industrial production in China grew in January-February by 5.4% compared to the same months of 2015. This is the lowest growth since November 2008, said the national statistics Office Beijing, indicating that the increase in production from January to February 2015 was 6.8% and in December at 5.9%. Investments grew by 10.2%, compared to estimates of 9.5%, but retail sales only rose by 10.2% in the first two months compared to a year ago, less than expected. Industrial production, called in technical terms “added industrial value” represents the 40.5% of Chinese GDP and is therefore one of the main indicators of growth. Faced with a series of signals that highlight the economic slowdown Chinese leaders insist to play defense.
the central bank reassures on economy and yuan
to reassure the world that there will be “hard landing” or social instability for industrial restructuring plans. Saturday is also joined the Chinese Central Bank. The economic growth target of China by 6.5% at year-end can be achieved without an “aggressive” monetary stimulus plan, says the governor of the PBOC, the central bank, Zhou Xiaochuan. “We maintain the stability of our monetary policy – Zhou said on the sidelines of a hearing in Parliament – and we do not think that too much money you can raise to keep our objectives.” “In the event occurring during international or internal upheavals we will show flexibility.” Zhou sees one yuan stabilized and full-bodied in capital flows still output in the short term, as is indeed the latest data: the foreign exchange reserves fell by about 29 billion dollars in February, to 3.2 trillion, less than 99, 5 billion in January and 108 billion in December. China has no interest in weakening the yuan: with a trade surplus of 600 billion dollars in 2015, there is no need of artificial supports.
“No to mass layoffs as in the 90s »
But the problem of excess production capacity is severe, so that the prime Minister Li Keqiang has admitted the need to” sink the knife into zombies factories’ that continue to work at a loss, just to try to pay interest on the debt and avoid a leap in unemployment, which according to Beijing should remain stable at 4.5% in urban areas. In early March, the Minister of Human Resources Yin Weimin announced painful restructuring in the coal and steel: provides 1.8 million redundancies, 1.3 million miners and 500,000 metalworkers. The central government will allocate more than 13 billion euro to support and replace the workers made redundant. But anonymous government sources have raised the budget to 5-6 million layoffs, extending it to other areas crushed by a mountain of excess production, from concrete to glass, paper, to shipyards. Li Keqiang in his speech on the state of the economy, just uttered before the People’s Assembly reiterated that the “zombie factories” must be addressed, but did not provide figures on redundancies. Apparently in Beijing is undergoing a difficult and hard debate. Xiao Yaqing, head of the supervision of state enterprises Commission, says that the restructuring will not result in the same mass of the 90 layoffs, which meant the dismissal of 28-30 million workers. “The situation is quite different, the economic fundamentals today are much more solid,” said Xiao. In China there are about 150,000 public companies that are worth the little card less than 14 thousand billion euro, according to official data. “Protecting the interests of workers is an important aspect of the next phase of reforms and there will be more mergers and restructuring, and the least possible number of bankruptcies”, concluded the executive.
The rigidity of the labor law in the viewfinder
But from within the government come other less reassuring voices on the employment front. To revive the economy it is necessary to change the law on the work that is too protective of employees and lack of flexibility with respect to the interest of the companies have said the other day on TV Finance Minister Lou Jiwei arguing that this rigidity discourages firms and it holds back from taking on. “The purpose was to protect the workers, but in the end will damage the interests of some because the increase in wages and business costs induce some traders to shift production abroad,” the minister said in a speech that there Lou One might have expected in Europe. Moreover, it is a criticism of the government action expressed by a minister, a fact more than rare in China. So, the analysis of the minister, to create jobs we must act on the minimum wage, freezing increases. Currently in Beijing the minimum hourly wage is set at $ 2.87 (provided it is respected); but in the industrial province, for example in Liaoning steel and coal, the minimum is $ 1.32. On the web it has unleashed a strangely uncensored controversy, with some bloggers even went to demand the indictment of the minister. The fact that the post of criticism to the words of the communist leader were not immediately deleted it seems a further sign of an internal debate still not concluded.
The warning from the IMF
waiting to see what will be the final decision of Beijing, the director of the International Monetary Fund Christine Lagarde insists: “what should be done at this stage of Asia? Structural reforms to increase competitiveness, growth and jobs’. Easy to say, not to realize, in Asia and in Europe.
March 12, 2016 (edited March 12, 2016 | 24:44 )
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