This tag is associated with 96 posts

China-US dialogue: China’s unrequited love again?

In my post South China Disputes: Encirclement of China, I described China’s unrequited love. I said that in spite of China’s efforts and sacrifice in the case of Libya (where it has suffered huge loss due to support for US policy), the US has neglected China’s courting and started to encircle China. China began to seek … Continue reading

Australia warned of China economy danger

Former Australian prime minister John Howard has warned Australia not to become mesmerised by China, and instead focus on maintaining an efficient and productive economy. In a major speech to the Australian Chamber of Commerce in Shanghai, Mr Howard said he believed Australia must stay diversified and not become reliant on the mining industry. China … Continue reading

China will cut off credit to rebalance economy

China said on Friday it would cut off credit to force consolidation in industries plagued by overcapacity as it seeks to end the economy’s dependence on extravagant investment funded by cheap debt. In a statement from the State Council, or cabinet, Beijing laid out broad plans to ensure banks support the kind of economic rebalancing … Continue reading

China plays down economic turmoil

China’s chief banking regulator said on Saturday that liquidity in China’s banking system is sufficient and pledged to control risks from local government debt, real estate and shadow banking. Despite a cash squeeze that sent money-market interest rates soaring over the last two weeks, banks have more than enough reserves to meet settlement needs, Shang … Continue reading

China heading for unprecented credit bubble implosion

China’s shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned. The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying … Continue reading

China’s economy stumbles in May, growth seen sliding in Q2

Risks are rising that China’s economic growth will slide further in the second quarter after weekend data showed unexpected weakness in May trade and domestic activity struggling to pick up. Evidence has mounted in recent weeks that China’s economic growth is fast losing momentum but Premier Li Keqiang tried to strike a reassuring note, saying … Continue reading

Renewed Chinese-Russian friendship is a cause for international concern

Chinese President Xi Jingping has continued his visit to Russia, aimed at bolstering the friendship between the two nations and increasing cooperation. The visit, his first since officially taking office last week, demonstrates that China is seeking to overcome past suspicions and solidify its friendship with Russia in order to form an axis against perceived … Continue reading

An Asian century is highly unlikely

The 19th century was the European century, the 20th century was the American century and the 21st century is believed to be an Asian century. While this century has 86 more years to go, Asia is unlikely to be the sole dominant political and cultural power.  Out of the big Asian players, none has arisen, nor … Continue reading

China’s ambition to become global currency has a long way to go

In Reuter’s report titled China’s yuan hits headwinds in bid to be global currency, it says, “China’s campaign to get the world using its currency, the yuan, is hitting headwinds in corporate boardrooms, raising doubts as to whether it will ever challenge the dominance of the U.S. dollar in global trade and finance.” China certainly has … Continue reading

China’s real estate bubble

In just 30 years, China‘s state-controlled economy became the world’s second largest, strictly managed by government policies and decrees. One of the few economic sectors where the rising and affluent middle class could invest was real estate and construction. As much as 30% of China’s economy is housing-related. Families have tied their savings into apartments. No one … Continue reading

What could derail a middle class China?

Every investor knows about the middle income trap.That’s when countries hit a certain income level, say around $15,000 annually per head, and growth ceases to impress. The economy moves slower. It goes through bouts of recessions, some steeper than others. Middle class economies contract.  Poorer economies on route to middle classdom, expand. China is far from … Continue reading

China’s most severe economic downturn in decades; city transformation vital to changing future

China is experiencing its most severe economic downturn in decades, and revitalising its economic model is critical to future prosperity — not only in China, but around the world. Central to that effort is the transformation of China’s cities. By adopting a new approach to urbanisation, its leaders can assure more balanced investment, address a … Continue reading

China: America’s Asian pivot misguided and dangerous; trust and economic cooperation better

Today the freshly re-elected President Obama is heading for Asia, taking in Cambodia, Burma and Thailand. His trip, the first since he won the election, is clearly aimed to secure friends in a region that is increasingly important. Sadly the core US strategy of military presence hasn’t changed, and for as long as America believes … Continue reading

China’s non-manufacturing industries expand at a faster pace

China’s non-manufacturing industries expanded at a faster pace in October, adding to evidence the world’s second-biggest economy is recovering after a seven- quarter slowdown. The purchasing managers’ index rose to 55.5 from 53.7 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing today. A reading above 50 … Continue reading

A Chinese megacity is on the verge of bankruptcy

While most “developed world” people have heard of Hong Kong and Macau, far fewer have heard of China’s province of Guangdong, which is somewhat surprising. With over 100 million people, a GDP of nearly $1 trillion – the biggest of all Chinese provinces, this South China Sea adjacent territory is perhaps China’s most important economic dynamo. … Continue reading

China to sell 20 billion yuan ($3.2 billion) in treasury bonds

The certificate treasury bonds, the third batch this year, will be sold Oct 10-19 to individual investors, the China Daily Friday quoted the finance ministry as saying. They include 12 billion yuan of three-year bonds with an annual interest rate of 4.76% and 8 billion yuan of five-year bonds with an annual rate of 5.32%. Interest will … Continue reading

PBOC injects biggest daily amount of funds via repos to raise liquidity

China’s central bank yesterday injected the largest daily amount of money into the banking system via open market operations to ease a liquidity thirst before a week-long holiday. The People’s Bank of China conducted 190 billion yuan of 28-day reverse repurchase and 100 billion yuan of 14-day contracts, according to its statement. The PBOC set … Continue reading

China’s super-rich get poorer

Many of China‘s richest people have grown poorer over the past year and the number of its US dollar billionaires has fallen for the first time in seven years, according to the Hurun Rich List, which tracks Chinese wealth. In its annual report on China’s super-wealthy, released on Monday, Hurun said China had 251 people … Continue reading

Bond wars: Chinese advisor calls for Japanese bond dump

China is actively considering “using its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to “impose sanctions on Japan in the most effective manner” and bring Tokyo’s festering fiscal crisis to a head.” Meaning: dump Japan’s bonds en masse. Should this stunning recommendation be enacted, not only would it be the first time … Continue reading

China number two on Fortune 500 list

Two years after eclipsing Japan as the world’s second-largest economy, China on Monday stole the number-two spot on the Fortune 500 list of the biggest global companies from its Asian rival. In its annual revenue rankings, Fortune magazine said that China overtook Japan for the first time, landing 73 companies on the list compared with … Continue reading

Brazil, China to Sign $30 Billion Currency Swap Agreement Soon

Brazil and China will sign an agreement in the coming weeks to swap as much as $30 billion in their two currencies, Brazil Finance Minister Guido Mantega said. The currency swap, worth 60 billion reais or 190 billion yuan, will be the first step in a broader agreement with Russia, India and South Africa to … Continue reading

China January-April FDI inflow at $37.9 billion, outlook dark

China‘s foreign direct investment inflows dropped 2.4 percent in the first four months of 2012 versus last year, the longest period of declining inflows since the depths of the global financial crisis and a sign of external economic headwinds. The Commerce Ministry said on Tuesday that the country drew $37.9 billion in foreign direct investment … Continue reading

Bo’s successor woos more foreign investors for Chongqing

Chongqing‘s party boss has told a group of visiting business leaders from Hong Kong and abroad that the municipality will be more open to foreign investment, in a bid to reassure them in the wake of Bo Xilai‘s downfall. “Chongqing will definitely further open up and be more active in terms of its economic development,” … Continue reading

Foreign investors in China get a break

China will relax controls on qualified foreign institutional investors (QFIIs) soon, following a decision to nearly triple the amount they can spend. Regulators plan to scrap the requirement that a QFII invest at least half of its funds in stocks, said two people briefed by government officials about the matter. They said waiving the rule … Continue reading

The risks of a Chinese hard landing

With the Chinese economy seemingly in the midst of a fairly soft landing, global investors have not been paying much attention to China in recent months. However, all that will change as a result of the extremely weak Chinese activity data for April which were published last week. Asian equities and commodity prices have already … Continue reading

China growth risks signal need for fiscal action

China may need a back-up plan to stop economic growth being cut short by a surprise dip in demand at home and abroad that suggests monetary policy easing steps taken since the final quarter of last year are insufficient to deal with the downturn. The People’s Bank of China cut the amount of cash that … Continue reading

China’s unique economic model shows limits as economy slows

After the economies of Western nations imploded in late 2008, Chinese leaders began boasting of their nation’s supremacy. Talk spread, not only in China but also across the West, of the advantages of the so-called China model — a vaguely defined combination of authoritarian politics and state-driven capitalism — that was to be the guiding … Continue reading

China economy shows unexpected signs of weakness

China‘s economy stuttered unexpectedly in April with lower than expected output data, softening retail sales and easing prices suggesting economic headwinds might be stiffer than thought, requiring more robust policy responses to counter them. Industrial output expanded at its slowest annual pace in April in nearly three years, while fixed asset investment growth dipped to … Continue reading

Risks loom as China orders Big 4 auditors to go local

China and the world’s largest audit firms face credibility risks under an order Beijing issued saying the firms must hire more Chinese citizens to manage operations there, analysts said. Thursday’s order follows a string of accounting scandals at Chinese companies listed on U.S. stock markets and amid broader questions about China’s willingness and ability to … Continue reading

Guangdong free-trade zone plans criticised

The three experimental development zones in Guangdong have agreed to set up joint conferences to solve problems ranging from vicious competition among them to overlapping of industrial strategies, but some analysts are sceptical about the drive. Nansha in Guangzhou, Qianhai in Shenzhen and Hengqin in Zhuhai , which have been written into China’s 12th five-year … Continue reading

China orders “Big Four” auditors to restructure

The world’s top four accounting firms will have to bring in Chinese citizens to run their operations in China and end the dominance of foreign partners under new rules announced by the Finance Ministry on Thursday. The Big Four auditors – Deloitte Touche Tohmatsu, PriceWaterhouseCoopers, Ernst & Young and KPMG – must start to convert … Continue reading

Auditor watchdog reports progress on China deal

The main U.S. auditor watchdog said it is close to an agreement that will allow it to observe audit inspections in China, a first step toward doing joint inspections there. The breakthrough in lengthy negotiations between the United States and China on joint inspections came last week during meetings in Beijing, said Jim Doty, chairman … Continue reading

China defends forex strategy

China, the No 1 holder of US debts, has defended its overseas investments, with the country’s foreign exchange regulator claiming it made money from its outbound assets every year over the past eight years. Guan Tao, head of the international balance of payment divisions at the State Administration of Foreign Exchange, said China earned US$128 … Continue reading

China’s ailing bad debt market cries for change

Veteran investor Jack Rodman has had enough. After waiting 11 years for China to sell its rising pile of bad bank loans, he is quitting and going to Spain instead. His pull-out exposes a pressing failing in China’s booming financial sector: it does not properly dispose of a growing store of bad loans from banks’ … Continue reading

US condemned as a money-mad fake democracy

State-owned media have stepped up their attack on Western democracy, targeting the United States in particular with accusations of corruption and lack of real democracy. The Communist Party mouthpiece People’s Daily said Western democracy worshipped money and was “fed by money”. “Wall Street is so powerful that it can hold the [US] Congress hostage and … Continue reading

Loans to poor countries – China has strings attached

“China is a very aggressive and pernicious economic competitor with no morals. China is not in Africa for altruistic reasons. China is in Africa for China primarily.” This was the argument put forth by a confidential US State Department memo in February 2010, later published by Wikileaks. The secret memo reinforced Western perceptions, not often … Continue reading

BlackRock targets consumers in slowing China

China’s 1.3 billion consumers may be the only thing preventing the world’s second-largest economy from a hard landing that could reverberate across global markets, according to a report issued by asset manager BlackRock Inc on Tuesday. The Chinese economy is transitioning from production and exports to building a strong middle class that could support future … Continue reading

Working Hard or Hardly Working? Trends in China’s Leisure Economy

The following article was translated and edited from an article that appeared in China Economic Weekly. The article analyses several findings from the 2011-2012 CCTV Economic Life Survey, in particular the dichotomy between northern and southern cities for “happiness” rankings and “leisure” rankings. The article also defines an income level “leisure time threshold” and concludes … Continue reading

Ex-Wall Street bankers bring science to China’s rocky stock market

Ex-Wall Street bankers are betting science can exploit opportunities in China’s often rumour-driven stock market, with some predicting the quant-driven fund industry to grow by as much as 10-fold to 100 billion yuan within a few short years. Former Goldman Sachs banker Shen Yi is confident his newly-launched 20 million yuan ($3.17 million) quant fund, … Continue reading

U.S. political rhetoric to stay as China widens yuan band

China’s widening of the yuan’s trading band will do little to blunt criticism of its currency policy by the United States and the Treasury Department said on Sunday more progress was needed to correct a “misalignment” of the exchange rate. Not much shift in the political rhetoric from Washington was expected in the wake of … Continue reading

China stocks czar faces battle to win back investor trust

In little over six months as China’s top securities watchdog, Guo Shuqing has let loose a flurry of reforms targeting insider trading, market manipulation and dodgy disclosure that have hamstrung China’s stock markets even as its economy surges. But China’s more than 72 million retail investors, who account for about three-fourths of trading on the … Continue reading

China currency move nails hard landing risk coffin

China’s weekend reform of its currency regime nails shut the coffin on the last remains of doubt about whether the world’s second biggest economy has successfully steered a course past a hard economic landing. Investors were questioning whether the worst sequential slowdown in China’s economy since the 2008-09 global financial crisis could enter a sixth … Continue reading

Timeline: China’s reforms of yuan exchange rate

China took another step on Saturday towards turning the yuan into a global currency by doubling the size of its trading band against the dollar to 1 percent. By peeling back trading restrictions on the yuan, Beijing is working toward its goal of having a currency that trades relatively freely, or is basically convertible, by … Continue reading

U.S. politics clash with reality over China currency

U.S. politicians readily muscle up to talk tough against China on the campaign trail, charging its policies undermine American manufacturing, but two key planks of the argument for criticizing Beijing are crumbling. The Chinese currency has risen 31 percent against the dollar over the past seven years, eroding a chunk of the price advantage Chinese … Continue reading

Chinese insurer to stop covering tankers carrying Iranian oil

China P&I club, the nation’s key ship insurer, will stop indemnity coverage for tankers carrying Iranian oil starting in July in order to abide by tightened Western sanctions against Iran following similar action in Japan, The New York Times reported. It is the first Chinese maritime insurer to make the decision, and the first sign … Continue reading

What is the Renminbi’s Fair Value?

Spats between the US and China over the value of the renminbi seem to wax and wane with the regularity of the moon. The yuan has appreciated by around 8% in nominal terms since it was effectively de-pegged from the US dollar in June 2010 and by around 12% in real terms (after inflation is … Continue reading

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