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OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #1690/01 1210914
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O 300914Z APR 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7007
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUCPDOC/USDOC WASHDC
RUEHGV/USMISSION GENEVA 2207
RUEHFR/AMEMBASSY PARIS 4326
RUEHRC/USDA FAS WASHDC

UNCLAS SECTION 01 OF 07 BEIJING 001690 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
FOR EEB/TPP/ABT/ATP JANET SPECK 
 
E.O. 12958:  N/A 
TAGS: ECON EFIN PGOV EAGR SOCI CH
 
SUBJECT: RESPONSE: IMPACT OF RISING FOOD/COMMODITY PRICES -- CHINA 
 
REF: STATE 39410 
 
INTRODUCTION/SUMMARY 
-------------------- 
 
¶1. (U) INTRODUCTION:  This report is Mission China's response to 
reftel, which requested input on the impact of food and commodity 
price increases.  It is a composite of analysis and data compiled by 
Embassy Beijing as well as by Econoffs in Consulates General 
Guangzhou, Shanghai, Chengdu, and Shenyang.  The first part of this 
message is our formal response within the space limits prescribed by 
Dept.  Given China's large population, size, and significant role in 
global food demand and production, however, we have additionally 
included an addendum with more on-the-ground views, largely from the 
Consulates General.  At the end of this report is a list of relevant 
reftels from this post, sent over the last year.  END INTRODUCTION 
 
¶2. (SBU) SUMMARY: China is not a significant importer or exporter of 
grains, and the country's recent food price/supply shocks are 
largely domestic in nature.  China is, however, the world's top 
importer of oilseeds and edible oils, and this has bearing on the 
prices of these items in other markets.  China is also a huge 
contributor to the world's rising demand for oil; this impacts the 
global price of petroleum- and natural gas-derived agricultural 
inputs and increases the economic attractiveness of biofuel crops 
and production in other countries.  China is not a major source of 
globally traded grain supplies, but it is a significant exporter of 
some types of produce.  The mainland consumer price index (CPI) food 
basket rose 21% during the first quarter of this year, while overall 
CPI inflation was 8%; both figures were 11-year highs.  Food 
inflation is expected to moderate over the coming months.  Higher 
prices have adversely affected lower-income consumers who spend a 
higher proportion of their income on food.  Apart from isolated 
incidents, there is no sign of widespread or sustained instability. 
Major factors in recent food inflation are domestic pork supply and 
disease problems, winter storms, and the aforementioned costly 
imports of edible oils.  The Chinese Government has imposed a range 
of measures to address food inflation, including export tariffs on 
fertilizer and grains as well as price controls on staple food 
items.  There are also new investment restrictions on some areas of 
commodity processing and distribution.  Key longer-term drivers of 
China's influence on global food markets include rising incomes 
raising the caloric intake, limited arable land, and widespread 
environmental degradation.  These factors are expected to increase 
imports over time, but this trend will likely play out gradually. 
END INTRODUCTION/SUMMARY 
 
DEMAND 
------ 
 
¶3. (U) China's population growth has slowed dramatically; the 
current population of 1.3 billion is expected to reach 1.46 billion 
by 2030.  However, continued economic expansion and rising living 
standards have driven up food consumption from approximately 2,000 
cal/day in the 1970's to 3,000 cal/day today.  Over the past 20 
years, there has been a major shift in the composition of caloric 
intake, with the grains proportion falling from 70% to 45% and 
meat/dairy rising from 6% to 25%.  China's average GDP growth has 
been above 9% for a generation and is only gradually expected to 
slow over the coming years.  As living standards further shift 
intake away from grains and boost overall calorie consumption, a 
fixed arable land supply with limited potential for increased yields 
suggests the likelihood of greater imports, perhaps on the order of 
15% growth annually in the medium term, according to a report 
prepared by UBS, with even higher rates for grains. 
 
¶4. (U) The mainland consumer price index (CPI) food basket rose 21% 
during the first quarter of this year, while overall CPI inflation 
was 8%; both figures were 11-year highs. Pork prices alone rose 69% 
yoy as of February 2008, with beef and lamb not far behind.  Food 
prices account for approximately 87% of the overall CPI increase. 
Income disparities are very high in China -- the Gini Coefficent is 
estimated to approach 0.50.  Consequently, those in the bottom half 
of the income distribution -- who spend more of their budget on food 
than suggested by the 33% CPI weighting -- are adversely affected. 
 
¶5. (SBU) There is some evidence of product substitution under way. 
For example, Consulate General Guangzhou reports that low-income 
consumers in the provinces of Fujian, Hainan, and Guangxi are 
increasingly substituting cheaper foods, e.g., soy milk for fresh 
milk.  To date, the effect of such substitution has not been obvious 
in demand growth, and it is most likely only moderating the 
 
BEIJING 00001690  002 OF 007 
 
 
spectacular growth rates we are seeing in milk and meat 
consumption. 
 
¶6. (SBU) No discussion of China's impact on the world's rising food 
and commodity prices is complete without reference to energy demand, 
which affects fertilizer prices, transport costs, and the incentives 
for biofuel crop cultivation and production in other countries. 
China does not produce enough crude oil or natural gas to meet its 
needs.  The International Energy Agency estimates that China's oil 
imports will grow from 3.5 million bbl/day in 2006 (half of current 
consumption) to 7.1 million bbl/day in 2015 to 13.1 million bbl/day 
in 2030, implying that China will account for approximately 40% of 
the global increase in demand for traded oil over this period. 
 
SUPPLY 
------ 
 
¶7. (U) China is the world's largest producer of agricultural goods 
and is number one in cotton (27% of world production), rice (31%), 
apples (52%), peanuts (43%), pears (71%), and pork (51%).  It is 
second in poultry (17%), corn (19%), wheat (16%), citrus (19%), and 
rapeseed (27%).  China is fairly isolated from global markets and 
prices for grain because it neither exports nor imports a 
significant percentage of any grain product.  This reflects high 
transportation costs, poor logistics to export terminals, high and 
increasing domestic demand, and government incentives for local use. 
 China does export seafood, fruits, vegetables, and animal products. 
 It is the world's top importer of oilseeds and edible oils, 
particularly soybeans, where its high level of imports means that 
China influences the international market, although it is a price 
taker. 
 
¶8. (U) Recent food price inflation primarily reflects domestic 
supply shocks in both livestock and perishables.  Some food 
inflation is imported, and this is most notably reflected in prices 
for cooking (soybean) oil.  A swine viral infection has sharply 
reduced pork production over the past two years, and 
January/February 2008 brought the worst winter weather in 40 years, 
killing 63 million poultry birds, 4 million pigs, 393,000 cattle, 
and 1.38 million sheep and goats.  The storms damaged the spring 
2008 fruit and vegetable crops, and will reduce the harvested 
rapeseed area from 7.1 million hectares to 6.7 million.  Citrus 
production is expected to decrease by 10-15%.  Overall economic 
losses from the storms are estimated at $21 billion.  In 2007, a 
drought cut corn production by 6%.  Livestock growth has also 
pressured the corn supply, lowering increases in corn exports to 
other markets such as South Korea and Japan. 
 
¶9. (U) China faces significant longer-term supply constraints.  Only 
14% of land in China is cultivated, and the country is poorly 
endowed with water resources.  Although there is much excess rural 
labor, there is a significant exodus under way from agricultural 
areas: approximately 150 million of China's 700 million rural 
residents have migrated to jobs created by China's manufacturing 
boom, primarily in coastal areas.  The rising cost of inputs such as 
fertilizers, pesticides, and feed products for livestock means that 
increased prices are not always translating into expanded margins 
for farmers.  Consequently, supply increases in response to prices 
are uneven, depending on specific conditions.  Agricultural 
productivity and yields have already increased with economic 
liberalization and the expanded use of fertilizer.  Further gains 
will not come easily in an environment of small-scale household 
plots and amidst environmental degradation.  Food prices do not yet 
seem to be a factor in causing an increase in land used in food 
production or a shift in production from non-food commodities to 
grains.  There appears to have been some response by farmers to high 
pork prices, but this also is a longer-term trend based on upward 
demand for pork in China. 
 
¶10. (SBU) A think tank contact in Sichuan Province, an important pig 
raising center, described supply challenges to us.  Many farmers 
there no longer raise pigs now because of blue-ear disease.  Prices 
of baby pigs are so high that farmers cannot afford them.  (Note: 
We have also heard reference to higher input prices (feed, 
electricity, transportation), and the inability to find higher 
paying work in urban centers.  End Note.)  The contact described a 
similar situation with rice: many farmers do not store as much grain 
as before, since family members have left home to go to other 
provinces as migrant workers; they think they can buy grain if they 
need it.  The contact expressed alarm that stockpiles of grain in 
government storehouses are the lowest since the 1980s. 
 
 
BEIJING 00001690  003 OF 007 
 
 
ECONOMIC AND POLITICAL IMPACT 
----------------------------- 
 
¶11. (SBU) The mainland consumer price index (CPI) food basket rose 
21% during the first quarter of this year, while overall CPI 
inflation was 8%; both figures were 11-year highs.  Pork prices 
alone rose 69% yoy as of February 2008, with beef and lamb not far 
behind.  Food prices account for approximately 87% of the overall 
CPI increase.  Curbing inflation has on numerous recent occasions 
been declared the government's top economic priority for 2008.  This 
is the strongest bout of agricultural inflation since the early 
1990s and the first time in the past 30 years that rising food 
prices are not part of a more general inflation trend.  To date, 
inflation has not been a major factor in balance of payments or in 
fiscal spending, nor is it seen as a factor that will alter 
medium-term growth prospects. 
 
¶12. (SBU) There is no sign to date that food inflation has caused or 
is about to cause widespread unrest.  There have, however, been 
sporadic incidents of note, such as an occasion when supermarket 
shoppers stampeded a cooking oil sale (see addendum).  Commenting on 
inflationary trends in their respective localities, government 
officials and citizens in two provinces outside Beijing recently 
expressed optimism that prices are stabilizing and said their 
regions have not so far experienced widespread social unrest or 
hoarding. 
 
¶13. (SBU) Food inflation has drawn very extensive attention from the 
top leadership.  Over the past eight months, China has been 
undergoing a change in government and Communist Party leadership; 
the October 2007 17th Party Congress and March 2008 National 
People's Congress were key events in this regard, and on both 
occasions, discussion of managing inflation was prominent.  As 
statistics have been released, top leaders have gone to great 
lengths to make themselves visibly responsive, either by announcing 
new government measures or by visiting with local residents affected 
by high prices.  We are unaware of recent food inflation broadly 
affecting public attitudes towards biofuels or that it is generating 
friction between classes.  However, contacts in Hebei and Hunan 
Provinces recently asked Econoff if the United States would 
reconsider its policy on biofuels because of the recent surge in 
world food prices. 
 
ENVIRONMENTAL IMPACT 
-------------------- 
 
¶14. (SBU) China is profoundly challenged by long-term environmental 
degradation.  Recent food inflation has neither mitigated nor 
exacerbated this trend in a measurable way.  In the longer term 
however, China may face serious food production problems, especially 
given that per capita water resources are 25% of the global average, 
with much of the endowment concentrated in the south.  Agriculture 
accounts for 70% of water consumption, and water quality is 
deteriorating rapidly.  Declining water availability for agriculture 
in general is a concern of the government.  However, favorable 
weather conditions are a more important factor than the amount of 
available surface/ground water for irrigation for grain production. 
expected to negatively impact grain production over the coming 
decades.  The government is spending tens of billions of dollars to 
build infrastructure to transport water to the north. Although 
China's water shortages are alredy acute, it is the long term 
prospects that look especially daunting, especially with water 
pricing policies encourages overuse and waste. 
 
 
GOVERNMENT POLICY RESPONSE 
-------------------------- 
 
¶15. (SBU) Over the past 30 years, China has been transforming from a 
command economy to one primarily guided by market signals. 
Agricultural prices and volumes were formerly determined by the 
Central Government but are now relatively free and open.  A notable 
exception is grains, where a persistent desire for self-sufficiency 
has led to the continuation of price supports, subsidies, and trade 
quotas.  The prices of produce and meat are by contrast set without 
state intervention.  China's 2001 WTO accession has reduced tariffs 
on "non-essential" goods but left in place a TRQ system whereby 
imports of major grains and commodities are subject to prohibitive 
tariffs once an import ceiling is reached. 
 
¶16. (SBU) There have been a number of measures taken by the Chinese 
Government to address food inflation as well as broader inflationary 
 
BEIJING 00001690  004 OF 007 
 
 
trends in the economy: 
 
o In April, the Ministry of Finance announced a 100% special export 
duty on fertilizer and related exports for the period April 20 to 
September 30.  This expanded duties already imposed in February. 
 
o In January, the government imposed price controls on a number of 
staple products including cooking oil, pork, eggs, instant noodles, 
milk, and grains. 
 
o In December 2007, the government removed the export rebate 
(generally 13%) on wheat, rice, corn, other cereals, soybeans and 
their derived flour byproducts. 
 
o In December 2007, a new investment catalogue showed continued 
concern about foreign participation in the food sector and its 
perceived impact on food security.  The catalogue included 
restrictions on the seed industry, soybean processing, and 
distribution services. 
 
o In January 2008, the government announced provisional export taxes 
on grains and their flour products as well as an export license 
regime on flour products to discourage exports. 
 
o China's ethanol exports rose 500% from 2005-06, leading to 
concerns that export oriented ethanol plants might lead to domestic 
grain shortages.  The government responded by eliminating VAT 
rebates and halted approval of new corn biofuel processing plants; 
ethanol exports fell 87% in 2007. 
 
o The urban poor have been hit hardest by rising food prices, and 
the Central Government is providing subsidies to poor urban 
residents so that they can purchase pork and eggs. 
 
o More broadly, the government has adopted a "tightening" policy in 
response to inflationary trends, including six increases in interest 
rates since January 2007 and a rise in bank reserve requirements 
from 10% to 16% over the same period; real deposit rates, however, 
remain negative. 
 
ADDENDUM 
-------- 
 
¶17. (U) The following material includes spot reports from Econoffs 
in our Consulates General as well as Embassy Beijing's Economic 
Section: 
 
¶18. (SBU) SUPPLY AND DEMAND: 
 
** (Chengdu) 
 
o Rising incomes in southwest China have led to increasing demand 
for meat (especially pork) as well as vegetable oil.  At the same 
time, consumers are facing both rising prices and declining quality, 
especially for pork.  From March 2007 to March 2008, prices for 
important commodities rose dramatically in southwest China's two 
most important urban areas, Chengdu and Chongqing.  A breakdown 
(information comes from local Price Bureau data, not always reliable 
but indicative of trends at least): 
 
    -- Vegetable oil: Chengdu 79%, Chongqing 71% 
 
    -- Cabbage: Chengdu up 183%, Chongqing 260% 
 
    -- Pork: Chengdu up 88%, Chongqing 67% 
 
    -- Eggs: Chengdu down 4%, Chongqing 17% 
 
    -- Rice: Chengdu info unavailable, Chongqing 59% 
 
o Rural areas are also feeling the impact of urbanization, 
industrialization, and migration of farmers to work in other areas. 
Villages are being emptied out, farmers (staying at home) are 
getting older, and agricultural production has become a sideline 
activity.  Farmers' enthusiasm for grain production has been hurt 
because of the high costs they have to cover for grain production. 
Now some farmers are changing grain farmland into cash-crop land. 
 
 
** (Guangzhou) 
 
o Despite data showing increased food prices, averaging 9 percent 
 
BEIJING 00001690  005 OF 007 
 
 
across all food categories in Guangdong, and double-digit percentage 
increases for household food expenditures throughout Guangzhou's 
consular district (Guangdong, Fujian, Guangxi and Hainan), the 
locally-produced supply has not correspondingly increased.  Less 
than half of all food products in Guangdong province are produced 
locally, and total production levels are between one-half and 
two-thirds of food supplies in the other three provinces. Food 
production only increased marginally in 2007, growing by an average 
of 2-3 percent for most products. 
 
o Fujian, Hainan, and Guangxi Provinces produce higher percentages 
of their own food, but demand exceeds supply, and 2007 statistics 
show that low-income consumers are substituting less nutritious, 
cheaper foods for more expensive ingredients because of rising food 
prices.  One example is a trend towards consumption of soy milk 
instead of fresh milk in low income households. 
 
o An important reason for slower supply-side growth is major 
increases in production input costs -- especially chemical 
fertilizers and pesticides (mostly based on petroleum-related 
inputs) as well as feed products for livestock.  May producers have 
seen profit margins remain te same or decline as the cost of some 
inputs ave risen more quickly than food prices. 
 
o Aother reason for slow supply-side growth is  wait-and-see 
approach among South China farmes, especially pig farmers.  This 
group remains risk-averse after sustaining major losses in 2006 when 
pork prices were very low; feed and vaccination costs have increased 
faster than profits; and risks to livestock from disease remain 
high. 
 
¶19. (SBU) ECONOMIC/POLITICAL IMPACT 
 
** (Chengdu) 
 
o Stories of food-related unrest are hard to come by here, but one 
example took place in Chongqing in November 2007, when three people 
were killed and 31 people injured in an incident at a Carrefour 
Store.  In order the celebrate the 10th anniversary of its store 
opening, Carrefour had a big sale on vegetable oil, in which the 
price of a bottle of vegetable oil was reduced by 11 RMB ($1.50) to 
from 51 RMB to 39.9 RMB ($5.32).  Early on the morning of the sale, 
thousands of people were waiting in front of the main gate of 
Carrefour.  Most of them were 60 or older.  When the gate was 
opened, people rushed into the store, and many people fell down in 
the stampede.  Three people were trampled to death, and 31 were 
injured, seven of them seriously.   According to a report released 
by the Chongqing Statistics Bureau, Chongqing's CPI in Oct. 
increased by 6.5%, but the price of food in Chongqing including 
vegetable oil increased by 34%.  "The fast increases in food prices 
and the low income of poor people as well as poor management of 
Carrefour are the major reasons for the incident," said Mr. Pu 
Qijun, Director of the Sociology Research Institution of Chongqing 
Academy of Social Sciences. 
 
o Rising food prices have relatively little impact on high-income 
families.  A contact who is a college professor married to a doctor 
tells us, "Food prices, especially pork and vegetables, are going up 
very fast, but our quality of life is not affected."  Middle-level 
income earners face more pressure.  Some of them tell us they eat 
less pork than before, sometimes substituting fish, the price of 
which is increasing less rapidly.  As for low-income families, their 
living quality has been affected most obviously.  A migrant farmer 
said his wife and he moved to Chengdu last year.  Both of them hold 
temporary jobs and they only earn about 1,200 RMB ($171) a month. 
They have to pay the house rent, tuition for their son, and other 
expense. Previously, they only needed about 300 RMB ($42) for food 
per month. But now they said they need at least 500 RMB ($71).  He 
said they only eat pork on Sunday, and sometimes, they eat some 
fish. 
 
** Guangzhou 
 
o News reports have surfaced about occasional boycotts and other 
signs of consumer dissatisfaction, particularly among 
price-sensitive groups like students.  An example was a one-day 
boycott of a Guangdong university canteen in September 2007, with 
almost 20,000 students participating, after the government increased 
campus cafeteria prices 33-50 percent. 
 
o Statistics from each of the four provinces show that among 
low-income households, those that earn 50 percent or less of the 
 
BEIJING 00001690  006 OF 007 
 
 
local average income, food expenditures . 
 
** Shanghai 
 
o Official data show food price increases in Shanghai roughly on par 
with the national level (18% yoy in March compared to 21% 
nationally, although official numbers are widely considered to 
underestimate actual inflation).  Food price inflation has been 
largely driven by meat/pork prices, which increased by 40% yoy in 
Shanghai in March.  Prices may have started to stabilize, although 
it remains unclear how much of this is due to ongoing government 
intervention.  Local media reported the Shanghai Development and 
Reform Committee implemented temporary price freezes for rice and 
wheat, vegetable oil, meat, milk and eggs on January 26.  Anecdotal 
evidence from wet markets in Shanghai indicates pork prices have 
been flat in April (pork increased 67% yoy in March, nationally). 
In terms of grains, local supermarkets have not raised rice prices 
materially in the last few months, which is consistent with national 
level data and also reports that the government has sold some of its 
stock of reserves. 
 
o Analysts note that there has been no evidence of a significant 
move by the government to increase imports of pork or other meat 
products to ease supply constraints, leading some to conclude that 
the government is comfortable with its policy response.  In terms of 
policy measures, a pork vendor in Shanghai explained that financial 
incentives to shift farmers to pig production in Zhejiang have not 
yet had much success because farmers believe the intermediate food 
distributors have pricing power.  On the demand side, subsidies from 
the Shanghai Municipal Government have allowed local universities to 
keep prices at school cafeterias fixed. 
 
¶20. (SBU) ENVIRONMENTAL IMPACT 
 
** Guangzhou 
 
o Guangxi Province suffered crop and farmland damage as a result of 
severe winter storms and a drought last summer.  However, despite 
the losses last summer, Guangxi was able to increase total crop 
production in 2007 due to subsidies and better technology.  Hainan, 
Guangdong and Fujian Provinces regularly suffer typhoon-related 
agricultural losses, and this year's typhoon season has started no 
differently with an early storm that damaged farms in Hainan and 
Guangdong. 
 
¶21. (SBU) POLICY RESPONSE 
 
** Chengdu 
 
o Comments from a think-tank contact:  Local governments offer 
agricultural subsidies to farmers in Sichuan.  On average, each farm 
household can get 280 RMB per year.  The Central Government's 
purpose in providing such subsidies is to encourage farmers to 
engage in agriculture production. However, the policy still has 
problems.  Subsidies are offered according to how much land a 
household has.  As a result, many farmers receive the subsidy even 
if they no longer farm.  The policy should be changed, that is, only 
those who do farm production should get the subsidy.  It is good 
that the agriculture tax and other fees have been abolished.  But 
more and more farmland is going out of cultivation since many 
migrant farmers on't care about it.  In the past, they had to think 
more about the taxes they must pay, and would keep their farmland in 
production. 
 
** Guangzhou 
 
o Fujian and Guangxi both announced major government programs to 
increase agricultural production including more funding for 
subsidies, farmer training and relief programs.  South China's 
provincial and local governments have implemented stronger price 
controls on certain basic food products and agriculture inputs like 
fertilizer. 
 
REFERENCE TELEGRAMS 
------------------- 
 
Beijing 1671: Prices Still High but Provinces Remain Calm 
 
Beijing 870:  NPC:  Food Inflation Rural Sector's Main Concern 
 
Beijing 823:  NDRC Chairman:  Slowing Investment Growth, Fighting 
Inflation Key Challenges in 2008 
 
BEIJING 00001690  007 OF 007 
 
 
 
Beijing 809:  Premier's NPC Report Pledges More Reform, Tackles 
Tough Social, Economic Problems 
 
Beijing 750:  More Attention to the Rural Sector:  Will It Be 
Enough? 
 
Beijing 573:  Inflation, Exacerbated by Snow Storms, Hits a New 
11-Year High 
 
07 Beijing 7554:  China:  Moderate Inflation Here to Stay, Experts 
Say 
 
07 Beijing 7233:  October Price Surge Attracts Attention in Beijing 
and Provinces 
 
07 Beijing 7052:  China/Energy:  Fuel Shortages Tied to Independent 
Firms 
 
07 Beijing 6859:  Rising Prices, Rapid Growth Remain Economic Focus 
During Party Congress 
 
07 Beijing 6857:  Economic Policy Implications of the 17th Party 
Congress 
 
07 Beijing 6720:  Party Buoyed by Good Social Stability but 
Inflation, Bubble Economy Worrisome 
 
07 Beijing 6609:  China Inflation:  Asset and Consumer Price 
Pressure In Focus During Golden Week 
 
07 Beijing 6365:  Migrants, Microfinance, and Meat-Shanxi's Rural 
Development Challenges 
 
07 Beijing 6286:  Party Congress:  Economic Policy Impact Seen as 
Limited, But Inflation Remains... 
 
07 Beijing 5627:  Inflation/Currency:  Contrasting Perspectives... 
 
07 Beijing 5578:  Inflation Spike Getting Attention from Leadership, 
Media, and Public 
 
07 Beijing 3895:  Contacts Cite Leadership Concerns Over Future 
Stock Market Downturn 
 
07 Shanghai 679:  Stock Exchange Up 300% in Two Years 
 
07 Shanghai 553:  Inflation Watch Up in Shanghai 
 
07 Hong Kong 2598:  Inflation, Overinvestment Key Chinese Risks 
 
PICCUTA