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Transparency the crux in China's struggle to deal with rising debt

China’s quest to solve its $3 trillion-and-growing public debt problem by starting a domestic municipal bond market hinges on the one thing its officials are most afraid of: transparency. As markets absorb the results of China’s latest audit of its state finances, Beijing’s long-standing vow to develop a municipal bond market to curtail rapid growth in other types of hidden public debt will take centerstage once more. By letting local governments sell bonds for cash, China wants to rely on nimble markets rather than inflexible regulations to keep spendthrift units in check. The stakes are high. A bond market is the centerpiece in China’s blueprint to mop up fiscal troubles and keep its economy growing at an even pace, giving it needed room to start other bold financial reforms. But analysts say China’s dreams of a municipal bond market are so far just that, as building […]

Posted On : Published By : Tom Whipple
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Transparency the crux in China’s struggle to deal with rising debt

China’s quest to solve its $3 trillion-and-growing public debt problem by starting a domestic municipal bond market hinges on the one thing its officials are most afraid of: transparency. As markets absorb the results of China’s latest audit of its state finances, Beijing’s long-standing vow to develop a municipal bond market to curtail rapid growth in other types of hidden public debt will take centerstage once more. By letting local governments sell bonds for cash, China wants to rely on nimble markets rather than inflexible regulations to keep spendthrift units in check. The stakes are high. A bond market is the centerpiece in China’s blueprint to mop up fiscal troubles and keep its economy growing at an even pace, giving it needed room to start other bold financial reforms. But analysts say China’s dreams of a municipal bond market are so far just that, as building […]

Posted On : Published By : Tom Whipple
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Pollution Rising, Chinese Fear for Soil and Food

The farm-to-table process in China starts in villages like this one in the agricultural heartland. Food from the fields of Ge Songqing and her neighbors ends up in their kitchens or in the local market, and from there goes to other provinces. The foods are Chinese staples: rice, cabbage, carrots, turnips and sweet potatoes. But the fields are ringed by factories and irrigated with water tainted by industrial waste. Levels of toxic heavy metals in the wastewater here are among the highest in China, and residents fear the soil is similarly contaminated. Though they have no scientific proof, they suspect that a spate of cancer deaths is linked to the pollution, and worry about lead levels in the children’s blood. “Of course I’m afraid,” said Ms. Ge, in her 60s, pointing to the smokestacks looming over her fields and the stagnant, algae-filled irrigation canals surrounding a […]

Posted On : Published By : Tom Whipple
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China Says Local-Level Debt Soars, Stirring Fear

The total debt of local governments in China has soared to nearly $3 trillion as the country’s addiction to credit-fueled growth has deepened in recent years, according to the findings of a long-awaited report released on Monday by the central auditing agency. In the report, which is likely to further raise concerns about China’s debt problem, the National Audit Office found that local governments across the country had accumulated 17.89 trillion renminbi, or $2.95 trillion, worth of debt obligations as of the end of June. That was an increase of 12.7 percent from December 2012, when local government debt stood at 15.88 trillion renminbi, the report said. The June figure also represented a sharp increase of 67 percent from the end of 2010, when an earlier report by the Audit Office estimated local government debt at 10.71 trillion renminbi. Other reports have estimated local government debt […]

Posted On : Published By : Tom Whipple
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China's Tianjin to start car plate auction, lottery in 2014

China’s northern municipality of Tianjin will start a bidding and lottery system for car license plates on Jan. 1, 2014, a move targeted at restricting the increase of cars, said government authorities on Tuesday. Sixty percent of the quota of 100,000 new car license plates will be issued via lottery, including 10,000 and 50,000 for fuel-efficient cars and conventional cars respectively, said a management plan approved by the Tianjin municipal government. The remaining 40,000 plates for conventional cars will be auctioned. The opening bid will be 10,000 yuan (about 1,652 U.S. dollars). A total of 88 percent of the plates will go to individual car owners, while non-individual applicants, such as companies, will compete for the other 12 percent. Government organizations and institutions in Tianjin will not be permitted to apply for new official cars, and all auction incomes from car plates will be […]

Posted On : Published By : Tom Whipple
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China’s Tianjin to start car plate auction, lottery in 2014

China’s northern municipality of Tianjin will start a bidding and lottery system for car license plates on Jan. 1, 2014, a move targeted at restricting the increase of cars, said government authorities on Tuesday. Sixty percent of the quota of 100,000 new car license plates will be issued via lottery, including 10,000 and 50,000 for fuel-efficient cars and conventional cars respectively, said a management plan approved by the Tianjin municipal government. The remaining 40,000 plates for conventional cars will be auctioned. The opening bid will be 10,000 yuan (about 1,652 U.S. dollars). A total of 88 percent of the plates will go to individual car owners, while non-individual applicants, such as companies, will compete for the other 12 percent. Government organizations and institutions in Tianjin will not be permitted to apply for new official cars, and all auction incomes from car plates will be […]

Posted On : Published By : Tom Whipple
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Agriculture Land Shrinking in China; World Bank Provides Loans to Reduce Soil Pollution

Growing population, industrialization and rapid economic growth are putting unprecedented pressure on China’s agriculture resources, and have become a threat to food security in the country and the world. According to China’s national land survey figures released recently, total arable land in the country stood at around 135.4 million hectares at the end of 2012. This is still about 15.4 million hectares above the “red line” of a minimum 120 million hectares earmarked to ensure food security in China. However, pollution of land and water are eroding agriculture land in China. Coupled with increasing population, China’s per capita arable area now stands at around 0.1 hectare, almost half of the global average of around 0.2 hectare. According to government officials in China, it was found from the survey that about 3 million hectares of land is now unsuitable for rice cultivation due to heavy contamination by poisonous heavy metals […]

Posted On : Published By : Tom Whipple
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EIA: U.S. October Oil Use Up 3% vs. Year Earlier to Two-Year High — Update

U.S. oil demand rose 3% in October from a year earlier, hitting the highest level since August 2011, government data released Monday show. At 19.273 million barrels a day, demand was its highest for the month since 2008. Demand for gasoline, the most widely used petroleum product in the world’s biggest oil consumer, rose 1.4%, or 120,000 barrels a day, to a three-year October high of 8.821 million barrels a day. The strength in gasoline demand came as the average price of regular gasoline at the pump in October was $3.344 a gallon, down 40.2 cents from a year earlier, EIA data show. Demand for ultra-low sulfur diesel fuel in October averaged 3.929 million barrels a day, up 4.8% from a year earlier. Demand for the fuel that powers trucks and trains and is used as heating oil […]

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EIA: U.S. Crude Imports Drop for 20th Straight Month

U.S. crude-oil imports fell year-on-year for a 20th straight month in October, as domestic crude output climbed to its highest level for the month since 1988, government data released Monday show. Imports dropped 7.8% from a year earlier to 7.475 million barrels a day in October, the lowest level for the month since 1995, according to the Energy Information Administration. The drop of 633,000 barrels a day came as domestic crude-oil output jumped by 12% from a year earlier to 7.753 million barrels a day. Among major sources of imports, Canada maintained the rank of top supplier as it has since March 2006. Imports from Canada averaged 2.622 million barrels a day, 17% above a year earlier. Crude-oil imports from Saudi Arabia, the world’s biggest oil exporter, rose 8.5% from a year earlier to 1.36 million barrels a day. Crude imports from the Persian Gulf […]

Posted On : Published By : Tom Whipple
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Weather shift near ND derailment worries officials

A shift in the weather could heighten the risk of potential health hazards after a mile-long train carrying crude oil derailed in North Dakota and set off explosions, authorities said, urging residents of a nearby town evacuate. About 2,400 people live in Casselton, about a mile from Monday’s fiery derailment. The Cass County Sheriff’s Office called on residents there and those living five miles to the south and east to leave their homes because of the weather shift, which it said the National Weather Service was forecasting. "That’s going to put the plume right over the top of Casselton," Sheriff Paul Laney said. No one was hurt, and the cause was still being investigated. Sheriff’s officials said that the evacuation unfolded in calm and orderly fashion in recent hours, with the majority of nearby residents heeding a strong recommendation by authoriites […]

Posted On : Published By : Tom Whipple