2017-06-28

Zhengzhou: Sunac Slashes Prices 20pc, Demands 100pc Cash

Caijing: 调控下房企求生样本:融创郑州降价20% 要求全款购房
June 24, Zhengzhou Sunac as a new opening of a lake. In the surrounding high-level housing prices average price of 13,000 yuan / square meters above the market, like the lake one high-level average price of 10,000 yuan / square meter, down 20%. But Sunac made an all cash purchase prerequisite. Reporters on June 27 repeatedly call the sales office were no answer.

Informed sources, the recent financial development of two real estate promotions. In addition to the above as Lake One, there are Tianjin Rongyuan. Reporters call the project sales office was informed that last year opened in September to sell a group with 28,000 yuan / square meter decoration, and now only sold rough 24,000-25,000 / square meter.

...Not only Zhengzhou, June 25, Shijiazhuang a low-key opening of a project, hardcover high-level about 15,000 yuan / square meter, houses 15,500 yuan / square meter, lower than the expected price of about 15%. It is understood that the project surrounding the rough price of the project, the basic in the 16,000 -2 million / square meter range. Beijing surrounding Yanjiao, there are housing prices have been reduced by five or six thousand yuan / square meter, the decline is about 20% -30%.
The article speculates that the cuts stem from cash flow problems at Sunac, along with the desire to quickly move property in markets with slackening demand.

Li Keqiang Says Foreign Profits Can Leave Anytime

Rebutting the April news of multinationals being asked to stop capital outflows, LI Keqiang said companies are free to take profits out of China. Though perhaps the key word in that sentence is profits.

iFeng: 李克强保证外企利润自由进出 一条不成文规定早已松动
Speaking at the World Economic Forum's 2017 New Champions' Annual Meeting (also known as "Summer Davos"), Chinese Premier Li Keqiang said: "We encourage foreign-funded enterprises to stay in China to invest in China, Of the profits in China to reinvest, will create more lucrative profits, of course, I also assure you that all foreign - funded enterprises as long as the profits made in China, you can freely in accordance with your wishes free access, there will be no restrictions.
Turning to Chinese firms, the article says capital controls are easing:
The lawyer told the first financial reporter, starting from April last year, every month have a certain amount of foreign exchange restrictions, this is an unwritten rule.

And now, they told the first financial reporter, this situation has begun to improve.

Zhan Xiaoning, director of the United Nations Development Program (UNCTAD), told the first financial reporter that China's policy environment for foreign investment is now in an important transitional period. One is from the traditional foreign management system to the new negative list based on the open foreign investment management system transition; the second is from preferential policies to investment facilitation-oriented transition. The overall direction of China's investment environment is to be further liberalized and facilitated.

He said that the "foreign investment industry guidance catalog" in the ban and restrictions on the continuous decline in industry, the service sector and the original restrictions on foreign investment in some manufacturing industries to increase the intensity of foreign investment. At the same time, the investment environment is optimized and facilitated. The establishment of foreign-funded enterprises outside the negative list from the approval system to the filing system, foreign-funded enterprises unified registration of capital system and the promotion of fair competition within the domestic and foreign enterprises, have further improved the foreign environment. Which are conducive to the growth of foreign capital inflows.

Facing the future, Zhan Xiaoning told the first financial journalists that the rapid growth of China's foreign investment reflects the objective needs of Chinese enterprises to become international and participate in international competition. With the "one way" and the international production capacity to promote cooperation, China's foreign investment is expected to remain at a high level.
And back to Li:
Li Keqiang said that these years, in the face of economic downward pressure, we did not take the "flood irrigation" type of strong stimulus, nor follow the excessive dependence on investment, consumption of resources, the traditional way of development, but through reform and innovation, Economic growth from the past too much rely on investment, export-led, to rely more on consumer-driven, service industry and domestic demand support. Last year, the contribution of consumption to economic growth rose to 64.6%, becoming the main force of economic growth; the proportion of added value of services increased to 51.6%, accounting for half of the country; the difference between current account and gross domestic product fell to 1.8 %, Domestic demand has become a ringing pillar.

Behind the above changes, highlighting China's economic structure and quality of the change and enhance the economic growth has also maintained a stronger stability and sustainability.

Li Keqiang said that China will continue to maintain a healthy monetary policy in the future, and to promote production and other structural reforms.

2017-06-27

FRED on Chinese Economic Data

FRED: China's Economic Data: An Accurate Reflection, or Just Smoke and Mirrors?

As soon as economists start altering data, even something as simple as seasonality, they are deviating from reality. Some Chinese data points are more suspect, such as GDP, but then all GDP is somewhat suspect given the major revisions that take place.

The more skeptical you are of Chinese data, the more it makes a case against economic planning and the field of economics. If its all fabricated numbers and they're achieving real growth, then why even keep statistics? It brings to mind this paper on Hong Kong: GOVERNMENT WITHOUT STATISTICS: POLICY-MAKING IN HONG KONG 1925-85, WITH SPECIAL REFERENCE TO ECONOMIC AND FINANCIAL MANAGEMENT.

Also: Freedom Works: The Case of Hong Kong
The laissez-faire attitude of the Hong Kong government on economic matters was cemented by Sir John Cowperthwaite, the colony’s financial secretary from 1961 to 1971, whom Welsh called a “political economist in the tradition of Gladstone or John Stuart Mill” and the personification of “unreconstructed Manchester-school free traders.” Cowperthwaite had almost complete control of Hong Kong government finances and used it to implement his policy of “positive nonintervention.” Friedman gave Cowperthwaite a great deal of the credit for Hong Kong’s success, citing approvingly Cowperthwaite’s refusal to collect most economic statistics on the grounds that “[i]f I let them compute those statistics, they’ll want to use them for planning.”
The most important data point is debt. How much of Chinese economic growth is tied to an expansion of credit? How much will survive a downturn in the credit cycle?

HK Microcaps Plummet

Bloomberg: Hong Kong Small Cap Stock Plunge Wipes Out $6.1 Billion in Value
A string of Hong Kong stocks suddenly plunged Tuesday, with traders pointing to links between some of the companies and a brokerage that’s under regulatory investigation.

Seventeen firms tumbled by more than 40 percent at the close, losing a combined HK$47.8 billion ($6.1 billion) in market value. China Jicheng Holdings Ltd., an umbrella maker, and GreaterChina Professional Services Ltd. sank more 90 percent. Lerado Financial Group Co., whose shares were halted by Hong Kong’s securities regulator this month, has previously disclosed an investment in China Jicheng and an underwriter role on a GreaterChina share placement in 2015.

...The S&P/HKEX GEM Index sank 9.6 percent, its biggest retreat since August 2015, and closed at its lowest level on record. The gauge has lost more than 90 percent since 2000.

2017-06-26

Mistress Dispelling in China

China’s Mistress-Dispellers
A week after his first visit, Yu went back to the store. He had heard that Wang had recently purchased property nearby, and he let drop that he was looking to buy an apartment in the neighborhood. She offered to take him on a tour and introduce him to agents with properties to sell. In the course of several weeks, Yu and Wang started getting meals together, and eventually Yu invited her to Shanghai for a weekend sightseeing trip. She demurred at first but later accepted, on the condition that she could bring a girlfriend along.

Using his client’s money, Yu put the pair up at a hotel, showed them the city, and took them to sample its culinary specialties. On Shanghai’s famous river promenade, Yu took pictures of the two women and then got the friend to take several of him and Wang with their arms around each other. Once the weekend was over, these pictures found their way to Wang’s boyfriend. “A picture speaks louder than a thousand words, and, in a jealous man’s imagination, it can speak ten thousand,” Yu told me. The man ended the relationship, and returned to his wife, appreciative, if nothing else, of her loyalty. The mission had taken around four months in all.

Beijing Subway Pushes Smartpass

Caixin: Beijing Subway Wants to Go Cardless
Beijing’s subway authorities are trying to get more people to use their smartphones to pay for metro fares amid the explosion in China’s digital payments market.

As far back as 2013, subway stations across the capital were equipped with the technology to accept mobile phone payments, but only 1 million commuters — a fraction of the passengers who take the metro every day — have used the service so far.

One reason for the feature’s low popularity is that it requires mobile phones to have a special SIM card with embedded NFC (near-field communication) technology.

Since last year, more phone makers have been adding an NFC component to their handsets. Now, there are more than 160 phone models that can be used for card-free payments and don’t require the user to buy a special SIM card.

2017-06-25

Scholar Says Current Regulatory Framework Can't Stop Local Debt Buildup

An increasingly visible evidence of renewed signs of local government debt indicates that the relevant documents in recent years and the debt management framework established by the new budget law are still inadequate. If the capital budget process and the comprehensive financial commitment control system are not introduced as soon as possible, the trend of debt expansion and financial risk spread will be difficult to be effectively curbed.

Objective analysis, China's existing debt management framework is not sufficient.

Since the audit conducted a comprehensive audit of government debt in 2013, the government's senior management in the face of debt control, the continuous introduction of dozens of related documents. The new budgets that were implemented in 2015 also rarely set out many of the terms of debt management. Today, despite the basic framework is ready, senior management debt determination and efforts remain unabated, the relevant policy documents continue to be frequently introduced is proof.

Who Gets Dongbei Steel?

EO: 东北特钢关键一周:破产可能性不大,谁会最终接盘?
Northeast special steel time is running out.

July 10, is the Northeast Special Steel Group and the bankruptcy administrator to Dalian Intermediate People's Court to apply for a second extension of the draft deadline for submission of reorganization plan.

According to Article 79 of the Bankruptcy Law, the debtor or the manager shall submit the draft of the reorganization plan to the people 's court and the creditors' meeting within six months from the date when the people 's court determines the debtor' s reorganization. If the prescribed period expires, the people 's court may adjudicate for a period of three months if the debtor or the manager requests and has justifiable reasons. Where the debtor or the administrator fails to submit the draft plan for reorganization, the people 's court shall decide to terminate the reorganization procedure and declare the debtor bankrupt.

On July 10, it was the law that allowed the final deadline for the reorganization of the Northeast Special Steel.

From October 10, 2016 to July 10, 2017, a total of 273 days, which is the process of the Northeast special steel reorganization cycle. During this period, around the reorganization, the parties to the Northeast Special Steel and strategic investors and many creditors negotiations stalemate.

Inside the Northeast Special Steel, on the strategic investors, that is, the reorganization of the acquisition of who is who, has been rumors constantly.

On 21 June, an unnamed person from the subsidiary of the Northeast Special Steel Company told the Economic Observer that since the end of last year, the Anshan Iron and Steel Group and the Northeast Special Steel have been in constant contact with each other during this period. Anshan Iron and Steel can pick up the rumors of the Northeast Special Steel.

The company where the people, during this period with a total of two positive contact with Anshan Iron and Steel, respectively, the Northeast Iron and Steel Company of the assets of the assessment and audit. The person reported to the Economic Observer, in addition to Anshan Iron and Steel, there is no other intention to investors at the level of the subsidiary had a similar contact.