People’s Bank of China

This tag is associated with 24 posts

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

China opens door further to foreign stock investors

China has relaxed rules to allow more foreign participation in its main stock market, in the latest step towards liberalising the financial system in the world’s second-largest economy. From Thursday, foreign investors on the Shanghai stock exchange will be allowed to invest in more products and can invest up to 30 percent in a single … 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 free trade zone plans herald quicker FX reforms

China plans to roll out financial sector reforms in the Shanghai special economic zone in the next three months and most will be implemented in a year, suggesting authorities are accelerating the pace of dismantling capital account controls. A People’s Bank of China (PBOC) statement on Wednesday for the first time gave a timeline for … Continue reading

China wants fewer curbs in free trade zones to lure foreign investment

China hopes to suspend its laws governing foreign investment in proposed free trade zones, the cabinet said, in a sign the world’s second-biggest economy could open further to foreign competition. The State Council, China’s cabinet, will ask senior members of the National People’s Congress, or parliament, for the power to suspend laws and regulations governing … Continue reading

China’s internal conflict over yuan reform rattles foreign firms

Multinational companies in China say they are being forced to pick sides in a turf war between two major financial regulators fighting over which agency will drive currency and capital account liberalisation. The conflict between the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE) risks undermining confidence in the country’s … Continue reading

China frees up lending rates in major reform

China’s central bank removed controls on bank lending rates, effective Saturday, in a long-awaited move that signals the new leadership’s determination to carry out market-oriented reforms. The move gives commercial banks the freedom to compete for borrowers, a reform the People’s Bank of China (PBOC) said will help lower financial costs for companies. Previously, the … 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

China heads back to the ’90s in economic reform drive

China is poised to launch its most serious economic reform drive since the 1990s after a series of top appointments at the weekend put the architects of Zhu Rongji‘s clash with state owned enterprises in charge of key economic agencies. Vice Premier Ma Kai, Finance Minister Lou Jiwei and central bank governor Zhou Xiaochuan were … 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 is ready for currency war

The deputy governor of China’s central bank, Yi Gang, said that the country was prepared for weakening currencies in the United States and Europe, and now Japan. Worldwide, the central bankers are already in a currency war, so this policy statement should not come as a surprise. Noteworthy is the fact it was publicly and … Continue reading

China’s economy posts slowest growth since 1999

China’s economy grew at its slowest pace in 13 years in 2012, though a year-end spurt supported by infrastructure spending and a jump in trade signalled the foundation for the stable growth path Beijing says is vital for economic reform may be in sight. Evidence of a burgeoning recovery in exports, stronger than expected industrial … Continue reading

China: Economist warns of dangerous asset bubble

Economist Wu Jinglian, one of the mainland’s best-known advocates of market reform, warned yesterday that excess domestic money supply was creating an increasingly unsustainable asset bubble. Wu, a senior research fellow at the State Council’s Development Research Centre, said the risk of an asset bubble was even greater than it was in Japan before its … Continue reading

China says economy recovering, bad debt risks dismissed

Reuters reports from Beijing: “Comments by China‘s two top banking officials playing down the risks of bad debt in the banking system provided the latest upbeat signal from Beijing suggesting seven straight quarters of slowing growth have ended. “Markets will be looking for the remarks, from Central bank governor Zhou Xiaochuan and bank regulator Shang … 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

How much gold does China have?

China Is Seeking To Offset The Declining U.S. Dollars It Holds By Buying Gold On the 24th of April 2009, China announced that it had increased its gold reserves 75% from 600 tonnes to 1,054 tonnes. What made the announcement unusual was the six year gap in reporting, given the previous two changes were in … 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

China Faces Pension Crisis

Study predicts a USD 2.8 trillion pension shortage in China next year. By the year 2013, China will face a pension gap of RMB 18.3 trillion (about USD 2.8 trillion), says  Ma Jun, chief economist and investment strategist of Deutsche Bank Greater China, and Cao Zhengyuan, chief economist of Bank of China,  in a recent report titled … Continue reading

China’s second interest rate cut in month

SCMP says, “China made a surprise move yesterday to cut interest rates for the second time in a month. At the same time, the European Central Bank cut interest rates to a historic low and the Bank of England took steps to further ease credit. “While the moves by the three central banks don’t appear … Continue reading

China’s Wen urges more support for growth

China‘s premier called for additional efforts to support growth on Sunday, signalling Beijing’s willingness to take action after a recent series of economic indicators suggested that the world’s second-biggest economy will slow further in the second quarter. “We should continue to implement a proactive fiscal policy and a prudent monetary policy while giving more priority … 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 acts to boost loans, bolster flagging economy

China‘s central bank cut the amount of cash that banks must hold as reserves on Saturday, freeing an estimated 400 billion yuan ($63.5 billion) for lending to head-off the risk of a sudden slowdown in the world’s second-largest economy. The People’s Bank of China delivered a 50 basis point cut in banks’ reserve requirement ratio … Continue reading

China gives the yuan more muscle

Beijing set the reference rate for the yuan at a record high yesterday, one week ahead of an economic summit between the nation’s top policymakers and their United States counterparts. The People’s Bank of China put the central parity rate at 6.2829 per US dollar yesterday, 0.15 per cent higher than Wednesday’s 6.2923 per dollar, … Continue reading

China central bank: Yuan, interest rate reform to be gradual

China will take a gradual approach to yuan reform and will not be in a hurry to free up deposit rates offered by banks, as it seeks to rebalance its economy and deepen its financial markets. Beijing doesn’t plan a one-off revaluation of the currency and will instead allow market forces to determine the yuan’s … Continue reading

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