By David Pierson May 30, 2012, 2:07 a.m.

BEIJING – China moved to temper expectations of another massive stimulus plan amid reports the country was green-lighting more infrastructure projects to stabilize its slowing economy.

“The Chinese government’s intention is very clear, it will not issue another large scale stimulus plan to boost robust growth,” the official New China News Agency said in an article published Tuesday.

The statement helped drive stock markets down across Asia Wednesday as investors sought clues as to how the world’s second largest economy would respond to its biggest economic challenge in three years.

Weak foreign demand, a cooling real estate market and diminished bank lending has slowed Chinese economic expansion to a pace not seen since the aftermath of the 2008 financial crisis.

The global economy can ill afford to see China, the world’s second largest importer, skid off the rails, especially at a time when Europe appears to be heading for a deeper economic crisis.

Beijing has already indicated it will act to stabilize growth, but it can’t afford to reproduce its 2009 strategy, which included a $586 billion stimulus and the opening of the bank lending floodgates. That led to asset bubbles and inflation that still hampers the Chinese economy today.

“The Chinese government will not use stimulus money to reach the goal of ‘stable growth’ like they did last time because it’s unsustainable,” Tuesday’s New China News Agency article said.

Speculation had grown in recent days that China would reach for a larger-than-expected stimulus.

A surge in local officials were reportedly seen at the powerful National Development and Reform Commission’s Beijing headquarters hoping to get approval and funding for new projects.

“Everyone was double-parked in government cars last week,” said a storekeeper across the street Wednesday who only gave his last name, A (an ancient and rare surname descended from the Mongols).

The mayor of Zhanjiang, a city in southern Guangdong province, was photographed walking out of the commission’s offices Sunday kissing approval papers for an $11 billion plan to build a steel manufacturing base.

Analysts say China is shooting for a modest policy boost, or what Standard Chartered economist Stephen Green called a “mini-me” stimulus.

China “is introducing a measured but still significant set of stimulus measures, which should begin to affect growth in August-September,” Green wrote in a research note.

Those measures appear to include infrastructure projects such as airports, subsidies for energy-efficient household appliances and an invitation for the private sector to invest in state-dominated industries such as railways.

China’s central bank could also reduce the amount of capital lending institutions must hold in reserve and lower benchmark interest rates to spur growth.

Some analysts lamented that China was using the same playbook to stave-off a serious slowdown.

“Many government officials argued repeatedly during the past year that tolerating slow growth is critical for rebalancing the economy, improving the quality of growth and sustaining it a rapid pace,” wrote economists at Barclays. “Yet the government is already implementing a second stimulus package. Near-term growth may be well supported now, but what about next year and the year after? These beg the more fundamental questions if whether the economy can ever graduate from the state-investment-driven stage and whether the economic transformation will ever happen.”

By David Pierson, Los Angeles Times

BEIJING — The Chinese government has ordered the world's Big Four accounting firms to appoint Chinese citizens to head their mainland operations within five years, an edict that could crimp the auditors' expansion in one of the world's most important markets.

The new regulations, announced Thursday by China'sMinistry of Finance, also require Deloitte Touche Tohmatsu, PricewaterhouseCoopers, Ernst & Young and KPMG to localize their management ranks starting this year.

Although the firms have hired thousands of Chinese accountants in recent years, many of their senior staffers have come from outside China. The firms were originally allowed to operate largely with foreign partners because qualified local staff were scarce.

The edict comes amid rising tensions between regulators in the U.S. and China over the sharing of audit information of mainland China-based companies whose shares are traded on U.S. exchanges.

On Wednesday, the U.S. Securities and Exchange Commission charged a Chinese unit of Deloitte with violating the Sarbanes-Oxley Act by refusing to hand over documents related to a Chinese firm that's under investigation for defrauding investors. Deloitte has said doing so would violate Chinese state secrecy laws.

Under the new rules, the Big Four will have to show by the end of this year that no more than 40% of their Chinese partners have gained their certified public accountant certification overseas. By 2017, that cap will drop to 20%, and a Chinese citizen must be picked to head each of the Big Four's operations in China.

At present, only about 30% of the Big Four's partners in China have been certified in China, according to Paul Gillis, a professor of accounting at Peking University's Guanghua School of Management and a former partner at PricewaterhouseCoopers.

"What China is really doing here is adopting the global norm," Gillis said. "If you look at the Big Four around the world, China is an anomaly where foreigners control their practices. In the rest of the world, the Big Four are a collection of practices owned by local partners."

Still, he said, finding so many seasoned Chinese partners could prove a challenge for the Big Four.

The changes take place at a time when the Chinese auditing industry has been hobbled by accounting scandals involving several U.S.-listed Chinese companies, some of which have seen their shares delisted or halted.

In the latest move, the SEC launched legal proceedings Wednesday against Deloitte's Shanghai-based unit.

American regulators are demanding that Deloitte turn over documents relating to their former client Longtop Financial Technologies, a Chinese software company whose shares were suspended last year on the New York Stock Exchange because of massive accounting irregularities.

Deloitte says Chinese law prohibits the firm from sharing that information.

"China regulators would be authorized to dissolve the firm entirely and to seek prison sentences up to life in prison," Deloitte wrote in response to a subpoena filed in U.S. District Court for the District of Columbia.

The impasse raises concerns about how the new local partnership rules could further diminish the ability for the Big Four firms to assist in U.S. investigations.

"If everybody running these firms is a Chinese citizen and the government puts pressure on them to protect a favored state-owned enterprise or industrial policy, they will have no power to resist," said James McGregor, a senior counselor for APCO Worldwide in Beijing.

The chairman of the U.S. auditing industry regulator said this week that Beijing may soon allow American inspectors into China as observers in the audits of U.S.-listed Chinese firms.

Unlike banking, where foreign firms still have only a small market share because of regulations, the Big Four command about one-third of the Chinese auditing sector with revenue of $1.3 billion in 2010, according to the Ministry of Finance.

China has been determined to develop its own firms and has encouraged Chinese auditors to expand or consolidate over the years to meet the demands of China's increasingly lucrative corporate sector.

"As more and more Chinese companies go public, the Chinese government wants to promote the development of local auditing firms," said Ye Kangtao, a professor of accounting at People's University in Beijing.

Gillis said the new rules were more than a decade in the making. China negotiated in its entry to the World Trade Organization that auditors eventually must become certified with a Chinese license.

That put foreign partners on notice. The Chinese certification exam is notoriously difficult and is only offered in Chinese. A push to translate the test into English was quickly quashed when China called for reciprocity and suggested the American equivalent be offered in Chinese, Gillis said.

"The big question now is what are the local partners going to do with their newfound power," Gillis said.

what's this LA Times blog? this isn't part of the newspaper

GUYS WHY ARE WE EVEN TALKING ABOUT THE LA TIMES? WHO CARES. COME ON.

we don't know dude. you brought it up.

you of your own volition bumped a thread where your deepseated self-hate and insecurity led you to lie pathetically about reading a paper that you don't read

then you like an imbecile railed when someone corrected you... ranting about "blog" and revealing that, not only do you NOT READ the LA Times, you've never even been on the website

GUYS WHY ARE WE EVEN TALKING ABOUT LA THIS. TO SHOW HOW MUCH I DONT WANT TO TALK ABOUT THIS I'M GOING TO POST THE PREVIOUS THING I WAS OWNED ON FOR THE NEXT 5 PAGES

wow guys there's entire articles on the LA Times about China. I'm going to post them ALL up because owowowow I'm sure you guys have never HEARD OF A BLOG and didn't know that PRESS ABOUT CHINA is available here in the US.

I'm going to cut and past a bunch of them that I didn't even read so I CAN'T EVEN GIVE AN OPINION ON THE THINGS I POST. but even KNOWING THESE EXIST make me feel SMART.

This thread is devoted to economic developments impacting China.

the articles posted here are beyond the intellectual capacity of those who pretend to understand economics, namely Turd Chin.