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Chitchat PRC Leader Xi Jinping’s Impressive NY2019 Speech
- Thread starter Pinkieslut
- Start date
I thought china celebrate only chinese new year!
He asked people to thank those taxi driver etc working during year end too. I am in the same league as Xi Jinping!
http://www.xinhuanet.com/politics/2018-12/31/c_1123931806.htm
国家主席习近平发表二〇一九年新年贺词
2018-12-31 19:14:22 来源： 新华网
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新华社北京12月31日电 新年前夕，国家主席习近平通过中央广播电视总台和互联网，发表了二〇一九年新年贺词。全文如下：
新年前夕，国家主席习近平通过中央广播电视总台和互联网，发表二〇一九年新年贺词。 新华社记者鞠鹏摄
大家好！“岁月不居，时节如流。”2019年马上就要到了，我在北京向大家致以新年的美好祝福！
2018年，我们过得很充实、走得很坚定。这一年，我们战胜各种风险挑战，推动经济高质量发展，加快新旧动能转换，保持经济运行在合理区间。蓝天、碧水、净土保卫战顺利推进，各项民生事业加快发展，人民生活持续改善。京津冀协同发展、长江经济带发展、粤港澳大湾区建设等国家战略稳步实施。我在各地考察时欣喜地看到：长江两岸绿意盎然，建三江万亩大地号稻浪滚滚，深圳前海生机勃勃，上海张江活力四射，港珠澳大桥飞架三地……这些成就是全国各族人民撸起袖子干出来的，是新时代奋斗者挥洒汗水拼出来的。
这一年，中国制造、中国创造、中国建造共同发力，继续改变着中国的面貌。嫦娥四号探测器成功发射，第二艘航母出海试航，国产大型水陆两栖飞机水上首飞，北斗导航向全球组网迈出坚实一步。在此，我要向每一位科学家、每一位工程师、每一位“大国工匠”、每一位建设者和参与者致敬！
这一年，脱贫攻坚传来很多好消息。全国又有125个贫困县通过验收脱贫，1000万农村贫困人口摆脱贫困。17种抗癌药降价并纳入医保目录，因病致贫问题正在进一步得到解决。我时常牵挂着奋战在脱贫一线的同志们，280多万驻村干部、第一书记，工作很投入、很给力，一定要保重身体。
我始终惦记着困难群众。在四川凉山三河村，我看望了彝族村民吉好也求、节列俄阿木两家人。在山东济南三涧溪村，我和赵顺利一家围坐一起拉家常。在辽宁抚顺东华园社区，我到陈玉芳家里了解避险搬迁安置情况。在广东清远连樟村，我和贫困户陆奕和交谈脱贫之计。他们真诚朴实的面容至今浮现在我的脑海。新年之际，祝乡亲们的生活蒸蒸日上，越过越红火。
这一年，我们隆重庆祝改革开放40周年，对党和国家机构进行了系统性、整体性、重构性的改革，推出100多项重要改革举措，举办首届中国国际进口博览会，启动建设海南自由贸易试验区。世界看到了改革开放的中国加速度，看到了将改革开放进行到底的中国决心。我们改革的脚步不会停滞，开放的大门只会越开越大。
我注意到，今年，恢复高考后的第一批大学生大多已经退休，大批“00后”进入高校校园。1亿多非户籍人口在城市落户的行动正在继续，1300万人在城镇找到了工作，解决棚户区问题的住房开工了580万套，新市民有了温暖的家。很多港澳台居民拿到了居住证，香港进入了全国高铁网。一个流动的中国，充满了繁荣发展的活力。我们都在努力奔跑，我们都是追梦人。
此时此刻，我特别要提到一些闪亮的名字。今年，天上多了颗“南仁东星”，全军英模挂像里多了林俊德和张超两位同志。我们要记住守岛卫国32年的王继才同志，为保护试验平台挺身而出、壮烈牺牲的黄群、宋月才、姜开斌同志，以及其他为国为民捐躯的英雄们。他们是新时代最可爱的人，永远值得我们怀念和学习。
这一年，又有很多新老朋友来到中国。我们举办了博鳌亚洲论坛年会、上海合作组织青岛峰会、中非合作论坛北京峰会等主场外交活动，提出了中国主张，发出了中国声音。我和同事们出访五大洲，参加了许多重要外交活动，同各国领导人进行了广泛交流，巩固了友谊，增进了信任，扩大了我们的朋友圈。
2019年，我们将隆重庆祝中华人民共和国70周年华诞。70年披荆斩棘，70年风雨兼程。人民是共和国的坚实根基，人民是我们执政的最大底气。一路走来，中国人民自力更生、艰苦奋斗，创造了举世瞩目的中国奇迹。新征程上，不管乱云飞渡、风吹浪打，我们都要紧紧依靠人民，坚持自力更生、艰苦奋斗，以坚如磐石的信心、只争朝夕的劲头、坚韧不拔的毅力，一步一个脚印把前无古人的伟大事业推向前进。
2019年，有机遇也有挑战，大家还要一起拼搏、一起奋斗。减税降费政策措施要落地生根，让企业轻装上阵。要真诚尊重各种人才，充分激发他们创新创造活力。要倾听基层干部心声，让敢担当有作为的干部有干劲、有奔头。农村1000多万贫困人口的脱贫任务要如期完成，还得咬定目标使劲干。要关爱退役军人，他们为保家卫国作出了贡献。这个时候，快递小哥、环卫工人、出租车司机以及千千万万的劳动者，还在辛勤工作，我们要感谢这些美好生活的创造者、守护者。大家辛苦了。
放眼全球，我们正面临百年未有之大变局。无论国际风云如何变幻，中国维护国家主权和安全的信心和决心不会变，中国维护世界和平、促进共同发展的诚意和善意不会变。我们将积极推动共建“一带一路”，继续推动构建人类命运共同体，为建设一个更加繁荣美好的世界而不懈努力。
新年的钟声即将敲响，让我们满怀信心和期待，一同迎接2019年的到来。
祝福中国！祝福世界！
谢谢大家！
国家主席习近平发表二〇一九年新年贺词 全文
2019出征号！习主席这些话激荡人心 金句 “我们都是追梦人” 习近平提到的那些人那些事 接力棒，在你我手中闪光
新华社评论员：开启新征程，当好追梦人 海外热议 新年新愿｜六年来，习近平这样说 致敬新时代的奋斗者 这张海报，真提气！
You will be gone and turned to ash and China will still be China
Winny the pooh can make speeches!
the first joke of 2019....
Xi may be a dictator. But PRCs all love him.
But u look at that clown dotard? Go head Go stance. All his lieutenants forsaken him...
Last edited:
Xi Jinping's turbulent year marked by trade wars, detention camps and an economic slow down
ANALYSIS BY CHINA CORRESPONDENT BILL BIRTLESUPDATED MON AT 7:02AM
Email Facebook Twitter WhatsApp
PHOTO
Chinese President Xi Jinping has ended the year with a number of international controversies.
AP: NG HAN GUAN
In the grand narrative of China's rise, it's easy to ascribe a type of exceptionalism to the China model that renders normal standards for political analysis unsuitable.
Key points:
But if you try to judge President Xi Jinping's performance over the past 12 months by the standards of any other country, 2018 was a troubling year.
China in Focus
The rise of China has everyone talking. In a special series, RN examines Australia's relationship to China, and its rising prominence in global affairs.
It started so well for the man dubbed China's "chairman of everything", as he managed to contain signs of discontent among his Communist Party colleagues when changing the constitution to allow him to stay on as president indefinitely.
Even in a one-party state, controversial motions usually receive dozens of dissenting votes among the 3,000 delegates at the annual March meeting — sometimes even hundreds — but Mr Xi's power is such that the motion sailed through with just two dissenting votes.
And no, we don't know who those two were.
Chinese liberals were generally horrified but the world's most sophisticated censorship and state security apparatus ensured their voices were muffled.
State media gushed how the change would bring stability, but it predictably brought international headlines about China returning to the strongman era at a time when the world needed reassuring about Beijing's intentions.
PHOTO Xi Jinping and Donald Trump have been at odds over their countries' ongoing trade war.
AP: ANDREW HARNIK
Then there is the trade war.
From a nationalist Chinese view you could see it as strong leadership that Xi Jinping has made minimal concessions to Donald Trump in persisting with China's higher tariffs, restrictive investment environment and subsidised state-led growth model.
But Mr Xi's efforts to maintain a protectionist-heavy domestic economy while telling the world that China is a champion of free trade isn't going well.
The European Business Chamber, representing industrial giants that have transferred vital technological know how to China over the past 40 years of opening up, issued a statement in November describing yet more promises to "open up" as "constant repetition, without sufficient concrete measures or timelines being introduced".
A pre-Christmas proposal to outlaw forced transfers of technology was greeted with scepticism among the foreign business community here.
End-game for Uyghurs still unclear
PHOTO Satellite imagery captured over a remote and highly volatile region of western China lifts the lid on the size and spread of internment camps.
ABC NEWS/GOOGLE EARTH/DIGITAL GLOBE
And then there are the "vocational training centres".
For the first half of the year, Chinese officials were ordered to simply reject Western media reports of mass incarceration of ethnic minority Muslims in the country's far west.
By the end of the year, Chinese media outlets had changed tune, claiming the policy has brought an end to the sporadic terror attacks that used to happen and is an exemplary model of human rights.
But UN and Western media scrutiny aside, the year ended with Islamic groups in Turkey and Indonesia trying to pressure their own governments to raise concerns with China, something so far majority-Muslim nations have largely avoided.
Why is Huawei so controversial?
The dramatic arrest in Canada of Huawei's chief financial officer for possible extradition to the US shocked many. But what exactly is Huawei and why does it seem like it's continually being targeted by foreign governments?
The end game for the estimated hundreds of thousands of detainees is far from clear — they reportedly will be released after sufficiently completing training programs — and it's likely Mr Xi will have to contend with further concern from the Muslim world that previously wasn't a big issue in Chinese diplomacy.
China also ends the year in a heated spat with Canada, and with a growing backlash in the West to the country's flagship tech company Huawei over spying concerns.
That's not to say there hasn't been good moments for the Chinese President.
His pressure campaign on independently-run Taiwan saw more diplomatic allies of the democratic island flip to recognising the People's Republic, and Beijing was thrilled when Taiwanese voters overwhelmingly rejected the independence-leaning incumbents at the mid-term elections.
Distrust of economic figures
PHOTO President Xi Jinping sits alongside African leaders at the 2018 FOCAC Beijing summit.
TWITTER: PRESIDENCYZA
The sight of more than 40 African heads of state in the Chinese capital in September for a major summit also reaffirmed China's political grip on the continent.
Overall though, it's the domestic economy that has defined the rise of modern China, and if you believe the official figures, it only slowed a little this year.
But one liberal economist believes China's real growth rate is less than a third of the official figure, and while few support that view, there are ample signs that things are not chugging along as fast as China's Government would have us believe.
China's questionable numbers
Why does China even bother producing GDP numbers that few economists see as credible, asks Stephen Letts.
Censorship guidelines discouraging talk of bad economic news, local officials in China's manufacturing heartland withholding economic data and reports of factory workers being put on holiday leave earlier than normal.
Diminishing returns from China's debt-fuelled growth model morethan the US trade spat is causing the slowdown, which has long been on the horizon.
But Xi Jinping, like his predecessors, takes every opportunity to lavish credit on the Communist Party for China's economic rise.
If the slowdown worsens in 2019 as many predict, it'll be difficult for the Party and its leader not to wear the blame.
POSTED SUN AT 4:27AM
SHARE
Email Facebook Twitter WhatsApp
RELATED
Closed court, security and fake TV crews for trial of Chinese human rights lawyer
Huawei lashes out at Australia and others for 'malicious' and 'unfair' treatment
Looking back on a rollercoaster year of relations between Australia and China
Top Stories
MORE FROM ABC NEWS
ANALYSIS BY CHINA CORRESPONDENT BILL BIRTLESUPDATED MON AT 7:02AM
Email Facebook Twitter WhatsApp
PHOTO
Chinese President Xi Jinping has ended the year with a number of international controversies.
AP: NG HAN GUAN
In the grand narrative of China's rise, it's easy to ascribe a type of exceptionalism to the China model that renders normal standards for political analysis unsuitable.
Key points:
- Xi Jinping has had a turbulent year domestically and internationally
- Foreign nations are still unclear about Beijing's intentions
- 2019 could be another difficult year for Beijing if its economy continues to slow down
But if you try to judge President Xi Jinping's performance over the past 12 months by the standards of any other country, 2018 was a troubling year.
China in Focus
The rise of China has everyone talking. In a special series, RN examines Australia's relationship to China, and its rising prominence in global affairs.
It started so well for the man dubbed China's "chairman of everything", as he managed to contain signs of discontent among his Communist Party colleagues when changing the constitution to allow him to stay on as president indefinitely.
Even in a one-party state, controversial motions usually receive dozens of dissenting votes among the 3,000 delegates at the annual March meeting — sometimes even hundreds — but Mr Xi's power is such that the motion sailed through with just two dissenting votes.
And no, we don't know who those two were.
Chinese liberals were generally horrified but the world's most sophisticated censorship and state security apparatus ensured their voices were muffled.
State media gushed how the change would bring stability, but it predictably brought international headlines about China returning to the strongman era at a time when the world needed reassuring about Beijing's intentions.
PHOTO Xi Jinping and Donald Trump have been at odds over their countries' ongoing trade war.
AP: ANDREW HARNIK
Then there is the trade war.
From a nationalist Chinese view you could see it as strong leadership that Xi Jinping has made minimal concessions to Donald Trump in persisting with China's higher tariffs, restrictive investment environment and subsidised state-led growth model.
But Mr Xi's efforts to maintain a protectionist-heavy domestic economy while telling the world that China is a champion of free trade isn't going well.
The European Business Chamber, representing industrial giants that have transferred vital technological know how to China over the past 40 years of opening up, issued a statement in November describing yet more promises to "open up" as "constant repetition, without sufficient concrete measures or timelines being introduced".
A pre-Christmas proposal to outlaw forced transfers of technology was greeted with scepticism among the foreign business community here.
End-game for Uyghurs still unclear
PHOTO Satellite imagery captured over a remote and highly volatile region of western China lifts the lid on the size and spread of internment camps.
ABC NEWS/GOOGLE EARTH/DIGITAL GLOBE
And then there are the "vocational training centres".
For the first half of the year, Chinese officials were ordered to simply reject Western media reports of mass incarceration of ethnic minority Muslims in the country's far west.
By the end of the year, Chinese media outlets had changed tune, claiming the policy has brought an end to the sporadic terror attacks that used to happen and is an exemplary model of human rights.
But UN and Western media scrutiny aside, the year ended with Islamic groups in Turkey and Indonesia trying to pressure their own governments to raise concerns with China, something so far majority-Muslim nations have largely avoided.
Why is Huawei so controversial?
The dramatic arrest in Canada of Huawei's chief financial officer for possible extradition to the US shocked many. But what exactly is Huawei and why does it seem like it's continually being targeted by foreign governments?
The end game for the estimated hundreds of thousands of detainees is far from clear — they reportedly will be released after sufficiently completing training programs — and it's likely Mr Xi will have to contend with further concern from the Muslim world that previously wasn't a big issue in Chinese diplomacy.
China also ends the year in a heated spat with Canada, and with a growing backlash in the West to the country's flagship tech company Huawei over spying concerns.
That's not to say there hasn't been good moments for the Chinese President.
His pressure campaign on independently-run Taiwan saw more diplomatic allies of the democratic island flip to recognising the People's Republic, and Beijing was thrilled when Taiwanese voters overwhelmingly rejected the independence-leaning incumbents at the mid-term elections.
Distrust of economic figures
PHOTO President Xi Jinping sits alongside African leaders at the 2018 FOCAC Beijing summit.
TWITTER: PRESIDENCYZA
The sight of more than 40 African heads of state in the Chinese capital in September for a major summit also reaffirmed China's political grip on the continent.
Overall though, it's the domestic economy that has defined the rise of modern China, and if you believe the official figures, it only slowed a little this year.
But one liberal economist believes China's real growth rate is less than a third of the official figure, and while few support that view, there are ample signs that things are not chugging along as fast as China's Government would have us believe.
China's questionable numbers
Why does China even bother producing GDP numbers that few economists see as credible, asks Stephen Letts.
Censorship guidelines discouraging talk of bad economic news, local officials in China's manufacturing heartland withholding economic data and reports of factory workers being put on holiday leave earlier than normal.
Diminishing returns from China's debt-fuelled growth model morethan the US trade spat is causing the slowdown, which has long been on the horizon.
But Xi Jinping, like his predecessors, takes every opportunity to lavish credit on the Communist Party for China's economic rise.
If the slowdown worsens in 2019 as many predict, it'll be difficult for the Party and its leader not to wear the blame.
POSTED SUN AT 4:27AM
SHARE
Email Facebook Twitter WhatsApp
RELATED
Closed court, security and fake TV crews for trial of Chinese human rights lawyer
Huawei lashes out at Australia and others for 'malicious' and 'unfair' treatment
Looking back on a rollercoaster year of relations between Australia and China
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Very touching! Very inspiring! Make China Great Again!
Hundreds of China's top graduates 'fired before hired' as trade war bites
University students preparing for the upcoming National Entrance Examination for Postgraduate (NEEP) at a library of Shenyang Agricultural University in Shenyang in China's northeastern Liaoning province.
PHOTO: AFP
HE HUIFANG
SOUTH CHINA MORNING POST
Jan 07, 2019
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Tan Shiyang, a Beihang University biological science and medical engineering graduate student, should be one of the last people to have to worry about finding a decent job in China.
Biotech scientists with his skills are always in short supply and his Beijing-based school is regarded as one of the best, with a reputation as China's answer to the Massachusetts Institute of Technology.
And so, when Tan received multiple job offers soon after meeting representatives from various companies at an autumn on-campus recruitment fair at Beihang, things seemed to be working out as expected. He eventually decided to accept an offer of employment as a researcher with a hi-tech firm in Shenzhen, one of China's most vibrant cities.
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Assured of a job after graduation, Tan settled back and focused on enjoying his final months as a student.
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Hiring freezes and job cuts suggest a worse than expected employment outlook in China for the hi-tech and finance sectors. Photo: AFP
But in December, things took an unexpected turn. The company he had agreed to work for, Shenzhen Mindray Bio-Medical Electronics, told him that due to a change in the company's recruitment plans, the job offer was invalidated. Mindray, China's largest medical equipment maker, said it would give Tan 5,000 yuan (S$990.50), roughly a third of what would have been his salary for one month, as compensation.
The change has thrown Tan's life into chaos, coming as the "campus recruitment season" winds down and China's economic health continues its recent downward trend.
"I chose Mindray because I wanted to work as a researcher for an innovative firm, and that's why I turned down all other job offers," Tan said. "Now I have to start again … I had rarely thought about the economic downturn before, but now I guess I am one of its victims."
Tan is not the only graduate student caught off guard.
Eric Li had accepted a job offer from Mindray with a starting annual income of 200,000 yuan. When he too was told the offer had been withdrawn, he said his dreams were shattered.
"I had planned to make good use of the money to buy milk powder for my nephew every month," Li said. "I had planned to save 120,000 yuan a year to prepare for my marriage to my girlfriend.
"And I dreamed of the day when I could afford a down payment on a small flat in Shenzhen," he said. "That's now all vanished."
Li said Mindray had held a "welcoming party" for new hires on December 22 in Shenzhen, where company officials talked about the incoming employees' bright future. One week later, the students received a phone call from the company telling them their job offer had been terminated.
A number of students, who had similarly been hired by Mindray and then had their offers pulled, created a chat group to figure out their next steps. Li said the participants commonly felt it was their misfortune to have graduated in a year when China was under mounting economic pressure.
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In an email to the South China Morning Post, Mindray said it had signed tentative employment agreements with 485 new graduates from about 50 universities in China since September. But it decided to terminate 254 of those contracts at the end of December after "an internal review". The company had hired 430 new graduates a year ago.
Mindray, whose product lines include patient monitoring devices, said the demands of maintaining a sound operation in 2019 were "heavier than in than past years" and it had to scale back its student recruitment plans "for the sake of continuous and steady business development".
JUST HOW BADLY IS CHINA'S ECONOMY DOING?
Under Chinese regulations, agreements between students and potential employers are classified as contractual agreements, not official labour contracts, according to veteran human resources manager Elisa He. Thus, potential employers can legally terminate the contracts after the students agree to the terms.
It was rare, however, for an employer to terminate contracts with hundreds of students at once, He said.
Students shield themselves from the sun as they line up at a job fair at a university in Guangzhou, Guangdong province, China. Photo: Reuters
An official jobless claims report showed employment in China has been stable, despite the months-long US-China trade war and stock market volatility. Some 12.93 million jobs were created in the first 11 months of 2018, an increase of 130,000 over the same period last year. In November, China's surveyed jobless rate in urban areas fell to 4.8 per cent after rising to 4.9 per cent in October.
However, an increase in the number of companies announcing hiring freezes and job cuts suggests that in sectors such as hi-tech and finance, the employment picture actually could be much bleaker than official statistics suggest.
WILL A 'US$102 BILLION' MOVE TO AID CHINA'S SLOWING ECONOMY HELP?
Before the US and China announced a 90-day truce in their trade battle on December 1, then-new economic data had added weight to the argument that the slowdown in China's economy was worsening as the trade war with the US dampened consumer confidence and hurt sales of goods such as cars and electronics.
In light of these and other forecasts, China's leadership has made "stabilising" growth its top priority for 2019, since it regards job creation, especially for ambitious young graduates like Tan and Li, as necessary to ensure social stability.
Biotech scientists are usually in demand in China and are seen as likely to land jobs upon graduation from university. Photo: Alamy
This year, 8.34 million students will graduate from Chinese colleges and universities, an all-time high, according to the Ministry of Education. By contrast, a decade earlier in 2009, China had just 5.3 million new graduates. At the same time, China's economic growth has slowed to its lowest level in a decade and the worst is expected to come.
China's hi-tech firms and shadow banking institutions, which hired aggressively in past years, have either imposed hiring freezes or cut jobs.
Students draw sketches during a mock examination for art college entrance, at a sports stadium in Wuhan, Hubei province, China. Photo: Reuters
'WE ARE WASTING OUR RESOURCES TRAINING SO MANY UNIVERSITY STUDENTS'
Song Xuetao, an economist at Tianfeng Securities, wrote in a research note that about 2 million vacancies disappeared from 51job.com, a leading Chinese hiring website, from April to September. Song found that new job openings at private firms with 50 to 500 employees fell very sharply.
This decline has made young jobseekers insecure, pushing them to chase so-called stable positions at government agencies and state-owned enterprises as private firms like Mindray prove unreliable bets on a future.
Mindray, founded in 1991, went public on the New York Stock Exchange in 2006. But it decided to delist its shares from the New York market in 2016 and apply for a listing in China's A-share market. It finally launched an initial public offering on the Shenzhen Stock Exchange last October, raising about 6 billion yuan.
The company now has about 7,000 employees globally and posted a profit of 2.6 billion yuan in 2017 on sales of 11.2 billion yuan. Mindray received 13 per cent of its revenue from the North America market in 2017.
Joan Liu, another graduate student released from a work deal by Mindray, said the experience changed the way she looked at the job market.
"Mindray is a leading firm in the industry and its shares are publicly traded. However, it still has to terminate contracts with us … and you can imagine how other small firms are doing," she said.
"Now the first thing that comes to my mind [when considering an employment opportunity] is whether the job is safe, whether I would be laid off suddenly … I think only state-owned enterprises are trustworthy amid an economic downturn."
This article was first published in South China Morning Post.
University students preparing for the upcoming National Entrance Examination for Postgraduate (NEEP) at a library of Shenyang Agricultural University in Shenyang in China's northeastern Liaoning province.
PHOTO: AFP
HE HUIFANG
SOUTH CHINA MORNING POST
Jan 07, 2019
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Tan Shiyang, a Beihang University biological science and medical engineering graduate student, should be one of the last people to have to worry about finding a decent job in China.
Biotech scientists with his skills are always in short supply and his Beijing-based school is regarded as one of the best, with a reputation as China's answer to the Massachusetts Institute of Technology.
And so, when Tan received multiple job offers soon after meeting representatives from various companies at an autumn on-campus recruitment fair at Beihang, things seemed to be working out as expected. He eventually decided to accept an offer of employment as a researcher with a hi-tech firm in Shenzhen, one of China's most vibrant cities.
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Assured of a job after graduation, Tan settled back and focused on enjoying his final months as a student.
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Hiring freezes and job cuts suggest a worse than expected employment outlook in China for the hi-tech and finance sectors. Photo: AFP
But in December, things took an unexpected turn. The company he had agreed to work for, Shenzhen Mindray Bio-Medical Electronics, told him that due to a change in the company's recruitment plans, the job offer was invalidated. Mindray, China's largest medical equipment maker, said it would give Tan 5,000 yuan (S$990.50), roughly a third of what would have been his salary for one month, as compensation.
The change has thrown Tan's life into chaos, coming as the "campus recruitment season" winds down and China's economic health continues its recent downward trend.
"I chose Mindray because I wanted to work as a researcher for an innovative firm, and that's why I turned down all other job offers," Tan said. "Now I have to start again … I had rarely thought about the economic downturn before, but now I guess I am one of its victims."
Tan is not the only graduate student caught off guard.
Eric Li had accepted a job offer from Mindray with a starting annual income of 200,000 yuan. When he too was told the offer had been withdrawn, he said his dreams were shattered.
"I had planned to make good use of the money to buy milk powder for my nephew every month," Li said. "I had planned to save 120,000 yuan a year to prepare for my marriage to my girlfriend.
"And I dreamed of the day when I could afford a down payment on a small flat in Shenzhen," he said. "That's now all vanished."
Li said Mindray had held a "welcoming party" for new hires on December 22 in Shenzhen, where company officials talked about the incoming employees' bright future. One week later, the students received a phone call from the company telling them their job offer had been terminated.
A number of students, who had similarly been hired by Mindray and then had their offers pulled, created a chat group to figure out their next steps. Li said the participants commonly felt it was their misfortune to have graduated in a year when China was under mounting economic pressure.
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In an email to the South China Morning Post, Mindray said it had signed tentative employment agreements with 485 new graduates from about 50 universities in China since September. But it decided to terminate 254 of those contracts at the end of December after "an internal review". The company had hired 430 new graduates a year ago.
Mindray, whose product lines include patient monitoring devices, said the demands of maintaining a sound operation in 2019 were "heavier than in than past years" and it had to scale back its student recruitment plans "for the sake of continuous and steady business development".
JUST HOW BADLY IS CHINA'S ECONOMY DOING?
Under Chinese regulations, agreements between students and potential employers are classified as contractual agreements, not official labour contracts, according to veteran human resources manager Elisa He. Thus, potential employers can legally terminate the contracts after the students agree to the terms.
It was rare, however, for an employer to terminate contracts with hundreds of students at once, He said.
An official jobless claims report showed employment in China has been stable, despite the months-long US-China trade war and stock market volatility. Some 12.93 million jobs were created in the first 11 months of 2018, an increase of 130,000 over the same period last year. In November, China's surveyed jobless rate in urban areas fell to 4.8 per cent after rising to 4.9 per cent in October.
However, an increase in the number of companies announcing hiring freezes and job cuts suggests that in sectors such as hi-tech and finance, the employment picture actually could be much bleaker than official statistics suggest.
WILL A 'US$102 BILLION' MOVE TO AID CHINA'S SLOWING ECONOMY HELP?
Before the US and China announced a 90-day truce in their trade battle on December 1, then-new economic data had added weight to the argument that the slowdown in China's economy was worsening as the trade war with the US dampened consumer confidence and hurt sales of goods such as cars and electronics.
In light of these and other forecasts, China's leadership has made "stabilising" growth its top priority for 2019, since it regards job creation, especially for ambitious young graduates like Tan and Li, as necessary to ensure social stability.
Biotech scientists are usually in demand in China and are seen as likely to land jobs upon graduation from university. Photo: Alamy
This year, 8.34 million students will graduate from Chinese colleges and universities, an all-time high, according to the Ministry of Education. By contrast, a decade earlier in 2009, China had just 5.3 million new graduates. At the same time, China's economic growth has slowed to its lowest level in a decade and the worst is expected to come.
China's hi-tech firms and shadow banking institutions, which hired aggressively in past years, have either imposed hiring freezes or cut jobs.
'WE ARE WASTING OUR RESOURCES TRAINING SO MANY UNIVERSITY STUDENTS'
Song Xuetao, an economist at Tianfeng Securities, wrote in a research note that about 2 million vacancies disappeared from 51job.com, a leading Chinese hiring website, from April to September. Song found that new job openings at private firms with 50 to 500 employees fell very sharply.
This decline has made young jobseekers insecure, pushing them to chase so-called stable positions at government agencies and state-owned enterprises as private firms like Mindray prove unreliable bets on a future.
Mindray, founded in 1991, went public on the New York Stock Exchange in 2006. But it decided to delist its shares from the New York market in 2016 and apply for a listing in China's A-share market. It finally launched an initial public offering on the Shenzhen Stock Exchange last October, raising about 6 billion yuan.
The company now has about 7,000 employees globally and posted a profit of 2.6 billion yuan in 2017 on sales of 11.2 billion yuan. Mindray received 13 per cent of its revenue from the North America market in 2017.
Joan Liu, another graduate student released from a work deal by Mindray, said the experience changed the way she looked at the job market.
"Mindray is a leading firm in the industry and its shares are publicly traded. However, it still has to terminate contracts with us … and you can imagine how other small firms are doing," she said.
"Now the first thing that comes to my mind [when considering an employment opportunity] is whether the job is safe, whether I would be laid off suddenly … I think only state-owned enterprises are trustworthy amid an economic downturn."
This article was first published in South China Morning Post.
China's exports shrink most in two years, raising risks to global economy
China's exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world's second-largest economy in 2019 and deteriorating global demand.
image: data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==
FILE PHOTO: Containers and trucks are seen at a terminal of the Qingdao port in Shandong province, China November 8, 2018. REUTERS/Stringer
14 Jan 2019 06:06PM
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BEIJING: China's exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world's second-largest economy in 2019 and deteriorating global demand.
Adding to policymakers' worries, data on Monday also showed China posted its biggest trade surplus with the United States on record in 2018, which could prompt President Donald Trump to turn up the heat on Beijing in their bitter trade dispute.
Advertisement
Softening demand in China is being felt around the world, with slowing sales of goods from iPhones to automobiles, prompting warnings from the likes of Apple and from Jaguar Land Rover, which last week announced sweeping job cuts.
The dismal December trade readings suggest China's economy may have cooled faster than expected late in the year, despite a slew of growth-boosting measures in recent months ranging from higher infrastructure spending to tax cuts.
Some analysts had already speculated that Beijing may have to speed up and intensify its policy easing and stimulus measures this year after factory activity shrank in December.
China's December exports unexpectedly fell 4.4 percent from a year earlier, with demand in most of its major markets weakening. Imports also saw a shock drop, falling 7.6 percent in their biggest decline since July 2016.
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Analysts had expected export growth to slow to 3 percent with imports up 5 percent.
"Today's data reflect an end to export front-loading and the start of payback effects, while the global slowdown could also weigh on China's exports," Nomura economists wrote in a note, referring to a surge in shipments to the U.S. over much of last year as companies rushed to beat further tariffs.
"The export growth print also suggests that the recent strength of the yuan might be short-lived; Beijing will perhaps be more eager to strike a trade deal with the U.S.; and that policymakers will need to take more aggressive measures to stabilize GDP growth."
Net exports had already been a drag on China's economic growth in the first three quarters of last year, after giving it a boost in 2017.
Asian shares and U.S. stock market futures fell as the surprisingly weak Chinese data added to fears of weaker corporate profits and investment, while the yuan currency gave up some of its early gains.
HIGHER TRADE SURPLUS WITH U.S.
China's politically-sensitive surplus with the U.S. widened by 17.2 percent to US$323.32 billion last year, the highest on record going back to 2006, according to Reuters calculations based on customs data.
China's large trade surplus with the United States has long been a sore point with Washington, which has demanded Beijing take steps to sharply reduce it.
Washington imposed import tariffs on hundreds of billions of dollars of Chinese goods last year and has threatened further action if Beijing does not change its practices on issues ranging from industrial subsidies to intellectual property. China has retaliated with tariffs of its own.
However, Beijing's export data had been surprisingly resilient to tariffs for much of 2018, possibly because companies ramped up shipments before broader and stiffer U.S. duties went into effect.
As many market watchers predicted, that boost has faded in the last few months. China exports to the U.S. declined 3.5 percent in December while its imports from the U.S. were down 35.8 percent for the month.
China's total global exports rose 9.9 percent in 2018, its strongest performance in seven years, while imports increased 15.8 percent.
But December's gloomy data, along with several months of falling factory orders, suggest a further weakening in its exports in the near term.
"A trade recession is likely, in our view," Raymond Yeung, chief economist at ANZ, said in a note, predicting a period of export contraction similar to 2015-16.
"The global electronics cycle remains the key driver of Chinese exports. A potential downturn in the sector poses the real risk to China's external outlook even if China and the U.S. reach a resolution on their trade dispute."
ING said a fall in electronic shipments could be related to foreign companies avoiding using China-made electronic components, adding that exports and imports of electronic parts and goods will likely shrink this year.
WEAK IMPORTS HIGHLIGHT SOFTENING DEMAND
The higher tariffs China levied on U.S. supplies also hit overall import growth. For all of 2018, soybeans, the second largest imports from the U.S., fell for the first time since 2011.
Even if Washington and Beijing reach a trade deal in their current round of talks, it would be no panacea for China's slowing economy, analysts say.
"The import slowdown is consistent with other signs that growth in China's domestic economy continued to weaken," said Louis Kuijs, head of Asia economics at Oxford Economics.
"Overall economic growth slowed further in the fourth quarter and remains under pressure from weaker exports, slow credit growth and cooling real estate activity."
Chinese policymakers are widely expected to roll out more support measures in coming months if domestic and external conditions continue to deteriorate.
Early this month, the central bank said it would slash banks' reserve requirements - the fifth such cut in a year - as it tries to encourage more lending and reduce the risk of a sharp slowdown.
"If pressure on the economy is still relatively large in the first half, a cut every quarter should be highly likely," said Xu Gao, chief economist at Everbright Securities.
In an annual meeting of top leaders last month, China said it will boost support for the economy in 2019 by cutting taxes and stepping up policy adjustments.
A few analysts believe interest rate cuts are a possibility, but most expect Beijing will refrain from massive stimulus measures like those deployed in the past, due to worries that it could add to a mountain of debt and weaken the yuan.
Sources told Reuters last week that Beijing is planning to lower its economic growth target to 6-6.5 percent this year after an expected 6.6 percent in 2018, the slowest pace in 28 years.
(Reporting by Yawen Chen, Stella Qiu, Lusha Zhang and Martin Pollard; Editing by Kim Coghill)
Source: Reuters
Read more at https://www.channelnewsasia.com/new...ars--raising-risks-to-global-economy-11121204
China's exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world's second-largest economy in 2019 and deteriorating global demand.
image: data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==
FILE PHOTO: Containers and trucks are seen at a terminal of the Qingdao port in Shandong province, China November 8, 2018. REUTERS/Stringer
14 Jan 2019 06:06PM
Share this content
BEIJING: China's exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world's second-largest economy in 2019 and deteriorating global demand.
Adding to policymakers' worries, data on Monday also showed China posted its biggest trade surplus with the United States on record in 2018, which could prompt President Donald Trump to turn up the heat on Beijing in their bitter trade dispute.
Advertisement
Softening demand in China is being felt around the world, with slowing sales of goods from iPhones to automobiles, prompting warnings from the likes of Apple and from Jaguar Land Rover, which last week announced sweeping job cuts.
The dismal December trade readings suggest China's economy may have cooled faster than expected late in the year, despite a slew of growth-boosting measures in recent months ranging from higher infrastructure spending to tax cuts.
Some analysts had already speculated that Beijing may have to speed up and intensify its policy easing and stimulus measures this year after factory activity shrank in December.
China's December exports unexpectedly fell 4.4 percent from a year earlier, with demand in most of its major markets weakening. Imports also saw a shock drop, falling 7.6 percent in their biggest decline since July 2016.
Advertisement
Analysts had expected export growth to slow to 3 percent with imports up 5 percent.
"Today's data reflect an end to export front-loading and the start of payback effects, while the global slowdown could also weigh on China's exports," Nomura economists wrote in a note, referring to a surge in shipments to the U.S. over much of last year as companies rushed to beat further tariffs.
"The export growth print also suggests that the recent strength of the yuan might be short-lived; Beijing will perhaps be more eager to strike a trade deal with the U.S.; and that policymakers will need to take more aggressive measures to stabilize GDP growth."
Net exports had already been a drag on China's economic growth in the first three quarters of last year, after giving it a boost in 2017.
Asian shares and U.S. stock market futures fell as the surprisingly weak Chinese data added to fears of weaker corporate profits and investment, while the yuan currency gave up some of its early gains.
HIGHER TRADE SURPLUS WITH U.S.
China's politically-sensitive surplus with the U.S. widened by 17.2 percent to US$323.32 billion last year, the highest on record going back to 2006, according to Reuters calculations based on customs data.
China's large trade surplus with the United States has long been a sore point with Washington, which has demanded Beijing take steps to sharply reduce it.
Washington imposed import tariffs on hundreds of billions of dollars of Chinese goods last year and has threatened further action if Beijing does not change its practices on issues ranging from industrial subsidies to intellectual property. China has retaliated with tariffs of its own.
However, Beijing's export data had been surprisingly resilient to tariffs for much of 2018, possibly because companies ramped up shipments before broader and stiffer U.S. duties went into effect.
As many market watchers predicted, that boost has faded in the last few months. China exports to the U.S. declined 3.5 percent in December while its imports from the U.S. were down 35.8 percent for the month.
China's total global exports rose 9.9 percent in 2018, its strongest performance in seven years, while imports increased 15.8 percent.
But December's gloomy data, along with several months of falling factory orders, suggest a further weakening in its exports in the near term.
"A trade recession is likely, in our view," Raymond Yeung, chief economist at ANZ, said in a note, predicting a period of export contraction similar to 2015-16.
"The global electronics cycle remains the key driver of Chinese exports. A potential downturn in the sector poses the real risk to China's external outlook even if China and the U.S. reach a resolution on their trade dispute."
ING said a fall in electronic shipments could be related to foreign companies avoiding using China-made electronic components, adding that exports and imports of electronic parts and goods will likely shrink this year.
WEAK IMPORTS HIGHLIGHT SOFTENING DEMAND
The higher tariffs China levied on U.S. supplies also hit overall import growth. For all of 2018, soybeans, the second largest imports from the U.S., fell for the first time since 2011.
Even if Washington and Beijing reach a trade deal in their current round of talks, it would be no panacea for China's slowing economy, analysts say.
"The import slowdown is consistent with other signs that growth in China's domestic economy continued to weaken," said Louis Kuijs, head of Asia economics at Oxford Economics.
"Overall economic growth slowed further in the fourth quarter and remains under pressure from weaker exports, slow credit growth and cooling real estate activity."
Chinese policymakers are widely expected to roll out more support measures in coming months if domestic and external conditions continue to deteriorate.
Early this month, the central bank said it would slash banks' reserve requirements - the fifth such cut in a year - as it tries to encourage more lending and reduce the risk of a sharp slowdown.
"If pressure on the economy is still relatively large in the first half, a cut every quarter should be highly likely," said Xu Gao, chief economist at Everbright Securities.
In an annual meeting of top leaders last month, China said it will boost support for the economy in 2019 by cutting taxes and stepping up policy adjustments.
A few analysts believe interest rate cuts are a possibility, but most expect Beijing will refrain from massive stimulus measures like those deployed in the past, due to worries that it could add to a mountain of debt and weaken the yuan.
Sources told Reuters last week that Beijing is planning to lower its economic growth target to 6-6.5 percent this year after an expected 6.6 percent in 2018, the slowest pace in 28 years.
(Reporting by Yawen Chen, Stella Qiu, Lusha Zhang and Martin Pollard; Editing by Kim Coghill)
Source: Reuters
Read more at https://www.channelnewsasia.com/new...ars--raising-risks-to-global-economy-11121204
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CHINA POWER
China's looming great wall of debt may have 'major global implications'
BY TASHA WIBAWA
ABOUT 6 HOURS AGO
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A graphic image of a 100 yuan RMB note behind the Great wall of China and the outline of Mainland China.
PHOTO China could struggle to repay an ever-increasing wall of debt with potential detrimental consequences for the global market.
ABC NEWS: JARROD FANKHAUSER
While many countries struggled following the 2008 global financial crisis, China appeared as though it had largely escaped unscathed.
Key points:
China's rising levels of debt mostly attributed to a "credit boom" post GFC
Many large infrastructures are struggling to generate positive revenue
Chinese local government debt has been called an "iceberg" with "titanic risks"
But observers are becoming increasingly concerned Beijing will struggle to repay an ever-increasing mountain of debt, with potential detrimental consequences for the global market.
China's debt has been a key factor to its economic success in riding out the GFC, due to a large government stimulus injected into its economy.
However, the financial boost has mostly led to China having one of the highest corporate debts in the world, only second to the Special Administrative Region of Hong Kong.
US-China trade war explained
US-China trade war explained
It is upping the ante in a high stakes game, but what are the implications of President Trump targeting hi-tech Chinese imports?
The past year has been a tumultuous one for the Chinese market: it was hit by an economic downturn, and for the first time in two years, exports unexpectedly plunged to its lowest point, all of this against the backdrop of an ongoing trade dispute and punishing tariffs by the US.
Beijing made moves to solve its issues by slashing central bank reserves earlier this month — the fifth time within a year — freeing up $US116 billion ($161.3 billion) to stimulate more economic growth.
But forecasted figures by a number of global financial institutions are not looking too positive for the global superpower, and adding to the debt fears is an opaqueness and inability for analysts to completely obtain information and understand the full extent or impact of the potential looming problem.
'There's no positive way to spin it'
A man rides a motorcycle past a replica of the Eiffel Tower at the Tianducheng development in Hangzhou.
PHOTO The Tianducheng development in Hangzhou was designed to accommodate 10,000 people, but remains sparsely populated.
REUTERS: ALY SONG
A common misconception about the Chinese economy is that it is largely driven by exports, and while that might be the case prior to 2008, it all changed during the crisis when global demand for Chinese imports quickly declined throughout Europe and the United States.
To ride out the GFC, the Chinese Government injected a $US4 trillion ($5.5 trillion) stimulus to create jobs through large-scale infrastructures projects, real estate and foreign investments — despite limited domestic market interest.
China's questionable numbers
China's questionable numbers
Why does China even bother producing GDP numbers that few economists see as credible, asks Stephen Letts.
According to the Bank for International Settlement (BIS), China's overall debt currently sits at 255.7 per cent of its gross domestic product (GDP), with its corporate debt standing at 160.3 per cent, well ahead of Japan and the US.
However, the concerns do not surround the amount of China's accumulated debt, but rather the rate of its corporate debt and its growth since the GFC, which also includes State-Owned Enterprises (SOE) and local governments, prompting fears of a financial crisis with a domino effect.
Corporate debt is the amount of money borrowed by non-financial institutions from the private sector, while accumulated debt also includes household and public debts.
While many economists do not seem particularly concerned about a debt default due to China's large foreign reserves, including $US1.15 trillion in US bonds, speculation of a credit crisis still ranges from an economic slowdown to the next global financial crisis.
While its still up for debate, many agree the effects could be felt across the globe.
'A debt iceberg with titanic credit risks'
A green truck transports a blue shipping container at a cargo terminal in China
PHOTO According to the World Bank and the IMF, the Chinese economy is forecast to continue to slow down in the coming years.
REUTERS: STRINGER
Jane Golley, an economist and acting director at the Australian Centre on China in the World at the Australian National University, said the issue had become more complex as it was not known how big the debt was and how it was being spent.
"The uncertainty it creates makes global capital markets, individual investors and even local domestic consumers nervous about that trickle-down effect," she told the ABC.
Dr Golley added that China could not sell all its US Government bonds as it would have "major global implications".
A report published by S&P Global Ratings in late 2018 found off-balance-sheet borrowing by local governments as high as 40 trillion yuan ($8.2 trillion) and dubbed it "a debt iceberg with titanic credit risks".
James Laurenceson, deputy director at the Australia-China Relations Institute at UTS, said the debt held by the corporate sector, particularly in SEOs, became a core part of the problem, especially through "zombie firms" which do not generate revenue.
"There's no positive way to spin it … debt has been ploughed into assets that aren't producing a substantial return," he said.
"This is slowly grinding down China's growth rate and means more policy stimulus is needed to produce the same amount of growth."
'A total waste of money'
Re-valued: China has scrapped its peg to the US currency.
PHOTO China's central bank slashes capital requirements for the fifth time in a year amid an economic slowdown.
REUTERS: REINHARD KRAUSE
According to the China Power Project at US think tank the Center for Strategic and International Studies, state-owned enterprises accounted for more than half of China's corporate debt in 2016, while only accounting for half of its GDP.
He-Ling Shi, an economist from Monash University, said some of these infrastructure projects were "a total waste of money and will not generate cash flow".
He was referring to empty "ghost cities" and an array of abandoned projects such as airports and large buildings with limited use.
"Some cities with fewer than 100,000 in population have applied to build subways where the roads above are totally empty," he said.
"Also some airports constructed using loans from banks which provide services for very limited numbers per year," he said.
Cities with no people
Cities with no people
Fancy villas, high-rise apartment blocks, lakes, parks and sprawling road networks: ghost cities in China have everything — except people.
China's potential crisis may also be lurking in its "shadow banking" system which has been tied to its "credit boom".
Shadow banking is an unregulated and unstable aspect of the Chinese market which sells anything from wealth-management products to investment trusts — creating a notion of an expanding economy beyond official channels.
According to Dr Shi, shadow banks have been used by local governments to finance infrastructure projects, therefore contributing to the overall government debt.
A report published by BIS last year found much of the sector was driven by traditional and state-owned banks with significant levels of state involvement.
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VIDEO 3:43 Why are there dozens of 'ghost cities' in China? (Photo: J Capital research group, Footage: Wade Shepard)
ABC NEWS
'Bad outcome' imminent; sense of crisis 'contagious'
A 2016 International Monetary Fund (IMF) report found 38 out of 43 economies whose national debt was 30 per cent higher than its GDP experienced "severe disruption" in the form of financial crises and a decline in growth.
It also found the probability of a "bad outcome" was imminent if the boom lasted for more than six years — these are all criteria the Chinese economy meets.
Dr Laurenceson said it was unlikely a Chinese financial crisis would lead to a catastrophic, US-style market collapse and cause the next global financial crisis.
"This means that rather than a collapse, if the root causes aren't addressed, China's growth rate will just slowly grind down for the foreseeable future," he said.
He added that even this would be problematic as it had the potential to result in an economic stagnation similar to Japan's "lost decade" following the collapse of its asset prices.
An employee inspects newly-made steel coils at a steel plant in Lianyungang, Jiangsu province
PHOTO The Government seems to have recently introduced a number of financial reforms and budget restructuring aimed at lowering debt levels.
REUTERS: CHINA DAILY
According to the World Bank and the IMF, the Chinese economy is forecast to continue to slow down in the coming years, further adding to the anxiety around whether Beijing can repay its debts.
Dr Shi said it would continue to be an ongoing and difficult issue, with no clear solutions.
"If the Chinese GDP can be maintained at 6 per cent per year, in theory, it can still use its economic growth to repay its debt, however, this is a little bit too optimistic," he said.
He added that some of the infrastructure projects would need positive cash flow which then could be used to pay back some debt, but, "It might take a very long time".
"When it becomes massive is when that sense of crisis becomes contagious," Dr Golley said.
"Its not just a debt crisis on its own but it's the fear of debt crisis reducing consumer confidence, business confidence even further and then having impacts on Chinese demands for imports … and it all starts to ratchet up through there."
Xi Jinping's turbulent year
Xi Jinping's turbulent year
Diminishing returns from China's debt-fuelled growth model is causing the country's economic slowdown, and if it worsens in 2019 it will be hard for Mr Xi not to wear the blame, writes Bill Birtles.
The Chinese Government seems to have recently introduced a number of financial reforms and budget restructuring aimed at lowering debt levels in recent times, including greater restrictions on debt-financed overseas investments, allowing some state-owned zombie firms to go insolvent, and a reduction in coal and steel industries.
But Dr Laurenceson explained there was only limited evidence the authorities were addressing the root causes of the problem.
He said there had been attempts to audit books of local governments to move lending from murky, high-interest-rate shadow banking to official banking sectors, however, it still did not balance the disproportionate quantities of state-owned firms which were far less productive than private companies.
The Chinese Government considers SOEs to play an important stabilising role in society, and Dr Laurenceson added Beijing would be "reluctant to let them go bankrupt and close" therefore contributing to the "potential risk to growth and financial stability" of the second-largest economy in the world.
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CHINA POWER
China's looming great wall of debt may have 'major global implications'
BY TASHA WIBAWA
ABOUT 6 HOURS AGO
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A graphic image of a 100 yuan RMB note behind the Great wall of China and the outline of Mainland China.
PHOTO China could struggle to repay an ever-increasing wall of debt with potential detrimental consequences for the global market.
ABC NEWS: JARROD FANKHAUSER
While many countries struggled following the 2008 global financial crisis, China appeared as though it had largely escaped unscathed.
Key points:
China's rising levels of debt mostly attributed to a "credit boom" post GFC
Many large infrastructures are struggling to generate positive revenue
Chinese local government debt has been called an "iceberg" with "titanic risks"
But observers are becoming increasingly concerned Beijing will struggle to repay an ever-increasing mountain of debt, with potential detrimental consequences for the global market.
China's debt has been a key factor to its economic success in riding out the GFC, due to a large government stimulus injected into its economy.
However, the financial boost has mostly led to China having one of the highest corporate debts in the world, only second to the Special Administrative Region of Hong Kong.
US-China trade war explained
US-China trade war explained
It is upping the ante in a high stakes game, but what are the implications of President Trump targeting hi-tech Chinese imports?
The past year has been a tumultuous one for the Chinese market: it was hit by an economic downturn, and for the first time in two years, exports unexpectedly plunged to its lowest point, all of this against the backdrop of an ongoing trade dispute and punishing tariffs by the US.
Beijing made moves to solve its issues by slashing central bank reserves earlier this month — the fifth time within a year — freeing up $US116 billion ($161.3 billion) to stimulate more economic growth.
But forecasted figures by a number of global financial institutions are not looking too positive for the global superpower, and adding to the debt fears is an opaqueness and inability for analysts to completely obtain information and understand the full extent or impact of the potential looming problem.
'There's no positive way to spin it'
A man rides a motorcycle past a replica of the Eiffel Tower at the Tianducheng development in Hangzhou.
PHOTO The Tianducheng development in Hangzhou was designed to accommodate 10,000 people, but remains sparsely populated.
REUTERS: ALY SONG
A common misconception about the Chinese economy is that it is largely driven by exports, and while that might be the case prior to 2008, it all changed during the crisis when global demand for Chinese imports quickly declined throughout Europe and the United States.
To ride out the GFC, the Chinese Government injected a $US4 trillion ($5.5 trillion) stimulus to create jobs through large-scale infrastructures projects, real estate and foreign investments — despite limited domestic market interest.
China's questionable numbers
China's questionable numbers
Why does China even bother producing GDP numbers that few economists see as credible, asks Stephen Letts.
According to the Bank for International Settlement (BIS), China's overall debt currently sits at 255.7 per cent of its gross domestic product (GDP), with its corporate debt standing at 160.3 per cent, well ahead of Japan and the US.
However, the concerns do not surround the amount of China's accumulated debt, but rather the rate of its corporate debt and its growth since the GFC, which also includes State-Owned Enterprises (SOE) and local governments, prompting fears of a financial crisis with a domino effect.
Corporate debt is the amount of money borrowed by non-financial institutions from the private sector, while accumulated debt also includes household and public debts.
While many economists do not seem particularly concerned about a debt default due to China's large foreign reserves, including $US1.15 trillion in US bonds, speculation of a credit crisis still ranges from an economic slowdown to the next global financial crisis.
While its still up for debate, many agree the effects could be felt across the globe.
'A debt iceberg with titanic credit risks'
A green truck transports a blue shipping container at a cargo terminal in China
PHOTO According to the World Bank and the IMF, the Chinese economy is forecast to continue to slow down in the coming years.
REUTERS: STRINGER
Jane Golley, an economist and acting director at the Australian Centre on China in the World at the Australian National University, said the issue had become more complex as it was not known how big the debt was and how it was being spent.
"The uncertainty it creates makes global capital markets, individual investors and even local domestic consumers nervous about that trickle-down effect," she told the ABC.
Dr Golley added that China could not sell all its US Government bonds as it would have "major global implications".
A report published by S&P Global Ratings in late 2018 found off-balance-sheet borrowing by local governments as high as 40 trillion yuan ($8.2 trillion) and dubbed it "a debt iceberg with titanic credit risks".
James Laurenceson, deputy director at the Australia-China Relations Institute at UTS, said the debt held by the corporate sector, particularly in SEOs, became a core part of the problem, especially through "zombie firms" which do not generate revenue.
"There's no positive way to spin it … debt has been ploughed into assets that aren't producing a substantial return," he said.
"This is slowly grinding down China's growth rate and means more policy stimulus is needed to produce the same amount of growth."
'A total waste of money'
Re-valued: China has scrapped its peg to the US currency.
PHOTO China's central bank slashes capital requirements for the fifth time in a year amid an economic slowdown.
REUTERS: REINHARD KRAUSE
According to the China Power Project at US think tank the Center for Strategic and International Studies, state-owned enterprises accounted for more than half of China's corporate debt in 2016, while only accounting for half of its GDP.
He-Ling Shi, an economist from Monash University, said some of these infrastructure projects were "a total waste of money and will not generate cash flow".
He was referring to empty "ghost cities" and an array of abandoned projects such as airports and large buildings with limited use.
"Some cities with fewer than 100,000 in population have applied to build subways where the roads above are totally empty," he said.
"Also some airports constructed using loans from banks which provide services for very limited numbers per year," he said.
Cities with no people
Cities with no people
Fancy villas, high-rise apartment blocks, lakes, parks and sprawling road networks: ghost cities in China have everything — except people.
China's potential crisis may also be lurking in its "shadow banking" system which has been tied to its "credit boom".
Shadow banking is an unregulated and unstable aspect of the Chinese market which sells anything from wealth-management products to investment trusts — creating a notion of an expanding economy beyond official channels.
According to Dr Shi, shadow banks have been used by local governments to finance infrastructure projects, therefore contributing to the overall government debt.
A report published by BIS last year found much of the sector was driven by traditional and state-owned banks with significant levels of state involvement.
Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume.
VIDEO 3:43 Why are there dozens of 'ghost cities' in China? (Photo: J Capital research group, Footage: Wade Shepard)
ABC NEWS
'Bad outcome' imminent; sense of crisis 'contagious'
A 2016 International Monetary Fund (IMF) report found 38 out of 43 economies whose national debt was 30 per cent higher than its GDP experienced "severe disruption" in the form of financial crises and a decline in growth.
It also found the probability of a "bad outcome" was imminent if the boom lasted for more than six years — these are all criteria the Chinese economy meets.
Dr Laurenceson said it was unlikely a Chinese financial crisis would lead to a catastrophic, US-style market collapse and cause the next global financial crisis.
"This means that rather than a collapse, if the root causes aren't addressed, China's growth rate will just slowly grind down for the foreseeable future," he said.
He added that even this would be problematic as it had the potential to result in an economic stagnation similar to Japan's "lost decade" following the collapse of its asset prices.
An employee inspects newly-made steel coils at a steel plant in Lianyungang, Jiangsu province
PHOTO The Government seems to have recently introduced a number of financial reforms and budget restructuring aimed at lowering debt levels.
REUTERS: CHINA DAILY
According to the World Bank and the IMF, the Chinese economy is forecast to continue to slow down in the coming years, further adding to the anxiety around whether Beijing can repay its debts.
Dr Shi said it would continue to be an ongoing and difficult issue, with no clear solutions.
"If the Chinese GDP can be maintained at 6 per cent per year, in theory, it can still use its economic growth to repay its debt, however, this is a little bit too optimistic," he said.
He added that some of the infrastructure projects would need positive cash flow which then could be used to pay back some debt, but, "It might take a very long time".
"When it becomes massive is when that sense of crisis becomes contagious," Dr Golley said.
"Its not just a debt crisis on its own but it's the fear of debt crisis reducing consumer confidence, business confidence even further and then having impacts on Chinese demands for imports … and it all starts to ratchet up through there."
Xi Jinping's turbulent year
Xi Jinping's turbulent year
Diminishing returns from China's debt-fuelled growth model is causing the country's economic slowdown, and if it worsens in 2019 it will be hard for Mr Xi not to wear the blame, writes Bill Birtles.
The Chinese Government seems to have recently introduced a number of financial reforms and budget restructuring aimed at lowering debt levels in recent times, including greater restrictions on debt-financed overseas investments, allowing some state-owned zombie firms to go insolvent, and a reduction in coal and steel industries.
But Dr Laurenceson explained there was only limited evidence the authorities were addressing the root causes of the problem.
He said there had been attempts to audit books of local governments to move lending from murky, high-interest-rate shadow banking to official banking sectors, however, it still did not balance the disproportionate quantities of state-owned firms which were far less productive than private companies.
The Chinese Government considers SOEs to play an important stabilising role in society, and Dr Laurenceson added Beijing would be "reluctant to let them go bankrupt and close" therefore contributing to the "potential risk to growth and financial stability" of the second-largest economy in the world.
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China opens the debt taps again as economic growth slows to multi-decade lows
ANALYSIS BY BUSINESS REPORTERSTEPHEN LETTSABOUT 5 HOURS AGO
Email Facebook Twitter WhatsApp
PHOTO
Most key economic data is pointing to the Chinese economy cooling more rapidly than expected.
REUTERS: THOMAS PETER/FILE
When China's central bank makes its biggest single-day cash injection into its economy, should we be comforted authorities are managing a potentially nasty slowdown, or alarmed the mountains of debt in the world's second-largest economy are only getting bigger and more dangerous?
The initial take has been cautiously optimistic, but then again a sugar-hit is often far more palatable for markets than dealing with the heartburn of stacking on more debt.
The People's Bank of China (PBOC) injected a net 560 billion yuan ($140 billion) into the economy last Wednesday, and roughly 1.1 trillion yuan ($230 billion) for the week.
Authorities have been loosening restrictions on how much reserve capital banks need to hold, which in turn frees up more money to lend.
It was just the latest move in series of policy tweaks — including tax cuts and more public spending — announced in recent weeks.
So far it has been a cheaper, more "under-the-radar" tweaking, but things can escalate quickly if activity doesn't pick up in key sectors and jobs are shed.
Social stability is never too far away from such decisions.
PHOTO China's central bank has recently stepped up its cash injections into the economy.
SOURCE: REFINITIV/THOMSON REUTERSHard landing
Some idea of just how much the economy is slowing may be apparent in this weeks' GDP data release.
China's questionable numbers
Why does China even bother producing GDP numbers that few economists see as credible, asks Stephen Letts.
Year-on-year growth for the fourth quarter is tipped to come in at 6.3 per cent, which would be the weakest reading in almost three decades.
An official reading around 6.4 per cent would probably be fine from a central planning point of view.
It would bring GDP growth in line with the official target for 2018. It would also equal the 2009 GFC low and could also be used to justify even more stimulus.
Given the remarkable stability (and questionable quality) of the data, the actual number is probably less important than the direction — most independent analysts believe the Chinese economy is heading downhill more rapidly than planned.
Tipping point
For veteran China watcher, Stephen Joske, it is potentially a tipping point in terms of the economy's strength and the ability to keep stimulating it through Government policy.
"If it [a new stimulus package] is the size of 2015, it could increase the risk of a financial crisis in the next few years," Mr Joske said.
However for Mr Joske — who has worked in Beijing for both the Australian Treasury and The Economist's Economic Intelligence Unit, as well as advising Australian Super on investments in the region — a financial crisis blowing up in China is inevitable anyway.
"When they loosen it up there's an orgy of lending authorities can't control … there's a big reliance on unrestrained business lending."
Sugar hit doesn't last
A case in point is 2015.
From late 2014 the monetary and fiscal lever-pulling included slashing benchmark interest rates by more than 1.5 percentage points and further easing of bank reserve ratios; the budget deficit swelled and state pension funds were urged to invest in equities for the first time, while fund managers also pledged to support the stock market.
It is hard to pin down an exact figure, but at least one Beijing University estimate valued the total stimulus well in excess of $US1 trillion.
By mid-2015 China's equity market jumped 50 per cent. Year-on-year GDP growth rebounded and held above 7 per cent.
The magic didn't last long. The stock market is now down around 25 per cent from early 2015 (and 50 per cent from its peak), while economic growth could well nudge below levels recorded in the depths of the GFC.
EMBED:Shanghai exchange and stimulus
Mr Joske said the "disguised" lending, loans that didn't show up on the big banks' balance sheets, ran to "hundreds of billions of dollars".
Shadow lending crackdown
NAB's China economist Gerard Burg is somewhat more sanguine.
"A weak GDP figure has the potential to spook the markets, but it is not entirely a negative story," he said.
Mr Burg said he was reading a lot of information about stimulus in the media, but he was not seeing it in the data.
China's looming great wall of debt
Analysts are concerned China will struggle to repay an ever-increasing debt, with potential detrimental consequences for the global market.
If anything, tougher regulations on shadow bank lending had pushed credit growth down to the lowest level in more than a decade he said.
Mr Burg argued China's deleveraging, or reining in of debt, was being undertaken in a measured way.
"The policymakers are trying to get banks to lend to SMEs [small-to-medium enterprises] rather than the state-owned sector, and we see this as a positive sign," Mr Burg noted.
The data appears to show authorities are having some success at moving lending away from the shadow banking sector to mainstream, regulated banks.
Last year non-bank lending accounted for 19 per cent of aggregate finance, half the 38 per cent share in 2017.
Domestic economy worries
Chinese authorities have vowed they would not "flood" the system with stimulus, but that resolve may be tested in coming months.
It is not just the external economy being weighed down by US tariffs that is a worry.
Factory activity is at the point of contracting and a range of figures from falling car sales, property prices and consumer confidence, as well as tumbling imports, shows the domestic economy and demand is an even bigger problem.
EMBED:China GDP
A recent survey from the Bank of America Merrill Lynch (BoAML) economics team in China found the economy was deteriorating more rapidly than before the stimulus packages of 2012 and 2015 were unleashed.
"In our view, it will prompt policymakers to further roll out easing measures to buffer the negative growth shocks," the big investment bank told clients.
"The recent Central Economic Work Conference confirmed top policymakers fully recognised the need to prioritise growth stability with more countercyclical easing measures.
"Going forward, faster credit expansion and property policy easing would be crucial to economic cycle rebooting in the coming months."
Given the massive size of the Chinese economy, it won't be an easy, quick or cheap fix to turn things around.
If the central planners hear the echoes of the 2015 "hard landing", the floodgates may again be opened and a massive new wave of indebtedness could be unleashed.
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Ghost cities, shadow banks, and empty airports: Inside China's looming great wall of debt
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China's economy slows to levels not seen since the GFC
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China opens the debt taps again as economic growth slows to multi-decade lows
ANALYSIS BY BUSINESS REPORTERSTEPHEN LETTSABOUT 5 HOURS AGO
Email Facebook Twitter WhatsApp
PHOTO
Most key economic data is pointing to the Chinese economy cooling more rapidly than expected.
REUTERS: THOMAS PETER/FILE
When China's central bank makes its biggest single-day cash injection into its economy, should we be comforted authorities are managing a potentially nasty slowdown, or alarmed the mountains of debt in the world's second-largest economy are only getting bigger and more dangerous?
The initial take has been cautiously optimistic, but then again a sugar-hit is often far more palatable for markets than dealing with the heartburn of stacking on more debt.
The People's Bank of China (PBOC) injected a net 560 billion yuan ($140 billion) into the economy last Wednesday, and roughly 1.1 trillion yuan ($230 billion) for the week.
Authorities have been loosening restrictions on how much reserve capital banks need to hold, which in turn frees up more money to lend.
It was just the latest move in series of policy tweaks — including tax cuts and more public spending — announced in recent weeks.
So far it has been a cheaper, more "under-the-radar" tweaking, but things can escalate quickly if activity doesn't pick up in key sectors and jobs are shed.
Social stability is never too far away from such decisions.
PHOTO China's central bank has recently stepped up its cash injections into the economy.
SOURCE: REFINITIV/THOMSON REUTERSHard landing
Some idea of just how much the economy is slowing may be apparent in this weeks' GDP data release.
China's questionable numbers
Why does China even bother producing GDP numbers that few economists see as credible, asks Stephen Letts.
Year-on-year growth for the fourth quarter is tipped to come in at 6.3 per cent, which would be the weakest reading in almost three decades.
An official reading around 6.4 per cent would probably be fine from a central planning point of view.
It would bring GDP growth in line with the official target for 2018. It would also equal the 2009 GFC low and could also be used to justify even more stimulus.
Given the remarkable stability (and questionable quality) of the data, the actual number is probably less important than the direction — most independent analysts believe the Chinese economy is heading downhill more rapidly than planned.
Tipping point
For veteran China watcher, Stephen Joske, it is potentially a tipping point in terms of the economy's strength and the ability to keep stimulating it through Government policy.
"If it [a new stimulus package] is the size of 2015, it could increase the risk of a financial crisis in the next few years," Mr Joske said.
However for Mr Joske — who has worked in Beijing for both the Australian Treasury and The Economist's Economic Intelligence Unit, as well as advising Australian Super on investments in the region — a financial crisis blowing up in China is inevitable anyway.
"China's inability to stop stimulating is the cause of the problem, it is a question of when, not if," he said.
It is due, he says, to stimulus packages always ending up much larger than initially planned."When they loosen it up there's an orgy of lending authorities can't control … there's a big reliance on unrestrained business lending."
Sugar hit doesn't last
A case in point is 2015.
From late 2014 the monetary and fiscal lever-pulling included slashing benchmark interest rates by more than 1.5 percentage points and further easing of bank reserve ratios; the budget deficit swelled and state pension funds were urged to invest in equities for the first time, while fund managers also pledged to support the stock market.
It is hard to pin down an exact figure, but at least one Beijing University estimate valued the total stimulus well in excess of $US1 trillion.
By mid-2015 China's equity market jumped 50 per cent. Year-on-year GDP growth rebounded and held above 7 per cent.
The magic didn't last long. The stock market is now down around 25 per cent from early 2015 (and 50 per cent from its peak), while economic growth could well nudge below levels recorded in the depths of the GFC.
EMBED:Shanghai exchange and stimulus
Mr Joske said the "disguised" lending, loans that didn't show up on the big banks' balance sheets, ran to "hundreds of billions of dollars".
"It was worse than inefficient. Comparing the lending and GDP data, a lot wasn't spent on anything, not even on building a road to nowhere," Mr Joske said.
"There are still a lot of questions about where it went."Shadow lending crackdown
NAB's China economist Gerard Burg is somewhat more sanguine.
"A weak GDP figure has the potential to spook the markets, but it is not entirely a negative story," he said.
Mr Burg said he was reading a lot of information about stimulus in the media, but he was not seeing it in the data.
China's looming great wall of debt
Analysts are concerned China will struggle to repay an ever-increasing debt, with potential detrimental consequences for the global market.
If anything, tougher regulations on shadow bank lending had pushed credit growth down to the lowest level in more than a decade he said.
Mr Burg argued China's deleveraging, or reining in of debt, was being undertaken in a measured way.
"New bank loans are being outpaced by cuts in shadow bank lending … really they are not trying to loosen policy, they are just trying to maintain liquidity rather than stimulate in a major way."
On NAB's preferred measure, total Chinese debt peaked at 325 per cent of GDP in late 2017 and has stabilised, or even edged down since then."The policymakers are trying to get banks to lend to SMEs [small-to-medium enterprises] rather than the state-owned sector, and we see this as a positive sign," Mr Burg noted.
The data appears to show authorities are having some success at moving lending away from the shadow banking sector to mainstream, regulated banks.
Last year non-bank lending accounted for 19 per cent of aggregate finance, half the 38 per cent share in 2017.
Domestic economy worries
Chinese authorities have vowed they would not "flood" the system with stimulus, but that resolve may be tested in coming months.
It is not just the external economy being weighed down by US tariffs that is a worry.
Factory activity is at the point of contracting and a range of figures from falling car sales, property prices and consumer confidence, as well as tumbling imports, shows the domestic economy and demand is an even bigger problem.
EMBED:China GDP
A recent survey from the Bank of America Merrill Lynch (BoAML) economics team in China found the economy was deteriorating more rapidly than before the stimulus packages of 2012 and 2015 were unleashed.
"In our view, it will prompt policymakers to further roll out easing measures to buffer the negative growth shocks," the big investment bank told clients.
"The recent Central Economic Work Conference confirmed top policymakers fully recognised the need to prioritise growth stability with more countercyclical easing measures.
"Going forward, faster credit expansion and property policy easing would be crucial to economic cycle rebooting in the coming months."
Given the massive size of the Chinese economy, it won't be an easy, quick or cheap fix to turn things around.
If the central planners hear the echoes of the 2015 "hard landing", the floodgates may again be opened and a massive new wave of indebtedness could be unleashed.
SHARE
Email Facebook Twitter WhatsApp
RELATED
Ghost cities, shadow banks, and empty airports: Inside China's looming great wall of debt
How much does Australia's economy rely on China?
China's economy slows to levels not seen since the GFC
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From Mao to Xi: China's economic roller-coaster since 1949
image: data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==
Xi Jinping's previous moves had already earned the leader comparisons to Mao Zedong, but they came into even sharper focus after the party paved the way for him to assume the presidency indefinitely. (Photo: AFP/Greg Baker)
21 Jan 2019 11:24AM (Updated: 21 Jan 2019 01:10PM)
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SHANGHAI: After remarkable growth and change for decades, most economists believe China's economy is entering a period of slower, steadier growth.
The world's second-largest economy grew 6.6 per cent last year, government figures showed on Monday (Jan 21), the slowest rate since 1990.
Here is a brief look at China's economic roller-coaster since 1949:
THE MAO YEARS
When Mao Zedong's communists seized control in 1949 after decades of strife, China was a basket case: agricultural output had cratered, industry was hopelessly backward and hyper-inflation raged.
Adopting Soviet-style central planning, Mao's regime brought stability by nationalising industries, regulating the monetary system, and redistributing land to boost agriculture.
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But leaders courted crisis with ideologically-driven campaigns like the "Great Leap Forward" - an ill-advised bid to super-charge industry and agriculture that caused widespread famine.
Stability was eventually restored but Mao brought China to its knees again through his radical leftist "Cultural Revolution" from 1966 to 1976, which severely weakened the economy.
DENG TAKES CHARGE
After Mao's death in 1976, Deng Xiaoping - purged twice by Mao over his reform tendencies - rose again, taking power in 1978.
He turned away from ideology and isolationism toward a more pragmatic, results-oriented approach, and slowly re-connected China with the world.
Reforms began to modernise the economy and introduce market-based mechanisms, best exemplified by a handful of new coastal "special economic zones" like Shenzhen, where foreign investment in export-oriented industries was welcomed.
Such zones posted rapid growth, encouraging more reforms that would eventually give China the reputation as the "factory of the world".
THE BOOM
By the early 1980s, Deng's reforms had re-energised China, which became the fastest-growing major economy for most of the next four decades.
image: https://www.channelnewsasia.com/ima...1f6303ff36b6f7/DE/china-growth-since-1978.jpg
This was briefly threatened in 1989, however, when Deng and other party elders sent tanks to crush Tiananmen Square demonstrations demanding commensurate political reform.
Growth sputtered in the aftermath and hard-liners pushed back against further reform.
But the wily Deng visited coastal export zones in 1992 in his famous "southern tour" that cemented "reform and opening" once and for all as China's guiding philosophy.
Incomes and living standards soared, Shanghai's stock exchange re-opened in 1990 after a four-decade hiatus, and China symbolically rejoined the global economy with WTO membership in 2001.
But growth brought other ills like inflation, corruption, and environmental degradation, and reform of inefficient state enterprises in the 1990s deprived millions of the "iron rice bowl" of cradle-to-grave employment.
SLOWING DOWN
By 2010, China had become the world's second-biggest economy after the United States, a commercial, technological and military juggernaut which used that growing clout to extend its global influence.
But the era of double-digit expansion also ended around that time, due to an ageing workforce, gradual shift of foreign investment to lower-cost developing countries, and other factors.
China also began deliberately downshifting to curb environmental damage, wealth inequities, and other growth side-effects, while launching a re-balancing of the economy to rely more on domestic consumption, and less on volatile foreign export demand.
NEW CHALLENGES
Slower, but more stable, expansion is forecast in the years ahead, but economists say that may limit China's ability to grow its way out of two major new challenges: huge domestic debt and US trade hawkishness.
A US$586 billion stimulus package helped China weather the 2008-2009 world financial crisis better than other major economies, but it contributed to a mountain of debt that the IMF has called "dangerous".
Beijing launched a debt crackdown a year ago, but it faced a new challenge as US President Donald Trump launched a trade war with China that has prompted both sides to slap tariffs on more than US$350 billion in two-way commerce.
Read more at https://www.channelnewsasia.com/new...a-economic-roller-coaster-since-1949-11146982
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Xi Jinping's previous moves had already earned the leader comparisons to Mao Zedong, but they came into even sharper focus after the party paved the way for him to assume the presidency indefinitely. (Photo: AFP/Greg Baker)
21 Jan 2019 11:24AM (Updated: 21 Jan 2019 01:10PM)
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SHANGHAI: After remarkable growth and change for decades, most economists believe China's economy is entering a period of slower, steadier growth.
The world's second-largest economy grew 6.6 per cent last year, government figures showed on Monday (Jan 21), the slowest rate since 1990.
Here is a brief look at China's economic roller-coaster since 1949:
THE MAO YEARS
When Mao Zedong's communists seized control in 1949 after decades of strife, China was a basket case: agricultural output had cratered, industry was hopelessly backward and hyper-inflation raged.
Adopting Soviet-style central planning, Mao's regime brought stability by nationalising industries, regulating the monetary system, and redistributing land to boost agriculture.
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But leaders courted crisis with ideologically-driven campaigns like the "Great Leap Forward" - an ill-advised bid to super-charge industry and agriculture that caused widespread famine.
Stability was eventually restored but Mao brought China to its knees again through his radical leftist "Cultural Revolution" from 1966 to 1976, which severely weakened the economy.
DENG TAKES CHARGE
After Mao's death in 1976, Deng Xiaoping - purged twice by Mao over his reform tendencies - rose again, taking power in 1978.
He turned away from ideology and isolationism toward a more pragmatic, results-oriented approach, and slowly re-connected China with the world.
Reforms began to modernise the economy and introduce market-based mechanisms, best exemplified by a handful of new coastal "special economic zones" like Shenzhen, where foreign investment in export-oriented industries was welcomed.
Such zones posted rapid growth, encouraging more reforms that would eventually give China the reputation as the "factory of the world".
THE BOOM
By the early 1980s, Deng's reforms had re-energised China, which became the fastest-growing major economy for most of the next four decades.
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This was briefly threatened in 1989, however, when Deng and other party elders sent tanks to crush Tiananmen Square demonstrations demanding commensurate political reform.
Growth sputtered in the aftermath and hard-liners pushed back against further reform.
But the wily Deng visited coastal export zones in 1992 in his famous "southern tour" that cemented "reform and opening" once and for all as China's guiding philosophy.
Incomes and living standards soared, Shanghai's stock exchange re-opened in 1990 after a four-decade hiatus, and China symbolically rejoined the global economy with WTO membership in 2001.
But growth brought other ills like inflation, corruption, and environmental degradation, and reform of inefficient state enterprises in the 1990s deprived millions of the "iron rice bowl" of cradle-to-grave employment.
SLOWING DOWN
By 2010, China had become the world's second-biggest economy after the United States, a commercial, technological and military juggernaut which used that growing clout to extend its global influence.
But the era of double-digit expansion also ended around that time, due to an ageing workforce, gradual shift of foreign investment to lower-cost developing countries, and other factors.
China also began deliberately downshifting to curb environmental damage, wealth inequities, and other growth side-effects, while launching a re-balancing of the economy to rely more on domestic consumption, and less on volatile foreign export demand.
NEW CHALLENGES
Slower, but more stable, expansion is forecast in the years ahead, but economists say that may limit China's ability to grow its way out of two major new challenges: huge domestic debt and US trade hawkishness.
A US$586 billion stimulus package helped China weather the 2008-2009 world financial crisis better than other major economies, but it contributed to a mountain of debt that the IMF has called "dangerous".
Beijing launched a debt crackdown a year ago, but it faced a new challenge as US President Donald Trump launched a trade war with China that has prompted both sides to slap tariffs on more than US$350 billion in two-way commerce.
Read more at https://www.channelnewsasia.com/new...a-economic-roller-coaster-since-1949-11146982
China's economy grew 6.6% in 2018, slowest rate in 28 years
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Data suggests China's economy, the world's second biggest and a key driver of global growth, is beginning to feel the pinch from the US trade war. (File photo: AFP/STR)
21 Jan 2019 10:10AM (Updated: 21 Jan 2019 01:06PM)
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BEIJING: China's economy grew at its slowest rate in almost three decades in 2018 and lost more steam in the last quarter of the year, official data showed on Monday (Jan 21), amid a debt battle and a United States (US) trade war.
The world's second-largest economy posted 6.6 per cent growth last year and 6.4 per cent in the October-December period - in line with a forecast by analysts surveyed by AFP - according to the National Bureau of Statistics.
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This marks a cooling in the economy from a revised 6.8 per cent growth in 2017.
The government had set a 2018 growth target of around 6.5 per cent.
READ: From Mao to Xi - China's economic roller-coaster since 1949
The September-December growth rate was the weakest expansion since the financial crisis, adding to fears of a sharper slowdown in global growth.
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On a quarterly basis, gross domestic product rose 1.5 per cent in Oct-Dec, compared with 1.6 per cent in the previous three months. Analysts had expected 1.5 per cent.
READ: Asian markets post fresh gains as China growth slows to 28-year low
Chinese policymakers are expected to ramp up support for the economy this year to avert a sharper slowdown but analysts say economic activity may not stabilise until summer, adding pressure on Beijing to strike a deal with Washington to end their trade war.
China has ample room for macro policy support, Ning Jizhe, head of the National Bureau of Statistics said.
He added that China has confidence and the capacity to achieve reasonable growth this year, and the slowing economy has shown some signs of stabilisation over the past two months.
TRADE WAR IMPACT MANAGEABLE
Ning also said that while the China-US trade war has affected China's economy, the impact on growth is manageable.
Net exports were an 8.6 per cent drag on economic growth last year, Reuters calculations based on official data showed.
Final consumption accounted for 76.2 per cent of China's economic growth in 2018, while capital formation accounted for 32.4 per cent of growth, the National Bureau of Statistics said.
Those numbers compare to shared proportions of 58.8 per cent for consumption and 32.1 per cent for capital formation in 2017, when net exports provided a 9 per cent boost to growth.
China's survey-based jobless rate was 4.9 per cent at the end of December, slightly up from 4.8 percent in November.
The economy created 13.61 million new jobs in 2018.
China will announce a series of measures to maintain stable employment this year as the economy slows, officials said in recent months.
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Fixed-asset investment rose 5.9 per cent in 2018, missing expectations of a 6.0 per cent increase and the slowest annual growth since at least 1996., the statistics bureau said.
Private-sector fixed-asset investment, which accounts for about 60 per cent of overall investment in China, rose 8.7 per cent in 2018.
Industrial output grew 5.7 per cent in December from a year earlier.
Analysts polled by Reuters had expected industrial output would grow 5.3 per cent, slowing from 5.4 per cent in November.
Retail sales rose 8.2 per cent in December on-year, in line with a forecast rise of 8.2 per cent and up from November's 8.1 per cent gain.
Real estate investment in China rose 9.5 per cent in 2018 from a year earlier, slowing from a 9.7 per cent gain in the first 11 months of the year.
The property market, a key growth driver, has been cooling in recent months, adding to pressure on China's slowing economy. Further weakness, or signs of recovery, could impact the pace and scope of further stimulus measures expected from Beijing this year.
Property sales by floor area increased 1.3 per cent year-on-year in 2018, easing from a 1.4 per cent rise in January-November.
Read more at https://www.channelnewsasia.com/new...8-slowest-rate-28-years-us-trade-war-11146804
image: data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==
Data suggests China's economy, the world's second biggest and a key driver of global growth, is beginning to feel the pinch from the US trade war. (File photo: AFP/STR)
21 Jan 2019 10:10AM (Updated: 21 Jan 2019 01:06PM)
Share this content
BEIJING: China's economy grew at its slowest rate in almost three decades in 2018 and lost more steam in the last quarter of the year, official data showed on Monday (Jan 21), amid a debt battle and a United States (US) trade war.
The world's second-largest economy posted 6.6 per cent growth last year and 6.4 per cent in the October-December period - in line with a forecast by analysts surveyed by AFP - according to the National Bureau of Statistics.
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This marks a cooling in the economy from a revised 6.8 per cent growth in 2017.
The government had set a 2018 growth target of around 6.5 per cent.
READ: From Mao to Xi - China's economic roller-coaster since 1949
The September-December growth rate was the weakest expansion since the financial crisis, adding to fears of a sharper slowdown in global growth.
Advertisement
On a quarterly basis, gross domestic product rose 1.5 per cent in Oct-Dec, compared with 1.6 per cent in the previous three months. Analysts had expected 1.5 per cent.
READ: Asian markets post fresh gains as China growth slows to 28-year low
Chinese policymakers are expected to ramp up support for the economy this year to avert a sharper slowdown but analysts say economic activity may not stabilise until summer, adding pressure on Beijing to strike a deal with Washington to end their trade war.
China has ample room for macro policy support, Ning Jizhe, head of the National Bureau of Statistics said.
He added that China has confidence and the capacity to achieve reasonable growth this year, and the slowing economy has shown some signs of stabilisation over the past two months.
TRADE WAR IMPACT MANAGEABLE
Ning also said that while the China-US trade war has affected China's economy, the impact on growth is manageable.
Net exports were an 8.6 per cent drag on economic growth last year, Reuters calculations based on official data showed.
Final consumption accounted for 76.2 per cent of China's economic growth in 2018, while capital formation accounted for 32.4 per cent of growth, the National Bureau of Statistics said.
Those numbers compare to shared proportions of 58.8 per cent for consumption and 32.1 per cent for capital formation in 2017, when net exports provided a 9 per cent boost to growth.
China's survey-based jobless rate was 4.9 per cent at the end of December, slightly up from 4.8 percent in November.
The economy created 13.61 million new jobs in 2018.
China will announce a series of measures to maintain stable employment this year as the economy slows, officials said in recent months.
image: https://www.channelnewsasia.com/ima...1f6303ff36b6f7/DE/china-growth-since-1978.jpg
Fixed-asset investment rose 5.9 per cent in 2018, missing expectations of a 6.0 per cent increase and the slowest annual growth since at least 1996., the statistics bureau said.
Private-sector fixed-asset investment, which accounts for about 60 per cent of overall investment in China, rose 8.7 per cent in 2018.
Industrial output grew 5.7 per cent in December from a year earlier.
Analysts polled by Reuters had expected industrial output would grow 5.3 per cent, slowing from 5.4 per cent in November.
Retail sales rose 8.2 per cent in December on-year, in line with a forecast rise of 8.2 per cent and up from November's 8.1 per cent gain.
Real estate investment in China rose 9.5 per cent in 2018 from a year earlier, slowing from a 9.7 per cent gain in the first 11 months of the year.
The property market, a key growth driver, has been cooling in recent months, adding to pressure on China's slowing economy. Further weakness, or signs of recovery, could impact the pace and scope of further stimulus measures expected from Beijing this year.
Property sales by floor area increased 1.3 per cent year-on-year in 2018, easing from a 1.4 per cent rise in January-November.
Read more at https://www.channelnewsasia.com/new...8-slowest-rate-28-years-us-trade-war-11146804
