Archive for January, 2008

China to offer support policies for non-food biofuels

    BEIJING, Dec. 7 (Xinhua) — China’s Ministry of Finance (MOF) has drawn up policies to promote the production of non-food sources for biofuels, a senior MOF official told a Beijing energy conference.

    The ministry will use subsidies and other forms of financial support to reduce the risks of producing these sources, said Zeng Xiao’an, deputy director of the MOF’s Department of Economic Development, at a synthetic fuel forum held in Beijing Thursday.

    ”We have worked out a complete set of policies to support non-food biofuels, as they are clean energy sources with a limited negative impact on the environment,” Zeng said.

    Flexible subsidies will be offered to biofuel producers who lose money on crops when crude oil prices are low, he said, and the government would encourage enterprises to reserve funds to offset such risks.

    Farmers will receive a 3,000-yuan (405 U.S. dollars) subsidy for each hectare of forest products for biofuels, such as ethanol and bio-diesel, and 2,700 yuan for each hectare of crops for biofuels, Zeng said.

    The ministry would also subsidize demonstration projects producing ethanol from cellulose, sweet sorghum and cassava or making bio-diesel from forest products, so as to make it easier to get bank loans for construction, according to Zeng.

    Projects that are up to industrial standards would receive rewards ranging from 20 percent to 40 percent of the total investment, he said.

    ”Government subsidies are a small proportion of the total investment of a bio-diesel project; however, we are confident of the long-term prospects for bio-diesel production,” said Liu Jianbo.

    Liu runs a company, Hunan Rivers Bioengineering Co. Ltd, that set up a bio-diesel plant with an annual capacity of 20,000 tons, one of several such small plants in China. There is no reliable figure for the nation’s bio-diesel output, but there are believed to be fewer than 10 plants, all small-scale.

    Chinese officials have said that the country would increase bio-diesel output to 200,000 tons by 2010 and 2 million tons by 2020.

    In 2006, China’s four ethanol projects produced about 1.3 million tons of fuel, which was blended with gasoline in some provinces, including Shandong.

    All four projects mainly produce corn-based ethanol. However, earlier this year, China banned the further use of grain for ethanol production, to ensure that grain was available for food.

    China has set a target of an annual production capacity of 2 million tons of ethanol by 2010 and 10 million tons by 2020.

    The energy-thirsty country has also sought to use its abundant coal reserves to produce synthetic fuel, with the goal of reducing reliance on imported petroleum. But support policies for such projects are still being debated, because there are concerns over the environmental impact of coal-based synfuels, Zeng said.

    The production of coal-derived fuels, such as methanol and dimethyl ether (DME), is usually accompanied by abundant carbon dioxide emissions, contrary to the country’s efforts to cut emissions.

    ”We are still doing research and will publish specific support policies for such projects as soon as possible,” Zeng said.

Science journal: China among fastest-growing research supporter

    WASHINGTON, Dec. 6 (Xinhua) — As one of the world’s fastest-growing economies, China is also the world’s fastest-growing supporter of scientific research and development (R&D), the Science journal said in an

CSRC chairman underscores direct finance expansion

    BEIJING, Dec. 6 (Xinhua) — The head of China’s securities regulator said on Thursday that the regulator will vigorously develop capital markets to expand direct financing.

    Shang Fulin, chairman of China Securities Regulatory Commission(CSRC), vowed to improve the multi-tier capital markets system and gradually develop the futures markets.

    Shang told a forum in the south-eastern city of Shenzhen that China will gradually develop corporate bonds and financial derivatives to provide investors with effective risk management tools.

    The CSRC will work to put in place more basic market regulations to better supervise the listed companies, he said.

    The chairman also called for effective investor risk education and harsh, cooperative clampdowns on illegal transactions to guard against market risks.

    The potential risks should not be underestimated with the increasing huge number of investors and expanding market scale, he added.

Backgrounder: timeline of China’s fiscal and monetary policy

    BEIJING, Dec. 5 (Xinhua) — China’s Central Economic Work Conference closed here on Wednesday with the headline news that the ten-year prudent monetary policy will be replaced by a tight one in 2008.

    China’s development in fiscal and monetary policies are as follows:

　　– Prudent fiscal and monetary policies (2005 – now)

    The Chinese economy was running at 11.5 percent year-on-year growth in the first nine months this year, and the annual consumer price index was estimated to stand at 4.5 to 4.6 percent, overrunning the warning threshold by more than 1 percent. In face of rapid growth in bank loans, investment and forex reserves, the country is carrying out prudent fiscal and monetary policies to prevent its economy from overheating.

    China switched to the current policy at the beginning of 2005, replacing the former proactive fiscal policy. In that year, China reduced the issuance of its long-term National Construction Bonds to 80 billion from 110 billion yuan (about 14.9 billion U.S. dollars) in the previous year, and cut down the fiscal deficit by 19.8 billion to 300 billion yuan (about 40.5 billion U.S. dollars).

    – Proactive fiscal policy and prudent monetary policy (1998 – 2004)

    The proactive fiscal policy and prudent monetary policy was adopted in 1998 to counteract the destructive potential of the 1997 Asian Financial Crisis.

    China issued a total of 910 billion yuan worth of national bonds (about 131.1 U.S. dollars) over these years and invested the money in infrastructure construction. The move boosted the domestic demand weakened by the financial disaster, and contributed to 1.5 to 2 percent of national output growth each year.

　　– Appropriately tight fiscal and monetary policies (1995 – 1997)

    In order to rein in high inflation across the country since 1993, China brought in appropriately tight fiscal and monetary policies. The country saw a drastic surge in fixed assets investment in the latter half of 1992, which was followed by major food price rises in 1993.

    After the launch of the new policies, the central bank stepped up efforts to control money supply and finally reduced the consumer price index from 21.2 percent in January to 12.3 percent in August in 1995. The annual price increase was kept under 15 percent and gradually flattened out in the following years.

Factbox: China’s central economic conference foresees tasks for 2008

    BEIJING, Dec. 5 (Xinhua) — Chinese leaders concluded a high-profile annual economic conference on Wednesday and decided a slew of tasks facing the country’s economy in 2008.

    They are as follows:

    – The primary task of macroeconomic control is to prevent the economy from overheating and the current price rises led by foodstuff from evolving into “evident inflation”.

    – The meeting decided to shift the country’s monetary policy from “prudent”, an approach China has followed for the last ten years, to “tight”. But the change of policy must be made to secure a steady economic expansion.

    – Monetary policy should play greater role in the macro-control policy. China will strictly control the volume and granting pace of loans, so as to better regulate domestic demand and balance international payments.

    – Fiscal expenditure must be optimized to facilitate industrial restructuring and coordinate regional development. Fiscal input in social security, medicare, sanitation, education and household benefits will see concrete increase, while low-income families will receive more stipends as an offset of price rises for basic living necessities.

    – Consolidate the fundamental role of agriculture in China’s economic growth so as to secure grain crops, and supply and enrich rural China.

    – Technical innovation should be based on market demand and be centered upon core technologies that can break the bottlenecks of China’s economic and social development. Enterprises should be put at the core of technical innovation to enhance national competence and facilitate emission reduction and energy conservation.

    – Prices, taxations and financial policies should be used as an incentive to stimulate energy conservation while environmental-friendly and compulsory market access criteria must be put into place.

    – Environmental protection and emission reduction should serve as a crucial criterion for the evaluation of local authorities so as to promote the application of advanced technology and curb the development of high-polluting and high-energy-consumption industries.

    – Channel more financial aid to undeveloped regions, especially the interior revolutionary bases, habitats for people of ethnic groups, border regions and poverty-stricken areas.

    – Urbanization must be advanced in a sustainable manner and not at the costs of land waste.

    –Deepen economic reforms, especially in fiscal and taxation systems as well as pricing and investment mechanisms so as to facilitate the transfer of economic growth mode from quantity to quality.

    – Advance the Free Trade Area strategy and strengthen bilateral and multi-lateral cooperation. Open up China wider to the outside world and improve the quality and added value of export products.

    – Double efforts in improving the livelihood of the people and facilitate social harmony, including expanding the social benefit and medicare for urban and rural residents, increasing education capital input and boosting low-rent house construction.

China to intensify land reserve control

    BEIJING, Dec. 5 (Xinhua) — The Chinese Ministry of Land and Resources (MLR) is seeking to improve land reserve system amid intense concerns over a 9.5 percent year-on-year housing price rise in 70 major Chinese cities this October.

    Experts hold that robust demand, tight supply and higher land development costs drove up housing prices and the government’s new move is in a bid to regulate the real estate market and curb the housing price rises.

    The local land and resources regulatory agencies will conduct the macro-control of land development, storage and supply, according to the circular issued jointly by the MLR, the Ministry of Finance and the People’s Bank of China, China’s central bank towards the end of last month.

    The large-scale land hoarding of some real estate development enterprises has recently become the focus of the media.

    Experts hold that this is one move taken by the government to prevent property developers from hoarding land and guarantee land use for basic infrastructure and residential construction for the needy.

    According to a research report released by the prestigious Beijing Normal University on November 20, more than 800 million square meters of land has been hoarded by property developers during the past decade.

    Land hoarding is especially common in the country’s eastern provinces of Shangdong, Jiangsu and Zhejiang and southwestern province of Sichuan, says the report.

    In a similar development, earlier last month the Chinese government urged local governments to reserve at least 70 percent of the land designated for residential construction for low-rent units or smaller, cheaper commercial homes.

    The government has been trying to curb soaring real estate prices and provide adequate housing for the needy. Regulators have raised interest rates, ordered developers to build more small, low-cost homes and imposed curbs on the purchase of second homes and foreign investment in real estate.

    In a bid to provide low-cost homes, the Ministry of Construction (MOC) and the MLR and another seven relevant ministries released the low-rent housing guarantee policy this November, which took effect on December 1.

    This policy is targeted at the country’s ten million low-income urban families whose living space is less than ten square meters per person, accounting for 5.5 percent of the country’s combined households.

    The low-rent housing guarantee policy is built on the back of the low-rent housing system. By the end of October, the low-rent housing system had been established in nearly all the 656 cities in this country and 7.94 billion yuan (1.07 billion U.S. dollars) has been earmarked this year to fund the system nationwide, surpassing the total volume the country has pooled into this endeavor since it started the low-rent housing project in 2003, according to statistics from the MOC.

China to tackle five major problems in national economy next year

    BEIJING, Dec. 5 (Xinhua) — China’s just concluded economic conference identified five major problems in the national economy in a bid to better steer the country’s economic growth in the coming year.

    The three-day Central Economic Work Conference that ends on Wednesday cited overheating risks, inflation pressure, a weak agriculture sector, arduous energy conservation and emission reduction tasks and prominent issues on welfare of the general public as key concerns of Chinese authorities.

    ”We need to pay great attention to these problems and solve them in a timely manner,” the meeting said.

    It emphasized that it would be of great significance to properly guide the national economy in 2008, which is the first year for China to implement policies mapped out at the 17th National Congress of the Communist Party of China (CPC), during which the country’s new leadership was selected.

    China will host the Olympic Games in August next year, for which the government is going all out in preparation to guarantee the success of the major event.

    The meeting has also outlined policies to be adopted to ensure problems could be properly solved, such as the prevention of overheating economy and guarding against a shift from structural price rises to evident inflation.

China’s top leaders emphasize need to improve people’s livelihood

    BEIJING, Dec. 5 (Xinhua) — China’s top leaders on Wednesday wrapped up a key meeting on economic policies for 2008, emphasizing the need for efforts to improve the people’s livelihood and to build a harmonious society.

    The three-day Central Economic Work Conference, the most important annual economic policy-making meeting which came about six weeks after the 17th National Congress of the Communist Party of China, has placed unprecedented emphasis on the welfare of the people.

    ”Increased efforts to improve the people’s livelihood will start with the most realistic problems, which people are concerned about most and are most directly related to people’s interests,” said the meeting.

    To boost employment, the government will encourage people to start their own businesses, improve the training system for workers, offer a good employment service for college graduates and extend timely help for jobless families.

    Latest statistics showed that 9.2 million urban residents found jobs in the first nine months of the year, while 810,000 out of the 847,000 jobless families nationwide obtained employment.

    As China’s economic boom of recent years has been accompanied by a widening gap between the rich and the poor, the meeting called for “rational income distribution” in order to better share the benefits of the spectacular economic and social development.

    Residents in both urban and rural areas, especially low-income people, will be better paid, it said. A mechanism will be established to ensure “normal pay rises” for company employees and to guarantee the payment.

    During his visit to some needy citizens in Beijing last month, Premier Wen Jiabao called on employers in the country to offer higher salaries and to strictly abide by the rules on minimum wages.

    ”Prices have been on the rise these days and I’m aware that even a one-yuan (0.13 U.S. dollars) increase in prices will affect people’s lives,” he said.

    The meeting vowed to improve China’s social security system, with more urban residents to be covered by pension and medical insurance.

    In the countryside, an endowment insurance system will be set up, while the cooperative medical insurance, under which the government helps fund farmers’ medical expenses, will continue to expand. It currently covered 85 percent of the country’s rural residents.

    The government will increase investment in education, exempting all the students in the country from paying tuition fees in the nine-year compulsory education, the meeting said.

    The meeting also promised the common people better medical services and more low-rental houses. And the government will spend more fiscal revenue on underdeveloped provinces to reduce the regional wealth gap, it said.

China’s Party newspaper outlines economic policies for 2008

    BEIJING, Nov. 5 (Xinhua) — People’s Daily, the mouthpiece of ruling Communist Party of China (CPC), is running an

China aims to prevent overheated economy, curb inflation in 2008

    BEIJING, Dec. 5 (Xinhua) — The primary task of China’s 2008 economic work has been set “to prevent the economy from becoming overheated and to guard against a shift from structural price rises to evident inflation,” a key economic meeting said here Wednesday.

    The annual Central Economic Work Conference concluded that the key for next year’s macro-economic control was to keep in check “economic gross value, price stabilization, structural adjustment and to promote balance”.

Chinese President Hu Jintao deliveres a speech at China’s 2007 Central Economic Work Conference which is held in Beijing, capital of China, from Dec. 3 to 5, 2007.(Xinhua Photo/Ju Peng)
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    The meeting said the country would rationalize fiscal expenditure to boost structural adjustments. Expenditures alt=”Chinese Premier Wen Jiabao deliveres a speech at China’s 2007 Central Economic Work Conference which is held in Beijing, capital of China, from Dec. 3 to Dec. 5, 2007.” hspace=0 src=”http://news.xinhuanet.com/english/2007-12/05/xin_02212040520360781278365.jpg” border=0>

Chinese Premier Wen Jiabao deliveres a speech at China’s 2007 Central Economic Work Conference which is held in Beijing, capital of China, from Dec. 3 to Dec. 5, 2007.(Xinhua Photo/Li Xueren)
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