n a further attempt to contain the price of housing and curb the housing bubble, the Chinese government will carry out a rent promotion plan that will allow the issuance of securities backed by residential rental properties.
The official Xinhua news agency reported today that the plan, jointly prepared by the Ministry of Housing and Rural-Urban Development and the China Securities Regulatory Commission, was published on Wednesday and that it will encourage companies to realize backed securitizations. for assets of rental housing.
This process consists of converting certain assets, in this case, rented homes, into marketable securities in the market, and the companies that carry it out will be asked to strengthen the supervision of said securities to contain the risks.
Thus, the issuance of the real estate investment trust (REIT), a means of securitizing real estate assets for companies to raise funds, will be put to the test.
The country will encourage housing rental companies to make asset securitizations according to their operating conditions and financial demand.
This, explains the plan, will reduce the index of leverage of the companies and diversify the options of investment in the capital market.
Companies must meet certain requirements to issue such securities, such as an apartment must have been built with clear property and companies must have a clean record of having complied with the laws and regulations during the last two years.
The large and medium-sized cities, the New Xiongan Area and the cities under the pilot program for the construction of rental housing on collective construction sites will be the first to obtain the green light, according to the document.
China is striving to develop the rental housing market as one of the long-term strategies to ensure the sustainable and stable development of the real estate market, along with several policies restricting home purchases.
The country’s real estate market was overheated at the beginning of last year and government authorities had to implement in 2017 a total of 270 restrictions in 110 cities in the country to control it.
China’s fiscal revenue grew 13.6% year-on-year in the first quarter of 2018, to reach 5.05 trillion yuan (806,000 million dollars, 650,000 million euros), the Ministry of Finance reported today.
During the period between January and March, revenues increased by 28% in the concept of excise taxes, 21.1% in the case of commercial value-added taxes (VAT) and 14.4% in the case of excise taxes. import.
By provenance, taxes on corporate earnings rose 11.7% and those on individual earnings rose 20.7%.
The Ministry also reported that fiscal spending increased 10.9% year-on-year in this period to 5.1 trillion yuan (814,000 million dollars, 657,000 million euros).
According to an official of the Ministry, Lou Hong, the increase was mainly due to the strong fiscal income of the companies, since “the companies saw a better performance in the middle of a solid economy in the first three months”.
Lou expects the growth of tax revenues to moderate in the coming months, but forecasts that it will remain stable.
Wang Xinxiang, also an official of this ministry, explained that since the beginning of the year China has injected more money into reforms for poverty alleviation, environmental protection, and education.
Thus, government spending increased 76.8% in forest protection, 58% in poverty alleviation, 47.5% in applied research, 38.3% in agriculture and 13.7% in funds from the basic pension.
The Ministry explained that “with the economy on a firm footing and tax revenues increasing”, China has reduced its fiscal deficit target to 2.6% of GDP by 2018, a decrease of 0.4 percentage points compared to 2017 and that if fulfilled would suppose the first fall since 2013.
China today responded to Trump’s protectionism with the announcement of possible tariffs worth 3,000 million dollars on imports of products from the US, a move that fuels the fear of a trade war that Beijing wants to avoid.
“China does not want a trade war, but we are not afraid of it at all, we have the confidence and capacity to face any challenge,” Chinese Foreign Ministry spokeswoman Hua Chunying stressed at a press conference in Beijing.
His appearance came a few hours after the Chinese Ministry of Commerce announced the possible imposition of tariffs on 128 US products, including tariffs of 25% on recycled aluminum products and pork, and 15% on wines, nuts, fruit or steel tubes.
“They have underestimated China’s ability to safeguard its legitimate rights and interests and this is the cost that the US has to pay for its reckless actions,” Hua told reporters.
These charges, which will be applied in two stages, are the responsibility of Beijing to the tariffs of 60,000 million dollars to the import of Chinese products that Donald Trump announced yesterday, with the aim of reducing the strong trade deficit that his country has with China and punish the alleged theft of patents.
“Despite appearances, Beijing’s response has been overwhelming,” he said, adding that tariffs on products worth 3,000 million dollars are not very strong if compared to Trump’s threat to apply tariffs of 60,000. He seems to be very clever, “Alex Fusté, chief economist at Andorran bank Andbank, told Efe.
According to his forecasts, although the Chinese Ministry of Commerce has not detailed the products to which tariffs could apply, it will be directed mainly to agricultural products, “with which it could inflict great damage on US producers.”
“The decisions are always used to send signals and the signals that Beijing would be sending with a tariff response for a value of only 3,000 million dollars are essentially three: we will respond, we have more capacity to hit and we do not want an escalation of the confrontation”, adds Fusté.
At the end of 2017, China’s trade surplus with the US was 1.87 trillion yuan (288,000 million dollars, 239,000 million euros), which represented an increase of 13% compared to the previous year in the first year of the President of Trump.
In addition to demanding that China balance the balance of trade between the two countries, the US president has resorted to Article 301 of the US Foreign Trade Act of 1974 to investigate the alleged theft by China of US intellectual property and the forced transfer of technology.
“Chinese innovation does not depend on theft,” but on the “hard work” of Chinese citizens, Hua defended himself.
The US response has sparked a widespread fear of a commercial battle and has caused major declines in international stock markets, which according to the Chinese Foreign Ministry demonstrates “the lack of confidence of the markets” in Trump’s policies and ” the concern of the international community. ”
Although he considers this reaction of the stock markets “exaggerated”, Professor Li Wei, director of the Center for Economy and Sustainable Development in China, told Efe that this may be due to the fact that Trump’s tariffs to China not only affect this Asian country.
“Imagine that tariffs are imposed in the US on the import of Xiaomi or Huawei phones, for example, its components are manufactured in Asian countries such as Japan, Korea or emerging countries, so the entire value chain will be affected and will suffer,” he pointed.
Therefore, he considers that the measure will be “unpopular” both in the US and in Asia.
Michael Kagan, manager of Clearbridge, a subsidiary of the US Legg Mason, warns that the US could go further and block Chinese investments in its territory, restrict its ability to do business and even limit the entry of Chinese citizens to US soil.
“Depending on the seriousness of this conclusion, there could be reprisals with a similar effect on the part of Beijing against US companies and imports,” he says, while warning that this response “could generate an earthquake in the markets.”
In his opinion, “a commercial war with the Asian country would hurt more American listed companies that would benefit”, such as the aeronautical, automotive, agricultural crops, semiconductors, and chemicals.
The Chinese government welcomed the announcement today that the leaders of the United States and North Korea, Donald Trump and Kim Jong-un, agreed to meet in May and noted that “the nuclear issue in Korea is moving in the right address. ”
“We welcome the positive signals given by the US and North Korea in the sense of conducting a direct dialogue,” a spokesman for the Chinese Foreign Ministry, Geng Shuang, told a news conference.
“The next step to take by all parties is to sustain this positive moment, forge synergies and work together to restore peace and stability on the Korean peninsula,” the official source added.
US President Donald Trump has accepted an invitation from the leader of North Korea to start a round of negotiations on the North Korean nuclear program in a location not yet decided, according to confirmed in the White House by the National Security Adviser of Korea from the South, Chung Eui-Yong.
The Chinese spokesman did not clarify today if China could offer to host that meeting, and merely said that his country “will continue with its positive role” in the search for a negotiated solution to the crisis.
Geng reiterated today that the parties involved in the current moment of détente “must show political courage and determination, engaging in much needed bilateral and plurilateral contacts, making the maximum effort to return the dialogue and negotiation.”
On the eve of today’s announcement, Chinese Yuan Minister Wang Yi defended his country’s “double suspension” proposal, in which South Korea and the US should stop their military maneuvers in exchange for North Korea to stop. its nuclear tests have been key in the current detente.
China today confirmed its desire for economic opening with the appointment of reformist Yi Gang as the new governor of its central bank, which is expected to continue on the modernizing path of its predecessor, Zhou Xiaochuan.
Despite being number two and Zhou’s right hand, Yi did not figure in the pools on who could succeed the former governor of the People’s Bank of China (central), so his appointment decided today by the plenary of the National People’s Assembly ( highest legislative body in the country) was received with surprise.
On the contrary, the elevation of Liu He, economic adviser and ally of President Xi Jinping, to the position of Deputy Prime Minister of Finance and Planning, was expected, a position of maximum responsibility that will also be decisive for the management of commercial relations with the USA and the economic opening.
“The main task (of the central bank) right now is to implement a prudent monetary policy, to promote the reform of the financial sector and its opening, and to maintain the stability of the sector,” Yi told the press shortly after his promotion became public. in the Great Hall of the People in Beijing.
His pro-reformist profile and his extensive training abroad seem to point to Yi (60-year-old Pekinese) continuing on the modernizing path initiated by Zhou and encouraging the opening of finance to investment from abroad.
Yi Gang is considered a leader “with very deep international ties,” BBVA Research economist Jinyue Dong told Efe.
In his opinion, the election of Yi is a sign that China “will promote financial liberalization and liberalization, as well as connect the domestic financial sector with the world, in particular by promoting dialogue between China and the West”, while at the same time perpetuates its monetary policy.
Yi studied Economics for two years at Peking University, the Business Administration at the University of Hamline (Minnesota, USA) and Economics at the University of Illinois, where she also studied her Ph.D. specialized in the selection of statistical models.
In 1986 he began his career as a professor at the University of Indiana, a position he left in 1994 to return to China and join as a professor at Peking University.
He joined the People’s Bank of China in 1997 and, five years later, was appointed Secretary-General of its Monetary Policy Committee. From that position, he led in 2004 the reform of rural financial institutions and, in 2007, he was appointed vice governor.
From 2009 to 2016, he headed the State Administration of Foreign Exchange (SAFE) and was in charge of reforming China’s foreign exchange system and diversifying its investments.
In addition, he was involved in the research and design of the reform of the Chinese social security system and is recognized for his determination to help the poorest strata of society.
He is credited with having asked the Government, already in 2002, not only to take care of the growth of the Gross Domestic Product of the country but to take into account factors such as employment, the environment and the indebtedness of the banks.
His appointment coincided today with the rise of Liu He to the level of the country’s economic vice premier.
“Liu and Yi are expected to lead the Chinese financial sector,” he told Efe Dong, who recalled that “since Xi came to power in 2012, Yi served as Liu He’s right-hand man.”
The latter, 66, studied at Harvard University and his role in the Chinese economy has been increasing recently.
In January, he intervened as China’s representative at the World Economic Forum in Davos (Switzerland), one year after President Xi himself, and in February he traveled to the US to analyze the economic and trade relations between both countries, at a time critical for bilateral ties.
“Possibly Liu He is the most important economic legislator in the world (…) He was granted considerable honor at the beginning of the year to be the only spokesman to intervene in one of the main Davos sessions without being a national leader,” he said. in an analysis Matthew Dobbs, manager of Asian equities of the British Schroders.
Three days before Liu’s appointment as deputy prime minister, Dobbs reflected that Liu had “no impressive office, beyond economic adviser to China’s president, Xi Jinping, who has given him an open power over the second largest economy in the world. “
With the National People’s Assembly (ANP) also began the “forced vacation” for many Chinese activists, who have been forced to leave Beijing to avoid disturbances during this meeting in which the reform of the Constitution is finalized that will allow Xi Jinping to be president for life.
“For the dissidents, the ANP is like a purgatory,” prominent human rights defender Hu Jia, who was forced by authorities to go to Zhongshan, in the province of Canton, told Efe on the phone today. March, when the full legislative body of China has concluded.
As it has been a custom every year during the ANP, which this year will renew the leadership of the Government, some agents arrived at Hu’s home in Beijing last Friday and took him away by car. First, he was transferred to Shenzhen and, a few days later, to Zhongshan.
“Every day two policemen follow me very closely, but I imagine that there will be more agents watching,” explains the renowned activist installed in a hotel in Zhongshan, where the authorities are covering all expenses and also has some freedom to communicate with the Exterior.
Hu is already used to these “forced trips” with which the communist regime tries to silence the dissidents during the ANP or other important meetings that attract the attention of the international community.
Especially, the ANP of this year has a special character before the controversial elimination in the Constitution of the presidential limit of two mandates that will allow Xi to continue in power for an indefinite period.
“This year’s ANP is super important because Xi is going to have his crown (…) he wants to ascend his throne and he does not want there to be noise,” Hu says.
This unusual method of silencing critical voices has been repeating itself for years. Some of them travel accompanied by police officers and are usually housed in hotels and remote resorts with all expenses paid.
“It is difficult to know the exact number of people forced to travel since the police threaten them not to speak,” Frances Eve told Chinese Human Rights Defender (CHRD) researcher Efe.
In his opinion, “it is an absurd practice since it is also a free holiday for the police that accompanies them.” The reality is that activists are deprived of their freedom in these trips, it is a form of detention.
One of the dissidents who has also been forced to leave this year, Li Wei, has reported being beaten by agents during his stay in the city of Hangzhou (east), according to CHRD, which also has evidence of the arrest of two activists, Huang Fangmei and Geng Caiwen.
“It is scandalous,” says Amnesty International (AI) researcher Patrick Poon, who uses this method to “eliminate any dissenting voice during these official meetings.”
This year, however, there is much more tension in the environment due to the constitutional reform, which has also caused an increase in control in social networks, where the comments related to the possible life presidency of Xi, the leader, have been censored. Chinese with more power since Mao Zedong.
“China’s lawyers’ associations have issued warnings warning or reminding their members to be careful with their comments during this meeting,” says Poon.
Since the Chinese Magna Carta came into force in 1982, it has been amended four times, the last one in 2004.
It was precisely fourteen years ago that these controls began to be carried out on the activists during the ANP for fear of their criticisms, according to Hu.
“The worst year was in 2006. They kidnapped me for 41 days and tortured me, and for thirty days I went on a hunger strike,” Hu recalls.
A soldier of the famed Xian Terracotta Army (central China) suffered a break and theft of a finger during an exhibition in Philadelphia before Chinese property patrols called for harsh penalties against the perpetrator of the act of vandalism and think of asking for compensation.
According to the Beijing Youth Daily newspaper, the Chinese center charged with organizing this exhibition condemned “the theft and destruction of this cultural heritage” and called for a severe punishment of the person responsible for the event.
The value of the statue that was damaged “is incalculable,” said a spokesman for the Shaanxi Cultural Promotion Center, the central province of China where the famous Terracotta Army is located.
The South China Morning Post reported that the center is considering the possibility of seeking compensation from the Franklin Institute of Philadelphia, where the event occurred.
According to Chinese media reports, the author of the robbery took advantage of a night party held at the Institute on December 21 to sneak into a room where the terracotta soldier was exposed, take a selfie while leaning on his shoulder and plucking a finger, which he took home.
The American museum publicly apologized for the incident, which was investigated in January when someone noticed that one of the toes of the statue was missing, so the “looter” was discovered after an FBI investigation and detained, although currently on parole and waiting for judgment.
The Franklin Institute hosts until March 10 of the 8,000 soldiers of the Terracotta Army, which was discovered in the 70s, is about 2,200 years old and is considered one of the most valuable assets of the ancient Chinese civilization.
The Shaanxi heritage center has lent the statues, but officials have hitherto reported no such incidents.
The European companies that operate in China have urged the Government of Beijing on Tuesday to make their promises of openness to investments and trade a reality and warned that a breach could bring “a negative reaction” against globalization.
“The lack of reciprocity in access to markets is becoming politically unsustainable,” said the president of the Chamber of Commerce of the European Union in China, Mats Harbor, presenting the organization’s annual report on the Chinese economy.
“We are afraid that if this does not change quickly there will be a negative reaction against economic globalization,” he added.
Harborne said in a press conference that European companies are “frustrated” by the lack of progress in the promises of opening by the Chinese authorities, which on the other hand are applying new restrictions on investments and imports.
The 400-page report recalls how Chinese President Xi Jinping became a champion of free trade with his speech at the last Davos Economic Forum in January, but in Beijing, the government continues to shuffle when it comes to opening its economy to the external presence, against previous promises.
The president of the European Commission, Jean-Claude Juncker, proposed last week to create a foreign investment review system to protect EU companies from unwanted acquisitions of countries that do not offer the same level of opportunities to community companies.
Juncker stressed that his proposal is not directed against any country, but Beijing has already shown concern about what he perceives as an increase in “protectionism” in Europe.
European companies regret that sectors such as telecommunications or retail banking remain totally closed to foreigners in China, while in other sectors their presence is still limited (normally they can only associate with a local company that holds the majority of the capital of the joint venture).
In addition, discrimination against Chinese firms in public tenders and purchases continues, and the large publicly owned business giants continue to enjoy advantages outside the free market.
Meanwhile, Chinese companies have much more freedom in Europe when it comes to settling in, buying European companies or participating in public purchases.
Herborn recalled recent measures approved by the Chinese government, such as new inspections on food imports (including those packaged in boxes or cans) that will take effect on October 1 or the recent decision that electric and hybrid cars that receive subsidies for their purchase they must have only batteries manufactured in China.
In addition, the legal services sector went from “restricted” to “prohibited” in 2014, recalls the document, which also affects the limitations of the internet (technical or censorship) or the increasing bureaucratic obstacles to rotate in China to staff or scholars.
As a result of all this, direct investment in China from the European Union fell by 23% last year to 6,670 million euros (8,000 million dollars), while on the opposite side the companies of the Asian giant shot a 77 % your investment in the EU up to 33,350 million euros (40,000 million dollars).
In the first half of this year, Chinese investments in EU territory have remained stable, due in large part to Beijing’s limitations on capital outflows, while investments from the European Union on Chinese soil have been cut back another 23%
In contrast, the EU’s investment in the United States last year reached 230,000 million euros (277,000 million dollars), according to data from the US Chamber of Commerce in Europe.
China and Brazil signed on Friday 14 cooperation agreements, some of them for the construction of railway, nuclear and electric projects in Brazil with Chinese investment, after the meeting in Beijing of the presidents of both countries, Xi Jinping and Michel Temer.
Xi received Temer with a military ceremony at the entrance to the Great Hall of the People, seat of the Chinese Legislature, west of Tiananmen Square, and after a one-hour meeting, the two rulers signed these agreements.
Among them, the Bank of China Development and BNDES signed a US $ 3 billion credit line and signed by China Communication and Construction for the construction of a terminal in the Port of São Luís (an investment of US $ 700 million), and the US $ 300 million loan between Eximbank and Banco do Brasil.
In addition, Chinese investment in various infrastructure projects, such as the Bamin-Fiol-Porto do Sul railway line, with the participation of CREC, and the works for the high-voltage transmission line between the Xingu and Rio de Janeiro have been confirmed. January, in which the state-owned stateGrid will work.
Another project with participation is the Angra III nuclear plant, in which will be present the company China National Nuclear Corporation.
Memoranda have also been prepared to facilitate the issuance of tourist and business visas, which will allow the film co-productions between both countries and cooperation agreements in football (between the two national federations) in e-commerce, health and food safety.
At the signing of the agreements, among others were the Ministers of Foreign Affairs, Aloysio Nunes Ferreira, and Industry, Foreign Trade and Services, Marcos Pereira.
The agreements, as well as Temer’s visit to Beijing, “raise coordination between Brazil and China to a new level,” said Zhang Run, deputy director general for Latin America and the Caribbean at the Ministry of Foreign Affairs Chinese.
In remarks to the press, Zhang recalled that this is the second meeting between the two presidents, following a year ago in Hangzhou (East China) at the G20 summit, and stressed the importance of the ties between the two countries, “the largest developing countries in both hemispheres. ”
Xi and Temer agreed today that in the face of a climate of global uncertainty, the two powers “should strengthen unity and coordination and jointly face the challenges of transforming Sino-Brazilian cooperation into a model of ties between economies emerging “.
The two presidents underscored the need to coordinate the Chinese plan for the New Silk Road Routes, which seeks to build telecommunications and infrastructure works worldwide, with Brazil’s new development plan, which Temer will present in more detail this Saturday to Chinese entrepreneurs. different sectors.
Temer, who also traveled to China to attend the Brics summit, to be held from September 3 to 5 in Xiamen, was also hosted by Chinese Prime Minister Li Keqiang and the Chairman of the Advisory Power, Yu Zhengsheng.
The purpose of the Brazilian government is to present in China the recently announced national privatization and public works program, which seeks to end two years of economic recession and consolidate the timid recovery of recent months.
“Brazil is back on the road to recovery, with many positive indicators, and the Chinese side expects this growth to continue,” said Zhang.
The Chinese official recalled that in the first half of this year, bilateral trade grew by 30.6% and that China has invested more than US $ 30 billion in Brazil, which has become the main Latin American destination of Chinese capital, surpassing Venezuela.
Zhang avoided claiming that Brazil replaced Venezuela in the focus of Chinese companies because of the political crisis in Caracas, and pointed out that economic cooperation with Latin America “is not prone to momentary changes.”
“We will continue to participate actively with the countries of Latin America, including Brazil and Venezuela, and contribute to social development to be a positive influence for regional peace and stability,” he concluded.
China has firmly rejected the unilateral sanctions the US government has imposed on Chinese companies to economically isolate North Korea, Foreign Ministry spokesman Lu Kang said on Wednesday.
“We firmly oppose the long arm of the jurisdiction against Chinese companies and individuals according to their legislation because it is wrong,” Lu told a news conference after it was revealed that the US sanctioned four companies based in China that have trade relations with Korea From the north.
According to the US Treasury Department, between January 2013 and August 2017, three of these companies exported goods worth $ 650 million to North Korea and imported goods worth $ 100 million from that country.
Lu Kang said that if China confirms that any of these companies or individuals “are involved in activities that violate Chinese law or international obligations,” it will strictly settle its own rules.
He also asked those who wanted to cooperate with Beijing “in a constructive way” and had solid evidence in this respect, to share with China to solve the problem.
Lu commented that the US knows China’s position on this issue and has claimed that, as a permanent member of the UN Security Council, the Asian giant has always strictly implemented all North Korea-related sanctions, but opposes those sanctions. some countries.
Donald Trump’s government announced on Tuesday sanctions against North Korean companies and Chinese commercial companies in a new attempt to economically isolate the regime of Kim Jong-un to put an end to its nuclear development.
The sanctions came just a day after the US president put North Korea back on the list of “sponsors of terrorism,” which had come out nearly a decade ago and included Iran, Syria, and Sudan.
The goal of the sanctions is to impose “greater economic pressure” on North Korea to make it difficult for Kim Jong-un regime to access key entities within the transportation industry, according to Treasury Secretary Steven Mnuchin.