China Economic News

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Further interest rate cuts expected: Chinese bank
PETER CAI NOVEMBER 25, 2014 1:00PM

One of China’s leading domestic investment banks, China International Capital Corp, predicts the central bank will cut interest rates further or lower the capital reserve ratio to address the problem of high funding costs for companies.

According to a note released by the bank, the latest weak HSBC PMI number suggests the country’s manufacturing sector is still under pressure and past policy remedies have not been effective. The best way to address the problem is to cut interest rate according to the report.

The bank estimates the latest move from the central bank would save 360 billion yuan in terms of cost of funding for companies, which amounts to 0.6 per cent of GDP.

[CityFarmer]

A scaled-down "AMCs" in the making, comparing the one in 1998? The previous ones were targeted on the Big Four banks, while the newly approved AMCs are seem for smaller banks, the local ones...

China said to expand bad-loan purchase trial as sour debts rise

SHANGHAI (Nov 25): China’s banking regulator expanded a trial to allow more regions including Beijing to set up firms to buy bad loans from local financial institutions, government officials familiar with the matter said.

The latest batch also covers the municipalities of Tianjin and Chongqing, and Fujian and Liaoning provinces, said the people, who declined to be identified as the additions haven’t been publicly announced.

The China Banking Regulatory Commission in July allowed five places including Shanghai to set up companies to manage sour debt for the first time.
...
http://www.theedgemarkets.com/sg/article...debts-rise

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China's budget deficit tipped to increase in 2015
PAUL PENNAY DECEMBER 03, 2014 2:45PM

China's party and government leaders are set to decide on key economic targets for next year at the upcoming Central Economic Work Conference in Beijing.

In order to maintain economic growth rates in 2015, many analysts expect the government to lift fiscal outlays.

One of the key features of China's new budget law, which is set to come into effect on January 1, 2015, will be to limit the amount of funds that local governments can raise from financing platforms, making them more reliant on provincial bond sales.

This new reliance on provincial bonds will likely lead to an increase in the nominal size of China's overall budget deficit but also in terms of a ratio of GDP.

In March 2014, China announced that it was planning for a budget deficit of 1.35 trillion yuan this year, equivalent to 2.1 per cent of GDP.

The chief economist with Haitong Securities told the 21st Century Business Herald

that the need to provide supportive fiscal policy and the phasing out of local financing platforms means that the deficit to GDP ratio would likely increase to 2.5 per cent, which equates to a deficit of about 1.7 trillion yuan.

Everbright Securities' chief economist told the financial paper that the deficit would blow out to at least 2 trillion yuan in 2015.

[greengiraffe]

HSBC non-manufacturing index expands in Nov
FERGUS RYAN DECEMBER 03, 2014 1:15PM

Activity in China's non-maufacturing sector expanded in November but only slightly higher than the previous month according to a private survey.

The HSBC China Services Business Activity Index printed at 53.0 in November, just nudging up slightly from 52.9 in October.

A reading above 50 indicates expansion, while a reading below signals contraction.

Chief economist, China and co-head of Asian economic research at HSBC, Hongbin Qu, said that new business had improved while outstanding business contracted further.

"The labour market index moderated and price pressures remain subdued. The service sector saw a very marginal improvement in November, alongside sluggish activity in the manufacturing sector” he said.

"We expect the PBoC's recent rate cuts will help stabilize demand in the near term. However, downside pressures on the economy still persist and warrant further monetary and fiscal easing measures in the coming months.”

Earlier, the official non-manufacturing purchasing managers' index (PMI) printed at 53.9 in November, after a read of 53.8 in October.

[greengiraffe]

China's building blocks to recovery
Angus Grigg
650 words
6 Dec 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Infrastructure

Shanghai Stimulus watch has been a constant distraction for those following China's economy over the last three years and it's on again as the central bank and government hint that more support is coming.

The Shanghai Composite Index, the world's worst-performing market last year, has been the chief beneficiary of these hopes, rallying 27 per cent over the past six weeks.

In what has been described as "mania" by one economist, the market is close to a four-year high on hopes of further interest rate cuts and suggestions the government is close to finalising a new infrastructure package.

On Thursday, the National Development and Reform Commission, China's top economic planning agency, gave its strongest hint yet that a suite of new projects would shortly be unveiled.

At a press conference to announce the "acceleration of major projects", the NDRC said it was targeting spending on oil and gas pipelines, clean energy and telecommunications infrastructure, without revealing the size of any new spending commitments.

This followed news last week that the NDRC would also boost spending on irrigation, transport, environmental protection and elderly care.

And to re-enforce the point that it was moving decisively to support growth, the NDRC said it would be closely monitoring local governments and the progress of each project.

The NDRC looks to be signalling to the market that it won't let growth drop sharply in the early months of next year, as it did in the middle of this year.Giant number

This has forced it to play catch up over the last six weeks, announcing the approval of 36 projects valued at 1 trillion yuan ($192 billion).

This appears like a giant number, but it is a fraction of the roughly 22 trillion yuan in stimulus pushed into the economy after the global financial crisis.

The NDRC's latest round of approvals should push China's annual economic growth rate close to 7.5 per cent this year and the projects under planning should underwrite growth of 7 per cent in 2015. For China, this is solid if unspectacular growth and according to Mark Williams, the chief China economist at Capital Economics, does not justify the recent frenzy of stock buying.

"Turnover, leverage and account openings have all soared and there is a sense of mania taking hold," he said.

Such exuberance was on display during the first 15 minutes of trading in Shanghai on Thursday.

Turnover topped 55 billion yuan, more than an entire day's trading ­during a quiet session in May.

Account openings over the past week have also surged more than 150 per cent from the prior seven days and outstanding margin loans have doubled over the year. Unwind further

"From a macro-economic perspective, our view is that gains from this point should largely unwind further down the road," said Mr Williams.

He said the Shanghai Composite was trading on price earnings ratio of 14 times, which was expensive compared to other emerging markets.

"There are still major headwinds facing banks, property developers and industrial firms which make up much of the Shanghai Composite," said Mr Williams. The lightning end of year rally has evoked memories of late 2007, when the Shanghai market tripled in just 12 months.

While a stimulus plan still has to deliver its full benefit, growth in China is markedly stronger than in Europe. The forecast growth figure of 7.5 per cent compares sharply with data out from the European Central Bank on Friday, which projects euro zone growth of just 1 per cent in 2015.

Key points Shanghai Composite Index close to a four-year high on rumours of further rate cuts and a government infrastructure package. National Development and Reform Commission to target spending on oil and gas pipelines, clean energy and telecommunications.


Fairfax Media Management Pty Limited

Document AFNR000020141205eac600019

[greengiraffe]

China Can Rise Through It

Daniel Fisher
1089 words
15 Dec 2014
Forbes Asia
FBGL
English
Copyright 2014. Forbes Media LLC.

China was well into an intended transformation toward a consumer-driven economy when Japan, fittingly enough, threw a wrench into the works. The latest iteration of the "Abenomics" stimulus measures, on top of news of recurring recession, drove down the value of the Japanese yen against the Chinese yuan (or renminbi) by 15% this year.

Of course, the rest of Asia was affected as well, and the business press noted other countries scrambling to keep their currencies from getting out of whack with the yen. But China has held firm so far, basically remaining stable against the U.S. dollar since June. (The Hong Kong dollar, tied to the U.S. greenback, similarly didn't move.) A collapsing world oil price has been a loud accompaniment, helping to sustain the Japanese policy by holding energy import costs in check.

Despite all the tensions between China and Japan, the Japanese aren't thought to be acting to smite China financially in all this. Prime Minister Shinzo Abe's government is just looking for one desperate measure after another to galvanize sustained growth in a depopulating, (public) debt-heavy nation.

Likewise, when China cut benchmark interest rates in late November, it wasn't seen as a response to Japan but rather as a domestic prod to keep the economic growth rate above an official 7% and shore up shaky real estate and state enterprise borrowings.

Economist Richard Portes of the London Business School thinks the depreciating yen may make life tougher for some of China's less-efficient export manufacturers but that President Xi Jinping remains committed to reforms designed to increase consumer demand and decrease reliance on those exports.

"Of course they will get pressure from the guys who make toys and T-shirts," said Portes, an expert on currency markets and their effects on economic growth. "But it's in China's interest to get out of toys and T-shirts, and that's what they are going to do."

The trick will be managing the renminbi so that a transition can occur on China's timetable and not be forced early or lead to currency-juggling that either triggers renewed inflation (beyond the current 2% to 3%) or prompts dangerous deflation as China slows overall. Not that Chinese monetary authorities are above some maneuvering--they did that in 2012, halting the renminbi's steady rise since 2010 for several months to discipline traders against thinking appreciation was a one-way bet. That gave pause to speculators who used any means possible to get their hands on renminbi-denominated investments despite strict capital controls.

"They engineered a period of depreciation, which changed the psychology," Portes says. "They don't want the markets to assume anything."

A stable or rising exchange rate makes Chinese consumers or resource acquirers relatively wealthier, as they've learned lately amid the falling global oil prices. China is the world's largest importer of oil--about 6 million barrels a day--and it has seized the opportunity to pump record amounts of crude into its strategic petroleum reserve--some 200 million barrels, or a 30-day supply of imports, so far. Oil priced in renminbi has fallen 22% since June, allowing Chinese refiners like Sinopec and PetroChina to profitably export gasoline and other products as domestic demand slows.

There are those, including Société Générale's steadily bearish Albert Edwards, who believe China will be forced to devalue its currency as Japan loses control of the yen. China has already endured almost three years of producer price deflation, Edwards notes in a recent report, as bad as in the aftermath of the 1997 Asian currency crisis. Sooner or later such deflation wreaks such havoc with overleveraged domestic borrowers that the government must intervene.

"They simply can't tolerate this, and they won't," Edwards insists. "They will devalue."

Not so fast, replies Portes: "There is a lot of work that shows exchange rates are less important than quality, marketing strategies, backup and service. If you have those, exchange rates are not unimportant, but it may take big moves in exchange rates to have an effect."

Japan's pressure on the renminbi could be little more than an irritating distraction as China focuses on the more important task of escaping the so-called middle-income trap. Yale's Stephen Roach, the former chairman of Morgan Stanley Asia and author of Unbalanced: The Codependency of America and China (Yale University Press, 2014), says the Xi administration is desperate to avoid the well-established tendency of developing economies to grow per capita incomes to the equivalent of $12,000 to $15,000 a year and then stall out.

To keep the momentum going, Xi has borrowed a page from the script of Deng Xiaoping from 35 years ago in opening Chinese markets to the rest of the world, Roach maintains. Xi's tool is cumbersomely named Small Leading Group for Comprehensively Deepening Reforms, which, combined with a high-profile anticorruption campaign, is designed to neutralize resistance from entrenched power blocs. (He's also stifling various forms of civic dissent.)

"What's not appreciated in the West is China has moved to a different implementation structure," away from the old state planning apparatus, Roach says. "The new government under Xi Jinping realizes this is the problem."

Can Xi's version of creative destruction keep its resolve amid a sick yen and increasing competition from rising export powers like Vietnam and India? Lower oil prices are helpful for China's refiners, airlines and energy-dependent manufacturers, though not so good for shipbuilders eyeing cargos of crude. China has also taken advantage of Western sanctions on Russia--whose ruble is especially weak--to strike favorable long-term deals to import natural gas, including a $280 billion pact signed in November to deliver 30 billion cubic meters of gas a year from new fields in Siberia.

Meantime, the sorry experience of the Japanese economy over the last 20 years should at least teach China's leaders that growth won't come without further economic reform, Roach says. With weak demand from China's top export markets (including Europe) trumping money matters, he says, joining Japan in a currency war would be a mistake.

"The Koreans and the Taiwanese are worried about the Japanese, and the Chinese should be worried about Japan, in a sense," adds economist Portes. "But we make too much in general of the role of exchange rates in determining competitiveness."


Forbes Media LLC

Document FBGL000020141206eacf0000a

[greengiraffe]

Healthcare hell in smog-filled China

PUBLISHED: 17 HOURS 17 MINUTES AGO | UPDATE: 15 HOURS 32 MINUTES AGO

Healthcare hell in smog-filled China
Few believe that historic levels of atmospheric pollution in Chinese cities are caused by fireworks and barbecues alone. Photo: AFP
DANIEL WOLF
Flying back to Beijing after a period of absence, I feel the familiar anxiety. As I leave the airport and breathe the morning air, I glimpse the sun, a smudgy disk floating in a haze of carcinogenic particles.

Just over two years ago, after living and studying in the city for more than three years, I was diagnosed with cancer of the throat. One evening in my apartment, poring over a story by the Chinese author Lu Xun (which, as it happened, was called Medicine), I discovered a large, painless lump on the side of my neck.

I called a friend in London who had had cancer – Hodgkin’s lymphoma – and described my symptoms.

He said it was probably nothing to worry about. I was reassured. As I was busy at the time, preparing for my exams at the Beijing Language and Culture University’s “Intensive College”, I decided to postpone a visit to the doctor. After a long period of reasonably diligent study, this was my only chance of graduating from their highest level, a trivial achievement, no doubt, but the biye zhengshu (graduation certificate) would at least be something tangible to show for my time in Beijing.

Three weeks later, on the day my exams concluded, I took a taxi to the International Medical Centre. An Egyptian doctor examined my throat, looked at me gravely and said: “We cannot rule out bad things.” He sent me to the Tongren Yiyuan, the Mutual Benevolence Hospital, one of Beijing’s best, established by an American missionary society in the late 19th century.

As I entered the hospital, the atmosphere was one of palpable desperation. Every day patients and their families flood into the reception area and register for an appointment. Many have lined up all night long to get an early appointment the next day. Some have succumbed to ticket scalpers who scoop up dozens or hundreds of registration tickets and sell them at an exorbitant profit.

For the patients, however, obtaining an appointment is just the beginning of their troubles. There is a line and a fee for every service the hospital offers. Many have come from the remote countryside in the belief that only a city hospital will do. They can wait for days, or even weeks. And while they wait, they stay in cheap, grim hostels or sleep on floors.

You see these families, often with an aged relative on a gurney, desperately shuttling from one kiosk to another, paying at each location for scans, medicines and services, until they run out of money.

In China, trust in doctors is low. Health services are profit-driven. Provisions are rationed according to the ability to pay and, although a few years ago the government introduced state health insurance payments, they are set at a low rate and require co-pays, which many cannot afford. Unless you are rich, you can expect long waits and cursory attention from harassed staff. The system is based on the American model, but is even more ruthless.

In a country where the great majority of people are still extremely poor, the only sound advice is not to fall ill. That is exactly what Chinese people say: “Whatever you have, don’t have an illness” (You shenme, bie you bing), and the less easily translatable but even more sardonic, Mei shenme, bie mei qian, or “Whatever you don’t have, don’t fail to have money.”

For many millions of Chinese people over the past 30 years, especially in the countryside, falling ill has been a death sentence. And for many, it still is.

A Chinese friend recently told me about her uncle, a man in his 70s. One day, he was crossing the road when he was hit by a car. Despite being badly injured, he managed to make his way home.

He needed medical treatment but did not have the money for it. He reflected that he had had a long life, and did not want to be a burden on his family. A few days later, he went to the nearest reservoir, threw himself in and drowned. This happened four years ago in Beijing. In my experience, Chinese people, hearing a story like this, will nod their heads in recognition.

BEIJING’S SUFFOCATING SMOG
Earlier this year, after a spell of clear, cold weather, the sun disappeared and a thick grey mist descended. Looking through the window of my seventh-floor apartment, all but the very closest blocks were lost to view. This had happened frequently during the four winters I spent in Beijing, but rarely so dramatically and never so persistently.

Each morning, as the days passed, I looked out of the window to see the same pale, grey light, the same sunless sky and the nearby buildings fading into the toxic mist.

Two weeks passed, and the city was still suffocated by wumai, “fog haze” or smog. Even indoors, my eyes were smarting and there was an ashen, gritty taste in my mouth. When I went out, I wore a mask, like many of the city’s inhabitants. It was hard to tell whether the mask was doing me any good but, feeling I was making a stand, I kept it on.

A Chinese friend, an economist in her early 30s who, during her 20s, had studied for eight years in Sweden and the United States, told me that, until now, she had always thought complaints about Beijing’s air quality were just foreigners’ whining.

My own story offers persuasive evidence of the scale of the problem.

It began, in the autumn of 2011, with a tickling sensation in my throat. I first noticed it after eating an orange during a break from class. I ignored it for a couple of months – it wasn’t painful, just mildly irritating, and I was absorbed in my studies.

I did feel rather more tired than usual, but put that down to my schedule. I was also losing weight – about 15 pounds (6.8 kilograms) in three months – but I attributed that to stress. It was only when, in December, I noticed the lump on my neck that I realised something was not right. I still did not connect the two symptoms – the tickling in my throat and the swelling on my neck. As it turned out, both were signs of a cancer that had begun in my throat and spread to the lymph nodes in my neck.

The etiology of cancer is generally hard to establish, and causation is often determined on a statistical rather than clinical basis.

My particular cancer is thought to have three possible causes: probably the strongest link is to smoking; others cited are excessive alcohol consumption and HPV, which can be acquired through oral sex.

LUNG CANCER RATES UP 465PC IN 30 YEARS
I don’t smoke, rarely drink and wasn’t carrying HPV. However, there’s reason to suspect that Beijing’s atmospheric pollution played a role. In China, cancer is now the most prevalent cause of death. Lung cancer is the most common form of the disease, its incidence having risen by 465 per cent over the past 30 years.

Other forms of cancer connected with the respiratory organs have also proliferated.

If you look at the figures, it is not hard to understand why this should be. International air quality assessments are based on concentrations of PM2.5 (PM stands for “particulate matter”). The World Health Organisation designates particulates a Group 1 carcinogen. They are thought to be the most dangerous form of air pollution, due to their ability to penetrate deep into the lungs and bloodstream.

PM2.5 “fine particles”, with a diameter of 2.5 micrometers or less, are the deadliest – the smaller the particles, the deeper they penetrate. A Danish study published last year, involving more than 300,000 people in nine European countries, showed that there is no safe level of PM2.5: for every increase of a millionth of a gram per cubic metre of air, there was a 36 per cent increase in the incidence of lung cancer.

PM2.5 concentrations are measured on a scale running from zero into the hundreds. According to the WHO guidelines, any PM2.5 reading of over 10 micrograms per cubic metre is hazardous to health.

In Europe and the United States, readings of under 20 are considered “good” or “moderate”; readings of over 35 are thought to be “unhealthy” or “high”. The US classifies over 250 as “hazardous”; Europe thinks of it as off the scale.

The Chinese government’s view of these matters is rather different.

By its measurements, any reading under 150 is “excellent”, “good”, “light” or “moderate”; over 150 is “heavy”. In other words, China considers atmospheric pollution serious only when it reaches 15 times the WHO-designated safe level.

According to the WHO, the 10 US cities with the highest PM2.5 readings range from Washington, with a reading of 10.6 to Bakersfield, California, with a reading of 18.2. Meanwhile, the top 10 Chinese cities range from Zhengzhou, at 102.4, to Xingtai at 155.2.

These are merely averages, and they significantly understate the problem in China.

Over the past year I have spent several months in Beijing. In February, when smog enveloped the city for weeks, readings from instruments on the roof of the US embassy were consistently showing PM2.5 readings of above 500 and for some of the time ­touching 700.

The authorities announced in February that official data on pollution, formerly secret, should be made public. The Economist, the kind of serious Western publication that treats every utterance of the Chinese authorities with pedantic respect, hailed this as “an important step” that signalled “the beginning of a move toward openness”.

The magazine also noted the widespread evasion of such targets and regulations in China. There are national targets for the control of carbon dioxide emissions per unit of gross domestic product, for a limit to the quantity of coal that may be burned and for compulsory installation of pollution-control devices on factories.

All are routinely ignored.

CORRUPTION AND INDIFFERENCE
The Economist explained that such controls operate through the central-planning system, which gives insiders – managers of enterprises and local officials – every chance of getting away with pretty much whatever they want.

The Chinese system is an insiders’ system, of course. Even if the government is serious about the targets it sets, it is easy for these to wither quietly in a desert of bureaucratic obstruction, corruption, indifference and sheer incompetence.

A Chinese acquaintance once told me that a government slogan should almost invariably be understood to mean its opposite: if the stated aim of the government is “a harmonious society” (hexie shehui) – the portentous phrase, echoing Confucian precepts, that was propagated as the kernel of former President Hu Jintao’s political philosophy – then the reality of Chinese society must be the opposite, a society riven by competition and conflict. In the same way, a government announcement does not mean that something will be done to solve a given problem. It merely means that the government recognises that there is a problem and that people are anxious about it. And quite often, the announcement is the action.

At the height of last winter’s smog – which was not just the worst I had experienced in my time in the city, but also the worst my wife, a Beijinger, had known in 40 years – the authorities announced measures to reduce atmospheric pollution.

One was a ban on roadside barbecues. Lu bian shaokao are run by migrant workers, and offer roast meat on skewers. They are popular in Beijing, but also controversial. Apartment dwellers regularly complain to the chengguan, the neighbourhood police, about the smoke and aromas invading their flats and about food poisoning from insanitary cooked meats that they or their children have eaten.

The food stalls have a place on the long list of complaints that Beijingers bring against the waidi ren, the outsiders. According to many lao Beijing (literally, old Beijing, those born in the city to Beijing families), the outsiders are dirty, uncouth, often criminal, indifferent to Beijing traditions and, with their impenetrable dialects and regional accents, incapable of speaking putong hua (“common speech” or standard Mandarin).

These prejudices are widely and stridently held, if extremely unfair.

Meanwhile, everyone knows that government measures against roadside barbecues are, so to speak, a smoke screen.

In the same vein, the authorities announced measures to limit Chunjie – Spring Festival – fireworks. For two weeks each year, all over the country, the sound of firecrackers can be heard day and night. This is a virtually unassailable tradition, but each year there are hundreds of accidents, particularly involving children.

For the government, controlling the sale of fireworks, like suppressing roadside barbecues, is a low-cost route to popularity, clamping down on an activity many dislike while appearing to be taking measures to improve urban air quality.

Yet few believe that historic levels of atmospheric pollution in Chinese cities are caused by fireworks and barbecues alone.

BEIJING’S POLLUTION
Beijing is far from being the most polluted city in China, but because it is the capital and large numbers of foreigners live there, it receives particular attention. It is ringed by Hebei province – according to some measures, the most polluted of China’s 32 provinces – where thousands of factories spew coal smoke into the atmosphere.

And like other northern Chinese cities, Beijing’s central heating systems are communal. From the middle of October, heating in most apartment blocks is provided by a coal-fired central plant that pumps hot water, day and night, to the block’s radiators and smoke into the atmosphere.

Finally, there is Beijing’s traffic: more than 5 million cars are registered to city owners. These clog the roads daily, emitting all the usual pollutants, along with some that are less common in more developed countries that have a larger stock of newer, more energy-efficient vehicles.

Nonetheless, the authorities continue to insist that the shao kao stalls and Chunjie fireworks are the problem. A Chinese friend of mine said: “The government looks for the weakest groups and then bullies them.”

In February, President Xi Jinping went for a walkabout in Nan Luo Gu Xiang, one of the earliest of Beijing’s hutongs, its medieval lanes, to be gentrified.

Now equipped with boutique shops and cafes, it has become an attraction for visitors and leisured Beijingers alike.

Xi and his handlers are practised in modern media management and are fond of stunts. His widely publicised “Chinese dream” slogan, first promulgated in late 2012, was an early example. Xi’s purpose in hanging out with the people during an unprecedentedly bad period of wumai was to reassure them that the Communist Party is with them.

He was followed by a posse of department heads and ministers, all enacting, under his command, a well-known saying from the early Maoist days: Tong huxi, gong mingyun It means: Breathe the same air, share a common destiny.

Many Chinese people believe that atmospheric pollution is one problem the leaders cannot ignore: “They can eat their own food,” a friend said. “They can go to their own hospitals, live in their own compounds, educate their children abroad, but they can’t breathe their own air.”

XI’S COMMENTS
It’s a persuasive argument, but Xi’s remarks in Nan Luo Gu Xiang suggested that he doesn’t feel the issue is particularly urgent. “In the face of problems,” he said, surrounded by a battery of television cameras, “we shouldn’t be too anxious; we should apply the calmness we’ve gained from our life experience.”

Xi looked back on his Beijing childhood: “I wore a mask when I cycled to school. By the time I arrived, my mask was thickly covered with yellow sand. When winter came, there was also the coal smoke, and the situation was even worse. At that time there was no PM2.5, but there was PM250.”

This last remark was the key to the whole scene. It was a play on Beijing slang in which to describe someone as “250” – erbaiwu – is to say that they’re a fool.

(In Chinese culture, numbers have a mystical significance, partly because of their homophonic qualities. For example, si, four, is homophonic with si, “death”.)

Xi’s witticism provoked the expected laughter. He concluded: “We have solved our former problems, and now we face new ones; in fact, in Chinese society, old and new problems exist side by side.”

Xi’s words were meant to reassure people that the party had the problem under control. Yet, most years, spring sandstorms from Mongolia still blow into Beijing, just as they did 40 years ago, while the atmospheric pollution has grown dramatically over several decades. According to a former government official of my acquaintance, the president hoped to combat the “widespread sense of depression about the Chinese model of development”.

FINANCIAL WOES
The country’s environmental problems are a reflection of its explosive economic growth, but also a metaphor for anxieties that, despite justifiable pride in the country’s recent achievements, grip large numbers of Chinese people.

Many of those anxieties are financial: average incomes have risen strongly in recent decades, but the income distribution is drastically unequal. Western celebrations of Chinese growth rates largely ignore the hundreds of millions who teeter on the edge of financial disaster, or have already fallen off the cliff, let alone those who haven’t even reached the lowest ledges of security.

The casualties of government policies are concealed by growth statistics. Another recent article in The Economist, describing three decades of migration from the Chinese countryside to the cities, announced: “This extraordinary revolution has been surprisingly smooth – there are, for instance, very few shanty towns of the sort you see in Brazil or India.”

The writer evidently hadn’t spent much time wandering around the cities he or she was describing.

In 2009, I was living in north-west Beijing in a xiao qu, a “little district”, the name for a group of high-rise apartment blocks with their own shops, services and playgrounds. Crossing the road behind the blocks, I found myself in a shanty town where waidi ren, migrant workers, lived in small shacks. Children ran on rough, unpaved tracks and women washed clothes in bowls of water filled from a standpipe. They looked at me with the suspicious eyes that any outsider, and particularly a foreigner, would naturally attract. Their faces were ruddy, raw from thousands of days spent out in the open.

These were some of the bei piao, “floating in Beijing”, the name Beijingers give to the millions clinging on in the capital in the hope of making a living or changing their destiny. Figures are hard to come by, but waidi ren in the major cities are generally estimated to be 35 per cent to 40 per cent of the urban population. Some have money and decent jobs, but many millions do not.

I wandered for quite a long time that day. The shacks ran down to a brackish lake. Looking along the bank to the left and right, I could not see the end of them.

A few months passed – I was busy with my studies and didn’t go back until the summer. When I did, I found that the town had been bulldozed.

All that remained were a few shacks surrounded by rubble. There was still a handful of people clinging on, but they too were destined for removal.

This is how it is. One day the character (chai) will appear roughly whitewashed in broad strokes on a wall, and the next day the place where you’re living will vanish. Chai means to dismantle or to demolish.

In another pronunciation – ca – it means “to Sh**, to piss”, literally “to discharge”.

A little while later, in place of the squatters’ village, a luxury hotel and expensive apartment blocks started to go up. It is the same story all over the country: local authorities do deals with developers, palms are greased, a few people get rich and the people on the land lose all they have.

A LUCKY ALTERNATIVE
An encounter with cancer leaves scars, but, if you are lucky, you will recover. I was lucky. My cancer was relatively treatable, and I caught it fairly early on. The specialist at the Tongren Hospital in Beijing looked at my scans for two or three minutes and said that, if I was to survive, I required a 12-hour operation as soon as possible.

There was no discussion, and no alternatives were offered. I decided to return to London for treatment.

A French friend, who had spent three years researching the Chinese health system near Wuhan, commented in an email: “I recognise very well the Chinese medical environment from your description: dramatisation of the situation to the highest level to ensure that patients’ mental health plummets to the level of their diagnosed physical health, leading to acceptance of the most intrusive (and lucrative) intervention; forecast of a small likelihood of a successful outcome for this intervention so that the doctor in charge can be revered as your saviour upon recovery (and possibly earn a fat hongbao). You escaped at the . . . right time.”

The hongbao is the famous red envelope containing cash, which remains an unavoidable part of the search for decent medical treatment in China.

As I say, I was lucky. I was able to fly back to the UK, where I received the best possible treatment. After 35 sessions of radiation, and a few episodes of chemotherapy, I was sent out into the world to recover. It took about a year, but the prognosis is good. I still visit Beijing, but I’m not living there.

I can leave when I like. Millions of Chinese people are not so lucky.

© 2014 Prospect Magazine. Distributed by the New York Times Syndicate. Daniel Wolf is a former documentary producer.
The Australian Financial Review

[cfa]

China boosts bank liquidity with $65 billion fund injection

https://sg.news.yahoo.com/china-boosts-b...nance.html

[Behappyalways]

$60 oil will be norm for next 5 years: Economist
http://www.cnbc.com/id/102259827#.

http://investideas.net/forum/viewtopic.p...7&start=60

[cfa]

Banks told to step up lending to push growth
CHINA has told its banks to lend more in the rest of this year and relaxed enforcement of loan-to-deposit ratios to expand credit, sources said, as Beijing prepares to release data that could confirm the relentless slowing of its economy.

Figures on inflation, imports and fiscal spending in November have already undershot expectations since the People’s Bank of China sprang a surprise interest rate cut on November 21, raising fears that the bid to boost lending could foreshadow more weak figures on industrial activity for the month, due today, and on lending, due in the next few days.

http://www.shanghaidaily.com/business/fi...aily.shtml