Your daily digest of the biggest business news in China, translated and summarized every day.
Three new free-trade zones to use the same 'negative list' as Shanghai
China will set up three new free-trade zones in Guangdong, Fujian and Tianjin, according to a State Council announcement on Friday.
The proposed free-trade zones will be modelled on the existing Shanghai FTZ and adopt the same 'negative list' (a list of sectors where foreign investment is banned or restricted) that is used in Shanghai, according to a report from Caixin media.
The same report says that, similar to the situation in the Shanghai zone, some laws related to foreign investment will also be suspended in the three new trade zones.
Last August the National People's Congress, China's parliament, gave the State Council the authority to establish a free-trade zone in Shanghai.
Release of local government budget reforms plans imminent
Provincial governments are about to release detailed plans of how they plan to implement the recently announced overhaul of China's budget laws, according to a report in today's Economic Information Daily.
The local government plans are set to be released in quick succession and will be aimed at eliminating local government debt.
Quoting unnamed sources from various provincial finance bureaux, the report says that although the full details of the 'overall plan for the deepening of reform of the fiscal system' announced by China's politburo in June will not be released, the detailed provincial budgetary reform plans will be released to the public.
The reforms, which cover important items such as an overhaul of budget management systems, a shake up of the tax system and a reworking of the fiscal relationship between central and local governments.
As the local governments are only really responsible for reforming the budget management system, the focus of the local level plans will be on promoting public-private partnership (PPP) models and eliminating debt and according to an unnamed finance official from a central province.
Chinese property market will not crash
The chairman of China’s largest property developer says the country’s property market will not crash, and that homebuyers are not heavily geared.
Wang Jianlin, the founder of Wanda, warns people should not expect to return to the good old days of real estate anytime soon. However, he says the industry will not go bust because of a strong central government that could intervene as well as low-level of gearing amongst home owners.
In addition, he also argues the country’s urbanisation process is far from complete. “The real rate of urbanisation is only about 40 per cent and there is still a lot of room for growth,” he said at forum in Beijing recently.
Beijing’s silence on the real estate industry is making developers nervous
The Chinese government did not mention the real estate industry at its latest economic conference which sets out the strategy for 2015, making property developers nervous.
At previous meetings in 2011 and 2012, Beijing made stabilising the real estate sector an important part of its policy. Property developers are nervous about the fact Beijing failed to mention the industry in its economic plan for 2015.
Government policies such as tight mortgage lending rules as well as restrictions on buying properties without local residential permits play a large role in the country’s real estate sector.
Central bank chief economists rules out strong stimulus in 2015
Ma Jun, the chief economist of China’s central bank, says the government does not need to embark on strong stimulus in 2015.
He estimates the country’s economic growth rate to be around 7.1 per cent and it would not put more pressure on employment.“ China’s working age population is declining and the economic structure is undergoing change as the service industry absorbs 30 per cent more people than the manufacturing industry.
Colour TV industry at turning point
The Chinese colour TV industry has experienced its first negative downturn after 30 years of rapid growth at the world’s largest consumer market for TV.
It is estimated that TV sales would drop to 45 million units in 2014, a decline of 5.6 per cent compared to the same period last year.
The chief executive of TCL says the industry has reached a turning point.