Cut your spending. That’s what China’s state-owned companies have been told to do, in order to weather the global financial crisis. They’ve also been told to get Western companies to pay their bills now, just in case they go out of business. And another bit of advice for those state-owned enterprises: Stop aggressive acquisitions.
It seems Chinese consumers already have that “spend less” attitude. Although China’s retail sales grew 22% year-on-year in October, that was down slightly from the previous two months. Meat, poultry and egg sales rose 13.1%, and car sales rose 19.6%, down from 25.6% and 29.1%, respectively.
China is taking more steps to help some important sectors of the economy. It will hike tax rebates for more than a quarter of all products shipped out of the country. A previous round of tax rebate hikes took effect on November 1.
And Beijing will also lower domestic fuel prices before the end of the year to help unprofitable airlines. They need all the help they can get: China’s airlines posted combined losses of US$615 million for the first 10 months of the year.
And finally, something fishy is going on in Hong Kong. Officials there say they found high levels of melamine in fish feed from Fujian province, though the chemical has not actually been found in fish. Last week an animal feed factory in Liaoning province was shut down after suspicions that its chicken feed was laced with high levels of melamine.