Ningbo- Xiangshan Bridge Opens

[cir]

Ningbo，the 2nd city in Zhejiang province and with 2012 GDP well in excess of 100 billion dollars，is a far larger economic entity than most Indian states。

 

[Ray]

Ningbo，the 2nd city in Zhejiang province and with 2012 GDP well in excess of 100 billion dollars，is a far larger economic entity than most Indian states。

And so?

This is also important to note

China's market reforms have led to a boon in economic choice, but the nation faces ever-widening and sometimes violent social unrest. U.S. policymakers might infer that growth in protests and demonstrations implies a burgeoning democratic movement. However, China's social unrest overwhelmingly reflects unavoidable and narrowly parochial side-effects of China's successful reforms and rapid growth, side effects worsened by local corruption. In a new Carnegie Policy Brief, China's Social Unrest: The Story Behind the Stories, Senior Associate Albert Keidel explores the consequences of a rapidly changing economy on China's record of unrest.

Increased social unrest could, nevertheless, undermine China's leadership effectiveness, and Communist Party officials are raising alarms about national security risks. Since 1993, reports of "mass disturbances" in China rose by nearly 10-fold. In his Policy Brief, Keidel identifies root causes for this social unrest -- price reforms that disenfranchise subsidized urban groups, state enterprise layoffs, investment shifts away from traditional industrial centers in the interior towards coastal locations, rural-to-urban migration, urban growth's expropriation of farmland, and failures in compensation schemes. Keidel suggests that efforts to combat corruption coupled with further reforms to strengthen dispute resolution tools could mitigate social unrest.

Keidel also prescribes a proactive role for the U.S. in improving international understanding of China's reform challenges by facilitating China's participation in international policy conclaves like the G-8. Two-way exchanges on the nature of unrest and steps for handling it could help China reduce its reliance on draconian measures.

China's Social Unrest: The Story Behind the Stories - PolicyArchive

As the saying goes -


All that glitters is not Gold!

 

[Ray]

May read this too!

SOCIAL UNREST IN CHINA - ECRAN
https://www.google.co.in/url?sa=t&r...F0mgliZUY8RQt31YZgn4w&bvm=bv.1355534169,d.bmk

It givs various factors that is leading to the social unrest in China causative of the economic booom.

But nearer home to China, the China Daily has this to say:

Demolitions cause most social unrest

BEIJING - Demolitions caused the most social conflict and public discontent in Chinese society in 2010, according to a recent report published by a Beijing-based social research center.

A man cries as he sits on the debris of his house, which had been demolished in Guiyang, Guizhou province, on June 6. The house was said to be an illegal construction. [Guo Yong / for China Daily]

Measuring the amount of discontent generated by various social conflicts last year, demolitions and relocations scored almost 50 percent higher than all other factors combined, said the report filed by the Research Center for Social Contradiction.

It had become a spike point among all conflicts in Chinese society, the report said.

The center operates under the Office of Letters and Calls of Beijing, which handles petitions. The report was conducted with the help of Horizon Research Group, a Beijing-based privately run polling company.

The center said the report was based on an opinion poll conducted with 412 urban and rural respondents in a Chinese city, who had been or would be relocated.

Nearly 70 percent of those polled said they had come across problems in the course of demolitions and relocations, such as problems related to compensation and forced eviction.

Demolition issues inflicted far more damage on their personal lives than other issues such as education, healthcare, housing and social security, the report revealed.

Economic loss caused by relocation compensation was the most serious effect because the compensation tended to be less than the value of demolished properties. About 36 percent of respondents said they had been given compensation plans well below market value.

About 10 percent said they had not received the full compensation promised in the demolition contracts.

A lack of information related to demolition led to many of the compensation problems, the report said.

Relocated people were likely to become disgruntled due to suffering economic losses caused by inadequate compensation.

Demolition and relocation could be fairer if people were given stronger rights to information about the process and were allowed to participate in it, the report added. They should also be allowed to demand their rights in accordance with the law through negotiation.

http://www.chinadaily.com.cn/china/2011-06/27/content_12780316.htm

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One cannot eat or live GDP, but one can exist in his home which brings happiness and security and not GDP.

 

[Ray]

Zhejiang's slippery slope
Global Times | 2012-10-14 21:05:04

East China's Zhejiang Province has long been recognized as the home of many of the country's most vibrant and active private enterprises.

But as China's economy slows down, private companies in the province are beginning to lose the vigor that once put them on the map.

"The economy is far worse now than during the 2008 financial crisis," an official from the Jiaxing Taxation Bureau in Zhejiang Province who declined to be named, told the Global Times. The official also noted that during the first nine months of this year Jiaxing failed to achieve the local authority's tax revenue target.

The official said the main reason behind what he called an "obvious taxation decline" was the "very bad" business climate that has left many companies struggling just to survive.

Worse than 2008

During the first half of this year, Zhejiang Province saw its GDP growth rate reach 7.4 percent year-on-year, below the nationwide growth rate of 7.9 percent, according to the Zhejiang Provincial Bureau of Statistics.

During 2008 and 2009, when the global financial crisis was battering economies around the world, coastal Zhejiang was largely immune to the problems experienced elsewhere, as the province saw its economy grow by 10.1 percent and 8.9 percent respectively during the two years.

But, four years on, the province's economy has transformed.

According to a research report released in July by the Standing Committee of Zhejiang Provincial People's Congress, during the first five months this year, profits for large, medium and small-sized companies in the province dropped by 23.8 percent, 18.3 percent and 14.3 percent respectively.

In Wenzhou, often considered the epicenter of Zhejiang's private sector, 60.43 percent of the city's 3,998 large-scale industrial enterprises were found to have suspended operations or cut output between January and June, the report said.

"The situation for small and medium-sized companies is even worse," Zhou Dewen, director of the Wenzhou Council for the Promotion of Small and Medium-sized Enterprises, told the Global Times on October 2.

Nowadays, many export-oriented companies would rather shut down than take orders from overseas clients, according to Zhou.

"Some export companies took overseas orders, then spent their own money to produce the goods. But due to deteriorating external conditions, foreign clients are refusing to pay, leaving these companies with nothing but losses in the end," said Zhou.

Zhou noted that many business owners in the province are now voluntarily sidelining their operations in order to save on rent and labor costs until more favorable economic conditions emerge.

Deal with it

The provincial government of Zhejiang is taking the current slowdown seriously and has already rolled out measures to prevent further deceleration.

At the end of August, the Zhejiang provincial economic planning authority unveiled 490 investment projects aimed at supporting local marine industries - including fishing, shipping and marine tourism. These projects are valued at a total of around 1.2 trillion yuan ($109.9 billion).

"Without effective investments, it will be very difficult for us to meet annual development goals," Xie Xiaobo, deputy inspector at the Zhejiang Provincial Development and Reform Commission, said on August 22 at a forum held in Beijing.

The province set its economic growth target at 8.5 percent this year.

Xie noted that as economic difficulties continue in Zhejiang, "the development of the marine economy can make up for part of the lost momentum that exports used to offer."

The coastal province has for years relied on foreign trade as its main driver of local economic growth. Yet, during the first half of 2012, the total value of imports and exports of Zhejiang was $26.58 billion, up by an annual rate of just 3.5 percent, well below the year-on-year growth rate of 23.1 percent recorded during the same period in 2011.

But as real estate prices and employee salaries continue to mount along with corporate tax burdens, administrative charges and interest rates, "the profit margins for many companies in Wenzhou are only between 1 and 3 percent, much lower than the interest rate on a one-year loan," said Zhou.

Tian Yun, deputy head of the China Society of Macroeconomics under the National Development and Reform Commission, told the Global Times he thinks the most effective and long-term business solution for companies in the province is "industrial upgrading."

"The upgrading process needs more than time," said Tian, noting that only by producing competitive products can companies survive the current downturn and formulate a solid business plan for the long run.

Possible silver lining

While many manufacturers in the province are just barely staying afloat, the service sector seems to be doing fine - for now at least.

"My restaurant business is doing alright, as well as many others," Yuan Qi, owner of the Xicun Restaurant in Jiaxing, told the Global Times.

According to the Zhejiang Provincial Bureau of Statistics, the service sector still grew by 8.8 percent year-on-year between January and June. Specifically, the province's hotel and dining industry grew by 10.6 year-on-year during the period, while the financial service industry expanded by 12.4 percent.

Yuan said, worsening conditions for manufacturers may be, at least to some degree, behind the robust growth seen by many service businesses. As factory owners battle to keep their production lines running, they are spending more on dinners and entertainment to win over potential clients and negotiate deals, she explained.

Local tax data also support the conclusion that the city's service industry is holding up well despite slowdowns elsewhere, according to the Jiaxing taxation official. "Due to the ongoing economic difficulties, there is an increasing demand for services that will help maintain business relationships," the official said.

Yet, Yuan has also noticed a small drop in the number of customers coming through the doors of her restaurant, a trend that led her to begin offering group-buying discounts to lure in more diners.

Also, as the economy continues to falter and demand for Chinese exports remains low, financial service firms and private loan companies have experienced rapid growth as more and more business owners turn to them for help easing their capital pressures, a banking industry insider told the Global Times on condition of anonymity.

But, there is no guarantee that the industry will continue to prosper indefinitely, the insider noted.

According to Cao Jianhai, director of the Chinese Academy of Social Sciences' Institute of Industrial Economics, if manufacturing companies halts production and leave the market, the service sector will suffer further as fewer companies exist to seek out their services.

Zhejiang's slippery slope - Globaltimes.cn

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I would just like to tell you that while you would feel that we are not aware of what is happening in China and so you can purvey anything you feel as the Gospel and feel that it will lull the local storm, but in actuality there are many who read international newspapers and do look at the world with a broad view.

The Chinese Govt media contradicts.

Note the date of the report.

Recent.

So much for your elation!

 

[Ray]

Credit crisis in China's richest province Zhejiang

A credit crisis in China's richest province has forced the local government to set aside more than 10bn yuan (£1bn) in bail-out funds.

In June, a team of Chinese policemen arrived at the Wyndham Grand Plaza Royale, a five-star hotel on the north east shores of Hanghzhou's West Lake.
They were there to arrest Yu Zhongjiang, a balding 47-year-old former taxi driver with a small goatee beard, who happened to also be the hotel's owner.
They arrested him for fraud: his company owed 8 billion yuan (£800m) and investigators believe he had fabricated a number of the loan applications.

Indeed, in 2008, he had financed his purchase of the Wyndham almost entirely through loans, including issuing IOUs to his own employees, according to Caixin, a financial magazine.

But his arrest, and the bankruptcy of Zhongjiang Group, had a lethal domino effect in Hangzhou, an affluent city of 9m residents on China's east coast. Mr Yu had guaranteed the loans of several other companies, and the banks rushed to demand repayment.

One of China's biggest lenders, Construction Bank (CCB), loaned a total of 3 billion yuan to companies tied to Zhongjiang, a source from the bank told Caixin, and is now facing its "largest ever loan crisis," according to a banking regulator.

Between 2010 and this year, CCB's loan book to Zhongjiang tripled in size, despite the company's deteriorating financial position. Even when other banks started to recall their loans in panic, CCB kept lending.

Webs of loan guarantees are common in Zhejiang, the export-led province that has become China's wealthiest, on a per capita basis.

"The local economy is tightly interlocked," said Yang Yiqing, the head of the research centre of the Zhejiang Business Association. "Many companies in the province form industry chains, with one firm providing raw materials, another the logistics, another the finished product, and so on. Often, the companies inside the chain will all guarantee each other's loans to the bank," he said.

Access to capital remains a challenge for private businesses; state-owned Chinese banks prefer to lend to large state-owned firms, who are implicitly underwritten by the government.

The banks lend according to policy and often, for good reasons, do not trust the financial statements of small and medium sized firms. "The crisis has been created by the monopoly of the banks, and the vast majority of companies cannot meet loan criteria without guarantees," said Mr Yang.

To get a loan, private firms have to jump through impossible demands, and often can only succeed by arranging credit guarantees. Private credit guarantee companies have also sprung up to service the market, taking a cut to underwrite the loans.

Credit guarantees have multiplied so rapidly in the last two years that the International Monetary Fund has warned the rapid growth could pose a systemic risk.

"The explosion that we have seen in this shadow banking over the past two years has essentially been a conflict between the People's Bank of China, which was trying to rein in credit in order to fight inflation, and the insatiable demand for credit to fuel the investment boom," said Patrick Chovanec, a professor of Business studies at Tsinghua university in Beijing.

The system has left firms vulnerable to an economic slowdown, especially as export markets in the United States and Europe dry up. "When the economy turns sour and an industry as a whole is affected, all the companies in a chain can go bankrupt," said Mr Yang.

"There is no AIG. There is no big company guaranteeing a lot of risk that will blow up, but there are lots of mini-AIGs, and the risk is all correlated around slower growth, a weaker property market and so on," added Mr Chovanec.

The loan guarantee system has also masked the troubles of some companies, since the banks made no real assessment of their profitability. "The reciprocal nature of the guarantee network has removed any value from bank loan guarantees. The system has made all its participants mutually vulnerable to an economic downfall," said one banker to Caixin.

Mr Yu, for example, was described by one friend as a man who was perpetually "trying to cover ten woks with five lids" - juggling his various liabilities to keep his company afloat.

"Even three years ago, I was thinking he would not last long," another unnamed acquaintance told the Southern Weekend newspaper.

His first success came in 1998, when he moved on from driving a taxi to set up a car rental firm. He used his profits to set up a chemical company in 2000, which eventually grew into the Zhongjiang group.

Leveraging himself to the hilt, he then diversified into property, but timed his move badly, missing the boom and ploughing his money in just as the Chinese government clamped down on the hot money flowing into the sector and house prices began to rapidly cool.

In 2003, he also put millions of pounds into a small airport at the tourist resort of Qiandaohu, but it never got off the ground. "At most, it has been used by some gliders," remarked a local.

On paper, the Wyndham hotel should also be a success, with a perfect location on the shores of the lake and opposite the local government offices. But it too failed to turn a profit.

The collapse of Zhongjiang, and of another hapless property developer, Tianyu, has left some 62 companies in the mire. As the banks panicked, and cut off the flow of loans, more than 500 other firms, some of them allegedly among China's biggest private companies, have written a letter to the local government asking for emergency relief funds.

One of the biggest companies to issue a distress call is Hupai, one of China's top 250 private firms, which said it had guaranteed around 1.35 billion yuan of loans to other companies, including the bankrupt Tianyu, and would face the wall if banks demanded repayment on those debts.

Now the local government in Zhejiang province has set aside 10 billion yuan to deal with the problems, according to Yang Liuyong, head of the School of Finance of Zhejiang University.

The allowances have been decided at county level, and even some remote parts of the countryside have set aside cash to deal with potential problems.
"There was a similar domino effect last year, so the government is getting more experienced at stepping in. After all, it does not make local officials look clever if big businesses go bankrupt," he said.

In Hangzhou, the local government has made bridging loans to companies to keep them going while they pay off their debts, and ordered banks to keep lending. "The situation has been contained, the crisis has not expanded," said Mr Yang.

"But the influence on the real economy is even bigger than the effect on the banks. Private companies need those bank loans to keep going, but the banks will not go bankrupt from one or two bad debts," said Yang Yiqing.

In another city in Zhejiang, Wenzhou, which has seen similar problems, non performing loans have doubled so far this year to more than 18 billion yuan, according to the local banking regulator. That represents 2.85pc of the loan book.

Signs of rising bad debt have already have pushed the shares of the four state-controlled banks down an average 19pc from their highs in February.

"The fundamental problem is that the amount of guarantees it makes are not included in its financial report, which means a company that has huge liabilities can still get a loan," said Yang Yiqing. "This is a Chinese characteristic, because the rapid growth of the sector is outpacing the underdeveloped bank system."

Nor are the problems confined to Zhejiang province, Mr Yang said. In Beijing, a credit guarantee company called Zhongdan with over 300 clients and 3.3 billion yuan of guarantees unravelled in January. In Ordos, in Inner Mongolia, non-performing loans are proliferating, and there is also a credit crisis in the Pearl River Delta, according to Mr Chovanec.

"This is pervasive throughout China," he said. "If this was just one instance, that would be fine. But this is systemic. And while you can say they have the money to bail out these firms, every yuan you spend on a bail out is money that cannot be spent on stimulating the economy in other ways. They are just filling the hole," he said.
Additional reporting by Valentina Luo

Credit crisis in China’s richest province Zhejiang - Telegraph

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Hope this help you to understand this Province that you are so excited about and how it really stands or operates!

 

[cinoti]

Credit crisis in China's richest province Zhejiang

A credit crisis in China's richest province has forced the local government to set aside more than 10bn yuan (£1bn) in bail-out funds.

...... Telegraph[/url]

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Hope this help you to understand this Province that you are so excited about and how it really stands or operates!

Nah, this is just showcasing of how former colonial drug dealers are jealous of China's development.
Telegraph sounds like England still has the credit to point fingers.

 

[cinoti]

I marvel how you all love to squirm and jump from one dung to another like blue bottom flies when the going gets tough.

One of you raise Zhejiang and we tell you the reality and you go crazed like a started blue bottom fly!

Come come, make up your mind what you wish to talk about and then come back!

Bad mouthing anyone by anything is the easiest, you are even not good at copying from a brits propaganda.

 

[Ray]

I have deleted my post since it was written on an incorrect premise.

My regrets to you since I did not understand the context in the heat of the debate.

It is soft deleted so that the Mod can read it.