China’s Banking Sector Rebounds But Faces Challenges
When asked by a reporter from Caijing about the deterioration of asset quality, the heads of two small and medium banks from different regions gave contradicting answers. However, the two persons in charge are both cautious about the further emergence of adverse risks in the banking industry in the foreseeable future. Compared with other industries, the impact from the abrupt outbreak of COVID-19 on the banking industry this year has not immediately been shown. Still, industry experts understand that the delayed impact is just around the corner.
Commercial banks currently entrusted with the important task of supporting the real economy must reduce profit margins while resisting risks with non-performing assets. This will help deepen supply-side reforms in financial sector. It also assists China’s balance sheets to repair themselves. It is worth noting that regulators in the Chinese financial industry have noticed risks in time and issued warnings to the market on many occasions to remind institutions to prepare for the rebound of non-performing assets.
China is Fighting Against Massive Food Waste
Chinese government is becoming aware of the potential crisis of food shortage. Chinese leaders recently issued instructions, emphasizing the establishment of a long-term mechanism to resolutely restrain food waste. Later, CCTV criticized some of the online reality shows which are characteristic of waste of food. According to estimates, the amount of food wasted in China’s urban catering industry has come to astonishing scale.
China’s grain supply and demand have been in a tight balance for a long time. In terms of imports, under the impact of the pandemic and the East African locust plague, more than a dozen major agricultural countries announced restrictions on food exports. At the same time, southern part of the country was hit by wide-spread floods, and some farmlands had lost the majority of produce. The uncertainty of food supply has enormously increased and there is an urgent need for the country to save food.
Low-Speed Electric Vehicle, A Promising Market
China is facing a tricky problem: how to deal with the booming low-speed electric vehicle market? This kind of vehicle is priced from RMB10,000 to 30,000, and looks similar to a car. However, it has a shorter cruising range and slower speed than a normal car. This low-speed electric vehicle is becoming popular in China. But national standards of low-speed electric vehicle have not been released for a long time. This has resulted in low-speed electric vehicles not being able to obtain legal driving status.
Without any subsidies, low-speed electric vehicles have reached the scale of annual sales of one million. This has even exceeded the sales of electric cars which have been heavily subsidized by national policies. This is evolving into a proper sector with an output value of 100 billion yuan and has become a pillar industry for some local governments. Supporters believe that low-speed electric vehicles are products that meet market demand. Opponents denounce them as irregular and deformed developments tolerated by local governments. Affordable prices make it possible for the low-speed electric vehicles to be sold by the millions every year, despite their questionable safety.
Floods in South China Making Locals Suffer From Economic Losses
In the summer of 2020 Anhui, Jiangxi and other Chinese provinces suffered severe floods. These devastating disasters affected as many as 71 million people nationwide. After the floods, some people were trapped in debt, and some slipped back deeper into poverty. Keeping their heads above literal and economic deep waters has been a major challenge in the wake of the floods. Poverty lurks everywhere. Obviously, the old disaster relief mechanisms cannot solve these worsening problems.
Faced with such situations, both central and local governments will raise 100 billion yuan for post-disaster recovery and reconstruction work. At the same time, there will be a substantial amount social donations. These can help alleviate the economic losses.