Highlights from the Economic Observer issue 395 November 24 2008
Consumption Stimulus Package in the Pipeline
Cover
Two weeks after China released its RMB 4 trillion stimulus plan, another package to spur domestic consumption was being drafted by the state's macro economy planner, the National Development and Reform Commission (NDRC). Sources from the NDRC said the package would include a higher threshold for individual income taxes, long-term subsidies to low-income groups, and more generous housing subsidies, among other measures. The package would be released after a discussion at the central economic working conference in early December.
Original article: [Chinese]
Official Hints Less Policy to Save Housing Market
News page 3
An official from Housing and Urban-Rural Development Ministry told EO that there was less policy room left to save the on-going real estate market depression in China, and suggested that land developers shouldn't count on government aids. Housing prices was still at a high level, so the Ministry had yet to change its policy goal to squeeze bubbles in the market, the Official added. In addition, facing the year-end accounting settlement, many commercial banks were urging land developers to repay their loans by selling their houses at a lower price.
Original article:[Chinese]
Fuel Tax May Impact Oil Pricing Reform
News, page 3
After ten years of debate, China's macro economic authority announced on November 20 to levy the fuel tax soon and abolish road maintenance charges at the same time. One drafter from the National Development and Reform Commission (NDRC) told the EO that the tax rate would be set between 20% and 30%, and would be raised gradually to 100% over the following five years. Industry professionals generally believed the new tax would lead to looser government control over oil prices.
Original article: [Chinese]
Tainted-milk Victims Sue for Compensation
News, page 6
Over a hundred family members of tainted-milk victim babies have submitted power of attorney to the OCI, a Chinese legal NGO, for collective litigation against Sanlu, Shengyuan and other melamine-tainted milk producers. Several families which had filed lawsuits previously have been refused to be heard by the court.
Original article: [Chinese]
Hangzhou Subway Collapse: An Inevitable Tragedy?
Nation, page 9
Nine days after an incomplete subway tunnel collapsed in east China's Zhejiang Province on November 15, the confirmed death toll has risen to 24, with another four people still missing. A source from the subway's contractor ascribed the accident to the sticky soil, heavy traffic, and continuous rainfall, while engineering experts believed unscientific operation and hasty work should be to blame.
Original article: [Chinese]
Dairy Companies Bid for CCTV Commercial Time
Corporation, page 28
In the aftermath of the tainted-milk scandal, Chinese dairy companies were spending hundreds of millions to buy the state television station CCTV's commercial time to save their reputations and regain market confidence. At the auction for CCTV's commercial breaks in the first half of 2009 on November 18, eight dairy companies won their bids. Five of them, including leading brands Shengyuan, Mengniu, Yili, offered more than RMB 100 million.
Original article: [Chinese]
China Housing Prices Slump
Industry page 37
Feng Ke, director of Real Estate and Finance Research Center in Beijing University, wrote a piece ranking China's 11 large cities by the amount that housing prices have slumped in them. Among them, Shenzhen ranked number one, tumbling by 33%. Beijing was listed at the bottom, with prices declining by 0.4%. Both were compared with their peak prices.
Original article:[Chinese]
China's Contemporary Art Meets Foreign Luxury Brands
Lifestyle page 49
Western luxury brands like Dior, Cartier, Hennessy and Martell have become increasingly involved in art awards ceremonies and large-scale art exhibitions in China. In a recent example,"Christian Dior and Chinese Artists" showed off contemporary Chinese art at Artron Gallery in Beijing. Pictured is an oil painting and an incomplete sculpture by Zhang Xiaogang, portraying a factory worker, farmer, merchant, student and soldier in the Mao era.
The trend was not without criticism, however. He Guiyan, an art critic, said domestic artists were often fettered down by these foreign sponsors, and as a result, their art was detached from China's real culture.
Original article:[Chinese]
