MonitorsPublished on Jul 19, 2016
China Weekly Report | Volume VI; Issue 24


Ambitious urban plan to house 3.4 billion people sparks concern

Ambitious expansion plans by small and medium towns across China have lead to the creation of more than 3500 “new areas” for residential and economic use raising fears many are destined to become ghost towns. The combined projected population of these new areas is an “impossible” 3.4 billion people — 2.5 times the current number of people in the country, experts say. The world’s population today stands at 7.3 billion, according to the US Census Bureau. Beijing has pinned high hopes on making urbanisation a new engine of growth as the economy matures and slows. But the number of towns that have rushed to join the urbanisation wave has outpaced the central government’s plans.

Source: South China Morning Post, July 15, 2016

High cost of second child discourages many

While the change of family planning policy allows couples to have an additional child legally, the high costs associated with growing a family discourages those who can't afford even one. The husband of a woman in Henan province recently filed for divorce because she had been using contraceptives without telling him. She was convinced that they could not afford to raise a child. It's not the first time for a couple to turn to the court to settle a dispute about whether to have a second child. In February, a couple in Zhejiang province reportedly divorced because the husband insisted on having another child but the wife refused. The quality of child-raising is much more important than the quantity of children, according to Xiao Ling, a marriage consultant in Shenzhen, Guangdong province.

Source: China Daily, July 8, 2016


Rocks, reefs and the Hague tribunal ruling

The Permanent Court of Arbitration covered a range of claims brought by the Philippines against China’s claims in the South China Sea. Here are the key rulings. The court said Beijing had no legal basis to claim historic rights to resources within the nine-dash line. All features that remain above water at high tide in the Spratlys were given the legal status of “rocks”, including Taiping, which is administered by Taiwan. None of the islands enjoys an exclusive economic zone (EEZ). China did not have an EEZ in this region, the court found. The court found the construction of artificial islands by China violated the Philippines’ sovereign rights in its EEZ. The tribunal found that China had interfered in Scarborough Shoal.

Source: South China Morning Post, July 13, 2016

Visit pushes cooperation between China, Mongolia

Mongolia is the host of the 11th Asia-Europe Meeting Summit, scheduled from July 15 in Ulaanbaatar. Li Keqiang and his Mongolian counterpart, Jargaltulga Erdenebat, agreed to "speed up the dovetailing of China's Belt and Road Initiative with Mongolia's Steppe Road Program", and carry out cooperation in key areas. China proposed the Belt and Road Initiative in 2013, which is aimed at promoting policy coordination, infrastructure connectivity, trade and financial integration as well as cultural exchanges in Asia, Africa and Europe. The Steppe Road plan is an infrastructure construction proposal aimed at boosting the Mongolian economy through trans-border transportation. The premiers witnessed the signing of 15 agreements in areas including trade, technology, infrastructure, and TV and broadcast services.

Source: China Daily, June 15, 2016


Subdued inflation points to policy easing

Moderate price data released may prompt policy makers to use mild policy stimulus to achieve growth target, economists predicted. China's consumer price index (CPI), a main gauge of inflation, grew 1.9 percent year on year in June, according to the National Bureau of Statistics (NBS). June's data slowed from 2 percent growth in May and dropped for the second-consecutive month, from 2.3 percent in April when the CPI reached the highest level since July 2014. CPI grew 2.1 percent in the first half of 2016, while the annual target was set around 3 percent. China's producer price index (PPI), which measures costs for goods at the factory gate, slid 2.6 percent year on year in June, compared with a 2.8-percent decrease in May. Over the last six months, industrial product prices rebounded slightly but consecutively on an annual basis.

Source: Xinhua, July 10, 2016

Bank of China issues 3 billion USD equivalent Green Bond

Bank of China (BOC) Luxembourg Branch, together with the BOC New York Branch, on Tuesday (July 5) issued the first BOC Green Bond, with the total amount equal to 3 billion USD. The structure of the green bond includes fixed rate and floating rate for two year, three years and five years, and denominated in Chinese currency Renminbi, USD and euro. The bond issued by the BOC Luxembourg Branch will be listed on the Luxembourg Stock Exchange while the bonds issued by the New York Branch will be listed on the Hong Kong Stock Exchange. Green bond is one of the fastest expansion bond category in international market. The funds raised by green bond will be exclusively used to support environmental-friendly green projects.

Source: Xinhua, July 7, 2016

Chinese companies continue to look to offshore corporate debt markets

In the wake of the Brexit turmoil, mainland Chinese companies say they have no plans to roll back overseas bond issuance, as global investors remain upbeat towards Chinese corporate debt even as the yuan has lost ground against the US dollar recently. Still, there has been some negative impact, as Chinese companies face higher costs when issuing dollar-denominated corporate bonds in the offshore market, however some of these costs are offset by the willingness of investors to accept lower yields. The yuan has lost about 1.3 percent against the US dollar since the Brexit result on June 24. Some mainland companies said conditions in the offshore debt market have held up pretty well considering the uncertainties over the future relationship between Britain and Europe. The Shanghai home builder has issued two tranches of dollar bonds totalling US$600 million, maturing in 2017 and 2019 respectively. In some instances, Chinese homebuilders, one of the most active issuers in the offshore debt market, are able to tap the overseas debt market at a lower cost than the domestic mainland market as authorities seek to put the brakes on credit.

Source: South China Morning Post, July 10, 2016


China sends environmental inspection teams to eight more provinces in war on pollution

China will send inspection teams to eight more provinces and regions to see how well they are complying with state environment rules in fighting the country’s war on pollution, the environment ministry said. Beijing has identified local governments as one of the key battlegrounds in its nationwide anti-pollution efforts, with many accused of turning a blind eye to environmental violations in an effort to protect valuable sources of revenue and jobs. The latest round of inspections will cover the huge coal-producing regions such as Inner Mongolia and Ningxia in the northwest, the old northeastern industrial heartland of Heilongjiang and the poor rural regions of Yunnan and Guangxi in the southwest.

Source: South China Morning Post, July 8, 2016

China pumps money into national disaster relief

The Ministry of Finance on Thursday issued 199-million-yuan worth of subsidies to help the nation tackle natural disasters, after the southern part of China experienced the worst floods in years this summer. The subsidies mainly aim to enhance capacity building in less developed and vulnerable regions and to reduce possible economic loss to the least extent, according to a statement issued on its website. China is likely to continue hitting extreme weather this year due to strong El Nino events, according to Zhou Bing, chief engineer at the National Climate Center. The Yangtze River basin in the southern part of the nation experienced torrential downpours and floods that continued into July, resulting in damages to more than 200,000 homes in the region, according to Ministry of Civil Affairs.

Source: China Daily, July 14, 2016

Chinese bullet trains cross in world first

Two Chinese trains dashing at world-record speeds in opposite directions passed each other on parallel tracks on Friday, in the latest feat achieved by China in high-speed rail.  At about 11:20 am, the two trains, "Golden Phoenix" and "Dolphin Blue," traveling at 420 km per hour, crossed on lines between Zhengzhou in the central Henan Province and Xuzhou in the eastern Jiangsu Province.  The experiment set a world-first for trains traveling at such speed, Zhou Li, head of the technological management department of China Railway Corporation, told Xinhua.  Zhou said the achievement, using homegrown trains, demonstrated that China has fully mastered the core technology of high-speed trains.

Source: China Daily, July 15, 2016


Choi Chi-yuk, Why 13 is an unlucky number for China’s would-be Communist Party high-flyers, South China Morning Post, July 8, 2016

Michael Chugani, Public Eye: lawmaker’s delaying tactics expose Hong Kong’s rotten political system, South China Morning Post, July 12, 2016

Alex Lo, Hong Kong now the dumping ground for waste from world’s two largest economies, South China Morning Post, July 8, 2016

William Burke-White, Will China abide by the South China Sea decision?, CNN, July 13, 2016

Ian Bremmer, These 5 Facts Explain China’s Coming Challenges, Time, July 14, 2016

Reforming China’s stock market still has some way to go, and it is a difficult journey, South China Morning Post, July 10, 2016


  • Pratnashree Basu
  • Ambalika Guha
  • Swagata Saha

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