MORE POWER: The Three Gorges Corp. aims to generate more than 100 billion kwh of electricity this year, to reach a total of 107 billion kwh (ZHENG JIAYU)
Numbers of the Week
The Hong Kong Special Administrative Region's GDP grew by 6.8 percent in 2010 year on year, said Hong Kong's financial chief John Tsang.
75 billion yuan
China will spend 75 billion yuan ($11.15 billion) to curb heavy metal pollution in the next five years, according to the Ministry of Environmental Protection.
TO THE POINT: Local governments at all levels in China are taking efforts to curb soaring home prices, with Beijing introducing the strictest policies. On observing the increase of international crude oil prices, China raised gas prices for the first time this year. Foreign direct investment in China continued to expand in January and will remain high in 2011. Hot money, on the other hand, accounted for a small amount of capital inflows. Huawei Technology withdrew from its acquisition of the U.S. 3Leaf Systems and the Chinese Government has requested transparency in the U.S. approval procedure. Baidu, the biggest search engine in China, is facing a lawsuit for allegedly blocking competitor's search results.
By LIU YUNYUN
Reining in Property
Dozens of Chinese cities, led by Beijing, adopted tougher-than-ever property restriction measures to curb the skyrocketing home prices.
On February 16, Beijing announced 15 measures to cool the housing market, which is the strictest among all cities. Basically, the new rule requires that non-Beijing residents must have paid their monthly social security contribution or income tax for five consecutive years before they are eligible to buy their first apartment in the city, while people with Beijing hukou, or permanent residence registration, will be limited to two properties.
Beijing's high real estate prices have caused huge complaints from the city's dwellers for years. Wealthy speculators who buy several pieces of real estate for investment purposes are the major reason why the prices haven't stopped their skyward trajectory.
Home prices in some major cities such as Beijing have more than doubled during the past two years. Property prices in 70 large and medium-sized cities rose 6.4 percent in December 2010 compared with the same month in 2009. In January, among the 70 large and medium-sized cities, 68 saw their property prices rise over the same month last year, and 10 of them witnessed a growth rate of over 10 percent, according to the National Bureau of Statistics.
As of February 21, a total of 14 cities have released the local package of rules on home purchase restrictions, all requiring local household registration status.
To further wipe out the cause of soaring home prices, the Central Government ordered more than 20 central state-owned enterprises (central SOEs), whose core business is not property, to fully exit the real estate market this year. Altogether, 14 central SOEs already exited the market in 2010.
In spite of the good intentions, people questioned the fairness in home purchases. Some argued that including hukou in the home purchase is a discrimination against non-hukou holders. Others worry once the government finds out its revenue shrinks substantially without the property trading taxes, it might ease the rules again, triggering a new surge in property prices.
Higher Gas Price
The National Development and Reform Commission (NDRC) raised the prices of gasoline and diesel by 350 yuan ($53.2) per ton effective on February 20.
The adjustment was the first hike this year but the second one in the past two months. The benchmark retail price of gasoline was increased by 0.26 yuan ($0.04) per liter and diesel by 0.3 yuan ($0.045) per liter.
The statement on the NDRC website said the increase was in line with international oil price fluctuations, but the timing was "properly postponed" and that the hike was "limited," meaning the oil prices should have been higher than the adjustment.
Liu Zhenqiu, Deputy Director of the Department of Price of the NDRC, said that the government would continue to provide subsidies to low-income families, farmers, taxi drivers and other sectors that could be hurt by the price adjustment.
The foreign direct investment (FDI) in January increased 23.4 percent year on year to $10.03 billion, said the Ministry of Commerce (MOFCOM), which expects the FDI will continue robust growth in 2011.
Analysts said China's strong economic growth and the transformation of the economy led by domestic consumption will help to sustain China's appeal to foreign investors.
The 23.4-percent increase in January was higher than the growth rate of 15.6 percent in December 2010. Last year, foreign investment grew by 17.4 percent year on year to a record $106 billion.
Hot Money Inflow
China witnessed a "hot money" inflow of $35.5 billion in 2010, accounting for a relatively small part of the increase in foreign exchange reserves, the State Administration of Foreign Exchange (SAFE) said in a report published on February 17.