OPINION

Three Economic Signals From the Pickle Index

Recently, the pickle index, a new way of tracking migrant workers through the sales of pickled vegetables, or zhacai, a popular and affordable food among China's floating population, has aroused plenty of attention. The index reveals something fascinating about China's migrant workers. More and more migrant workers, who largely originate from China's central and western regions and head toward the coastal areas for job opportunities, mostly for factory jobs, are now returning home in larger numbers.

The reason is that wages are growing at a slower pace along the coast compared with more inland regions, and job benefits aren't so desirable.

The market share of Fuling zhacai, produced in the city of Chongqing, fell from 49 percent in 2007 to 29.99 percent in 2011, implying that few migrant workers are on the go.

Now that fewer migrants are leaving for the coast, China's inland areas need to make improvements in public services and social security. According to media reports, officials from the National Development and Reform Commission invented the index, which enables them to discern population inflow and outflow areas in hopes of formulating policies accordingly.

For years, the energy-intensive and low value-added manufacturing industry has absorbed numerous workers along the coast. Now, China is going through economic restructuring and industrial upgrading. An array of factors, such as rising labor costs, declining overseas demand and the return of manufacturing to developed countries, have made its original development mode unsustainable.

The backflow of migrant workers will push the new urbanization of central and western regions. Workers are the most important factor in production. The question is how to retain these rural migrant workers in their hometowns before they possibly leave again. In this sense, local governments in central and western regions should strengthen efforts in promoting their respective social security and healthcare systems, and education for their children.

It has been suggested that the likes of the pickle index and beer index, aside from traditional economic indicators, can help common people become informed of

economic changes in a clearer, more vivid way. The emergence of the pickle index indicates that traditional economic indexes should advance with the times, and get rid of false reports and modifications, a common trait among local politicians who routinely inflate economic figures in order to receive promotions.

This is an edited excerpt of an article by Fu Jianli, a financial commentator, published in Securities Times

THE MARKETS

Soho Posts Growth

Pan Shiyi, Chairman of Hong Kong-listed Soho China Ltd., said that the company's business mode has successfully transformed from selling properties to operating self-owned projects.

In the first half of this year, Soho China posted profits of 2.09 billion yuan ($341 million), up 242 percent year on year, and its revenue reached 2.48 billion yuan ($405 million), growing 103 percent from a year ago, the company said in its interim report on August 20.

Robust demand for high-quality office space in Beijing and Shanghai versus insufficient supply has catapulted vacancy rates to historic lows, the report said.

At the end of June, Soho China held 15.2 billion yuan ($2.48 billion) in cash, and its net debt ratio was 14.3 percent.

"Soho China's financial condition is capable of weathering any market turbulence," Pan said.

iPad Sales Fall

China's best-selling tablet computer iPad saw its shipments to the country between April and June drastically halved from the previous quarter as Apple Inc's competitors, both international and Chinese, build up market share.

Shipments of the tablet in China were down from about 3.04 million in the first quarter of the year to 1.48 million in the second quarter, with its market share in the country shrinking from 49 percent to 28 percent during the same period, according to statistics from International Data Corp., a global market intelligence firm.

Apple's product is still No. 1 in terms of market share in China's tablet computer sector, but rapidly increasing sales numbers from rivals have led to a more competitive market.

NUMBERS

102

Number of mergers and acquisitions (M&As) in the Chinese market in July. All but 16 revealed their transaction value, totalling $3.05 billion

91

Number of M&As among domestic companies in July

$366.95 mln

Transaction value of M&As in the real estate sector in July

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