April 19, 2024

You are here: Home / Archives for politburo

China Plans on Continuity in Economic Policy in 2013

December 16, 2012 by Leave a Comment

BEIJING — An annual conference that helps set economic policy in China ended with a lengthy government statement Sunday warning of difficulties in the global economy as well as industrial overcapacity and financial-sector risks at home.

But a review of the two-day conference’s activities, which was released by the official Xinhua news agency, suggested few changes in existing economic policies, calling for continuity for the time being.

The statement endorsed tax cuts, continued curbs on real estate speculation and a broader effort to increase domestic consumption and wean the economy from its dependence on exports and investment.

“The opportunities facing us are no longer the traditional ones of simply entering the international division of labor, expanding exports and accelerating investments, but rather new opportunities forcing us to expand domestic demand, improve innovative capacities and promoting the transformation of the mode of development,” the statement said.

Held in December each year, the Central Economic Work Conference in theory is jointly run by the Central Committee of the Communist Party and by the government’s cabinet of ministers. In reality, the Standing Committee of the Politburo has the power, and all seven of its members attended the conference, together with Prime Minister Wen Jiabao, who left the standing committee last month but remains in office as prime minister until the National People’s Congress next March.

While China has many economic opportunities, “we must soberly recognize that there are still many risks and challenges confronting our national development,” the overview released by Xinhua said. “Problems with imbalances, ill-coordination and lack of sustainability remain pronounced.”

“The contradiction between downward pressures on the economy and relative overcapacity in production is deepening,” the statement continued. “Business operating costs are rising while innovative capacities are inadequate. There are latent risks in the financial sphere.”

Previous annual conferences have lasted three days. The government issued no explanation of why the conference this year appeared to last only two days, opening Saturday and closing Sunday.

The conference called for the agricultural sector to pay attention to maintaining an adequate food supply for the population, and endorsed continued urbanization, a favorite theme of the incoming prime minister next March, Li Keqiang.

“Urbanization is a historic task of our country’s modernization, and also possesses the greatest potential for expanding domestic consumption,” the statement said.

The statement called for continued but unspecified industrial reforms to address the problem of overcapacity. It was not clear what would be done to address risks in the financial sector, but a government official had said before the conference that China’s leaders were eager to move toward the introduction of a system of bank deposit insurance.

The precise details of discussions at Central Economic Work Conferences sometimes take days or weeks to dribble out.

Article source: http://www.nytimes.com/2012/12/17/business/global/china-plans-on-continuity-in-economic-policy-in-2013.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

China Unexpectedly Reverses Economic Policy

November 30, 2011 by Leave a Comment

The central bank said Wednesday that commercial banks would be allowed to keep a slightly lower percentage of their deposits as reserves at the central bank. The change, which will take effect on Monday, means that commercial banks will have more money available to lend, which could help to rekindle economic growth and a slumping real estate market.

Real estate developers, small businesses and other borrowers have been complaining strenuously in recent weeks of weakening sales and scarce credit. Prices have dropped up to 28 percent for new apartments in some Chinese cities this autumn, real estate brokers have been laying off thousands of agents as transactions have dried up, and export orders have slumped.

The Chinese move was a particular surprise because the central bank usually announces moves on Friday evenings, to allow banks and markets plenty of time to digest the news.

The Chinese announcement came after the Shanghai stock market had slumped 3.3 percent on Wednesday, its worst one-day loss in four months, on worries that the government might not act.

The reduction in the so-called reserve requirement ratio came after the central bank had increased the same ratio six times this year, and raised interest rates three times. The monetary policy moves earlier this year had been aimed at curbing inflation, which persists but appears to have been replaced by weakening economic growth as the top worry for policymakers.

Monetary policy changes are made not by the country’s central bank but by the State Council, the country’s cabinet. Shifts in the broad direction of policy are usually made only with the approval of the Standing Committee of the Politburo of the Chinese Communist Party – the nine men who really run China.

Analysts said that the central bank’s decision to announce a change in reserve requirements instead of quietly nudging state-controlled banks to make more loans showed an important political decision had been made.

“The public nature of this move – a move that would have gone through the State Council – is a clear signal that Beijing has decided that the balance of risks now lies with growth, rather than inflation,” wrote Stephen Green, a China economist at Standard Chartered Bank, in a research note. “This is a big move, it signals China is now in loosening mode.”

The People’s Bank of China, the country’s central bank, cut the reserve requirement ratio by 0.5 percentage points as of Monday, to 21 percent for large banks and to 19 percent for smaller banks.

The Chinese move was such a surprise that one of the 15 members of the central bank’s monetary policy committee, Xia Bin, had just said at a seminar in Beijing on Wednesday morning that China would only “fine tune” its monetary policy and would maintain an overall stance that he characterized as “prudent.”

Those remarks triggered the slump in share prices during Wednesday’s trading in Shanghai; the stock market there had been closed for several hours by the time the central bank announced its policy reversal.

It was unclear if the Chinese move had been coordinated with the six central banks in the United States, Europe and Japan that agreed an hour later to provide more liquidity to world financial markets.

 

     The United States Treasury notifies the Chinese government of policy moves by the Obama administration, so as to reassure the United States government’s largest foreign creditor. But economists say that there has been little international coordination of monetary policy by China’s central bank.

    The People’s Bank of China is considerably more secretive than central banks in the West and particularly wary of foreign governments because of years of international pressure to allow faster appreciation of the renminbi, China’s currency.

 

     The Chinese central bank provided no explanation for its move on Thursday evening. The one-sentence statement only said, “The People’s Bank of China decided to cut financial institutions’ renminbi deposit reserve ratio by 0.5 percentage points.”

Article source: http://feeds.nytimes.com/click.phdo?i=f92ba141d1e22e42d3c10afc2ff5ca68

Filed Under: Business News Tagged With: , ,

The Guggenheim Connection: Fame, Riches and a Masquerade

September 17, 2011 by Leave a Comment

Lady Catarina and Mr. Guggenheim (David Birnbaum, of Ditmas Park, Brooklyn, in court records) played for the grand name of Guggenheim, and they didn’t get far. They were arrested earlier this year, along with Vladimir Z. Guggenheim — in truth, Vladimir Zuravel, a massage therapist from Moldova — and accused of trying to swindle American investors out of billions of dollars.

Even in this post-Madoff era, their caper stands out for its chutzpah. The picture painted by authorities is a tabloid monument to financial fakery, replete with whispers of rare diamonds, Iraqi oil, connections to the Chinese Politburo and even to American presidents. Capping it all were supposed assurances from the Guggenheims, one of the nation’s richest and most famous families.

In hindsight, the whole affair seems so preposterous it is hard to imagine anyone could have gotten away with it. But, online and in person, the faux Guggenheims were so convincing that, for a moment, a few big-money types almost bit. Even now Mr. Zuravel insists that Mr. Birnbaum, described as a frail man of 68, is a real Guggenheim.

The three have said they are innocent. The criminal charges against Mr. Birnbaum were dismissed on Sept. 9, apparently because prosecutors failed to file a timely indictment, though they could file new charges against him. Ms. Toumei is scheduled to appear Monday morning in the federal courthouse in Lower Manhattan.

What makes the case even more intriguing is that the three were unmasked by the real Guggenheims, who are themselves trying to capitalize on the family name in ways the dynasty’s patriarch, Meyer Guggenheim, could not have imagined when he arrived from Switzerland in 1848 to seek his fortune in America.

Meyer Guggenheim amassed his wealth in mining and smelting. One of his seven sons, Benjamin, went down with the Titanic. As time went on, the family abandoned its early pursuits for the rarefied realms of philanthropy. Another of Meyer’s sons, Daniel, was a patron of Charles Lindbergh and endowed aviation research. Still another, Solomon, built the art collection that gave rise to the Solomon R. Guggenheim Museum in Manhattan. A granddaughter, Peggy Guggenheim, became known as much for her private life for as her art collection. The Picassos, Miros and Giacommettis in her palazzo in Venice draw thousands of visitors a year.

But in 2000, a great grandson of Meyer Guggenheim, Peter Lawson-Johnston Sr., decided that it was time for the Guggenheims to get back to work. With $30 million of family money, he helped found Guggenheim Partners, a boutique financial company modeled on the Wall Street partnerships of old.

Whether this Lilliputian investment company could take on the giants of global finance was anyone’s guess. The odds were certainly long. But its early success is turning some heads on Wall Street, particularly given tough financial times. In recent years, as the great investment houses have cut back, Guggenheim Partners has hired roughly 1,700 people, leveraging a name that is often mentioned in the same breath as Carnegie, Rockefeller and Vanderbilt. It is opening a high-octane trading unit and has tried to muscle in on the lucrative mergers-and-acquisitions business. Today, its money management division oversees $120 billion in assets, only a small portion of which is Guggenheim family money.

To help lead these ventures, Guggenheim Partners has hired Alan D. Schwartz, the smooth deal maker who tried to right Bear Stearns before it collapsed into the arms of JPMorgan Chase, foreshadowing the financial shocks to come. Others have signed on from the likes of Goldman Sachs and Merrill Lynch.

So no one was more surprised than the executives at Guggenheim Partners when two men purporting to be Guggenheims and fronted by a charming woman calling herself Lady Catarina offered to sell $1 billion in diamonds from a private Guggenheim collection that, in fact, didn’t exist.

And not only diamonds. Ms. Toumei — known to her associates as a countess — apparently tried to coax the Coca-Cola Company into a deal involving “Guggenheim” vodka. She invited Rupert Murdoch to dinner (he never got back to her) and tried to court the Bush family. There was talk of gold, of Swiss banks, of loans to the tiny African nation of Swaziland — on and on.

Article source: http://feeds.nytimes.com/click.phdo?i=47ee47106f677ccda8845b5a5a4897b0

Filed Under: Business News Tagged With: , ,

Accounts of Chinese Bloggers on Weibo Suspended, Causing Protests

August 27, 2011 by Leave a Comment

In messages, the operators of Sina.com’s Weibo microblog detailed the suspensions of the bloggers. The announcements provoked a torrent of online protest, some of which was directed at the government on the assumption that it was behind the punishments.

If so, it was the clearest expression yet of the government’s growing concern about its inability to curb free expression on the Internet — particularly searing criticism of official acts — despite a sweeping and extremely sophisticated censorship regime.

On Monday, a member of the Politburo, the Communist Party committee that acts as China’s collective leadership, visited Sina.com officials and said that they should “resolutely put an end to fake and misleading information.” The official, Beijing’s party secretary, Liu Qi, said they should use new technology to better manage the microbloggers, whose numbers have grown explosively in the last year.

The company’s notices stated that two bloggers who had spread false rumors on Weibo would lose their right to post messages or to add followers for a month. One stated that a blogger had been suspended after posting a false report that the accused killer of a 19-year-old woman had been set free after his politically powerful father intervened.

Another disclosed the suspension of a blogger who accused the Red Cross Society of China, which is mired in a financial scandal, of selling blood at a profit.

Some Weibo users sardonically applauded the suspensions, writing that the notices of them spread the rumors more effectively than the original bloggers.

“I didn’t know about the story till now. How tragic!” one blogger wrote. Others expressed outrage. “How does Weibo know what’s true or not?” one user wrote. “Who gives Weibo the right to silence its users?”

Still, one official of a Chinese Internet-related service, speaking on the condition of anonymity about a matter of deep concern to the authorities, predicted that the notices would have a chilling effect.

The official said the announcements may also represent the start of further efforts to keep politically sensitive information out of the public domain. On Monday, People’s Daily, the Communist Party’s official newspaper, appeared to suggest that restrictions were in the works, publishing a full-page article on the “political mission” to control microblogs and other new forms of media.

Sina.com is not the only company feeling new pressure. The operator of China’s other major microblog, Tencent, received a July 19 visit from another Politburo member, Zhou Yongkang, who oversees public security. In a speech to Tencent employees, Mr. Zhou called for “greater self-discipline” to ensure that the Internet promoted social harmony.

The Chinese authorities have pursued two tracks with regard to the Internet, allowing freewheeling debate on topics unrelated to high-level politics and governance, but carefully monitoring — and sometimes banning — discussions on topics deemed too sensitive. Censors frequently notify users that a specific posting “was deleted according to relative laws and regulations.”

But official concern appears to have risen after two recent episodes demonstrated the potential power of the Chinese Web to mobilize social protest.

In the first, tens of million of online bloggers assailed government railway officials after a June 23 train crash near Wenzhou that killed 40 people, accusing the officials of incompetence, corruption and a cover-up. In mid-August, residents of Dalian in northeast China flooded microblogs with photographs of their protest against a local chemical factory, overwhelming censors’ attempts to delete the posts.

Since then, a welter of commentaries and articles in Communist Party newspapers have debated the need to rein in comments on the microblogs. The Chinese government abruptly blocked Twitter and Facebook in 2009. The services remain blocked today. But many analysts say that the government will not completely close the hugely popular microblogs for fear of a public backlash.

Mia Li and Shi Da contributed research from Beijing.

Article source: http://www.nytimes.com/2011/08/27/world/asia/27weibo.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,