lundi 18 novembre 2013

New regulations from Beijing!

New regulations from Beijing! 

China is preparing to loosen the grip of the state of the economy , tackling the powerful public groups while encouraging private sector investment , with a burst of reforms announced Friday .

Central Committee of the Chinese Communist Party

The list of these reforms the second world economy , adopted by the Central Committee of the Chinese Communist Party (CCP) at the end of a completed Tuesday plenary session was delivered by China's official Xinhua news agency in a long document. If major societal changes are announced - the relaxation of the one-child policy to reduce the death penalty and the abolition of re-education through labor - much of decisions aimed at strengthen " the role of the market " in the economy. The state groups who enjoy comfortable monopolies over entire sectors , will see their room for maneuver to reduce : " By 2020 , they will pay 30 % of their profits to the government, against a current ratio 5% to 15 % , "said new China , noting that " part of their capital will be transferred to the social security fund " very faulty for years.

113 large companies in various sectors, from energy to finance to transportation, depend directly on the central government. Reducing the huge liquidity available to these groups , the measure would force them to manage their investments more efficiently , and thus moderate their excess production capacity, an endemic problem , told AFP Liu Ligang , an economist at the bank ANZ Australian- New Zealander . According to him, " it will even result in a more competitive environment." The general opinion , any reform of the public sector will, however, complicated by fierce resistance of these groups , which thrive on the lack of competition and their close relations with the authorities at all levels . The Party also multiplies the signals with respect to the private sector : " Firms in non- public capital will be allowed to take stakes in projects " initiated by state groups, according to new China without specifying how much . The plenum has called for the state groups are " owned by both private and public capital ." The authorities allow the creation of smaller banking institutions and financial institutions to private capital , said the Party document . Only a handful of private banks are currently allowed to operate in China !

Regulations restricting private investment in several service sectors will be relaxed , also notes new China. Beijing also confirmed its commitment to accelerate the liberalization of interest rates. China's central bank had raised in July its controls on lending rates , but the rates for deposits are strictly supervised. " This reform program is extremely ambitious , but the impact on the economy and markets will depend crucially on how they are implementations ," warned Wang Tao , an analyst at UBS in Hong Kong. Party leaders also undertake to move towards free convertibility of the yuan - ie the ability to buy and sell freely the Chinese currency - a long- term repeated regularly by the government. Convertibility without control might at first be realized in the free zone recently launched in Shanghai (east).

The government should just create new zones , and extend the reforms previously launched on an experimental basis on limited areas , noted the official news agency . As real estate prices continue to soar , a property tax - already implemented in two cities - could be " extended to other cities," the document adds Party , not to mention timing.

Local governement ! 

For their part, local governments heavily indebted , " will be allowed to diversify their incomes by raising funds through bond issues " - which will give them a source of income other than real estate transactions. So far, only a few cities, including Shanghai, issue their own bonds. Furthermore, " the consideration of debt levels in the evaluation of management ", " lower participation of local governments in enterprises" , as " the management of certain costs by Beijing " administrative levels of below will help " curb any swelling of local debts ," said Wang Tao.

Finally , farmers will be granted rights to " possess, use and transfer the land they cultivate , and can use their property rights as collateral " for financial transactions , said new China. So far , all agricultural land are officially owned by the state, which gives enjoyment to farmers.

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