MAW: China update

hina Tries to Curb Fancy Tombs of the Rich that Grate on the Poor

China feeds pirated DVDs to the chipper to make a point

China Is Ageing, And The Rich Are Fleeing

There are three major reasons behind rich people’s immigration: a better education for children, safety of personal wealth and a preparation for retirement, the report showed.
“Safety of personal wealth” is probably the main motivation. The story I have been hearing is this: these folks emigrate to other places and invest in real estate in other places as a form of “political insurance”. Too many of these rich folks got their wealth because of their connections with officials, probably bribery and corruptions, and they don’t see their assets in China being “safe” in a sense that if they get caught, they will have nothing left. So it makes some sense for them to flee before it is too late.

Real Estate Prices And Demographics: Implication For China

China facing rich drain

Russia Feuds With China Over Oil Price: "They Are Trying To Force Their Socialism Upon Us"

China Raises Power Use Forecast, So The Economy Is Still Strong

Just as another confirmation that the Chinese economy has not slowed down, the China’s National Energy Administration raises the energy use forecast for 2011 from 9% growth to 12% over the previous year.

The Gross Domestic Product of China has always been mistrusted because the authorities try to massage the numbers, so many consider power use as a better indicator. Certain rumblings earlier suggested that power consumption is slowed early this year in China, thus it pointed to the “end of tightening cycle” argument. This new report certainly confirms once again that the economy has not been slowed down much, and more monetary tightening will be done.

China Economy: Two Updates Concerning Inflation

Are China’s high-speed trains heading off the rails?

With the latest revelations, the shining new emblem of China’s modernization looks more like an example of many of the country’s interlinking problems: top-level corruption, concerns about construction quality and a lack of public input into the planning of large-scale projects.
Questions have also arisen about whether costs and public needs are too often overlooked as the leadership pursues grandiose projects, which some critics say are for vanity or to engender national pride but which are also seen as an effort to pump up growth through massive public works spending.
The Finance Ministry said last week that the Railways Ministry continued to lose money in the first quarter of this year. The ministry’s debt stands at $276 billion, almost all borrowed from Chinese banks.
“They’ve taken on a massive amount of debt to build it,” said Patrick Chovanec, who teaches at Tsinghua University. He said China accelerated construction of the high-speed rail network — including 295 sleek glass-and-marble train stations — as part of the country’s stimulus spending in response to the 2008 global financial crisis.
Zhao Jian, a professor at Beijing Jiaotong University and a longtime critic of high-speed rail, said he worries that the cost of the project might have created a hidden debt bomb that threatens China’s banking system.
“In China, we will have a debt crisis — a high-speed rail debt crisis,” he said. “I think it is more serious than your subprime mortgage crisis. You can always leave a house or use it. The rail system is there. It’s a burden. You must operate the rail system, and when you operate it, the cost is very high.”

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In March, government auditors found several problems with the construction of the Beijing-to-Shanghai line, including fake invoices that more than a dozen companies used for construction materials and supervisors at some construction companies who lacked professional engineering licenses.
The revelations have led to questions about safety and whether corrupt subcontractors cut corners to line their pockets.
Train line construction requires the use of high-quality fly ash in the concrete. Chinese media reported allegations that some contractors might have used lower-quality ash that had been mixed with other substances.
Chinese officials have proudly noted that their bullet trains were the world’s fastest on rails. But the slower speeds announced last week would put them on a par with European and Japanese trains. Trains and tracks wear out more quickly at faster speeds, and high-speed tracks need to be straighter.
In announcing the safety checks, officials said that in some places, villagers had built pigpens beneath bridges holding high-speed tracks, causing a potential hazard. They also cited concerns about people and dangerous materials being too close to the tracks, increasing the risk of casualties.
For now, the high-speed trains appear to have few riders, mainly because ticket prices are considered exorbitantly high for most Chinese.
China is the world’s second-largest economy in gross domestic product terms. But most Chinese are still relatively poor, with an estimated per capita income of $4,300, below the world average, according to the International Monetary Fund.
Many of those riding trains are migrant workers, who return annually to their home villages. But for most of them, even the cheapest tickets are unaffordable.
During February’s annual migration, officials noticed that the high-speed trains were largely empty. But the slow trains on those lines have been taken out of use, giving people few choices. As a result, the highways were clogged and more people rode long-distance buses.
Now that the Railways Ministry has announced lower ticket prices, it remains to be seen whether the bullet trains will earn money.

China's Most Powerful People All Want The Same German Car

An Updated Look At The Economic Trilemma In China