Shanghai’s economy grows 6.7%

SHANGHAI’S gross domestic product grew 6.7 percent in the first three quarters of this year from a year earlier and was in line with the national economic growth, the Shanghai Statistics Bureau said yesterday.

The expansion remained flat from that in the first half of the year, the bureau said.

Services, which accounted for 70.9 percent in the total economic output, was the main driver of the GDP growth. The sector rose 10.3 percent in the first nine months, while manufacturing dipped 0.7 percent and agriculture fell 12.1 percent, data showed.

The economic data of the third quarter showed that the city’s economy has been “better than expected,” the bureau said.

“Shanghai delivered a stable economic performance, but we have to admit that the economic conditions both domestically and globally remain complicated,” it said. “The city’s economy is in a crucial stage of transition and gear-changing. The foundation of a sustainable economic development is still unstable.”

The data also revealed a mixed picture as industrial production fell 1.3 percent to 2.22 trillion yuan (US$329 billion) from a year earlier in the first three quarters, with electronic products declining the deepest.

However, production in strategic new industries such as new energy and biopharmaceuticals rose 2.2 percent to 598.94 billion yuan, expanding faster than the 0.7 percent growth in the first half, the bureau said.

Retail sales added 7.2 percent to 7.27 trillion yuan in the first nine months, below the 7.7 percent growth in the first half of this year. Online sales surged 15.7 percent from a year ago to 90.41 billion yuan.

Other data showed consumer inflation hit 3.2 percent in the first three quarters, driven by services and food prices.

The disposable income of urban residents rose 8.8 percent to 40,888 yuan in the first nine months, and that for rural residents jumped 9.7 percent to 21,099 yuan.

Shanghai’s exports dropped 2.4 percent to 875.2 billion yuan in the same period while imports rose 1.5 percent to 1.17 trillion yuan.

China Daily

Chinese yuan strengthens to 6.7705 against USD Wednesday

BEIJING – The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 39 basis points to 6.7705 against the US dollar Wednesday, according to the China Foreign Exchange Trading System.

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the Interbank market each business day.

China Daily

Overseas, but underwhelmed

Overseas, but underwhelmed

A tour group of primary students pass a border port in Rizhao, Shandong province, before they head for a study tour in South Korea during the winter vacation in January. [Photo/VCG]

The rise in the number of children participating in study tours abroad is leading to conflicts between parents and organizers. Cao Yin reports.

Parents are being urged to ensure that they sign contracts and take time to study all the relevant information before allowing their children to take study tours overseas.

The warnings come after a number of schools and education institutions were sued by parents dissatisfied with the services provided, the subjects taught and the food and accommodations on offer.

China’s economic development has resulted in rising living standards and incomes, leading a growing number of Chinese to head overseas to study.

Last year, 523,700 Chinese citizens studied at undergraduate level overseas, compared with 339,700 in 2011, according to statistics provided by the Ministry of Education. Meanwhile, a wide range of programs, such as summer camps and non-degree study trips, are becoming increasingly popular.

For most students, the trips offer an opportunity to study in a new environment and develop social skills. Most pass off without incident, but some parents have sued organizers for not providing the services promised, or because food and accommodations failed to meet specified standards.

A family from Beijing recently sued a private middle school after their 13-year-old son returned early from a 10-month study tour to the United States.

“We hoped a trip to the US would help broaden his horizons and experience, so we allowed him to participate in a study tour organized by the school. But when he told us about the food and lodgings in the US, we weren’t satisfied,” said the family, who preferred not to name the boy or the school.

“We paid 330,000 yuan ($49,500), but we never thought the daily food allowance would be just $3.33 and he would have to share a room with 10 other students. We couldn’t accept that, so we allowed him to come home early, and then sued the school.”

However, the dispute wasn’t resolved as easily as the family had hoped. “They didn’t sign a formal contract with the school. In other words, they had no evidence to prove the organizers didn’t deliver what they had promised,” said Yang Lu, the judge who heard the case at Beijing No 3 Intermediate People’s Court.

“The number of similar disputes between families and study tour organizers, including schools, is rising,” she said, adding that four cases have been lodged with her court alone since the summer vacation.

On July 15, Yang ordered the school to return 240,000 yuan of the tour fee.

“The parents were unhappy with the verdict – they thought all their money should have been refunded – but it was actually a good result because both parties were at fault,” she said.

The court rejected the school’s claim that it had provided basic information and contracts before the tour began. “The documents were far from official and were unacceptable as evidence in court,” Yang said.

The school also said parents had been informed that living costs were not high as had been expected, and the boy had left because he was unable to adapt to life in the US, she added.

However, the parents were also culpable, because they failed to read the information provided before the visit, “let alone do some homework, such as learning about the regulations that protect children.”

Overseas, but underwhelmed

A Russian teacher shows a Chinese student participating in an international summer school in Vladivostok, Russia, how to paint wooden nesting dolls. [Photo/VCG]

Lack of regulation

According to a report published in April by the education service provider New Oriental Education & Technology Group, primary and middle school students account for most of the children on overseas study tours, which are mainly organized by schools and institutions.

It noted that in the future a growing number of parents would prefer their children to participate in study programs organized by schools, rather than other institutions.

“China has no specific laws to govern these study programs, especially long-term, non-degree tours,” Yang said.

Hu Guang, a judge at Beijing Haidian District People’s Court, said the government should supervise the study tour market, and called on parents to improve their legal awareness before allowing their children to study overseas.

‘Disorderly’ rise

Overseas study at undergraduate level is well protected under Chinese law, while international exchanges undertaken by universities in China and abroad are governed by strict rules devised by the education ministry.

“In other words, the rise in study visits, those organized by schools for students, most of them younger than 15, has been disorderly,” said Yang, who has called for the market to be regulated as quickly as possible.

She is also concerned about the legality of such tours: “I’m not sure whether schools – as part of the country’s public educational system – have the right to undertake commercial activities and sign contracts with parents.”

Despite the recent problems, Judge Hu believes study visits should be encouraged: “Going out, seeing the world and experiencing different cultures is good for students. What we should do is ensure children’s safety overseas,” he said.

“It’s essential to sign a contract with the organizers, and parents should pay close attention to safety clauses, such as those related to medical care and sanitation.”

Hu said parents should improve their risk awareness and attempt to learn basic contract law to clarify each party’s responsibilities, especially as schools are often the main organizers, but travel agencies or educational institutions run the actual tours. “That often means their duties are different,” he said, referring to differing areas of responsibility, such as which party should pay compensation if things fail to go as planned.

Details equal safety

Both Yang and Hu called on parents to read all the relevant information carefully before allowing their children to participate in trips organized by institutions.

“The more specifics an educational institution provides, the safer the children will be,” Yang said. “Because school-based study tours are unregulated, parents are advised to select large, qualified educational institutions with good reputations.”

Kou Fei, who oversees foreign study tours at the Education International Cooperation Group, said the company insists that parents sign a contract before their child can participate. “It’s a must for us. We provide specific information, such as what the students will eat and where they will live, in the document. Parents are shown photos and videos of the food, lodgings, transportation and what the children will study,” she said.

If tours have been organized by a school, the group outlines its responsibilities and those of the school. “We separate our responsibilities from those of the school, and inform parents which party to contact if problems occur,” she added.

“The clearer the separation of responsibility, the easier it is to resolve disputes.”

CHINA DAILY

Investors better to remain coolheaded about Chinese economy

BEIJING – Billionaire investor George Soros was found to have invested in China’s fifthbiggest State-owned lender, which raised a public uproar as many still remembered thatSoros has never stopped bad-mouthing China’s economy.

The dramatic scenario taught investors a lesson that judging Chinese economy needs to keepa cool headed mind for an objective conclusion rather than believing in the interest-drivenSoros. To benefit from Chinese economic transition, investors should abandon the habit ofbeing a copycat, and instead cultivate the ability of judging and behaving independently.

In fact, China’s economic fundamentals for long-term economic growth remain sound nomatter how foreign forces with ulterior motives hype up China’s economic weakness.

For the longer term, the Chinese economy has intrinsic tenacity, huge potential and ampleleeway, as Chinese government has been persisting with a proactive fiscal policy and prudentmonetary policy, while pushing the supply-side structural reforms.

For the near term, both the International Monetary Fund (IMF) and the Asian DevelopmentBank (ADB) have said that China’s economic outlook is positive, with an expected growth rateas high as 6.6 percent this year, which is only a dream for many countries to achieve.

To lead the market for the benefit of himself and achieve profitability, it is understandable thatthe billionaire creates a volatile atmosphere and misleads other investors. The gap betweenhis words and deeds depend on the rule and regulation of the investment market, and is alsobased on China’s economic fundamentals.

Meanwhile, the complexity and diversity, which are rooted in the economic transition whereengines are iterating and dynamics are changing, may have confused those “super players,”making them lag behind changeable situations.

On the other hand, China’s economic transition from traditional to new engines takes time.China’s economy faces such problems such as high and rising corporate debts, structuralexcess capacity and an increasingly large, opaque and interconnected financial sector.However, China is not facing a banking crisis, and still sees a high ratio of funding fromdeposit.

Moreover, the Chinese leadership is determined to conduct the reform, the fiscal and financialsectors have ample tools and resources to apply, and the Chinese economy enjoys greatroom for maneuver and endogenous dynamic.

In such a context, China’s economy will never be reduced to a wonderland for speculatorsand adventurers. Only those visionaries who are good at discovering new economies andexploring new dynamics can grasp opportunities and share prosperity arising from theChinese growth.

Provincial projects tipped to spur growth

PROVINCIAL projects worth more than 1 trillion yuan (US$150 billion) were launched this week as China strives to boost growth, Shanghai Securities News reported yesterday.

The projects are mostly infrastructure-related, with the southwestern province of Sichuan introducing nine highway projects worth 128.8 billion yuan. The Inner Mongolia Autonomous Region in the north unveiled 366 projects worth 739.6 billion yuan, including infrastructure, industrial parks and city planning.

The projects were unveiled as the National Development and Reform Commission, China’s top economic planner, urged faster approval procedures and vigorous implementation of projects under the country’s 13th Five-Year (2016-2020) Plan.

In the first eight months of this year, China’s infrastructure investment rose 19.7 percent year on year, gaining 0.1 percent from the January-July period, according to data from the National Bureau of Statistics.

“The 20 percent infrastructure investment growth is not enough to stabilize growth. The rate needs to be 22 or 23 percent,” said Lian Ping, chief economist at Bank of Communications.

The growth of infrastructure investment is likely to accelerate in the fourth quarter with implementation of major projects, faster approval by the NDRC and operation of public-private partnership projects, he said.

The NDRC introduced a new list of PPP projects with 2.14 trillion yuan in total investment on September 14 as part of its efforts to promote investment amid an economic slowdown.

It approved infrastructure projects worth more than 1 trillion yuan in the first eight months.

Shanghai Daily

China’s August exports up 5.9%, imports up 10.8%

CHINA’S exports in yuan-denominated terms rose 5.9 percent year on year in August, while imports increased 10.8 percent, customs data showed on Thursday.

That led to a monthly trade surplus of 346 billion yuan (US$51.9 billion), down 5.1 percent from a year earlier, according to figures from the General Administration of Customs (GAC).

Foreign trade in the first eight months was down 1.8 percent from a year earlier, with exports dropping 1 percent and imports falling 2.9 percent.

Trade surplus for the first eight months widened 5 percent from a year earlier to 2.31 trillion yuan.

Foreign trade with the European Union, China’s biggest trade partner, climbed 3.5 percent year on year in the first eight months, GAC data showed.

In the same period, foreign trade with the United States, China’s second-biggest trade partner, fell 3.2 percent, and that with ASEAN, its third-largest trade partner, declined 1.1 percent.

Shanghai Daily

Asian Development Bank to boost cooperation with China

The Asian Development Bank will enhance its cooperation with China, following the Chinese government’s priorities set out in the 13th Five-Year Plan (2016-20) and the Belt and Road Initiative, an official of the bank said on Monday.

Robert Guild, director of the transport division of the ADB’s East Asia department, said: “When we plan our forward pipeline of projects, we work with the National Development andReform Commission and with the provinces to identify projects that may contribute to the Beltand Road Initiative within China and crossing the borders into neighboring countries.

“ADB has more than 40 developing member countries all through Asia. Also in thosecountries, we finance projects that may contribute to the Belt and Road Initiative on the otherside of the border,” he said, speaking on the sidelines of a transport workshop in Beijing.

The Belt and Road Initiative, proposed by President Xi Jinping, is a development strategy thatfocuses on connectivity and cooperation among more than 60 countries and regions acrossAsia, Europe and Africa.

Speaking of the ADB’s priorities in the road sector associated with the initiative for the nextthree years, Guild said: “We have planned cross-border facilities – things like warehouses,sorting yards, and places for trucks and trains to interchange their cargo – border crossingposts, support to small and medium-sized enterprises and information systems in the GuangxiZhuang autonomous region… We also have projects dealing with logistics hubs in the XinjiangUygur autonomous region, going to the west.”

In the rail sector, the bank is working in Yunnan province and has three projects coming up, toconnect with southern neighboring countries, he added.

The ADB will scale up its operations in regional cooperation and integration, a major strategicagenda of the bank, to at least 30 percent of the total in 2020, and transport is the first pillar ofthe RCI strategy. More than half of the bank’s RCI loans to China between 2006 and 2014were devoted to transport projects, said Masahiro Nishimura, transport specialist of thetransport division of ADB’s East Asia department.

The bank approved more than $17 billion of loans for transport and information andcommunication technology in China from 1986 and 2015, accounting for 55 percent of itslending portfolio in the nation.

Zhang Dawei, deputy director-general of the comprehensive planning department of theMinistry of Transport, said under the Belt and Road Initiative, the Chinese transport sector willhave a huge demand for capital provided by international financial institutions like ADB duringthe 13th Five-Year Plan.

“China will further expand its cooperation with the ADB in terms of loans and technicalassistance and step up regional transport cooperation. In the meantime, we will also expandour cooperation with the ADB to areas such as integrated transportation, modern logistics,urban transport and green transport,” he said.

The Ministry of Transport will improve land transport passages along the Belt and Road by taking neighboring countries as priorities, promoting the connectivity of national infrastructure construction plans, and speeding up the construction of international transport passages.

China Daily

China’s imports rise for 1st time in nearly 2 years, exports grow

CHINA’S export growth surged in August as the yuan weakened and imports rose for the first time in nearly two years, suggesting domestic demand may be picking up and helping the world’s second-largest economy to stabilize, official data showed.

Exports in yuan-denominated terms rose 5.9 percent year on year in August, accelerating from 2.9 percent in July. Imports increased 10.8 percent, reversing from a drop of 5.7 percent, according to figures from the General Administration of Customs.

The import rise was the first expansion in value terms since October 2014.

The country enjoyed a trade surplus of 346 billion yuan (US$51.9 billion) in August, slightly below July’s seven-month high. Imports of automobiles, auto parts, semiconductor products and raw material increased sharply during the month.

The rise in imports may be due to the launch of new consumer electronic gadgets just before the year-end shopping season. China’s supply chain was boosted when firms imported more components to make products such as Apple’s iPhone 7, which was officially launched yesterday in the US, market watchers said.

“The improvement in imports is mostly a reflection of stronger domestic demand. Chinese companies are restocking (raw materials), and also are now expecting prices to start rising,” said Wang Jianhui, an economist with Capital Securities in Beijing.

Capital Economics said in a note that “the size of the pick-up suggests that there may also have been some improvement in import volumes last month.”

If it proves sustainable, a trade recovery or even signs of trade stabilization would help ease fears that China’s economy is becoming increasingly lopsided, and give feeble global growth a much-needed shot in the arm.

Nomura research analysts Zhao Yang and Wendy Chen said in a note yesterday that “imports of iron ore and oil improved significantly, which suggested domestic investment also improved in August, helped by post-flood reconstruction.”

The rise in exports was supported by a weaker yuan, Louis Lam and Raymond Yeung at Australia and New Zealand Banking Group said, adding that a “resilient trade balance” would ease capital outflows that would otherwise be worse due to exit of portfolio funds.

But they cautioned a sluggish global demand will still pressure China’s outlook for exports and manufacturing as the data indicated that new export orders in August continued to be weak amid external uncertainties.

“We are still wary of the impact of Brexit on European demand. Downside risk prevails in the next few months,” Lam and Yeung wrote.

International Monetary Fund Managing Director Christine Lagarde said earlier this month that the agency will likely downgrade its 2016 global growth forecast again.

Shanghai Daily

People from mainland flock to Hong Kong to scoop up insurance deals

A fresh shopping craze of people from the Chinese mainland is unfolding in Hong Kong, but this time the seasoned shoppers are not after luxuries, but insurance, reports the Securities Times.

According to the statistics of the insurance authority of Hong Kong, premiums of mainland customers’ insurance orders in the first half of 2016 hit a record high of 30.1 billion Hong Kong dollars (around 3.88 billion US dollars), an increase of 116 percent year-on-year.

Instead of the luxury stores, counters of the insurance companies are now thronged with mainland clients scrambling to buy insurance.

The most popular are critical illness insurance, investment-oriented insurance or establishing family trusts, with lower premiums, higher dividends and wider coverage proving the main drawcards for mainland clients.

Insurance in Hong Kong on average costs 10-30 percent less than on the mainland, and on the mainland insurance only covers up to 40 types of critical illnesses, while those in Hong Kong cover 50 to 120 types.

Buying large sum insurance in Hong Kong is also a way to avoid potential inheritance tax by transferring assets abroad.

Thanks to the booming demand, the business has also attracted a flock of those from the mainland who are working in Hong Kong and selling insurance.

The Securities Times also says that more and more mainland securities companies are also eyeing the insurance market in Hong Kong, considering it an important part of their overseas wealth management business.

Many insurance companies in Hong Kong have been offering various training courses for insurance agents, including private banking, trust management, analysis on the laws of the mainland and Hong Kong, and dollar bonds and investment for family asset inheritance, which are in great demand by mainland clients.

Despite the frenzy, experts in insurance are warning that buying insurance is not suitable for everyone, according to the reports of southcn.com.

Since the insurance bought in Hong Kong is not bound by mainland laws, legal disputes will be troublesome for mainland clients.

Such insurance, purchased and settled in US dollars, is also exposed to exchange rate risks.

The price advantage may also be offset by the cost of the procedures for exchanging currencies and the cost of trips to Hong Kong for submitting fees, if the annual premium is within 50,000 yuan (around 7,488 US dollars).

Senior insurance agents from Hong Kong also warn that clients from the mainland buying insurance in Hong Kong should be wary of illegal agents, reports southcn.com.

The Securities Times reports that Hong Kong insurance authority has ordered that mainland clients buying insurances in Hong Kong should fill a statement, clarifying the purchase process, dividend, and exchange rate of the insurance as of September 1, 2016. It has also ordered the agents to clearly explain these to the clients one by one.

China hosts G20 Summit, starting new journey for world’s growth

HANGZHOU – Leaders of the world’s 20 major economies on Sunday met in Hangzhou,discussing how to transform the lackluster global economy into the “innovative, invigorated,interconnected and inclusive” one, a vision proposed by the host country of China.

Around 3 pm, the leaders and heads of guest countries and international organizations joinedChinese President Xi Jinping to convene the 11th summit of the Group of 20 (G20).

This is the first time that the world’s second largest economy took the presidency of the primeplatform of global economic governance.

There are high hopes for this year’s summit, as it seeks a transformation from crisis response,which focused on short-term policies, to one of long-term governance, which shapes medium-to long-term policies.

Eight years ago when the world was ravaged by the 2008 financial crisis, G20 Summit waslaunched for member cooperation on international economic and financial issues. The thenplummeting world economy was stabilized and brought onto the track of recovery.

“Today, the world economy is once again at a critical juncture,” said Xi when addressing theopening ceremony.

Despite the overall trend of economic recovery, multiple risks and challenges still exist,ranging from the lack of growth momentum and faltering demand to turbulent financialmarkets, he explained.

Against such a backdrop, Xi said he hoped the summit could find a therapy that can bring theworld economy back on to a healthy growth trajectory.

“The therapy will be an integrative approach to address both the symptoms and root causes,and propel the world economy onto a path of robust, sustainable, balanced and inclusivegrowth,” he said.

A variety of topics essential to the world economy are to be discussed at the two-day event,including macro-economic policy coordination, innovation-driven growth, more efficient worldgovernance, robust trade and investment, and inclusive and interconnected development.

UN Secretary-General Ban Ki-moon appreciated President Xi and Chinese presidency foremphasizing sustainable development efforts as a core G20 Summit agenda at a pressconference Sunday.

An action plan for implementing the 2030 Agenda for Sustainable Development is to be madeat the summit, which features the participation of the largest ever number of developingeconomies.

Xi said the G20 should take the lead in major issues, working with real actions and withoutempty talk.

For the first time, the summit has put the issue of development front and center of the globalmacro policy framework, supporting the industrialization of African countries and leastdeveloped countries.

With two-thirds of the world’s population, G20 contributes 90 percent of the world’s total grossdomestic product and 80 percent of the world’s trade volume.

Over the past eight years, China has risen to become the world’s second largest economy.

Wang Wen, executive dean of Chongyang Institute for Financial Studies with the RenminUniversity of China, sees the summit as “a landmark event in the history of China’s diplomacythat reveals the growing influence and soft power of the country.”

In its latest effort to facilitate sustainable development, China deposited the country’sinstrument to join the Paris Agreement with Ban Ki-moon on Saturday, together with theUnited States, paving the way for the early entry into force of the climate pact.

Xi proposed that the summit should strengthen coordination of macro-economic policies,facilitate economic expansion worldwide, safeguard financial stability, make innovations ongrowth patterns, tap new potential, optimize global economic governance and makeinstitutional improvements.

The summit should also increase the openness of the world economy, facilitate trade andinvestment and boost inclusive development, he said.

Su Ge, president of the China Institute of International Studies, expects the Hangzhou summitto open a new chapter in global economic governance and engage both developed anddeveloping countries.

Sources with China’s Foreign Ministry said that significant consensus had been achieved inthe first-phase meeting presided over by Xi on Sunday afternoon, focusing on policycoordination and innovative growth.

After the meeting, Xi and the other leaders and guests took a boat trip and enjoyed a leisuremoment lightened by glitzy performance and fireworks display on the bank of Hangzhou’slandmark West Lake.

Nevertheless, in his speech, Xi mentioned the boat metaphorically to stress the need of jointefforts to overcome difficulties.

“To brave through the rough waters of world economy and start a new journey for futuregrowth, it’s good to know that we are in the same boat,” he said.

Xinhua News