Thursday, 28 June 2007

Will a savings tax slow the stock market frenzy?

With the bubble continuing to inflate it is clear that certain elements of the underlying structure of the Chinese economy are to blame. The bottom line appears to be a shortage of alternative assets for the local Chinese to invest in (for example, overseas shares, real estate).

The latest idea is to abolish the savings tax to encourage individuals to keep their savings in accounts instead of throwing it at the seemingly one way street that it is the Chinese stockmarket.

With increasing inflation means that real returns are close to zero the Chinese government has a long way to go to turn around the stockmarket juganaught.

The Independent summarise the current proposition:

China to act on savings tax to deter share-buying frenzy
Chinese regulators are considering suspending or abolishing a 20 per cent tax on bank savings to try to persuade consumers to stop moving cash out of bank deposits into the increasingly heady world of stock market investment.

Rising inflation is badly eroding the value of savings in China, where people tend to save as much as 40 per cent of their income in the absence of a solid social welfare system.

This has helped to fuel a boom in share buying, which has replaced bank saving as the most popular investment option in China and stoked fears of an unsustainable bubble. The country's stock market rose 130 per cent in 2006 and by over 50 per cent already this year, despite some vertigo-inducing corrections that have caused ripples around the world.

China has seen the introduction of record numbers of new share-trading accounts which now add up to over 100 million. A central bank survey last month showed that consumers now prefer shares to deposit accounts.

The regulators hope that changing the tax, first introduced in 1999, would make saving in banks more attractive. JP Morgan economists said removing the tax would be the equivalent of a 60 basis point rate rise for savers.

The move into share ownership has been driven by ordinary investors, such as former State-owned Enterprise (SOE) employees, students and fledgling business people in the booming "New China".

These investors are unable to invest in property but are unhappy with the returns they are getting on their bank deposits, because rising inflation has brought real deposit rates close to zero. Rising food prices in China have seen CPI creep up to 3.4 per cent in May.

The benchmark one-year deposit rate is now 3.06 per cent, just slightly higher than the 2.9 per cent rise in the consumer price index to May this year.

"What's really happened is a shift out of long-term savings deposits in favour of more liquid short-term deposits," said Jonathan Anderson, chief Asia economist at UBS in Hong Kong.

"The domestic stock market has been booming, with a sharp rally in March and April; [and] households and firms liquidated longer-term deposits to buy equities," said Mr Anderson.

Finance Minister Jin Renqing said the government had decided to look into the issue in the light of a booming economy.

1 comment:

Anonymous said...

June 27, 2007
Shanghai Cheerleader Seeks McDonald’s Dishwasher
Filed under: Culture

I haven’t decided yet if this is a parody or not, but my wife thinks it probably isn’t. As I read the post in Chinese — the post of a cheerleader in Shanghai who wants to marry a foreigner — I found myself alternately laughing and shaking my head in disbelief. I believe this was originally posted on the Tianya BBS, but it made its way to the largest Chinese BBS in the US, MIT BBS (where I stumbled upon it today).

The post itself is an amazing collection of stereotypes of both Chinese and Western men. Anyway, as I read it, I knew I had to translate this amazing document:

Female College Student: I just want to marry a foreigner

I am a female student at Jiao Tong University in Shanghai. This is my first time posting on Tianya, and I don’t write well, so please everyone, don’t laugh at me.

Everyone has their notion of the ideal life — some want to become heroes, some want to become rich, some long to become leaders. What about me? My greatest wish in life is to marry a Western man.

Some people might say I am very common, or even that I worship and fawn over foreigners, but I am a very traditional girl. In my opinion, marriage is the most important thing in life. There is a saying that is very popular now: marrying a good man is more important than excelling at your studies. After all, marrying a good man is the most important thing.

Some people will ask, “Is it possible that China has no good men?” Sorry, I never consider Chinese men as a possibility. As far as my reasons, ladies and gentlemen, be patient, take a seat — whether sofa, bench, or floor — and listen to a young girl tell you all about it.

One: China doesn’t have a suitable man for me

I am a very remarkable girl. In terms of my studies, I am studying at a famous university with excellent grades. Furthermore, I’m not at all the type of high-IQ ugly girl with thick glasses who has her head always buried in books. Whether my looks, my figure, or my conversation, I am outstanding. I am the captain of my school’s soccer cheerleading squad, and in my spare time I compete in local beauty contests. I love music, dancing, and the arts, and I also frequently publish little articles in newspapers; in sum, in every respect, I am outstanding.

But what kind of man am I able to marry? There really are a lot of men pursing me. My girlfriends are pairing off all around me, but mostly they separate right after graduation. When it comes to getting married, such issues arise as place of residence, which hometown, the burdens of family responsibility — it is all a question of integrating your interests. And as for the most important part of a marriage, feelings, on the contrary, they can be neglected.

I am a girl who really loves life and I hope to have a rich material life and a happy spiritual life. Sorry, I can’t find these things from Chinese men. I can look for a classmate to marry and become a white-collar worker. Could I afford to buy a house then? I hope to have a spacious living room, big enough to support a small salon, where I can talk with my good friends about everything under the sun and savor good wine. Even the bathroom needs to be very big, big enough for a large bathtub for two, with soft music playing, where I will spend romantic evenings with my dear lover.

Furthermore, shouldn’t the man I marry at least be able to afford a car? Would I squeeze myself onto a crowded bus to go to work everyday, which in the winter is like a freezer, in the summer like a microwave? If I did that it wouldn’t even take a few years for a pretty young girl like me to change into a hag. Furthermore, are you hardhearted enough to let a pretty white collar worker like me be jostled about by those peasant workers covered in dirt from head to toe?

Actually China doesn’t lack rich men, but take a look at what kind of men they are. How many of them have become successful through their own hard work, wisdom, and honesty? Either they are labor contractors who hire workers to deliver bricks or they are Shanxi coal bosses or they are corrupt, bribe-taking “public servants.” If you’re talking about personal quality, they don’t have it. If you’re talking about personal charm, they don’t have it. So how could we have any sort of common language? To be frank, if they can grunt out a few lines of Shaanxi opera, they could qualify as having some “artistic taste.”

When these men get rich, they lead a dissolute life, indulging themselves in food, drink, prostitutes, and gambling. It would be hard to lead a smooth and steady life with these men. Right now there are already men pursuing me who immediately give me their business cards — CEOs, chairmen of the board, bureau heads, department heads — all of them insufferably arrogant and acting like big shots. Some of them have even directly proposed to buy me off as their mistress. OH, MY GOD! Although I’m not a matchless beauty, I could be considered as pretty as flowers and jade, and one who studied so hard for ten years to get to a famous university — how could I end up just being someone’s mistress?!

Two: The living conditions in Western countries are good

Even if some dashing, charming, rich bachelor falls in love with me at first sight, pff, this girl wouldn’t want to marry him so much. To put it simply, I just want to marry someone from the West. The Western world that I’ve seen in movies and TV is just like heaven, with clean streets, unique architecture, and a pure sky. Whether a busy metropolis or a quiet little town, it all appears so warm and fragrant and harmonious. No matter their income or degree, everyone is polite and refined.

Considering all of my strengths taken together, of course in China I could become a woman who lives in a villa. So what? I could afford to buy a villa, but I can’t buy clean air. Where in this country is the sky not dusty? The countryside is a little better, but I wouldn’t think of going there either. Say when I put on a bikini and sunbathe by a pool, a group of shit-bucket peasants will come to the fence and stare right at me. Wouldn’t that be unpleasant? The air in Tibet is actually clean, though — please, this girl fears high-altitude sickness.

I am especially disgusted with the living environment in China. Every house has an anti-theft door. You live in the same building for dozens of years. Everyday you run into the same people. Many people are unwilling to take their garbage out, so in the summertime you’ve got piles of garbage in the doorways that stink to death. Sometimes I really suspect that I am living with a group of cavemen.

Of course you should love your homeland, but what is good about living in this country? The rice is poisonous, the powdered milk can give your infant a giant head, the pork is injected with water, cooking oil comes from ditches — just to think of it makes me tremble with fear. Sorry, you want me to love you? Give me a reason first. Don’t have one? Then I’ll love foreign countries. American hometowns, French vineyards, small sea-side towns in Spain, classical English farmsteads, whichever you want to pick would be fine. I have a classmate who went to Canada to study. She invited her father to stay there for half a year and when he came back he complained to whomever he met: “Ah, now that is a place where people can live.” Don’t talk to me about sacrifice and enlightenment. You want me to love this country? First give me a ballot. Is this requirement too much to ask? Is the country willing to provide that?

In China the cost of living is too high. You consume like an American with the income of an African. My parents took great pains to provide me the opportunity of going to college, so I should at least treat them well. Even if I could become a high level white collar worker, how high would my income be? My parents are old. If they get sick and are hospitalized, how would I pay the incredibly high cost of their medical treatment? In Western countries, however, there is medical care for everyone.

I especially wouldn’t dare to say anything positive about the domestic job market. I shake with fear as soon as I catch sight of those job fairs flooded with thousands of college students. My god, how could this be a job fair for talented people? It’s really like Omaha Beach in World War II! I am a gentle, frail woman — how can I get by these stinking men?

Living in our mighty motherland, the first task is survival. You study for the university entrance exams, look for work, save money to buy a house, save money for old age — which one of these doesn’t require you to work to death? Isn’t it tiring? My older classmates who have graduated have either turned into hags or married tycoons and let their husbands go out drinking, whoring, and gambling, and pretend that they don’t know. Why bother with this?

Three: Western men are all great.

Having said this much, no matter whether the environment is good, the material life is decent, the third point actually is the one I value the most: I just like Western men.

Since childhood I loved to watch foreign movies like “Roman Holiday” and “Gone With the Wind.” I just loved to see Westerners in these movies. Their clear, distinct facial features, especially their deeply colored eyes, their tall noses, and tight, thin lips. Plus most Westerners are very tall with strong, healthy builds. No matter how you look at it, they are sexy. Now let’s look at the Chinese men around me: let alone they have small eyes, but what’s more they have pimpled noses, thick lips, and black skin like Africans. Those few who have some education look like they are malnourished; I even worry whether or not they could protect me. Occasionally there is one who has good muscles, but he only has muscles and no brains.

There are a lot of college guys pursuing me and some from outside of college who frequently try to date me, but not so many that I consider suitable. Every one of them either looks like a bean sprout or like Ultra Man (??奥特曼). Every one of them is sloppy. They don’t even pay attention to their personal appearance. Many of them spit everywhere. I’m most disgusted by people who do this. Only little kids and animals relieve themselves everywhere — spitting everywhere is not any better. At most they are half-civilized men.

Most Western men are handsome and suave and behave gracefully because they have received a good education since they were young. In this city there are a couple of McDonald’s and KFC restaurants and I often eat there with friends. In those restaurants I saw Western men who all appeared to have good manners. They would hold the door for others. But Chinese men pushed their way through the door and rushed up to the counter and oftentimes bumped into people coming out of the restaurant. They looked like reincarnated ghosts who had died from starvation. Foreigners would get in line, but Chinese men all rush forward in a crowd and surround the counter yelling for food. It seemed like they hadn’t eaten in eight lifetimes. They don’t care if they act disgracefully. After eating, they throw their wrappers everywhere. But those foreigners would fold their wrappers in their plates after they eat in order to help clean up. They would throw away their leftover food into the garbage can themselves. They simply don’t belong to the same class.

There are also some Chinese men who lack independence. They just know how to follow girls around. They are just like super nursemaids. I feel like they don’t have themselves. The whole day their thoughts are only on girls. They get on a bus and they grab a seat and then busy themselves giving seats to girls, no matter if nearby there are old people or children. I would be embarrassed to take a seat they offer me. I despise this kind of man. Before marriage they follow their girlfriends around, after marriage they follow their wives around, at work they follow their bosses around, after work they live in the kitchen. They have no thoughts, they have no temper. My goodness, with this kind of man I fear the son would resemble the father. Right away you know this kind of good citizen comes from a country run by a dictatorship. What girl wouldn’t like a decisive man with character?

Western men are all brought up in an independent environment. They have the ability to think independently, unlike Chinese men, who parrot the words of others. For example, my classmates: if the central government says Japan and China have good relations, then they would like Japan. When the central government stirs up nationalism, they scream for the overthrow of Japan. None of them has brains. They are just someone else’s monkey, but think themselves so grand. They are all just a bunch of pig heads.

There are some things that are embarrassing to talk about in real life, so you can only talk about them online. I am a healthy, vivacious girl, and my sex drive is relatively strong. I wouldn’t feel shy about my normal sexual desires. I am not a slut, but I’m not conservative either. I feel like the union in which feelings come first, followed by the flesh, is normal. I don’t care if you laugh at me. I’ve had a few boyfriends, all of whom I slept with, but as far as my sex life goes I have always been dissatisfied. I don’t care if you laugh at me. This is the truth. But I can never tell them this; it would wound their pride.

According to reports of a survey done by a foreign company, American men last the longest in bed, French men take second place, and Chinese men take the shortest amount of time. Furthermore, Western men are all very considerate and romantic, are considerate of their lover’s feelings. They know that a woman’s feeling builds slowly, therefore they gently caress you, slowly leading you to orgasm. What kind of woman doesn’t want to make love to this kind of man? But what about Chinese men? In this respect they are all dictators; they all only care about feeling good themselves, they don’t care at all for their lover’s feelings. Even more annoying is that a few of the boyfriends I’ve slept with were obviously not good in bed. They sprint a very short distance to the finish like an athlete, like they are running the 100-meter dash. While I still haven’t had any feeling at all, they’ve already started snoring next to me. I know perfectly well that I am not satisfied, but I don’t dare to say it because I’m afraid they will make fun of me. I haven’t yet married but I feel like an old maid.

In short, I just want to marry a foreigner. The best would be an American, but a European wouldn’t be bad either. My requirements, um, I don’t have too many demands. I don’t mind if they have a lower degree than I do. I don’t require a certain kind of job either. Doesn’t even a dishwasher at McDonald’s make more than $1,000 per month? They could still buy a house and a car. Worse comes to worst, I would find someone who is divorced or I can even be a stepmother. Anyway Western kids are very independent — it wouldn’t be so bad that I would have to follow them around and clean up their shit. If not even that would work, I can also consider Japanese and Korean men. At worst they just don’t cook. Anyway, I just want to get out of the country and go to the West, if not for the ballot, then for the money.

I acknowledge that I am common, but I don’t think my thinking is wrong. I didn’t hurt others. I only want to live a better life, both material and spiritual. I have seen an American TV series, “Desperate Housewives,” set in a peaceful little town with clean streets, lawns everywhere, and those polite neighbors who behave gracefully — I really know that that is the kind of life that I want.


Where to even begin? It is hard to say anything about this because the truly deafening laughter of American women everywhere is drowning out my thoughts….

I have to go now: my giant bathtub for two with the soft music in the background is calling.