Artificial suppression of key utility prices – including water, electricity and gas – has been part of the secret of China’s industrial success. But now things are changing.
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11 Sep 2014
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Artificial suppression of key utility prices – including water, electricity and gas – has been part of the secret of China’s industrial success. But now things are changing.
Alleged insider trading and speculation on junk stocks have dampened sentiment, forcing regulators to launch a delisting mechanism for the growth enterprise board.
The ministry has attracted widespread criticism for appearing too lax over food safety after frozen food was recalled for containing deadly bacteria.
Debate has begun over whether property price cuts will lead to widespread easing of restrictions in the market.
A move by regulators to target the shadow banking system could squeeze the supply of credit, hitting smaller banks and private companies the hardest.
Developers are boosting investments in commercial property on curbs aimed at cooling prices in the residential segment.
Beijing is expected to lose Rmb 160bn in tax revenue following implementation of new income tax rules on September 1.
Local government financing vehicles are trying to repackage debts to escape default but the sector still looks shaky.
Concerted selling of Sina, Sohu, Netease, Baidu and other internet shares through fears of a severe web crackdown has been overdone.
The imposition of controls on prices and the supply of food and energy show deep disquiet in Beijing, but it will take several months to bring the root cause – ballooning money supply – under control.
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