China business news digest

Corruption investigators claim top leaders in 6 Chinese firms engaging in power for sex and money trades and PBOC official denies rates cut start of new stimulus.

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Your daily digest of the biggest business news in China, translated and summarized every day.

Social insurance income growth lags pay out growth in 2014

China’s four social insurance funds paid out a total of 3.2 trillion yuan in 2014, an 18.1 per cent increase on the amount released in 2013, according to data released by the Ministry of Human Resources and Social Security yesterday.

More than 3.8 trillion yuan was paid into the funds, which include a compulsory pension fund, medical insurance fund, work-related injury/unemployment insurance and maternity insurance, over the course of the year.

This represented an increase of 12.5 per cent on the previous year.

A separate compulsory housing fund is administered by the Ministry of Housing and Urban-Rural Development and not included in these figures.

The CCTV evening news report quoted the Ministry as saying that "overall the social insurance fund is safe."

The report also said that the Ministry has requested local agencies to put forward detailed policies explaining how they will implement the recently announced reform of pensions for "public institution" employees by June.

(CCTV News)

China's rail industry goes global

China was involved in 348 international rail projects last year, an increase of 113 projects on 2013, according to statements made by an official from the Ministry of Commerce's Foreign Trade office yesterday.

Rail equipment has already become a new area of export growth for China, with China's two largest train manufacturing firms signing overseas contracts worth more than $US6 billion in 2014.

Total contracts signed exceeded $US24.7b, tripling the previous year's total. 

The value of train carriage exports have increased from $US80m in 2001 to $US3.74b in 2014, an average annual increase of almost 35 per cent.

The report also says that China has already made the transition from an exporter of simple goods to a country that now exports projects, technology and standards.

(Beijing Times)

Local governments feeling the heat from ailing property market

Tensions between local governments and policy makers in Beijing in relation to housing policies are set to continue in 2015, according to a report in today's Economic Information Daily.

The article predicts that in the face of falling housing prices and a slow down in the rate of property investment, local governments that are being squeezed by slower growth in income from land sales will seek to revive the market with a third round of stimulatory measures.

However, the paper quotes unnamed industry players to the effect that any attempt to use policy measures to get the market moving again will likely fail due to the large overhang in supply.

The article says that this person expects the market to be stable this year.

(Economic Information Daily)

Steel firms’ profitability dropped 15.3 per cent

The Chinese steel industry made a collective profit of $219.2 billion yuan or $45 billion, down 15.3 per cent from the year before.

The profitability of Chinese steel firms has recovered due to lower cost of raw materials thanks to falling iron ore price but the winter is not over yet for the sector, says industry analysts.

(Beijing News)

  

China approves new trans-Pacific seabed cable

China has approved plans to build a new trans-Pacific international submarine cable project which will directly connect China and the US.

China's economic planning agency, the National Development and Reform Commission (NDRC)  approved the construction plan yesterday, according toChina News Service.

China Telecom, China Unicom and China Mobile will jointly fund the New Cross-Pacific Cable System (NCP) in conjunction with foreign telcos.

According to the report, the NCP will stretch 13,618 kilometres and will have a total capacity of 60 Tb/s. 

(China News Service)

China's RRR cut not start of strong stimulus

China’s rate cut this week is not the start of a strong stimulus for the economy, a senior official has told state media.

Lu Lei, head of the People’s Bank of China (PBOC) research department downplayed the decision in an interview with the official news outlet saying it was an ordinary policy operation and was based on liquidity conditions and the economic situation.

China's central bank lowered its reserve-requirement ratio for banks by 0.5 percentage points on Thursday in order to boost liquidity and support the economy. It was the first across-the-board cut since May 2012.

According to Xinhua, Mr Lu said the decision to cut rates was in line with the principle of a balance between tight and loose, in line with economic indicators.

The targeted RRR cut reflects the government's desire to restructure the economy, Mr Lu added.

The Purchasing Managers' Index released by the government's National Bureau of Statistics came in at 49.8 last month. A figure above 50 signals expansion, while anything below indicates contraction.

(Xinhua

CCDI: Top leaders in 6 Chinese firms engaging in power for sex and money trades

China’s anti-graft investigating body has found evidence of corruption in 6 firms, reports Sohu Business.

According to the news website, the agency has discovered various forms of corruption including the use of public funds for recreational activities and nepotism.

Top leaders at China Unicom, Shenhua group, Donfeng Motors, China National Radio, China Huadian Corporation, China State Shipbuilding Corporation (CSSC) are all reported to be involved.

(Sohu Business)