China's Economy - News and Projects III

[snow is red]

China auctions lavish building

Thursday, 17 July 2008


Officials in the Chinese province of Sichuan have announced plans to auction a lavish government building, the cost of which has prompted public anger.

The proceeds of the sale will go to the relief effort for victims of the huge earthquake in the region in May.

The building was built using public funds, but no expense was spared.

It was designed by French architect Paul Andreu - who also designed the new terminal at Charles de Gaulle airport and Beijing's new national theatre.

Public anger

The new local government building in Chengdu consists of a giant glass dome with six spurs around it, resembling the leaves of a lotus flower.

The complex and the landscaped gardens surrounding it are reported to have cost nearly $180m (£90m).

When rumours began to spread on the internet that city officials had moved into the building just three days after the earthquake that killed nearly 70,000 people, there was an angry public reaction.

The internet forums - which are the focus for much criticism of the Chinese authorities - were bombarded with messages.

Analysts say the Chengdu government now seems to have taken these comments to heart.

According to state media, the building will be auctioned to the highest bidder and the proceeds will go towards rehousing earthquake victims and rebuilding the parts of Sichuan province that were destroyed.

The gleaming new structure itself survived the earthquake unscathed.

http://news.bbc.co.uk/2/hi/asia-pacific/7512267.stm

[christianhoang]

Shanghai tops a new ranking of business conditions in mainland China's cities

THE port city of Shanghai is the best place in mainland China for doing business, according to a new set of rankings from the Economist Intelligence Unit (see background and methodology). Shanghai tops an overall ranking of 44 Chinese cities that were compared in five key areas—economic performance, market opportunities, labour market, infrastructure and environment. Hard on its heels come fast-growing Guangzhou (top for infrastructure) and the capital, Beijing (home to the best labour market). The top 15 also includes large cities focused on the booming domestic market, such as Tianjin and Chengdu. Cities with lower external trade exposure have performed well during the recent slowdown in global growth, and are likely to continue to do well over the next decade as a maturing Chinese economy becomes less dependent on exports for growth. The ranking was compiled by the China Regional Forecasting Service, a new business information service launched by the Economist Intelligence Unit.


Cited from http://www.economist.com/markets/ran...ry_id=12031179

[snow is red]

Continue from the last China's economy thread.

[big-dog]

The old thread is archived and can be found at http://www.skyscrapercity.com/showthread.php?t=525579

[Whiteeclipse]

China sees RMB 3 trln in property investment in 2008
China's State Statistics Bureau announced that investment in the real estate sector hit RMB 3.06 trillion last year, up 20.9% from a year earlier. In 2008, investment in commercial residential buildings reached RMB 2.21 trillion, up 22.6% year on year, accounting for 72.2% of the country's total property investment. The total floor space under construction rea

China, Switzerland to deepen strategic partnership, cooperation
China and Switzerland decided to jointly start a feasibility study on creating a bilateral free trade zone in the second half of 2009, in a bid to deepen their comprehensive strategic partnership and cooperation amid the global financial crisis, sources reported.
The feasibility study on the free trade zone is part of the measures that both sides agreed to take in face of the economic downturn worldwide.
In addition, China and Switzerland plan to boost their financial cooperation, expand trade and investment, and promote reform of the international financial system.
China and Switzerland will also boost cooperation in sectors including technology, energy and environmental protection.
Chinese Premier Wen Jiabao and President of the Swiss Confederation Hans-Rudolf Merz exchanged views on the current global financial and economic situation during talks in the Swiss capital. Both sides expected to work more closely to ride out the tough period.

Hainan teams up with Australian firm for mineral sands dev't
The Hainan Provincial Bureau of Geological Exploration (HPBGE) has signed a Memorandum of Understanding (MOU) with Image Resources NL (IMA), an Australia-based mining company, for possible commercialization of heavy mineral sands in the North Perth Basin, announced Image Resources in a press release earlier today. As part of the agreement, Image will release exi

Guangxi starts construction of new resources production base
Guangxi Zhuang Autonomous Region has started construction of its new production base for renewable resources in Nanning, the largest one in terms of scale in the province, the official Xinhua News reported. The base, involving a total investment of RMB 940 million, will be mainly engaged in recycling and processing of scrap metal, appliances and vehicle component

SAIC, Magneti Marelli to set up a 50:50 JV in Shanghai
SAIC Motor Corp Ltd, the Chinese partner of both General Motors Corp (GM) and Volkswagen AG, inked an agreement with Italian auto supplier Magneti Marelli to set up a joint venture (JV) for the production of hydraulic components in Magneti Marelli's Freechoice automated manual transmission, sources reported.
The 50:50 JV, to be located in Shanghai, is scheduled to be operational as early as the beginning of the second half of this year.
The JV is designed to produce hydraulic components for approximately 350,000 gearboxes a year. The components will be integrated with the electronic control unit.
Magneti Marelli now provides navigation systems to SAIC for the latter's Roewe brand of cars, as per industry sources.
According to China Knowledge's earlier report, in December, 2008, GM and SAIC opened a new passenger-vehicle plant in Shenyang, Liaoning province in Northeast China.
With a total investment of RMB 2.67 billion, the new plant was the second JV by GM and SAIC in Shenyang. Set to begin full production of Chevrolet Cruze compacts in the second quarter of 2009, it will be able to produce as many as 150,000 vehicles per year, GM said.

Japan's Komatsu to open new facilities in Changzhou by 2010
Komatsu Ltd, the world's largest maker of construction equipment, has decided to expand facilities in Changzhou, Jiangsu Province to boost production in China, despite economic slowdown, according to a company announcement. Komatsu has acquired approximately 630,000 square meters of land in Changzhou for the relocation of an existing facility, the building of a n

http://www.chinaknowledge.com/Newswi...1&NewsID=20707

[big-dog]

China reports 111 bln yuan in fiscal deficit in 2008

BEIJING, Feb. 2 (Xinhua) -- China reported a fiscal deficit of 111 billion yuan (16.21 billion U.S. dollars) in 2008.

The country's fiscal revenue reached 6.13 trillion yuan for the whole of 2008, up 19.5 percent from the previous year, the Ministry of Finance (MOF) said Monday in a statement posted on its website.

Meanwhile, fiscal spending last year increased 25.4 percent year on year to 6.24 trillion yuan.

The actual spending was 22.6 percent higher than planned in the budget fixed at the beginning of 2008, and the ministry attributed the increase mainly to extra-budgetary quake relief funds.

The MOF statement noted these are preliminary statistics and may be adjusted later.

(xinhuanet.com)

[big-dog]

20 million jobless migrant workers return home

BEIJING, Feb. 2 (Xinhua) -- About 20 million of China's migrant workers have returned home after losing their jobs as the global financial crisis takes a toll on the economy, said a senior official here on Monday.

Chen Xiwen, director of the office of the central leading group on rural work, said about 15.3 percent of the 130 million migrant workers had returned jobless from cities to the countryside.

The figures were based on a survey by the Ministry of Agriculture in 150 villages in 15 provinces, carried out before the week-long Lunar New Year holiday which began on Jan. 25.

His remarks came a day after the central government issued its first document this year, which warned 2009 will be "possibly the toughest year" since the turn of the century in terms of securing economic development and consolidating the "sound development momentum" in agriculture and rural areas.

The country's economic growth slowed to 6.8 percent in the fourth quarter of 2008, dragging down the annual rate to a seven-year low of 9 percent.

The document urged local and central government departments to adopt measures to create jobs and increase rural incomes.

Companies were asked to take on more social responsibilities and give rural migrant workers more favorable employment treatment. Flexible employment policies and more training chances were also encouraged.

Meanwhile, local government departments should increase investment to provide favorable tax and fee policies to those who lost jobs in cities and expect to find new work in their hometowns.

The government also urged departments to map out basic pension insurance measures suitable for rural conditions and migrant workers to ensure their rights.

[big-dog]

China's natural gas output jumps to ninth in the world

February 02, 2009

China's oil and natural gas production in 2008 maintained double digit growth with an increase of 13.7 percent, according to the China National Petroleum Corporation (CNPC). This was the sixth consecutive year that China’s oil and natural gas production recorded double digit growth.

Relevant statistics also show that the growth rate of China’s natural gas output in recent years has surpassed the average annual global growth rate of 4 percent, with China’s natural gas output already jumping to ninth in the world. China has not only become a major oil producing country in the world, but also one of the world’s major natural gas producing countries.

According to sources from CNPC, China has made timely adjustments to oil and natural gas output structures in 2008 based on market changes, and has accelerated the pace of construction in key natural gas provinces. Among those, Tarim Oilfield recorded a natural gas output of 17.4 billion cubic meters, continuing to be the largest natural gas province in China. Changqing Oilfield had a net increase of 3.37 billion cubic meters in natural gas production, ranking first in increased production for CNPC. Southwest Oil and Gas Field produced nearly 15 billion cubic meters of natural gas, steadily advancing in becoming a major strategic gas province. Qinghai Oilfield had an increase of 28.3 percent year-on-year in natural gas output, making it one of the gas provinces with the largest growth.

By People's Daily Online

[big-dog]

China's gov't warns 2009 to be "the toughest" year since 2000

·China's gov't Sunday warned 2009 will be "possibly the toughest year" since the turn of the century.
·"The development of agriculture and rural areas in 2009 is of special significance," said the 1st document.
·Local and central gov't departments are urged to adopt measures to create jobs, increase rural incomes.

BEIJING, Feb. 1 (Xinhua) -- China's government Sunday warned 2009 will be "possibly the toughest year" since the turn of the century in terms of securing economic development and consolidating the "sound development momentum" in agriculture and rural areas.

The lingering global financial crisis and the slowdown of the world economy had exerted an increasingly negative impact on the Chinese economy, said the first document of the year issued jointly by the State Council and the Central Committee of the Communist Party of China.

"The development of agriculture and rural areas in 2009 is of special significance," it said.

"The biggest potential for boosting domestic demand lies in rural areas; the foundation for securing steady and relative fast economic growth is based upon agriculture; the toughest work of securing and improving people's livelihoods stays with farmers."

In the document, the sixth of its kind to address rural problems since 2004, the government urged authorities to take resolute measures to avoid declining grain production and to ensure the steady expansion of agriculture and rural stability.

MORE FISCAL INPUT

The document promised increased government input.

This year's budget for agriculture and rural development is to be disclosed at the annual national legislative meeting scheduled in March, but the document said more investment would come from fixed assets investment, treasury bond issues and revenue from higher land use taxes.

Last year, the budgeted investment in agriculture and rural development grew 37.9 percent year-on-year to 595.55 billion yuan.

As of 2009, capital-stretched county governments in central and western areas would no longer provide counterpart funds for public utility construction bankrolled by central finance involving ecology, reservoir renovation, potable water supply and irrigation.

Government-sponsored investment corporations and industrial development funds for agriculture could be established when conditions were mature, it said.

Subsidies would be extended to cover not only all farmers who grow rice, wheat, corn and cotton this year, but also some who plant rape and soybeans. Purchases of energy-efficient machinery by farmers and stock-breeders would also be subsidized.

To improve the scale and quality of livestock and aquatic stockbreeding, the government would also extend credit support to breeding farms with standardized sanitation facilities. Dairy cattle production bases would receive more fiscal input for the construction of standardized milk collection stations.

RURAL EMPLOYMENT

The government aims to roll out social security schemes for rural residents and strengthen the protection of farmers' land rights and migrant rural workers' employment rights.

Millions of rural workers lost their jobs and returned home from coastal provinces, exacerbating the severe unemployment in rural areas.

The National Bureau of Statistics estimates that about 5 percent of the 130 million migrant workers have returned to their homes since late 2008. Other officials said even more migrant workers had gone home.

The document urged local and central government departments to adopt measures to create jobs and increase rural incomes.

Companies were asked to take on more social responsibilities and give rural migrant workers more favorable employment treatment. Flexible employment policies and more training chances were also encouraged.

Meanwhile, local government departments should increase investment to provide favorable tax and fee policies to those who lost jobs in cities and expect to find new work in their hometowns.

The government also urged departments to map out basic pension insurance measures suitable for rural conditions and migrant workers to ensure their rights.

Though the premium was yet to be decided, it was clear that rural residents would only need to pay a small fraction with governments subsidizing the rest.

RURAL-URBAN INTEGRATION

The government vowed to narrow the widening rural-urban economic gap.

More efforts would go to developing culture, education, health care, and other social welfare in rural areas, inhabited by 900 million people.

The government would raise teachers' salaries, and subsidize rural schools and students from poor families. This year, vocational school students from financially-strained rural households and those in agricultural majors would be exempted from tuitions fees.

The document said local governments could increase financial subsidies to the new rural cooperative health insurance system, and enhance construction investment in the public health care system.

Moreover, central and provincial governments would raise the stipend for rural households to meet the state-designated minimum subsistence standards.

MARKET MONITORING

The government also hoped to strike the balance between farm produce supply and demand this year to prevent low prices from hurting farmers' incomes.

The document said the authorities would closely track local and overseas farm produce markets and use all possible measures when necessary to secure the steady growth of rural households' income.

It urged authorities to "measure the timing and pace" of farm produce imports and exports to avoid flooding the domestic market with imports of farm produce and closer communication among governments, industrial associations and enterprises.

China would also optimize its market access system this year inline with the requirements of the World Trade Organization to allow foreign investment in farm produce and farming materials production.

The government would modify the regulatory mechanism for farming produce exports and imports to provide a smooth channel for governments between different countries, associations, and enterprises to communicate and resolve problems.

Governors would continue to be held responsible for grain production. An evaluation system would be set up to monitor the performance of authorities in the protection of arable land, water resources, and macro-economic control in the production and distribution of grain crops.

Under the document, different areas are encouraged to take the advantage of local soil and weather conditions to increase crop yields. For example, northeast regions and Inner Mongolia would be encouraged to produce soybeans while the Yangtze River valley would focus on high quality rape.

An industrial development plan in terms of oil tree plantations would also be mapped out as soon as possible, it said.

UNDERSCORE FARMLAND LEASE, TRANSFER REFORM

The document reiterated that the government would continue with and improve the household contract responsibility system that entrusts the management and production of publicly-owned farmlands to individual households through long-term contracts.

It also underscored farmers' rights to transfer their farmland use rights to others, but farmlands were still of collective ownership, and the land could be used only for farming.

No institutions or individuals could interfere with or force the transfer of the land, it added.

The government encouraged local authorities to establish organizations to provide farmers with land transfer information, legal advice, dispute settlement and other services.

It also said the government would finish collective forestry mechanism reform in five years, promoting a household contract system in the management of collective forestry land and ownership of wood nationwide.

HUGE MARKET POTENTIAL

The government would extend its rural subsidy scheme for home appliance purchases nationwide in an effort to boost rural consumption this year.

It would provide a 13-percent subsidy to all rural buyers of home appliances, including color TVs, refrigerators, mobile phones, washing machines and freezers.

A trial scheme had been conducted in 12 provinces, which had seen a boost in home appliance sales.

More items would be added to the list if necessary, said the document, which called for the expansion of chain stores in rural areas and better delivery and billing systems.

It also encouraged local governments to establish rural service centers to enhance chain store management and strengthen market supervision.

China should "especially place priority on tapping the rural market and developing the countryside" to alleviate the effects of the global financial crisis, said Vice Premier Wang Qishan last month.

[Whiteeclipse]

"20 million jobless migrant workers return home"

Don't migrant workers go home for the holidays around this time? Maybe they quite as I understand because when coming back to the city they hope to find better jobs with higher wage while new migrants from the countryside fill in the lower wage old jobs?

[big-dog]

20 million includes the rural workers who lost their jobs, who haven't found a job and those who resigned from their jobs. it's 15% out of 130 million rural migrant workers.

[AlexS2000]

Originally Posted by Whiteeclipse

"20 million jobless migrant workers return home"

Don't migrant workers go home for the holidays around this time? Maybe they quite as I understand because when coming back to the city they hope to find better jobs with higher wage while new migrants from the countryside fill in the lower wage old jobs?

You are correct on this one!
Western news seems like to give a negative spin to anything related to China.
The workers only protests if they were not properly compensated after being laid off, for example, the boss ran away with the money!

[tiger]

Purchasing managers' index rebounded again in January. That means China's industry output in January 2009 grew faster than the year on year growth of 5.8% in December 2008. It is the second monthly rebound in a row. Given the slower growth rate of consumption in January, it's either an acceleration of investment growth thanks to spending packages or better external trade situation due to lower commodity prices that helped stimulate manufacuring industry.

The Chinese purchasing managers’ index rose to a seasonally adjusted 42.2 from 41.2 in December, CLSA Asia-Pacific Markets said today.

http://www.bloomberg.com/apps/news?p...Zqk&refer=home

[Whiteeclipse]

Arkema to Invest $400 Million to Expand Changshu Base

French company Arkema SA (Colombes, France), one of the world's leading producers of chemical products, is set to invest another $400 million to expand the company's production base in Changshu, Jiangsu province, in eastern China.
With the additional $400 million, Arkema is expected to complete construction of a 15,000-ton-per-year pentafluoroethane (HFC-125) facility by the end of 2009. This facility will be jointly held by Arkema and Japanese company Daikin Industries Limited (Osaka), with 60 percent going to the Arkema and the rest to Daikin.

Part of the HFC-125 products will be used to replace Forane 22 (F22), which will be banned in Europe in 2010. As a major producer of F22, Arkema has doubled F22 production capacity at the Changshu base to 30,000 tons per year and is expected to raise this to 34,000 tons per year.

The addition of the new HFC-125 facility will add another 20,000 tons to the Changshu facility's current consumption of fluorite, which is currently between 44,000 and 45,000 tons per year. As a major production area of hydrofluoric acid, Changshu is capable of producing 28,000 tons of hydrofluoric acid annually.

Arkema has also been investing around 100 million euros in building an integrated poly-vinylidene fluoride facility with a production capacity that is expected to reach 40,000 to 50,000 tons per year by the second half of 2010. Efforts are also being made to build a vinylidene fluoride facility with a production capacity between 4,000 and 5,000 tons per year.

In 2005, Arkema also added a 3,000-ton-per-year organic peroxide facility to the Changsu plant. The production capacity of this facility is expected to rise to 3,000 tons per year by the end of 2009. Arkema also has doubled production capacity of nylon-11, nylon-12 and aromatic copolyamide microfiber to 4,000 tons per year.

http://www.pump-zone.com/global-news...gshu-base.html

[snow is red]

Originally Posted by AlexS2000

You are correct on this one!
Western news seems like to give a negative spin to anything related to China.
The workers only protests if they were not properly compensated after being laid off, for example, the boss ran away with the money!

This was reported by China Daily and Xinhua.

[snow is red]

New measures to boost service outsourcing

2009-02-02

The Chinese government has announced a raft of tax breaks and subsidies to encourage the growth of service outsourcing.

The measures to boost the development of service outsourcing were outlined in a document drafted by the Ministry of Commerce and approved by the State Council, China's Cabinet.

It said 20 cities, including Beijing, Shanghai, Xi'an, Suzhou and Hangzhou, had been identified as pilot service outsourcing regions, where companies are eligible for favorable polices.

The measures include a series of tax and fiscal policies and intellectual property rights protection measures.

The document cited Suzhou Industrial Park as an example, saying service companies there would enjoy an enterprise income tax rate of 15 percent, compared with 25 percent elsewhere in the country, in the five years to 2013.

The government will offer service outsourcing companies a subsidy of up to 4,500 yuan a year for every college graduate employed on a contract of at least one year.

The document says businesses involved in information technology, training, production materials procurement, logistics, and advertising are eligible for the measure as service outsource providers.

Service outsourcing allows companies to transfer service operations to professional providers and focus on their core business. International service and software outsourcing business is expected to hit $1.6 trillion by 2010.

http://www.chinadaily.com.cn/bizchin...nt_7439338.htm

[snow is red]

China's shipbuilders see profits up 50 percent in 2008

2009-02-02

BEIJING, Feb. 2 (Xinhua) -- Profits of China's shipbuilders rose 50 percent in 2008 from the same period a year ago, despite rising material costs and the appreciation of Renminbi, according to data released Monday by the Ministry of Industry and Information Technology (MIIT).

Profits jumped 50.5 percent to 28.34 billion yuan (4.05 billion U.S. dollars). The industry value totaled 118.3 billion yuan, up 61.2 percent year on year.

The nation's shipbuilders completed a production capacity of 28.81 million deadweight tons (DWT), or 29.5 percent of the world's total, up from 22.9 percent in 2007, according to MIIT figures.

New orders comprised 37.7 percent of the world's total, with a production capacity of 58.18 DWT. Current orders accounted for 35.5 percent of the total, with a capacity of 204.6 million DWT.

An official with the MIIT said China's shipbuilders had remarkably strengthened their capabilities in innovation and had improved their techniques notably in making bulk cargo ship, oil carrier and container ships.

They also had the world's leading techniques in making ships that could meet the standards of the international classification society, according to the MIIT official.

He warned, however, that as the global financial crisis begins to take a toll on the shipbuilding sector, the industry could face severe challenges in the coming two-to-three years.

He said it has become more difficult for shipbuilders to raise fund as there has been a sharp decrease in new orders and defaults on new orders are on the rise.

http://news.xinhuanet.com/english/20...t_10752955.htm

[xXFallenXx]

Thanks a lot for all the hard work you have put into these threads snow is red. i really enjoy reading these articles.

[Huhu]

Interesting article from NYT about capital flows from China. I suppose if the sums are large enough, it could put downward pressure on the yuan.

Concern as money moves out of China

By Keith Bradsher (New York Times)
Published: February 2, 2009
http://www.iht.com/articles/2009/02/...355.php?page=2

HONG KONG: In Beijing, an online real estate brokerage has organized a 40-person buying tour to real estate foreclosure auctions in the United States this month, and it had so many applicants that it had to turn away nearly 400 people.

In Shanghai, cash-rich Chinese companies are buying high-yield bonds of American companies in distress, and bringing home fewer of the dollars they earn abroad from exports.

And in Hong Kong, wealthy Chinese from the mainland are turning up in growing numbers at jewelry stores here seeking one thing: diamonds, big ones.

"They're looking for five-carat diamond rings and six-carat diamond earrings - three carats for each ear," said Yollanda Lam, the marketing manager for the King Fook chain. "Because of the stock market and all, definitely people are more willing to buy fine jewelry."

Chinese citizens are starting to send more money out of the country and overseas investors are pulling money out of China while slowing their pace of new investments. The result has been a shift in what has been one of the biggest trends in international finance over the past five years: China's central role in bankrolling trade and budget deficits elsewhere, most notably the United States.

To prevent China's currency, the yuan, from rising in value, the Chinese government has been buying up the dollars pouring into the country from trade surpluses and foreign investment, accumulating more foreign exchange reserves than Japan, Saudi Arabia and Russia put together. It has paid for the dollars by printing more yuan and invested at least two-thirds of the dollars in American securities, particularly Treasury bonds.

China still has torrents of cash pouring in from trade surpluses, as imports shrank faster than exports in the final months of last year. But that inflow has been nearly balanced in recent months by an unexpected outflow of private cash from the mainland and a slowing of investment into the mainland.

The quarterly pace of accumulation in China's foreign exchange reserves plunged 74 percent over the course of last year. In the fourth quarter of last year, it reached $40.45 billion, the lowest point since the spring of 2004, when China's reserves were still much smaller than Japan's.

"There is a recognition for sure that China is slowing down, so why keep your money there?" said Henry Lee, a Hong Kong fund manager.

Prime Minister Wen Jiabao of China made an enigmatic statement about China's purchases of Treasuries during the weekend that seemed to acknowledge that China's need to buy them may have eroded somewhat.

"Whether China will continue to buy, and how much to buy, should be in accordance with China's needs, and depend on the safety and protection of value of foreign exchange," he said during a visit to Bank of China offices in London, according to the semiofficial China News Service.

The tough part for economists is to figure out why money is leaving China - and how long the trend will last.

The most troubling sign for China would be if the money represented capital flight - people taking their money out because they worried about the stability of a country that announced on Monday that 20 million migrant workers had lost their jobs and returned home to their villages. While discerning the motives for any individual's decision to invest elsewhere is extremely difficult, most economists say that actual capital flight seems the exception rather than the rule, and anecdotal evidence seems to bear that out.

Jewelry stores in Hong Kong are one barometer of trends on the mainland, because they do not charge the steep luxury consumption taxes imposed on the mainland and have a reputation for not selling counterfeits.

Daniel Chun, manager of Gaily Jewelry here, said he had seen an influx of mainlanders since December, mainly buying round-cut diamonds either set in jewelry or as loose stones. Sales to mainlanders were 50 percent higher at Chinese New Year this year compared to a year ago, he said, adding that the store had a policy of not selling gold bars.

But Chun also said that it was impossible to determine how much of the increase in demand represented worries about China's future, because customers seldom discuss their motives. The Hong Kong government said on Monday that retail sales of jewelry, clocks and watches fell 9.8 percent in December, but that may have reflected plunging demand from local residents as Hong Kong's economy slowed suddenly.

Hong Kong residents have been snapping up gold bars at a brisk pace in case of greater economic or political turmoil in the months ahead, but few mainlanders have been willing to take the risk of flouting the mainland's stringent gold import regulations by buying gold bars, said Lin Tat Yin, a manager at Chow Tai Fook, a jewelry store chain.

Another motive for money coming out of China may be simply a perception among individuals and companies alike that better bargains are available elsewhere because of financial distress in the West.

Soufun.com, an online real estate brokerage in China, has organized a 10-day tour for at least 40 people to San Francisco, Los Angeles, Las Vegas and New York City, starting on Feb. 24, and found that demand outstripped the spaces available. "The people in the group are obviously interested in diversifying their investments, and the United States certainly is a very attractive location since real estate prices there have dropped drastically," said Zhao Xingyu, a manager organizing the tour.

Chinese real estate industry executives say that there was considerable speculation in recent years by overseas investors, especially overseas Chinese buying properties in Beijing, Shanghai and the Pearl River Delta region near Hong Kong. Those purchases contributed to a real estate bubble in China that peaked last spring and has gradually deflated since then.

"Certainly a lot of the Hong Kong money seems to be coming back," said Brad Setser, a fellow of geoeconomics at the Council on Foreign Relations in New York.

Since the Hong Kong dollar is pegged to the dollar, and the Hong Kong Monetary Authority typically buys more U.S. Treasury notes to offset strong inflows of money, slower accumulations of the notes by the Beijing authorities may be partially offset by more purchases by Hong Kong, he said.

The Chinese government's decision to halt the rise of the yuan against the dollar last July, and even allow a short-lived decline against the dollar in late November, has also removed the incentive for investors to put money into China in pursuit of currency gains.

Stephen Green, an economist in the Shanghai offices of Standard Chartered, wrote in a research note that yet another important contributor to slowing flows of money into China this winter may be that hard-up retailers in the West have been waiting longer before paying for goods from China.

Two agencies have primary responsibility for regulating the movement of money in and out of China: the People's Bank of China, which is the central bank, and the State Administration of Foreign Exchange, which is part of the central bank but enjoys considerable independence. Officials from both agencies have said conspicuously little about capital flight in recent weeks.

The State Administration of Foreign Exchange did subtly change its policy goals at the end of last year, replacing a goal of halting unauthorized flows of money into China with a new target of seeking to control and balance the inflows and outflows.

Some experts see a different motive in the reluctance of officials from these agencies to talk about capital flows in and out of China. The central bank and the foreign exchange administration were supposed to limit unauthorized investment into China, often described as "hot money," but had limited success in doing so over the past five years, said Victor Shih, a specialist in Chinese finance at Northwestern University in Illinois.

With a portion of that money now leaving China, "some parts of the government don't want to admit it is happening," Shih said.

[snow is red]

Migrant workers returning to Guangdong

2009-02-03

GUANGZHOU -- While the effects of the global financial crisis are not yet in the past, many migrant workers are back on the job in the province of Guangdong, one of China's economic powerhouses, after the traditional respite of the Spring Festival.

Zhao Wulin from Central China's Hubei province is one of them.

"I received a message from the human resources manager of my factory before the Spring Festival, to the effect that the factory welcomed me back, so I just hurried back," Zhao told China Daily yesterday while waiting for the train bound for Dongguan.

In his early 20s, Zhao worked for a hardware factory in Zhangmutou township of the Pearl River Delta boomtown of Dongguan for the past couple of years. He returned to his hometown in early January, long before the Spring Festival began, as there was not much work to do.

"I dare not hesitate any longer as I realize that it is even more difficult to make a living in my hometown and the case in other cities is no better," he said.

"Anyway, I've lived in the Pearl River Delta for some years and there are more job opportunities, although the income may be a bit lower than in the previous few years," he added.

According to a bulletin released on the website of the provincial labor department, about 1.68 million migrant workers returned to Guangdong from Monday to Friday of last week.

Over 90 percent of them returned to their original positions; about 8 percent found vacancies, and less than 2 percent came seeking new jobs, the bulletin said, basing the outcome on its sampled survey.

"Those migrant workers who are still holding a wait-and-see attitude and those who are to look for jobs in Guangdong may come after the Lantern Festival, which falls on Feb 9, as the Lantern Festival marks the real end of the Spring Festival holiday," predicted Liang Jiamin, a press official with the provincial labor and social security department.

"The provincial department has been doing much work including the endeavor to make the human resources market information transparent to prevent the migrant population from heading in blind to the province for a job," the official added.

Lin Shufan, an associate professor of human resources with South China Normal University, however, worries about the inflow of the migrant population to the province.

"The labor demand at different levels will definitely shrink in the province this year as the economy slows down," she said. "I'm afraid more social problems will crop up when the greater migrant population cannot find a job here."

http://www.chinadaily.com.cn/china/2...nt_7440602.htm