for officials within the FTZ. Those with lazy administration will be removed from their posts, according to the circular.
"A good working attitude among officials is the best contributor to a good business environment," said Zhang Dong, executive deputy director of the Yingkou area administration of the Liaoning FTZ.
In Shenyang, the provincial capital, enterprises with registered capital above 100 million yuan (15.8 million U.S. dollars) will enjoy a "green path" in which government workers will perform all required procedures for them free of charge. After-work and reserved on-call services are also offered.
"We are just 'waiters' that should serve the businesses well," said Wang Enbin, deputy director of the Liaoning FTZ office.
Wang said 24,000 new businesses were registered in the FTZ over the past year, meaning 68 companies were set up on average every day. Total registered capital reached 362 billion yuan.
FTZs often serve as experimental zones where measures are tested before being implemented nationwide.
Amid national efforts to forge good government-business relationships and simplify administrative procedures, measures that prove feasible in FTZs may also be adopted nationwide.
Chinese Premier Li Keqiang said last month China will continue to streamline administration and delegate power to improve the business environment and stimulate market vitality.
"We will cut the time it takes to open a business in China by another half, and we will reduce the time required for reviewing a project application by another half," Li said at a press conference after the conclusion of the annual legislative session.
Jura The idiot
General
now noticed the tweet
China becomes the driving force in global solar energy investment, which for the first time dominated global investment with a total of $160.8 billion in 2017, a UN Environment Program report showed
China becomes the driving force in global solar energy investment, which for the first time dominated global investment with a total of $160.8 billion in 2017, a UN Environment Program report showed
Jura The idiot
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now I read
Economic Watch: China locked and loaded as trade tensions escalate
Xinhua| 2018-04-07 23:40:49
Economic Watch: China locked and loaded as trade tensions escalate
Xinhua| 2018-04-07 23:40:49
In face of trade tensions increasingly stirred up by the United States, China has ample trade weapons loaded to return fire and protect its own interests whenever necessary, officials and economists have said.
Tension between the world's two largest economies reached a new height after the U.S. side threatened additional duties on Chinese goods worth 100 billion U.S. dollars Thursday. China, hours later, said it will "fight till the end at any cost" and take "comprehensive countermeasures."
This has been the third round of trade fire exchange between the two economic giants, all of which were initiated by the U.S. side.
In the first two rounds, the United States slapped tariff on steel and aluminum imports from countries including China, as well as additional tariffs on Chinese imports worth 50 billion U.S. dollars, to which China responded firmly with tariff plans of equal weight.
For the latest U.S. protectionist move, China also demonstrated full readiness to fight back "fiercely" with detailed countermeasures in the pipeline.
"We don't want a trade war, but we are not afraid of it," said China's Ministry of Commerce (MOC) Friday.
Though details of the possible options were yet to be revealed, the country has hinted that all options are possible regarding the escalating situation.
"We are not taking any options off the table," Gao Feng, spokesperson with the MOC, said at a press briefing Friday.
He Weiwen, an executive council member of the China Society for World Trade Organization Studies, said China still has many cards still up in its sleeve.
Petroleum and liquid natural gas could be the possible options for future tariff hike if trade tension mounts, as China is the largest regional buyer of these U.S. products, according to him.
As the world's second largest economy, China should not be threatened by the United States, he said, noting that China's countermeasures of equal scale will produce equal effect on the United States.
In the previous trade fire exchange, U.S. products such as soybeans, automobiles, aircraft and chemical products have already been on the list of China's reciprocative tariff plan.
"I have to say that we were forced to take countermeasures, and we have reacted with restraint," Vice Minister of Commerce Wang Shouwen told reporters.
Wang Xiaosong, a professor with Renmin University, said China's announced countermeasures have already hit the United States' tender spot, as U.S. products like soybean and aircraft are highly dependent on the Chinese market.
U.S. soybeans sold to China account for 62 percent of its total soybean exports, with 32.85 million tonnes of soybeans exported to China in 2017, or 34.39 percent of China's total imports.
"With all the domestic industries united as one, China is stronger in economic resilience," Wang said. If trade tension escalates, China still has plenty of countermeasures at disposal and room for maneuver.
Meanwhile, simulation calculations have shown that the U.S. trade bashing will not be a threat on China, and China is fully capable of bearing the consequences brought by a trade war, according to Li Chunding, an associate research fellow at the Chinese Academy of Social Sciences.
Vice Finance Minister Zhu Guangyao also reiterated earlier that China will not surrender to external pressure.
"Looking at it another way, external pressure is the driving force for innovation and development," Zhu said.
China will continue reform and opening up, safeguard multilateral trade, and promote global trade and investment liberalization and facilitation, the commerce ministry has pledged.
Jura The idiot
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now I read
China's foreign currency reserves rise in March
Xinhua| 2018-04-08 11:52:40
China's foreign currency reserves rise in March
Xinhua| 2018-04-08 11:52:40
(I add 59.24e6 ounces is about 1679 and a half ton LOL sorry about the rounding error)China's foreign currency reserves rose 8.34 billion dollars from a month earlier to 3.1428 trillion U.S. dollars at the end of March, the People's Bank of China (PBOC) said Sunday.
The market had widely expected China's foreign currency reserves to be 3.146 trillion dollars.
The increase in March reversed a slight decline seen in February 2018. Previously, the reserves gained for 12 consecutive months between February 2017 and January 2018.
According to the PBOC data, China's gold reserves in March remained unchanged at 59.24 million ounces, with a higher value of 78.42 billion dollars, up from 78.06 billion dollars in February.
Jura The idiot
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Alibaba’s Jack Ma: Nobody can stop globalization
2018-04-09 22:57 GMT+8
Alibaba’s Jack Ma: Nobody can stop globalization
2018-04-09 22:57 GMT+8
Trade is about respecting other cultures and nobody can stop globalization, Jack Ma, the billionaire co-founder of Chinese e-commerce giant Alibaba Group said on Monday at the Boao Forum for Asia in China’s southern Hainan Province.
“Globalization is great thing, but over the past forty or thirty years, it’s not inclusive enough. Developing countries, young people and small businesses do not benefit from that,” Ma made the comment at a dinner with International Monetary Fund (IMF) Managing Director Christine Lagarde.
As a businessman, Ma expressed his concerns over the recent trade tensions between China and the US. As the two biggest economies in the world, China and America definitely have problems, but it does not necessarily have to lead to a trade war, according to Ma.
“I don’t think trade deficit is a problem… In the past twenty or thirty years, through trade, China made revenue and America made profit,” said Ma.
“About jobs, last quarter, American unemployment was 4.1 percent, at historical low. There are about 6 million jobs waiting for Americans,” he said.
“If China and US have good relationship, we can not only make 1 million (jobs), we can make 10 million or 20 million jobs for both countries. If they have no good relationship, we’re going to destroy 10 million jobs,” said Ma.
Last year, Ma promised to create 1 million jobs by supporting small US businesses in selling to China and the rest of Asia through Alibaba’s network.
Lagarde: Trade based on rules
While attending the dinner with Ma, Lagarde also called for taking advantage of trade and solving disputes through the established rules, and she warned of the temptation of protectionism.
“Trade must be according to the rules that the players are giving to themselves. So there is WTO which has provided [rules] for multilateral trade,” She stressed.
“When there is allegation of dumping and unfair trade practices that contravene the rules, there is mechanism in the rules that is called dispute resolution mechanism that needs to be used,” said Lagarde.
“As trade is picking up again more than current growth, let’s take advantage of it,” said Lagarde.
“Trade has been a major factor in reducing extreme poverty, in bringing people out of poverty, and in spreading innovation,” said Lagarde.
Back in the mid-1980s, the number of people in extreme poverty was about 90 percent. In 1990, the number went down to about 37 percent of total population. Today’s number is around 10 percent, according to Lagarde.
“If we want to have reduction of poverty, improved productivity and more growth…, we need to have trade,” said Lagarde.
“We cannot deny that around the world, there are some regions and some industries that have been affected by trade. They have partly affected by trade and predominately affected by technology. But for those people and regions seriously affected, measures have to be taken, whether by way of readjusting them, retraining them, and giving them support,” said Lagarde.
She stressed that trade should be conducted under the terms which are predicable, based on the rules, and which do not disadvantage those people who will be displaced, will lose their job, but need to be given another one.
A global economic recovery has really taken root, and about 120 countries around the world are expected to grow 3.9 percent this and next year, with the numbers close to the pre-financial crisis level, according to Lagarde.
“Although the sun is shining, we have to look at the clouds on the horizon. One is protectionism temptation,” said Lagarde.
Jura The idiot
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Consumption becomes ballast stone for China's stable growth
Xinhua| 2018-04-10 19:00:44
Consumption becomes ballast stone for China's stable growth
Xinhua| 2018-04-10 19:00:44
As China's economic transition swiftly continues, consumption has become a ballast stone for stable economic growth, official data showed Tuesday.
Final consumption contributed 58.8 percent to economic growth in 2017, up from 45.3 percent in 2007, the National Bureau of Statistics (NBS) said on its website.
Retail sales, a main gauge of consumption, rose 9.7 percent year on year in the first two months of the year. Data for March is due to be released on April 14.
The NBS said strong income growth and consumption upgrade have driven up consumption in healthcare, education, and entertainment, which all maintained double-digit increases during the past few years.
With the economy transitioning from a phase of rapid growth to a stage of high-quality development, there will be huge potential for consumption growth, according to a separate statement on the National Development and Reform Commission website.
Domestic demand, including consumption and fixed-asset investment, has become a decisive force for economic growth, adding 105.7 percent on average to GDP growth annually between 2008 and 2017.
The NBS said domestic demand will remain a booming growth engine as the country continues to push through supply-side structural reform and innovation-driven development.
The economy expanded 6.9 percent year on year in 2017. The government has targeted growth of around 6.5 percent for this year.