Economy

Urban and Rural Pensions Unified

The State Council recently declared that China would establish a unified pension system for urban and rural residents， combining the New Pension System for Rural Residents with OldAge Insurance for Urban Residents.

According to Vice Minister of Human Resources and Social Security Hu Xiaoyi， the countrys migrant workers will benefit most from the new pension scheme. The government will set up an individual account for every eligible person. Regardless of how much or how often the policyholder contributes， the account will consistently record their entitlements. Migrant workers can thus conveniently contribute to their account in the place where they currently live or work.

A unified basic pension system for urban and rural residents not only facilitates the mobility of the population and improves security， but is also of great significance for boosting consumption and promoting innovation and entrepreneurship.

China Leads the World in Goods Trade

Data from the World Trade Organization （WTO） indicate that China was the worlds largest goods trader in 2013， its total goods trade volume topping US $4.16 trillion.

Yao Jian， spokesman for the Ministry of Commerce， said that Chinas exports and imports have leapfrogged those of other nations over 35 years of reform and opening-up. Chinas advance was especially marked after its entry into the WTO， an accomplishment that continues to boost Chinas economic development and contribute to the world economy. China is now the largest trade partner of over 120 countries and regions， and imports nearly US $2 trillion worth of goods annually， creating jobs and investment opportunities for global trade partners， according to Yao.

Yao pointed out， however， that Chinas exports are of relatively low added value. The country has relatively few prestigious native brands， lacks a sound and complete marketing network， and some of its products are still of relatively low quality.

Shanghai FTZ Lifts Foreign Currency Deposit Rate Cap

The Peoples Bank of China（PBC）， the countrys central bank， released its policy on interest rate liberalization in the China （Shanghai） Pilot Free Trade Zone （FTZ）， which came into effect on March 1. One major measure in the policy is to remove interest rate ceilings on smaller foreign-currency deposits （less than US $3 million） in the FTZ.

Revoking the interest rate ceiling is the first move of the Shanghai FTZ in entirely freeing up foreign currency deposit interest rates as a model for the country. Ren Lingtao， vice director of PBC Shanghai Head Office， indicated that this would be an important attempt by the FTZ towards interest rate liberalization， and would help the country accumulate valuable experience to roll out the reform nationwide.

This interest rate cap exemption is only applicable to deposits of less than US $3 million owned by businesses and agencies registered in the FTZ or by individuals who have worked in the zone for more than one year.

Chinas Luxury Market Cools

The 2013 fourth quarter sales report of Switzerlandbased luxury goods company Richemont indicated that Chinas was the only market in the Asia-Pacific region experiencing a drop in sales revenue.

A survey of 20 world luxury brands conducted by the international consulting firm Bain & Company showed that the number of newlyopened stores in China by these brands fell to around 100 in 2013 from roughly 150 in 2012.

Of course， the Chinese market still serves up a large slice of the pie， which is appetizing for world luxury goods firms. According to a report by the Fortune Character Institute， Chinese peoples luxury consumption sum topped US$102 billion in 2013， with US$28 billion spent within China. The global luxury goods market is valued at around US$217 billion.

Experts indicate that the days of plenty for luxury goods brands in China are numbered； in the future， discounts and sales promotion will become more regular since the changing market is forcing these high-profile brands to adopt more rationalized pricing.