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Economy of the People’s Republic of China

This tag is associated with 58 posts

China to ban foreign companies from online media business


The ruling Chinese Communist Party has announced new regulations that will ban foreign companies from publishing online media, games and other “creative” content within China’s borders from next month. The “Regulations for the management of online publishing services” also ban foreign-invested joint ventures from engaging in online content provision, according to a copy of the … Continue reading

The truth behind China’s exchange rate delusion


The current bout of anxiety is a symptom of the fact that China’s transition from an export-led growth strategy is proceeding far less smoothly than hoped China’s management of its exchange rate peg continues to rattle global financial markets. Uncertainty about renminbi devaluation is fuelling fears that deflationary forces will sweep through emerging markets and … Continue reading

Cool War: United States and China in the future of the global competition


Are we on the edge of a new Cold War era? Or, alternatively, every power struggle mindset has to be considered a lost legacy of the XX century and we’re headed to a new era of global cooperation? These are the big questions opening Cool War by Noah Feldman, a must read essay on the … Continue reading

China’s economy is worse than you think


The unreliability of Chinese official economic data has become almost a cliche. A few years before he became China’s premier, Li Keqiang said that the country’s numbers were “man-made” and “for reference only.” If the top economic policy maker of a country says that the numbers aren’t reliable … well, you believe him But how unreliable? … Continue reading

China’s meltdown shows the country is out of control


The world’s second-largest economy may be able to stem a financial crisis, but don’t count on it to stimulate the world’s economy. Global stock markets have rebounded after the shock of Black Monday, but worries over the Chinese economy are not over, in fact they are just beginning. The People’s Bank of China’s move on … Continue reading

Chinese companies face culture shock in countries that aren’t like China


Faced with slower growth at home and rising labour costs, Chinese entrepreneurs are seeking foreign markets as never before. But as they rush abroad, they are grappling for the first time with unruly trade unions, independent courts and meddlesome journalists. And for many, navigating the unfamiliar waters of multiparty politics and confronting the power of … Continue reading

China’s massive economic advantage over the world is about to disappear


We have finally arrived at a point in history that economists have been dreading for years: The moment when the total number of Chinese workers goes into decline for the first time in decades. Since way before the 1990s, China has had one huge economic advantage over the rest of the world: Year after year, … Continue reading

This is how China is trying to save its economy


China has had 35 years of hypergrowth, but now it’s over. It’s going to have to settle for really, really good growth instead. But that’s still going to be hard now that fewer Chinese are working-age, fewer people are moving to the cities and, most of all, now that China has a debt bubble it’s … Continue reading

The Domino Theory: Asia’s growing China problem


Asia has a China problem. Beijing has just initiated its biggest cut in bank reserve requirements since 2008, a move that underscores just how worried it is about its economy. But the cut is also a stark wake-up call for neighbours that have gotten used to riding China’s boom. For years, China’s steady growth served as a welcome antidote … Continue reading

Productivity, not reproductivity, must be the new driver of Chinese growth


Around a quarter of China’s remarkable economic growth over the past three decades or so was delivered by the dividend from its demographic structure, with a young population augmenting the workforce and lifting output in new jobs. A large proportion of the population were of working age; the proportion of the young and the old … Continue reading

What’s behind the surprise drop in Chinese exports?


China’s exports for the month of March fell by 15% from a year ago (in dollar terms), the General Administration of Customs said today. It was a big surprise to markets and investors, who were expecting a rise of as much as 12%. Imports also dropped, by 12.3%, although that was in line with expectations. As a result … Continue reading

Foreign capital exiting China at an accelerated pace


With the Chinese economy slowing down and its population dividend diminishing, foreign capital has been exiting the market at an accelerated pace, leading to concerns over a possible large-scale capital flight which may impact domestic banking capital and forex reserves, according to Duowei News, a media outlet run by overseas Chinese. A recent case in … Continue reading

Why China keeps throwing trillions in investments down the drain


A recent study performed by two economists affiliated with a Chinese state agency found that China’s state investments have becoming alarmingly wasteful and ineffective. There are two indisputable facts about China’s mammoth investments in its infrastructure and factories. One, they are a growth engine, accounting for roughly half of the country’s GDP increase since 2000. … Continue reading

China poised to pass U.S. as world’s leading economic power this year


The U.S. is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies. The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in … Continue reading

Multinationals invest less in China because of market access barriers


Multinational firms are planning to invest less in China because of market access barriers and slowing growth in the world’s second-largest economy, a U.S. business lobby said on Tuesday. China’s economy expanded 7.4 percent year-on-year in the January-March quarter, its slowest pace in 18 months. Concerns over market access and slower growth are greater this … Continue reading

Is China on final approach to an economic crisis?


January’s PMI data for China’s manufacturing sector, as released by Markit Economics and HSBC, showed a marked decline in production activity. More disturbing, however, is their analysis on the individual sectors of the manufacturing economy.  According to the report, firms cut their staffing levels at the quickest pace since March 2009, and, more importantly, “average … Continue reading

China’s commodity subsidising problems are only getting worse


Bloomberg recently reported that China, in order to aid its own cotton farmers by supporting cotton prices, has been buying up excess production into government stockpiles. The world’s biggest producer and user of cotton will have 12.7 million metric tons in inventory by July 31, 2014, 62% of the global total and enough to make … Continue reading

China needs 10 million new jobs a year to survive


The Chinese economy needs to create 10 million jobs per year and must sustain growth of at least 7.2% to achieve that, Premier Li Keqiang has warned ahead of a key meeting of the Communist Party. Li’s comments, in a speech published Monday on the website of the All China Federation of Trade Unions, indicate … Continue reading

How to get a slice of the money flowing out of China


In 2008, I wrote an article for an international business consultancy newsletter that outlined the opportunities associated with Chinese investing abroad. In the article, I wrote that since China commenced opening up in 1979, most international capital flow has been into China rather than out of it. By 2008, this capital flow had contributed to … Continue reading

China’s economic slowdown is precisely what Xi Jinping wants


“Those who live in worries and hardship survive while those who live in ease and pleasure perish,” says Chinese sage Mencius. In Reuters’ report titled Ditch the stats: China retailers don’t buy signs of recovery, it says that recent improved government data are perhaps inaccurate and do not mean that there is any success in the … Continue reading

Will China’s economy crash?


After many years of euphoria over China’s rapid growth and the country’s apparently inevitable rise to global economic dominance, the China story has taken a serious turn for the worse. China, it now seems, is about to collapse, and along the way it may well bring the world economy down with it. Fortunately, the new … Continue reading

I.M.F. warns China to hasten economic change


China’s growth has slowed significantly in recent months. But even its current pace of expansion may not be sustainable, the International Monetary Fund warned on Wednesday, unless China starts making significant and systemic economic changes — and soon. “Since the global crisis, a mix of investment, credit and fiscal stimulus has underpinned activity,” the I.M.F. … 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

Chinese Investors Seek Foreign Real Estate


Paul Salo has been selling real estate in China for more than twenty years, and now wants to show others how to sell real estate to wealthy Chinese buyers. Paul has made a series of eleven videos, showing how to tap into the network of wealthy Chinese buyers, and sell them property and investments in … 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

Economic motivation behind China’s dam building


The Chinese government has given preliminary environmental approval for construction of what would eventually be the country’s largest hydroelectric dam. The project, on the Dadu river in the southwestern province of Sichuan, is expected to take 10 years to construct at an estimated cost of a little over $4 billion. At 314 meters tall, it … Continue reading

European companies complain about China’s regulatory discrimination


An unlevel playing field in China costs European companies € 17.5 billion in missed revenues annually, according to a survey of the European Union Chamber of Commerce in China. The findings – which also highlight alleged regulatory discrimination as a key concern for these businesses – come amid rising trade tensions between China and the EU which, if intensified, … Continue reading

Job prospects grim for China’s 7 million fresh graduates


When James Zhao, 23, read news reports last Friday claiming Renren, the “Facebook of China“, could be laying off three-quarters of the staff at its 3G technology department, his heart sank. Having been unsuccessful in his job applications to several multinational tech firms, including mobile giant Motorola, he was hoping to have better luck with … Continue reading

Risks to China recovery seen as factory output underwhelms


China’s factory output growth was surprisingly feeble in April and fixed-asset investment slowed, rekindling concerns that a nascent recovery is stalling and adding to pressure on policymakers to take action to stimulate the economy. However, China’s already-easy monetary policy and rising home prices complicate the options available to Beijing’s new leadership, leading some analysts to … Continue reading

Why Beijing’s big economic announcement will not amount to much


China says it will open up capital flows – but will it work? China announced this week that it will formulate plans to permit more capital to flow in and out of the country, a key element of RMB convertibility, and liberalise its interest rates (link in Chinese), by the end of the year. In the simplest … Continue reading

Moody’s lowers China outlook after Fitch downgrade


Moody’s Investors Service on Tuesday affirmed China’s government’s bond rating of Aa3 but cut the outlook to stable from positive, the second pessimistic revision by a foreign ratings agency this month. Last week, Fitch Ratings cut China’s long-term local currency credit rating to A-plus from AA-minus, citing concerns about the risk that excessive local government … Continue reading

China’s shadow bankers and the vampire squid


“China is displaying the same three symptoms that Japan, the U.S. and parts of Europe all showed before suffering financial crises: a rapid build-up of leverage, raised property prices and a decline in potential growth.” – Zhiwei Zhang, Nomura economist. An uptick in manufacturing activity in March has eased fears of a hard landing, but China is … 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

The China Beige Book questions China’s economic data


For a city enthralled by intelligence work, like Washington, D.C., provocative intellects are a rare breed. So Leland Miller didn’t expect a warm reception when he rolled into town recently, declaring that everything everyone thinks he knows about China’s economy is wrong. Miller had no sooner introduced himself at the Atlantic Council, a think tank, … Continue reading

China’s shrinking pool of workers may limit economy’s recovery


China’s growth rebound may be capped by a labour force squeeze and shrinking resources that leave the government satisfied with rates of expansion as low as half the peak during the past decade. A pace of 7 percent to 8 percent reflects economic forces, Ma Jiantang, head of the National Bureau of Statistics, said on … Continue reading

The danger of Chinese overproduction


Coal, iron ore, steel, cotton, clothing, heavy equipment, ship-building, solar cells, LEDs, and property. All of these commodities at one point or another in the last year have been a hot topic due to overstocks caused by government-influenced overproduction. Falling prices and decreased global demand have crippled many participants in these industries, and many bankruptcies … Continue reading

Chinese college dropout turns market blog into pundits’ favourite


When Hu Bin started his blog in early 2008, he was a skinny 22-year-old college dropout with a perpetually sceptical look on his face and little doubt he’d soon be a household name. The previous year, the Shanghai Stock Exchange had been flooded by speculators. For a brief period, it was the second- busiest exchange in the … Continue reading

China’s rich on the move


The South Beauty chief Zhang Lan, a businesswoman known for her high-end restaurant chains in China and her celebrity daughter-in-law, recently sparked a heated debate on the emigration of rich Chinese after she was found to possess a foreign passport. Many “netizens” have lashed out at Zhang for her unpatriotic “betrayal”. In 2010, the world … Continue reading

Citibank forecasts a reversal in China commodity, growth patterns


In his latest note Citi‘s Edward L Morse writes “the commodity super cycle is over.” That is a monumental call, given how popular the long commodities trade has been. Why the turn? Basically, it’s all got to do with China. First, the economy is slowing down, and second as China rebalances its economy it is … Continue reading

BRIC hallucination: China won’t be engine of new world order, nor Russia, nor India


In the New World Order, the BRIC nations – developing nations – are to be the engine of global growth. That is at least what officials from the foremost global institutions have maintained all along, divorcing their narrative from the other, more populist narrative of just what the ‘New World Order’ is. That the ‘New … 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’s ghost infrastructure


As the Chinese economy continues to slow there is a growing consensus additional stimulus packages are forthcoming. What will be interesting to see is the exact nature of any new stimulus the central government enacts? Will it be focused again on infrastructure building at the local and provincial level? Will it be construction centric like … Continue reading

China approves $157-billion infrastructure spending to pump flagging economy


China has given the green light for 60 infrastructure projects worth more than $150-billion as it looks to energise an economy mired in its worst slowdown in three years, fuelling hopes the world’s growth engine may get a lift from the fourth quarter. Shares and steel futures contract prices jumped on the plans to build … Continue reading

Chinese export growth tumbles


Signs that the Chinese economy is sputtering mounted Friday, in the form of dismally feeble trade data that fanned expectations that Beijing would soon step up its efforts to buttress growth before a key leadership transition this autumn. China’s giant economy has emerged as a key driver of global growth, and hopes are high that … Continue reading

China Aims to Drive Domestic Consumption


China is currently facing a spending crunch from Europe and the U.S., which is impacting the economy and threatening a possible “hard landing.” The superlative growth over the last decade has largely been fuelled by export demand for cheaper Chinese-made goods. The country built thousands of plants and added significant capacity to handle the significant influx … Continue reading

China’s Catastrophic Deleveraging Has Begun


1. The frustrated and aggressive central bank If one wants to know how bad the health of China’s economy has gone, look no further than the PBOC‘s composure, which seems rather frustrated and aggressive as of late. On 5th July, the central bank cut benchmark interest rates for the 2nd time in less than a … Continue reading

Flaws in China’s economy mean tough times ahead


Shujie Yao says serious structural flaws in the Chinese economy mean the days of near-double-digit growth are over. The nation must now prepare for three years of hardship, which will be felt by the rest of the world. The world’s investors sift through the semantics of China‘s economic policy pronouncements with increasingly desperate optimism. As … Continue reading

Chinese Data Mask Depth of Slowdown, Executives Say


As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles. Record-setting mountains of excess coal have accumulated at the country’s biggest storage areas because power plants are burning less … Continue reading

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