China Economy: News & Discussion

Innocent

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Pigeon with Chinese numbers creates a flutter on Arunachal border


http://www.hindustantimes.com/india...chal-border/story-CloJolMf3hgaNCTs05I6aN.html


The pigeon was caught with Chinese tags in Anjaw district of Arunachal Pradesh. (HT Photo)

A pigeon with a tag bearing Chinese numbers has created a flutter in Anjaw district of Arunachal Pradesh on the Sino-Indian border. Anjaw villagers captured the pigeon on Sunday.

“We got information that villagers have captured a bird with tags. The forest department has been alerted to find out details,” Mamata Riba, deputy commissioner of Anjaw, told HT on Monday.

Amid talk that the pigeon could be part of a Chinese plan to carry out surveillance, officials did not say whether the bird was also fitted with transmitters or cameras.

A picture of the pigeon with the tag on its left leg has been widely shared on social media. District officials said this was the first recorded instance of such a capture.

The tag on the bird could be for research purposes, said officials. “Unless ascertained otherwise, we can’t surmise on our own since the nature of tagging is apparently for research. We are waiting for the forest department report,” Riba said.

Union home minister Rajnath Singh asked chief ministers of five Himalayan states and senior Indo-Tibetan Border Police (ITBP) officials on Saturday to remain “very vigilant” against Chinese transgression along the border.

Addressing the first meeting of CMs of Himalayan states, which are located along the Sino-Indian border, in Gangtok, Singh sought improvement of basic infrastructure in the areas so that locals do not migrate.
 

Armand2REP

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Pigeon with Chinese numbers creates a flutter on Arunachal border


http://www.hindustantimes.com/india...chal-border/story-CloJolMf3hgaNCTs05I6aN.html


The pigeon was caught with Chinese tags in Anjaw district of Arunachal Pradesh. (HT Photo)

A pigeon with a tag bearing Chinese numbers has created a flutter in Anjaw district of Arunachal Pradesh on the Sino-Indian border. Anjaw villagers captured the pigeon on Sunday.

“We got information that villagers have captured a bird with tags. The forest department has been alerted to find out details,” Mamata Riba, deputy commissioner of Anjaw, told HT on Monday.

Amid talk that the pigeon could be part of a Chinese plan to carry out surveillance, officials did not say whether the bird was also fitted with transmitters or cameras.

A picture of the pigeon with the tag on its left leg has been widely shared on social media. District officials said this was the first recorded instance of such a capture.

The tag on the bird could be for research purposes, said officials. “Unless ascertained otherwise, we can’t surmise on our own since the nature of tagging is apparently for research. We are waiting for the forest department report,” Riba said.

Union home minister Rajnath Singh asked chief ministers of five Himalayan states and senior Indo-Tibetan Border Police (ITBP) officials on Saturday to remain “very vigilant” against Chinese transgression along the border.

Addressing the first meeting of CMs of Himalayan states, which are located along the Sino-Indian border, in Gangtok, Singh sought improvement of basic infrastructure in the areas so that locals do not migrate.
What does that have to do with the Chinese economy?
 

lcafanboy

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China's reforms not enough to arrest mounting debt: Moody's




FILE PHOTO: A labourer has his dinner under his shed at a construction site of a residential complex in Hefei, Anhui province, August 1, 2012.REUTERS/Stringer/File Photo




By Yawen Chen and Ryan Woo | BEIJING

China's structural reforms will slow the pace of its debt build-up but will not be enough to arrest it, and another credit rating cut for the country is possible down the road unless it gets its ballooning credit in check, officials at Moody's said.

The comments came two days after Moody's downgraded China's sovereign ratings by one notch to A1, saying it expects the financial strength of the world's second-largest economy to erode in coming years as growth slows and debt continues to mount.

In announcing the downgrade, Moody's Investors Service also changed its outlook on China from "negative" to "stable", suggesting no further ratings changes for some time.

China has strongly criticized the downgrade, asserting it was based on "inappropriate methodology", exaggerating difficulties facing the economy and underestimating the government's reform efforts.

In response, senior Moody's official Marie Diron said on Friday that the ratings agency has been encouraged by the "vast reform agenda" undertaken by the Chinese authorities to contain risks from the rapid rise in debt.

However, while Moody's believes the reforms may slow the pace at which debt is rising, they will not be enough to arrest the trend and levels will not drop dramatically, Diron said.

Diron said China's economic recovery since late last year was mainly thanks to policy stimulus, and expects Beijing will continue to rely on pump-priming to meet its official economic growth targets, adding to the debt overhang.

Moody's also is waiting to see how some of the announced measures, such as reining in local government finances, are actually implemented, Diron, associate managing director of Moody's Sovereign Risk Group, told reporters in a webcast.

China may no longer get an A1 rating if there are signs that debt is growing at a pace that exceeds Moody's expectations, Li Xiujun, vice president of credit strategy and standards at the ratings agency, said in the same webcast.

"If in the future China's structural reforms can prevent its leverage from rising more effectively without increasing risks in the banking and shadow banking sector, then it will have a positive impact on China's rating," Li said.

But Li added: "If there are signs that China's debt will keep rising and the rate of growth is beyond our expectations, leading to serious capital misallocation, then it will continue to weigh on economic growth in the medium term and impact the sovereign rating negatively."

"China may no longer suit the requirement of A1 rating."

Li did not give a specific target for debt levels nor a timeframe for further assessments.

Moody's expects China's growth to slow to around 5 percent in coming years, from 6.7 percent last year, compounding the difficulty of reducing debt. But Diron said the economy will remain robust, and the likelihood of a hard landing is slim.



STIMULUS SPREE

Government-led stimulus has been a major driver of China's economic growth over recent years, but has also been accompanied by runaway credit growth that has created a mountain of debt - now at nearly 300 percent of gross domestic product (GDP).

Some analysts are more worried about the speed at which the debt has accumulated than its absolute level, noting much of the debt and the banking system is controlled by the central government.

UBS estimates that government debt, including explicit and quasi-government debt, rose to 68 percent of GDP in 2016 from 62 percent in 2015, while corporate debt climbed to 164 percent of GDP in 2016 from 153 percent the previous year.

A growing number of economists believe that a massive bank bailout may be inevitable in China as bad loans mount. Last September, the Bank for International Settlements (BIS) warned that excessive credit growth in China signaled an increasing risk of a banking crisis within three years.

ALSO IN BUSINESS NEWS



IS BEIJING MAKING PROGRESS?

The Moody's downgrade was seen as largely symbolic because China has relatively little foreign debt and local markets are influenced more by domestic factors, with many companies enjoying stronger credit ratings from home-grown agencies than they would in the West.

Still, the rating demotion highlighted investor worries over whether China has the will and ability to contain rising risks stemming from years of credit-fueled stimulus, without triggering financial shocks or dampening economic growth.

China has vowed to lower debt levels by rolling out measures such as debt-to-equity swaps, reforming state-owned enterprises (SOEs) and reducing excess industrial capacity.

In recent months, regulators have issued a flurry of measures to clamp down on the shadow banking sector while the central bank has gingerly raised short-term interest rates.

But moves so far have been cautious, especially heading into a key political leadership reshuffle later this year.

The autumn's Communist Party Congress is President Xi Jinping's most important event of the year, where a new generation of up and coming leaders will be ushered into the Standing Committee, China’s elite ruling inner core.

But party congresses are always tricky affairs, as different power bases compete for influence, so the government will be keen to ensure there are no distractions like financial or economic problems or diplomatic confrontations.
https://www.reuters.com/article/us-china-economy-rating-idUSKBN18M06Z
 

Kshatriya87

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World’s worst stocks are in China with no end to misery seen
As global stocks rally to new records, one part of China’s equity market is heading in the opposite direction

Hong Kong: As global stocks rally to new records, one part of China’s equity market is heading in the opposite direction.

The ChiNext index of small-cap shares plummeted 5.1% on Monday, its biggest loss in seven months, and extending its retreat this year to 16%. That’s worse than any of the 96 global benchmarks tracked by Bloomberg, and compares with a 10% advance by the MSCI World Small Cap Index.

Concern about rising funding costs, corporate governance issues, liquidity pressures and tougher regulatory oversight are hammering companies on the Shenzhen gauge, with at least 15 members falling by the 10% daily limit on Monday. The rout, triggered by a high-level conference over the weekend attended by President Xi Jinping, threatens to undermine already shaky investor sentiment in the broader $7 trillion equity market.

“Risk control seems to be the top priority on the regulators’ agenda, instead of growth,” said Sun Jianbo, president of China Vision Capital. “People are cutting risks in their portfolio.”

President Xi said the central bank will play a stronger role in defending against risks, and called for more work on safeguarding the financial system and modernizing its regulatory framework. Strategists also interpreted discussion at the conference on the need to increase direct financing as a signal that officials may accelerate the approval of initial share sales, diverting investor cash from existing stocks.

The selloff spread to the benchmark Shanghai Composite Index, which fell the most since December, trimming its gain this year to about 2%.

The weekend comments were the latest blow to the small-cap index that just over two years ago was one of the hottest investments in the world. The gauge has underperformed in 2017 as a regulatory campaign to curb leverage drives up funding costs for smaller, privately-run firms. Profit warnings by companies including Enjoyor Co. to Hithink RoyalFlush Information Network Co., and reports regulators are probing the finances of index heavyweight Leshi Internet Information & Technology Corp., have added to investor bearishness.

Large caps

“On the one hand, earnings have been worse than expected. And on the other, because of policy tightening, shareholders cut holdings quickly,” said Dai Ming, a Shanghai-based fund manager at Hengsheng Asset Management Co.

The ChiNext dropped 0.4% at 9:59am local time in the seventh decline in eight days.

The broader market is likely to hold up better than small caps because the macroeconomic environment is steady, Dai said, while China Vision Capital’s Sun said any state moves to shore up equities would likely focus on larger companies.

Big caps have been the winners in China this year, with the SSE 50 Index of some of the nation’s biggest companies jumping 15% as investors bet on the security of state-owned enterprises. Offshore traded Chinese stocks have also been immune to gloom: the MSCI China Index has surged 30% this year, led by technology giants such as Alibaba Group Holding Ltd and Tencent Holdings Ltd.

That’s of little consolation to shareholders of companies on the ChiNext gauge, the home of mainland-listed technology firms, as the gauge trades at levels not seen since January 2015.

ChiNext “shares are likely to continue to underperform” as investors plump for larger firms with more stable earnings, said Toshihiko Takamoto, a Singapore-based portfolio manager at Asset Management One, which manages about $800 million in Asia. “Why go for them when you can buy companies like Tencent?” Bloomberg
 

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China's second quarter growth beats expectations at 6.9%
  • 17 July 2017
Image copyrightGETTY IMAGES
China's economy grew at an annual rate of 6.9% between April and June according to official figures, slightly higher than forecast.

The growth rate, which compares expansion with the same three months in the previous year, was the same as in the first quarter of 2017.

Beijing is trying to rein in debt and a housing bubble with tough measures on the property sector and lenders.

Many analysts expected China's economy to slow as those policies kicked in.

But the latest data is well above Beijing's 6.5% growth target for 2017.

Limited impact
Despite efforts to slow down the housing market, property investment grew by 8.5% in the first half, which is up from the same period in 2016.

Some analysts are predicting that tighter lending rules may not have the cooling effect that many expected.

"Property prices will have an impact in the second half, but the impact might not be as big as we thought. It is only on prime cities. The third-tier and fourth-tier cities might catch up a little bit and that will offset some of the slowdown in first tier cities," said Iris Pang, Greater China Economist with ING.

China's economy grew at its weakest pace in 26 years during 2016, but other data released on Monday added to the picture of rebounding growth for the Chinese economy.

Industrial output for June grew by 7.6%, well above the forecast 6.5%.

Retail spending grew 11% last month compared with June 2016.

And growth in both imports and exports also came in above expectations.
 

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China's second quarter growth beats expectations at 6.9%
  • 17 July 2017
Image copyrightGETTY IMAGES
China's economy grew at an annual rate of 6.9% between April and June according to official figures, slightly higher than forecast.

The growth rate, which compares expansion with the same three months in the previous year, was the same as in the first quarter of 2017.

Beijing is trying to rein in debt and a housing bubble with tough measures on the property sector and lenders.

Many analysts expected China's economy to slow as those policies kicked in.

But the latest data is well above Beijing's 6.5% growth target for 2017.

Limited impact
Despite efforts to slow down the housing market, property investment grew by 8.5% in the first half, which is up from the same period in 2016.

Some analysts are predicting that tighter lending rules may not have the cooling effect that many expected.

"Property prices will have an impact in the second half, but the impact might not be as big as we thought. It is only on prime cities. The third-tier and fourth-tier cities might catch up a little bit and that will offset some of the slowdown in first tier cities," said Iris Pang, Greater China Economist with ING.

China's economy grew at its weakest pace in 26 years during 2016, but other data released on Monday added to the picture of rebounding growth for the Chinese economy.

Industrial output for June grew by 7.6%, well above the forecast 6.5%.

Retail spending grew 11% last month compared with June 2016.

And growth in both imports and exports also came in above expectations.
Begani Shaadi mein Abdullah diwana. Pakistani Sala aise khushi send post Kar raha hai jaise, uski biwi ko bacha ho gaya.
 

charlie

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I don't understand much about what they are saying but I did invest in mutual fund which has lot of Chinese stock in it.
 

abu bakr

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http://www.news18.com/news/tech/oppo-eyes-west-after-beating-apple-samsung-in-china-1439713.html

Oppo Eyes West After Beating Apple, Samsung in China

With its army of salespeople and vast network of outlets, a relatively new smartphone maker has exploded in popularity to overtake global giants Apple and Samsung in China's market -- and now it has its eye on the West.

Oppo began life selling DVD players in the in the southern manufacturing hub of Dongguan a little more than a decade ago and only broke into the handset market in 2011.



But with an aggressive marketing strategy and concentration on bricks-and-mortar stores in small and medium-sized cities -- rather than relying on online customers -- sales have soared.

Last year it had a market share of 16.8 percent making it the China market leader and while a slip in the first three months of 2017 put it just behind local rival Huawei, according to market analyst IDC, it remains well ahead of Apple and Samsung.

Globally it ranks fourth behind Samsung, Apple and Huawei.

While its rivals focus on the premium end of the smartphone market in major cities and online, Oppo makes relatively cheap devices -- its latest model is less than half the price of an iPhone 7.

Oppo also sells them in actual shops. It has 200,000 outlets across China -- less than 10 percent of its purchases are made online -- while retailers are offered generous commissions in exchange for promoting the brand.

"In small cities, consumers unfamiliar with smartphones need to see and touch the devices and to have salespeople there to help them," said Yi Jun, Oppo's international sales director.

At the company's factory in Guangdong province, Oppo handsets are submitted to a series of durability tests including one-metre drops and temperature changes ranging from -40 degrees Celsius to 85 degrees Celsius.

"Technology is essential for meeting consumers' expectations," Yi said, pointing to Oppo's fast-charging ability, high-definition camera lens and sleek design.



'Brand ambassadors'

Now Oppo's rivals are starting to follow suit.

Chinese brand Xiaomi, which lost significant market share in 2016, has been relying on the web for sales of its top-of-the-range smartphones.

But in February it announced plans to go back to old-fashioned selling techniques with plans to open 1,000 stores by 2020 in the hope of reversing its fortunes.

As competitors play catch up, analysts warn Oppo must maintain its momentum to stay on or near the top.

It needs to continue expanding its sales network and offering competitive products, said Mo Jia, an analyst at technology research firm Canalys.

Oppo has also been boosting its sales abroad, including emerging markets in Southeast Asia where its share more than doubled to 13.2 percent last year -- by far the biggest increase among its rivals, IDC data shows.

In India, it was the fourth-biggest player in the fourth quarter, with 8.6 percent market share, behind Samsung, Xiaomi and Lenovo.



"Its success in these countries comes from frantic marketing," said IDC analyst Tay Xiaohan, noting the use of local celebrities as "brand ambassadors" as it targets millennials.

It is also starting to back high-profile sports teams to increase brand awareness. Earlier this year it forked out more than $160 million to become an official sponsor of the Indian cricket side.

And Oppo is adapting its products to satisfy the "selfie" trend.

"We noticed the craze in Southeast Asia for group selfies and tailored our devices accordingly," Yi said, referring to special camera features that enable users to take better self-portraits.

Next stop is the West.

"We are very interested in entering the US and European markets, we are working on it... but without a precise timeline," Yi said. It will be challenging.

While Huawei has managed to make a name for itself in US and European smartphone markets, it was already very present in those places as a telecom equipment manufacturer, said Annette Zimmermann, an analyst with technology research company Gartner.

And Oppo's direct sales strategy might not be as successful in markets dominated by mobile network operators that provide handsets with their contracts.
 

abu bakr

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http://www.financialexpress.com/industry/why-chinas-overseas-acquisition-spree-ended-badly/771357/

Why China’s overseas acquisition spree ended badly



China’s overseas acquisition streak seems to be coming to an unhappy end. Outward direct investment fell by 46 percent in the first half of the year, due partly to tightened capital controls and partly to new restrictions on “irrational investments.” But the authorities should be asking a more fundamental question: Why do China’s companies struggle so much overseas? Typically, companies that expand abroad — through either trade or investment — are the best and most productive in their industry at home. They offer better or cheaper products, make more money than their competitors, and have capital to spare expanding into new markets. In China, this pattern doesn’t hold. Productivity and profitability often matter less than politics. The government regularly publishes a list of industries it wants companies to invest in, and multiple regulators must approve every aspect of a proposed deal, from the purchase price to whether firms can obtain foreign currency. Reliably, companies planning to invest in preferred industries get the most approvals. And when state-owned banks determine which deals get financing, they tend to favor those that will advance government objectives. This process creates a range of problems. One is that the overseas targets often don’t make a lot of sense. In recent years, there has been a rush by Chinese firms to buy foreign football clubs — not because they’re particularly good investments, but because President Xi Jinping has expressed hopes that China would become a soccer powerhouse. Another problem is that the acquiring companies tend to be uncompetitive. At home, they benefit from a wide range of goodies, such as preferential access to capital and near-impenetrable protectionism. Overseas, they often find that the competition is much tougher, and that business practices that are commonly accepted in China — such as a relaxed approach to health and safety standards — simply don’t fly.

Similarly, companies that don’t compete for capital on the merits see little reason to offer shareholders and debtholders a reasonable rate of return. One recent study of China’s outbound mergers and acquisitions found that although state-owned companies enjoy higher financing capacity, their stocks significantly underperform those of privately owned competitors.

The most pernicious problem with this system is that it encourages companies to overextend themselves. Sometimes, this means simply paying too much for foreign assets, as when a troubled Chinese company recently bought an Australian port for more than twice what analysts said it was worth.

But a bigger concern is debt. China’s companies have amassed a staggering $162 billion of total debt while expanding overseas, sometimes in seriously questionable deals. HNA Group Co., once a small airline, has turned itself into a giant global conglomerate by pledging shares to fund huge overseas purchases, including a $6.5 billion deal to buy a stake in Hilton Worldwide Holdings Inc. As its stock price declines, regulators are growing increasingly nervous.

Or consider Dalian Wanda Group Co., which has also come under official scrutiny of late. It recently sold a $9 billion piece of its empire to Sunac China Holdings Ltd. to pay down debt after an ambitious acquisition spree. But the deal had an unusual twist: It was funded with a loan from Wanda-the-seller to Wanda-the-buyer. Wanda is actually securing a loan to Sunac to buy the assets from Wanda.

This kind of thing doesn’t usually end well, and China’s regulators are rightly concerned. But the best way to discourage dubious deals and bad debt is to try to remove politics from the process of expanding overseas in the first place. As long as access to foreign investment is seen as a way of advancing political goals rather than financial ones, companies will keep incurring moral hazard — and sometimes on a huge scale.

Simply reducing foreign investment, as regulators are now doing, will in all likelihood alleviate short-term pressure on China’s currency and debt levels. But it won’t address the more fundamental reasons that Chinese companies struggle overseas. Unfortunately, curtailing political influence is likely to prove a much taller order than minting billionaires.
 

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[Mod Edit] Quoted Post deleted, therefore response not required.
 
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john70

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Good to see Chinese media focussing on growing Indian economy.




Why can’t Chinese stocks match the outstanding 2017 performance of Indian equities?


http://www.globaltimes.cn/content/1058207.shtml

After India's stock market hit record highs on Tuesday, Chinese social media was awash with intensive discussions, as many wondered why China's A-share market has performed not so good as its neighbor's equity market. Generally speaking, stock markets are a mirror of the economy, so the divergent stock market performances in China and India actually reflect the different economic focuses of the two countries in the years to come.

On Tuesday, India's Nifty 50 broke the psychologically important 10,000-point mark for the first time, while the Bombay Stock Exchange's Sensex index hit a new high of 32,374.30 points. The Nifty 50, which is composed of the country's 50 largest companies traded on the National Stock Exchange, has gained more than 20 percent so far this year, becoming one of the world's best-performing benchmarks.

Those gains have left the Chinese mainland stock markets in the dust, with the benchmark Shanghai Composite Index eking out a mere 4.64 percent year-to-date rise as of Wednesday.

To some extent, the divergent performances simply show the different levels of economic development in the two countries. In India, the government of Prime Minister Narendra Modi has been especially aggressive this year in pursuing policy reforms. Encouraged by the implementation of demonetization and the introduction of a goods and services tax, plus the easing of foreign direct investment regulations, overseas institutional investors have begun warming to Indian stocks. Expectations of an interest rate cut and robust economic growth have also enhanced investor confidence in Indian equities.

As for mainland stocks, things have changed dramatically since 2014, when the Shanghai Composite Index ended the year with a gain of 52.87 percent, making it one of the best-performing indices in the world. Yet, since A-share market turmoil spooked investors in 2015, the government has stressed tightening financial regulation for the purposes of preventing risk, deleveraging and eliminating bubbles.

In addition, the National Financial Work Conference, which ended on July 15, prioritized the task of curtailing financial risk, setting the tone for the economic focus in the coming five years.

To restore confidence in China's stock markets and economy, it is crucial to prevent and reduce financial systemic risk. Compared with temporary outperformance, steady growth is what the A-share market really needs now.

The author is a reporter with the Global Times. [email protected]
 
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TrueNeo

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Taiwan boosts cyber defences against threat from China
Hacking attacks on ruling party raise fears Beijing will seek to sway polls next year

A taipei programer shows a sample of decrypting source code © EPA
NOVEMBER 12, 2017
Edward White in Taipei

Taiwan’s ruling party is bolstering its cyber defences after hacking attacks that have raised fears that groups linked to the Chinese government plan to influence elections.

The Democratic Progressive party has boosted spending on online protection after the large-scale breaches over the past two years. Hackers accessed the party’s website and staff computers, stole data and modified content.

Relations between China and Taiwan, which Beijing regards as a renegade province, remain tense. Beijing has frozen official communications with Taipei since the DPP took power last year, replacing the more China-friendly Nationalist party, or Kuomintang.

The party and government agencies say they continue to be hit by hacking attacks from the mainland. Concerns are growing that tactics similar to those used by Russia to influence last year’s US election may be employed by China against Taiwan ahead of local polls scheduled for 2018.

“We are really aware that this may happen to us as well,” Yang Chia-liang, DPP spokesperson, told the Financial Times. “We are worried the Chinese government will try to target Taiwan and influence our elections.”

Mr Yang added that the party had started hiring outside companies to monitor network security and provide staff with additional training to protect their work.

Since last year’s election, cyber attacks have targeted the party, government agencies and private businesses, according to FireEye, a cyber security company with public and private sector clients on the island.

“What we’ve been seeing is that they are very actively targeted, and that many of the attack groups that are targeting them are based in mainland China,” said Bryce Boland, the group’s chief technology officer for Asia-Pacific.

Mr Boland said the hackers had built the capacity to “launch attacks to compromise victims in order to steal information to fuel an influence operation”, citing evidence that visitors to the DPP website had been profiled.

“China-based threat groups have all the technical know-how to pull off a Russian-style hack and leak operation,” he said.

Lennon Yao-chung Chang, a criminology expert at Australia’s Monash University, said he would “be surprised if China is not using similar tactics” to those employed by Russia.

Official statistics on the number of attacks, the exact locations they come from and the parties responsible are classified. Mr Boland and Mr Chang both said it was difficult to attribute an attack to a specific state actor.

Julie Wang, head of Taiwan’s National Center for Cyber Security Technology, said the most frequent hacks were “advanced persistent threats”, a type usually used to steal data rather than damage an organisation, and that they emanated from China. Taiwan’s government departments are targeted by such APT threats on a “daily basis”, she said.

The 2018 local elections will see Taiwanese choose city mayors and councillors across the island and will be a bellwether of voter support for President Tsai Ing-wen and her administration.

Despite upgrades at the DPP headquarters, the party is worried about the security of its polling data, event schedules and campaign strategies. “If this information is left to the wrong hands, it may affect the elections,” Mr Yang said.

https://www.ft.com/content/ff7690ba-c067-11e7-b8a3-38a6e068f464
 
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john70

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China investment growth slows, industrial output misses expectations

https://www.google.co.in/amp/s/www....ws-industrial-output-misses-expectations.html


China's fixed-asset investment growth slowed to 7.3 percent in the January-October period, and came in slightly below market expectations.

Analysts polled by Reuters had predicted investment growth of 7.4 percent.

Private sector fixed-asset investment rose 5.8 percent in January-October, down from the first nine months of the year.



Industrial output grew 6.2 percent in October from a year earlier, the National Bureau of Statistics said on Tuesday, just under analysts' estimates for a rise of 6.3 percent after increasing 6.6 percent in September.

Retail sales climbed 10.0 percent in October on-year, versus a forecast rise of 10.4 percent, after September's 10.3 percent gain.

The government is targeting annual economic growth of around 6.5 percent this year, down from the 6.7 percent pace clocked in 2016.

China's economy has surprised financial markets with robust growth of nearly 6.9 percent in the first nine months of this year, underpinned by a recovery in its manufacturing and industrial sectors thanks to a government-led infrastructure spending spree, a resilient property market and unexpected strength in exports.

But property and construction activity, two of the economy's main growth drivers, are starting to slow due to higher borrowing costs and government measures to cool a heated housing market and curb industrial pollution.
 

john70

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OPINION FROM THE OBSERVER By Per Bylund
The Chinese Economic Miracle Is a Sham !

OUR OPINION :

http://observer.com/2017/11/the-chinese-economic-miracle-is-a-sham-beijing-xi-xinping/





During a three-and-a-half-hour speech to mark China’s five-year congress in Beijing, President Xi Jinping laid out his vision for the nation’s future. Xi spoke at length about economic concerns troubling Chinese leaders, including problems with medical care, education, employment, and a growing income gap.

President Xi’s speech was by no means negative, though the hints of pessimism were unusual during a weeklong event designed to build confidence in the Chinese Communist Party. His opening remarks came mere weeks after rating agency Standard & Poor’s downgraded China’s credit rating because of rising debts. Chinese officials have slammed the downgrade as a “wrong decision,” but there is evidence to suggest the nation’s economy is not the powerhouse it seems.

I recently spent two weeks visiting China to attend several economic conferences. Aside from its magnificent scenery, what really struck me was the amount of development underway. Massive tower cranes dominate city skylines, and it’s not unusual to hear the clamor of construction at all hours. The country has an endless slate of infrastructure projects, including high-speed railways, bridges, and grand architecture.

It might look like a prosperous economy growing at warp speed, but these projects are not representative of genuine growth. This construction is commonly the result of cronyism in which investors, builders, and other players are “insiders” who profit from politically directed and supported clout.

Despite a flurry of construction, many of these structures are notably desolate. When you stroll through China’s large cities at night, dark skyscrapers tower over the metropolis, with nary a twinkling light from employees working late into the evening. Entire residential areas sit lifeless and lightless, casting an eerie vibe over a seemingly booming city.


These empty structures are emblematic of the Chinese economic miracle everyone loves to talk about. While it looks impressive at first glance, the hollow reality is apparent upon closer inspection.

Major Control Issues

Many of China’s problems stem from its lack of entrepreneurship and sustainable value creation. Contacts with the Communist Party and ruling politicians carry significantly more weight than actual value creation, and consumers have little say in which projects get priority. China’s economy is indeed liberalized, but it’s still far from a free market.

Government officials can shut down entrepreneurs at any time by revoking licenses or permits, and businessmen must navigate a complex web of licenses, permits, hierarchies, and personal contacts to stay in business. Entrepreneurs I spoke with said membership in the Communist Party and contacts in positions of power are necessary for any level of success. Anyone who does not benefit from special favors struggles to compete with businesses that do. This level of state control over business extends to a Ministry of Land Resources that sets strict development quotas, at times working directly against the interests of entrepreneurs.


Beyond the reality of a stifling government, the way we measure China’s growth creates a false narrative. Chinese officials have single-minded goals of increasing gross domestic product rather than developing the country’s ability to create value.

I’ve heard tales of Communist Party officials commissioning unnecessary infrastructure to boost GDP while ensuring it’s built shoddily enough that necessary repairs will fuel yet another GDP bump. The state builds monuments without actual value or significance — or failures like the Ring of Life in Fushun — to artificially inflate GDP. China’s growth is driven by infrastructure, but service-centered industries have seen minimal change.

Rather than measure China’s growth in GDP against Western economies or its own performance before liberalization, the proper comparison is to what the Chinese economy could look like if the wet blanket of the state were removed. Compared to growth potential, the current growth is neither impressive nor resilient. At some point, the high financing costs that companies and homeowners bear will sap activity.


Misplaced Fears

Regardless of what happens in China, Americans are obsessed with the outcome. Numerous politicians seem scared of the growing Chinese economy, but the true threat stems from a China that is increasingly less open, less hospitable, and less of a market economy.

President Xi has consolidated power and increased centralization as part of his mission “against corruption.” What that actually means is ensuring the state has an increasing amount of control through vigorous laws and sustained enforcement.

The Communist Party is able to scrutinize even relatively minor expenses, which creates unique problems. I haggled for months when a university’s state representative reneged on a promise to cover my travel expenses for attendance of an economic conference last fall. It wasn’t until I sent a rather nasty email to university higher-ups that they eventually fulfilled their commitment, though I’ve been told it was only because I’m a foreign “dignitary.”

The political implication of growth in China — even the mirage of growth — is disconcerting only because it strengthens the nation’s influence in international politics. More economic wealth means more money to use for weapons and potentially imperialistic offensives against other countries. Instead of emanating from true economic growth, this house of cards is built through the Communist Party’s power over the country and its economy.

The nation’s growing international influence through offshore investments and projects such as the “One Belt, One Road” initiative mean many governments depend on continued support from China. The government has taken a page from the U.S. playbook by using economic influence to promise development that creates indebtedness and puppet regimes. When an economically hollow player like China becomes intertwined in the finances of countless countries, it has the potential to create a global catastrophe.

The Boom Before the Bust

China’s superficial financial markers might indicate a nation on the rise, but the Communist Party will not be able to boast about a booming economy in perpetuity.

There’s plenty of investment being made in China, but relatively little of it is in the interest of consumers. Rather, the Chinese state’s grand projects are intended to boost GDP statistics and support the cheap production of goods for foreign consumers. Growth in China is essentially contingent on Western consumption. Truly sustainable growth, in contrast, arises from the production of goods and services that people voluntarily purchase, ultimately facilitated by free competition and entrepreneurship.

This will only exist in China when the government uses its power to carry out comprehensive economic reforms to transition the economy to a free market. When that day comes, people everywhere will be able to celebrate a world where China’s wealth is interconnected with other economies in a mutually beneficial exchange — ideally without any fear of political fallout.

Per Bylund is assistant professor of entrepreneurship and Records-Johnston professor of free enterprise in the School of Entrepreneurship at Oklahoma State University. His areas of research are entrepreneurship, management, and economic organization. Connect with him on Twitter.
 

john70

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The above article is truly interesting!
It shows lot of maturity and it does not just sound lambasting article.

Below are some jewels :
It might look like a prosperous economy growing at warp speed, but these projects are not representative of genuine growth. This construction is commonly the result of cronyism in which investors, builders, and other players are “insiders” who profit from politically directed and supported clout.
It brings out ground level happening in China - what we all knew has been so well put in words.

When you stroll through China’s large cities at night, dark skyscrapers tower over the metropolis, with nary a twinkling light from employees working late into the evening. Entire residential areas sit lifeless and lightless, casting an eerie vibe over a seemingly booming city.


These empty structures are emblematic of the Chinese economic miracle everyone loves to talk about. While it looks impressive at first glance, the hollow reality is apparent upon closer inspection.
Don’t you think Xi doesn’t know this ? Next what ?
The Chinese economic grey rhinos !


Many of China’s problems stem from its lack of entrepreneurship and sustainable value creation. Contacts with the Communist Party and ruling politicians carry significantly more weight than actual value creation, and consumers have little say in which projects get priority. China’s economy is indeed liberalized, but it’s still far from a free market.
DO WE INDIANS EVEN NEED TO COMPETE WITH THEM - OR OF THEIR OWN THEY WILL DISSAPPEAR FROM COMPETITION!


Rather than measure China’s growth in GDP against Western economies or its own performance before liberalization, the proper comparison is to what the Chinese economy could look like if the wet blanket of the state were removed. Compared to growth potential, the current growth is neither impressive nor resilient. At some point, the high financing costs that companies and homeowners bear will sap activity.
The bubble so well visible - my eyes are burning!

President Xi has consolidated power and increased centralization as part of his mission “against corruption.” What that actually means is ensuring the state has an increasing amount of control through vigorous laws and sustained enforcement.
The President is supposed to take the country away from doom - but he actually is pushing it more towards it. The way a control regime naturally reacts.

The political implication of growth in China — even the mirage of growth — is disconcerting only because it strengthens the nation’s influence in international politics. More economic wealth means more money to use for weapons and potentially imperialistic offensives against other countries. Instead of emanating from true economic growth, this house of cards is built through the Communist Party’s power over the country and its economy.
HOUSE OF CARDS IN MAKING - creation of an economically powerful demon.


The nation’s growing international influence through offshore investments and projects such as the “One Belt, One Road” initiative mean many governments depend on continued support from China. The government has taken a page from the U.S. playbook by using economic influence to promise development that creates indebtedness and puppet regimes. When an economically hollow player like China becomes intertwined in the finances of countless countries, it has the potential to create a global catastrophe
That’s not you speaking - it’s INDIA speaking since long - you got it now honey.

This will only exist in China when the government uses its power to carry out comprehensive economic reforms to transition the economy to a free market. When that day comes, people everywhere will be able to celebrate a world where China’s wealth is interconnected with other economies in a mutually beneficial exchange — ideally without any fear of political fallout.


The message from whole world to China : be FREE in real sense.
 
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john70

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This is serious ! The world is growing impatient with China and is finding methods to curb its state twisted growth :


US formally opposes China market economy status at WTO


The United States has formally told the World Trade Organization (WTO) that it opposes granting China market economy status, a position that if upheld would allow Washington to maintain high anti-dumping duties on Chinese goods.

The statement of opposition, made public on Thursday, was submitted as a third-party brief in support of the European Union in a dispute with China that could have major repercussions for the trade body's future.

China is fighting the EU for recognition as a market economy, a designation that would lead to dramatically lower anti-dumping duties on Chinese goods by prohibiting the use of third-country price comparisons.


The U.S. and EU argue that the state's pervasive role in the Chinese economy, including rampant granting of subsidies, mean that domestic prices are deeply distorted and not market-determined.

A victory for China before the WTO would weaken many countries' trade defenses against a flood of cheap Chinese goods, putting the viability of more western industries at risk.

U.S. Trade Representative Robert Lighthizer told Congress in June that the case was "the most serious litigation we have at the WTO right now" and a decision in China's favor "would be cataclysmic for the WTO."

Lighthizer has repeatedly expressed frustration with the WTO's dispute settlement body and has called for major changes at the organization.

The USTR brief, which follows a Commerce Department finding in October that China fails the tests for a market economy, argues that China should not automatically be granted market economy by virtue of the expiration of its 2001 accession protocol last year.

"The evidence is overwhelming that WTO members have not surrendered their longstanding rights ... to reject prices or costs that are not determined under market economy conditions in determining price comparability for purposes of anti-dumping comparisons," the brief concludes.

The move comes as trade tensions between Washington and Beijing are increasing as the Trump administration prepares several possible major trade actions, including broad tariffs or
quotas on steel and aluminum and an investigation into Chinese intellectual property misappropriation.

The Commerce Department on Tuesday launched the first government-initiated anti-dumping and anti-subsidy investigations in decades on Chinese aluminum sheet imports.

U.S. officials say that 16 years of WTO membership has failed to end China's market-distorting state practices.

"We are concerned that China's economic liberalization seems to have slowed or reversed, with the role of the state increasing" David Malpass, U.S. Treasury undersecretary for international affairs, told an event in New York on Thursday.

"State-owned enterprises have not faced hard budget constraints and China's industrial policy has become more and more problematic for foreign firms. Huge exports credits are flowing in non-economic ways that distort markets," Malpass said.

The brief submitted to the WTO also argues that China should be treated the same way as communist eastern European countries, including Poland, Romania and Hungary were when they joined the WTO's predecessor organization, the General Agreement on Tariffs and Trade, in the late 1960s and early 1970s.

A senior U.S. official said those countries eventually earned market economy status as evidence of state subsidies and state distortions waned. He added that going forward, WTO members wishing to use third-country price comparisons against Chinese imports would need to keep presenting evidence of economic distortions.

 

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