China’s Labor Day

There were quite a few announcements on Labor Day in China, as a matter of fact, 42 laws and regulations came into effect.

Let’s review some of the highlights as they appeared in Xinhua:

In Beijing, a new regulation allows college graduates who have not
found jobs to apply for bank loans of up to 500,000 yuan (62,500 U.S. dollars)
to start a business, the same as the unemployed, migrant workers from
the countryside and soldiers back to civilian work.

I should’ve studied there…
They’re keeping the foot on the peddle.

Operators who overcharge consumers and refuse to refund will be
confiscated of the illegal gain and compensate consumers’ losses, according to a
revised State Council regulation on delivering administrative penalty to illegal
price fixing practice.

In another regulation on price fixing, government agencies are
required to take the initiative in carrying out research on price range,
conducting survey among social circles on price change and group reviews as well
as publicizing final decisions.

That should keep them busy… 

The State Environmental Protection Administration has issued policy
measures to ensure environment safety of pathogenic microbe labs, demanding the
labs set up a dangerous waste registration system, not discard or pile up wastes
at will or put them among other trash.

 It highlighted that supervisors of the labs are responsible for
preventing and addressing pollution caused by waste water and gas and dangerous
wastes.

Signs of progress in the health front…

According to Xinhua,
May 1 brought some further very interesting developments; their pension
fund was allowed to invest 20% of their $25 billion USD fund in foreign
assets.

Why do I get the feeling that some western brokers were drooling…
And I guess the purchase of the USD bond saga adds one more player…

Also, Xinhua reports
that the Chinese Electric Council estimates power consumption will
increase 11.5% for the first half of 2006. It would seem that the
chinese economic growth train isn’t slowing down; this figure implies
that their 06Q2 will be better than their 06Q1 GDP growth of 10.2%.

A housing bubble seems to be picking up, according to Xinhua,
17% of the chinese disposable income was spent in 2005 to make house
payments; although chinese can bearly pay their mortgages, they choose
to become "house slaves" to invest in the rising real estate boom.

And the coup de grâce, Xinhua’s account on China’s commitment to vanish the surplus:

In its 11th five-year plan for economic and social
development in the 2006-2010 period, the Chinese government has set a goal to
basically eliminate the current account and capital account surplus and achieve
balanced economic growth.

The task calls for expanding domestic consumption
demand and transforming the mode of economic growth. China is to enhance its
capability of innovation, deepen reforms of land, resources, environmental
protection, social security, and medical care. The state will also readjust its
policies on domestic and foreign investment and on domestic and foreign trade to
optimize its export structure and expand imports. The country will also improve
its financial markets and the exchange rate regime, according to the 11th
five-year plan.

I’m not buying –too good to be true.