Economy

　　Policy Stability

　　China‘s economic growth in the first quarter was within a proper range， so the government will maintain the continuity and stability of its macroeconomic policies， the top leadership announced on April 25.

　　Since the beginning of the year， the country has been forced to face economic challenges and difficulties head on but the economy has generally had a good start， said a statement released after a meeting of the Political Bureau of the Communist Party of China (CPC) Central Committee.

　　Xi Jinping， General Secretary of the CPC Central Committee， chaired the meeting to discuss the economic situation and related matters.

　　“The economic situation was generally in line with the government’s macroeconomic regulation and developmental outlook，” the statement said.

　　Economic fundamentals remain unchanged and the country should coordinate the measures required for stabilizing growth， promoting reforms， adjusting structure， improving livelihoods and preventing risks， the statement said.

　　“Both fiscal and monetary policies will be kept steady to nurture expectation for sound development and a transparent macro policy environment，” it said.

　　The Yangtze Belt

　　Premier Li Keqiang promised on April 28 to help group 11 provincial-level regions into the largest development network in China—an economic belt along the 1，800-km “golden waterway” of the Yangtze River.

　　It is a logical step to use the Yangtze River to connect the relatively developed east China with central and west China， Li said.

　　Li discussed the plan with leaders from the 11 municipalities and provinces in Chongqing， and he said it will generate a powerful driving force behind the nation‘s next round of economic development.

　　The 11 regions in the proposed economic belt include Shanghai and Chongqing municipalities， along with Jiangsu， Zhejiang， Anhui， Jiangxi， Hubei， Hunan， Sichuan， Yunnan and Guizhou provinces.

　　“The well-being of people along the Yangtze River—about 580 million in 2012—is vital to the country’s overall development，” Li said.

　　Alibaba‘s Purchase

　　China’s e-commerce giant Alibaba has stepped up its investment in cultural and digital entertainment industries with a strategic deal with leading online video source Youku Tudou.

　　The deal， announced on April 28， means Alibaba and private equity firm Yunfeng Capital will buy an 18.5-percent stake in Youku Tudou for $1.22 billion.

　　Alibaba holds 16.5 percent while Yunfeng Capital possesses 2 percent. Alibaba‘s founder and chairman Jack Ma is a co-founder of Yunfeng Capital.

　　The cooperation will support Youku Tudou’s innovation in the newly emerging area and accelerate Alibaba‘s digital entertainment and video content strategy， said Ma.

　　It will also extend the Alibaba ecosystem and bring new products and services to Alibaba’s customers， he said.

　　The deal will help Youku Tudou build a cultural entertainment platform that integrates online and offline entertainment，“ said Victor Koo， Chairman and CEO of Youku Tudou.

　　Loans for Small Firms

　　Outstanding loans from both domestic and foreign-invested banks to the nation‘s small and micro-sized companies stood at 13.7 trillion yuan ($2.22 trillion) as of the end of March.

　　The value represented an increase of 16.3 percent year on year， with the growth rate picking up by 2.1 percentage points compared to the growth level at the end of last year， according to data released by the People’s Bank of China， China‘s central bank.

　　In the first quarter， new yuan-denominated loans to small and micro-sized firms totaled 560.9 billion yuan ($89.69 billion)， accounting for 30.5 percent of new loans to all companies.

　　Mobile Payment Thrives

　　The total trading volume of the third-party payment business rose 43.2 percent year on year to 17.9 trillion yuan ($2.9 trillion) in China in 2013.

　　The country’s third-party mobile payment market also grew as transactions exceeded 1.2 trillion yuan ($191.88 million)， up a staggering 707 percent year on year， according to a report by the Institute of Finance and Banking under the Chinese Academy of Social Sciences.

　　The People‘s Bank of China (PBC)， the central bank， suspended code-based payments and virtual credit cards on March 14， and set a limit on the size of third-party payments， causing discontent in some financial quarters.

　　Fan Shuangwen， Deputy Director of the PBC’s Department of Payments and Settlements， said the limit guaranteed security rather than restricting consumption， and would maintain transparency in the process and prevent money laundering.

　　Direct Money Exchange

　　China set up a currency-trading center on the China-Viet Nam border on April 26， which will help end rampant illegal private currency trading.

　　The ASEAN Currency Business Center， initiated by the Agricultural Bank of China (ABC) in Dongxing， southwest China‘s Guangxi Zhuang Autonomous Region， will allow direct convertibility of the Chinese yuan and the Vietnamese dong， said Zhang Xiaogao， General Manager of the International Business Department of ABC’s Guangxi Branch.

　　The center， the first of its kind in China， will boost convenience for business people in the border areas， Zhang said， adding that it could help end rampant illegal private currency trading.

　　Exchanges between the two currencies had to be conducted via the U.S. dollar in local banks， contributing to the business of traders that provide illegal services of direct yuan-dong exchanges in the cross-border region.

　　Downward Trend

　　The State Information Center (SIC)， a government think tank， on April 28 forecast China‘s economy to expand by around 7.4 percent in the second quarter， with notable downward pressure and rising financial risks.

　　The SIC predicted the economy will stay on a steady yet slightly downward track in the second quarter， as growth momentum remains sluggish amid slower income growth， easing investment and weak global recovery.

　　The center named risks from the property market， local government debt and overcapacity as major threats to financial stability.

　　After years of intense growth， China’s red-hot housing market is showing increasing signs of cooling down. In some cities like Hangzhou and Shanghai， there have been reports of price cuts to promote sales.

　　“Market expectation change and radical adjustment in the sector may lead to systematic risks that will affect related industries and broader financial and economic stability，” the SIC warned.

　　It advised the government to accelerate implementation of proactive fiscal policies and flexible use of prudent monetary policies.

　　When appropriate， China should consider lowering the reserve requirement ratio for banks， the SIC said.

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