China :: Business & Economy

CHINA'S rail construction investment slumped 26 percent last month after a deadly high-speed train collision prompted officials to suspend approvals for new projects and impose more safety checks. Spending on building railroads in July amounted to 41.2 billion yuan (US$6.4 billion), compared with 55.8 billion yuan a year earlier, based on data the Ministry of Railways has released. It was the biggest drop in eight months. "The slump in July construction investment started the downward spiral of China's rail investment," said James Chung, an analyst with Masterlink Securities in Shanghai. "I think it's impossible for the ministry to reach this year's investment target." Rail investment in the second half of this year may plunge by 40-44 percent from a year earlier as new projects are halted, Chung said. The government ordered trains to lower speeds and reduced Beijing-Shanghai bullet-train services after the July 23 collision in Wenzhou in Zhejiang Pr...

Visiting Chinese Vice Premier Li Keqiang announced here on Wednesday that new policies and measures have been adopted by the central government to support Hong Kong's development and deepen the economic and financial cooperation between the mainland and Hong Kong. The policies, which were announced in Li's keynote at a forum in the day, mainly focuses on the opening of the mainland market to Hong Kong in trade of services, support for Hong Kong's standing as an international financial center and Hong Kong's development of RMB business. Li said the policies and measures were "consistent with our policy of opening to Hong Kong first under the 'one country, two systems' and aimed at taking mainland-Hong Kong economic and financial cooperation to a new high." In terms of services trade, Li said that the mainland will take further steps to broaden market access for both traditional and emerging service sectors in Hong Kong, including medical services, const...

CHINA'S foreign-exchange regulator yesterday pledged it will continue to guard against speculative money inflows in the second half of this year as illegal foreign exchange dealings rose in the first half. In a statement posted on its website, the State Administration of Foreign Exchange said it will continue to combat illegal cross-border money flows in the second half of the year in the face of complicated domestic and overseas economic situations.

SHANGHAI'S key stock index fell for the first time in four days on concerns for more tightening measures and slower economic growth in China. The benchmark Shanghai Composite Index edged down 0.3 percent to close at 2,618.79 points in the morning session. Turnover rose to 51.3 billion yuan (US$8 billion) from yesterday morning's 43.8 billion yuan. China's central bank auctioned off 5 billion yuan's one-year note today and raised yield by 8.58 basic points to 3.584 percent. The yield was slightly higher than the benchmark one-year deposit rate of 3.5 percent, raising concerns that the central bank may increase interest rate. The People's Bank of China also issued 29 billion yuan of 28-day repurchase agreement at a yield of 2.8 percent, according to a statement. Meanwhile, Conference Board, a New York-based research organization, said today that growth in China is slowing significantly. The Chinese economy is cooling after the government raised interest rates and bank...

China's natural gas imports more than doubled year-on-year to 2.7 billion cubic meters (cu m) in July, boosted by increasing demand for the fuel to cut emissions. The July imports included 1.2 billion cu m of natural gas transported from Central Asia by pipeline and 1.5 billion cu m of liquefied natural gas (LNG), the National Development and Reform Commission (NDRC) said in a statement on Monday. The surge in July helped imports for the first seven months double to 16.8 billion cu m. The rise in imports signaled the country's rapidly growing appetite for natural gas. China's apparent demand for the fuel, which includes domestic production plus net imports, rose 24.5 percent year-on-year in July to 10.3 billion cu m, the highest in five months. Apparent demand reached 73.4 billion cu m from January to July. "Rising demand for natural gas has spurred the construction of more LNG terminals along the coast to handle LNG from overseas, which helps raise imports," said...

China said on Monday the default risk of its local government debt is "controllable overall," while it urged strict checks over new debts that are potentially unsafe. Local governments as a whole have the ability to repay their debts, but some districts and industries are financially weak and potentially risky, the Ministry of Finance said in a statement on its website. The evaluation came after the disclosure of massive local government debts aroused concerns over the sustainability of China's impressive economic growth. Local government debt totaled 10.72 trillion yuan (1.66 trillion U.S. dollars) at the end of 2010, the National Audit Office announced in June. That amount equaled about 26.9 percent of China's gross domestic product (GDP) in 2010, Deputy Finance Minister Li Yong was quoted in Monday's People's Daily. The ministry acknowledged some particular local governments have relatively high debt compared with their financial capabilities. In some cases...

Taxpayers in China can look forward to paying less income tax when the State Administration of Taxation starts to tax year-end bonuses under a new method from September 1. The new method comes after SAT issued a new notice recently that it would use a new mathematical formula for a quick-calculation tax deduction, used in a progressive tax regime, to better reflect a taxpayer's tax burden in line with his income and avoid situations where those who earn more before tax actually gets to keep less after paying tax. In China, the year-end bonus is a one-off annual bonus that can be divided by 12 to determine the tax rate and a quick-calculation tax deduction number accordingly. The new practice, effective from September 1, introduces a larger quick-calculation tax deduction that may lead to less tax payment for certain people. For example, an individual's year-end bonus is 19,000 yuan (US$2,813), equivalent to a monthly salary of 1,583 yuan. Under the new method, the tax rate is 1...