. Earth Science News .
POLITICAL ECONOMY
Profits at China's state-owned companies down sharply: govt

China to tighten control on fixed-asset investment loans
China is to tighten up supervision of lending for fixed asset investment projects after bank loans surged this year and auditors warned of fund misuse. Loans of more than five percent of a project's total investment, or greater than 500 million yuan (73.3 million dollars), should be paid to whoever is contracted to do the work, not the borrower, new draft regulations state. Loan applicants must also show equal or greater investment in the projects and their funds should already be invested, the draft rules, issued Tuesday by the China Banking Regulatory Commission, said. It was not immediately clear when they would come into force. The new regulations come as the National Audit Office published a report this week warning of fund misuse related to China's 580-billion-dollar stimulus package, unveiled in November to boost the crisis-battered economy. Some companies were found placing funds obtained through bill financing into deposits to profit from the interest rate spread, said the report. Companies can borrow for six months through discounted bills at a rate of about 1.8 percent, much cheaper than the benchmark lending rate of 4.86 percent for the same maturity, according to previous Chinese media reports. Heeding government calls to support the economy, Chinese banks have extended loans worth more than 5.1 trillion yuan in the first fourth months of this year, already more than the 4.9 trillion yuan lent in all of 2008. Investment in fixed assets in Chinese cities totalled 3.7 trillion yuan in the first four months of 2009, up 30.5 percent over the same period last year, Beijing said earlier this month.
by Staff Writers
 Beijing (AFP) May 20, 2009
 China's state-owned firms saw their profits fall sharply in the first four months, the government said Wednesday, in yet another sign the Chinese economy continued to suffer from the global crisis.

State-owned enterprises across the country made 323.6 billion yuan (47.4 billion dollars) in profit from January to April, down 32.3 percent from the same period of 2008, said a statement posted on the finance ministry's website.

But the decline was smaller than that seen in the first quarter, when profits dropped by 36.8 percent on year, according to the statement.

Revenues of the companies also decreased in the first four months of the year, falling 7.3 percent year on year to 6.0 trillion yuan, it added.

As a result, taxes paid by state-owned companies in the period fell by 9.1 percent to 577.6 billion yuan, the statement said.

China's trade-reliant economy has been severely impacted by the global crisis, with economic growth expected to slow to a 19-year low of 6.5 percent in 2009, according to the World Bank.

The tougher times are hurting the corporate sector, including state companies which have increasingly been forced to operate on market conditions.

China needs more than stimulus to sustain growth: World Bank
 China needs to do more to tackle the global economic crisis as the government-driven stimulus package alone cannot support long-term growth, a senior official of the World Bank said Wednesday.

"The stimulus package is large, having a good effect, and the right thing to do," said David Dollar, the development bank's China director, referring to China's 580-billion-dollar scheme unveiled in November to prop up the economy.

"But ... stimulus by itself cannot be the source of long-term sustainable growth," he said at a forum in Beijing.

Urban fixed-asset investment, a main indicator of progress in lifting growth by injecting massive amounts of public funds into infrastructure projects, rose 30.5 percent on-year in the first four months, official data showed.

However, private investment fell sharply in the first quarter, Dollar said, suggesting it was too early to say the Chinese economy was recovering.

"Until we see a recovery in private investment, it's hard to get too excited about the future," he said.

China's economy grew 6.1 percent in the first quarter, the slowest growth in at least a decade and down from 6.8 percent in the final three months of 2008, as exports weakened dramatically due to the financial crisis.

Share This Article With Planet Earth
del.icio.usdel.icio.us DiggDigg RedditReddit
YahooMyWebYahooMyWeb GoogleGoogle FacebookFacebook



Related Links
 The Economy


Memory Foam Mattress Review
SPACE MEDIA NETWORK PROMOTIONS
 Solar Energy Solutions
Tempur-Pedic Mattress Comparison ...
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News


POLITICAL ECONOMY
China massively expands consumer subsidies: state media
 Beijing (AFP) May 19, 2009
 China announced Tuesday a massive expansion of subsidies for people who buy new cars and home appliances this year, state media said, in the government's latest bid to lift the crisis-battered economy. The State Council, or cabinet, decided to increase the money available to subsidise car replacements to five billion yuan (733 million dollars) from one billion yuan when the programme was ann ... read more






The content herein, unless otherwise known to be public domain, are Copyright 1995-2009 - SpaceDaily. AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement