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Amanda Lee

Articles by Amanda Lee

China’s infrastructure plans aim to shore up economy, but experts say Beijing may first need to ease up on local debt

26 days ago

[unable to retrieve full-text content]Beijing’s pledge to “front-load” policies that include infrastructure spending to shore up the economy next year will not be effective unless it also loosens its grip on local government debt, according to analysts.At the tone-setting annual central economic work conference that concluded on December 10, China’s leaders emphasised the need to stabilise growth and promised to accelerate fiscal spending, allow the construction of new infrastructure and implement new tax and fee-reduction policies…

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Chinese aviation firms vulnerable to financing restrictions due to US embargo on dual-use exports

28 days ago

[unable to retrieve full-text content]As the US expands its sanctions lists, Chinese companies in the aviation sector are facing increasing restrictions on financial services as well as American technology, according to trade lawyers and defence experts.Washington is deeply concerned with China’s military-civilian fusion strategy, which aims to modernise the country’s defence forces by integrating civilian research and the commercial sector with military-industrial players. The plan is a central component of President Xi Jinping’s…

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China’s yuan strengthens as trade surplus hits US$72 billion in November amid robust export growth

December 8, 2021

[unable to retrieve full-text content]China’s yuan strengthened against the US dollar on Wednesday, reaching its firmest level since May 2018, although analysts say depreciation risks are rising.In late session trading, the onshore yuan hit 6.3477 against the US dollar, gaining from 6.3515 in the morning session, while the offshore yuan traded at 6.3459 against the American currency.A lower yuan exchange rate figure means it takes fewer yuan to purchase one US dollar, indicating a stronger Chinese currency.Meanwhile, China’s…

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Ahead of China’s key economic meeting, ‘risk of potential instability’ looms large in decision-making

December 7, 2021

[unable to retrieve full-text content]China’s economic planners are expected to switch their focus from financial discipline to gradual easing while boosting investment and consumption to fend off headwinds to growth, experts said ahead of the annual central economic work conference that may begin this week.But analysts also warn that it would be premature to expect an abrupt end to property crackdowns and other financial speculations. Instead, a gradual easing would be designed to keep economic growth within a minimum stable range…

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Boeing 737 MAX to return to China’s skies by ‘beginning of next year’ but more changes still needed

December 3, 2021

[unable to retrieve full-text content]China’s aviation regulator expects airlines will resume commercial operations with the Boeing 737 MAX by the beginning of next year at the latest following a ban of almost three years, an official said on FridayThe Civil Aviation Administration of China (CAAC) issued an airworthiness directive for the 737 MAX, which has been grounded in China since March 2019 after 346 people were killed in two deadly crashes in Indonesia and Ethiopia in the space of five months, on Thursday.It stated that…

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China’s manufacturing advantage at risk as restrictions mount and competition intensifies, leading engineer warns

December 1, 2021

[unable to retrieve full-text content]Years of imitating others’ innovations and relying on imports are among the reasons China is still a long way from becoming a hi-tech manufacturing powerhouse, according to a leading engineer who advises the Chinese government.“The next 15 years will be a critical period for our nation’s manufacturing industry to grow stronger,” Chen Xuedong, a member of the Chinese Academy of Engineering, said at an event in Beijing on Saturday.As China faces growing restrictions over its access to foreign…

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Record 2.1m Chinese sit civil service exam as economy slows, youth jobless rate climbs

November 28, 2021

[unable to retrieve full-text content]A record number of Chinese are sitting the national civil service examination this year, in hopes of landing a secure government job amid slowing growth and high youth unemployment.More than 2.12 million applicants registered for Sunday’s exam, known as guokao in Mandarin, according to the state-owned China News Service.That is 35 per cent higher than last year’s 1.57 million, and the first time the number has crossed 2 million.That also gives applicants just a 1-in-68 chance of success, even…

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China calls for ‘strict accountability’ at local government levels where funds are misused

November 25, 2021

[unable to retrieve full-text content]China’s State Council says local governments should be held accountable for wasteful spending, as Beijing seeks to strike a balance between controlling growing debt risks and maintaining steady economic growth.While China’s overall debt level has stabilised and is steadily declining, the economy is facing “new” downward pressure, according to a report by the official Xinhua News Agency on Wednesday after the State Council executive meeting, which was chaired by Premier Li Keqiang.As such, it is…

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China facing ‘quasi-stagflation’ risk as rising factory prices increase pressure on slowing economy

November 22, 2021

[unable to retrieve full-text content]With the economy facing “periodic, structural, and cyclical constraints” amid rising concerns over upcoming growth prospects, China could enter into a period of “quasi-stagflation”, a central bank adviser has warned.Liu Shijin, a member of the monetary policy committee at the People’s Bank of China (PBOC), said that while inflation risks are under control, a persistently high producer price index (PPI) – which reflects the prices factories charge wholesalers for their products – may add…

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US businesses in China must be transparent, with more restrictions in place, congressional advisory panel says

November 19, 2021

[unable to retrieve full-text content]The US government’s leading advisory panel on China policy is calling for more transparency from American businesses operating in China, and it has recommended further restrictions on investment in US-listed Chinese stocks, as well as comprehensive sanctions on Chinese companies and their subsidiaries when it comes to “sensitive” technology.The US-China Economic and Security Review Commission’s annual report, released on Tuesday, outlined 32 recommendations to Congress, including new…

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How have US-China talks failed and succeeded in recent years?

November 17, 2021

[unable to retrieve full-text content]Although presidents Xi Jinping and Joe Biden met virtually on Tuesday for their first formal dialogue since Biden took office in January, there was little indication that their nearly four hours of talks achieved any sort of breakthrough in the areas of trade and industrial policies – thorny issues that have strained China-US relations for almost two decades.US National Security Adviser Jake Sullivan elaborated on this prickly point during a separate discussion hosted by the Brookings…

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China calls for global cooperation to improve energy supplies as power prices surge across the world

November 16, 2021

[unable to retrieve full-text content]China wants to see more international cooperation to stabilise power prices and boost the global energy trade, the nation’s assistant commerce minister has said, as the world’s No 2 economy looks to steady domestic supply after weeks of disruptions.Market volatility had increased as a result of global energy shortages driven by a sharp uptick in post-pandemic demand and extreme weather, Ren Hongbin said.Slow investment in energy projects due to earlier forecasts of low oil and gas prices have…

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China’s Boeing purchases seen as ‘weakness’ in US trade deal probe, hurt by ‘sour’ relations

November 11, 2021

[unable to retrieve full-text content]As the administration of US President Joe Biden edges closer to discussions with Beijing over the progress of the phase-one trade deal, China’s failure to purchase commercial aircraft from Boeing is likely to be one of the “weaknesses” identified by US Trade Representative Katherine Tai.Tai on Wednesday said the administration aims to hold Beijing accountable to the two-year trade deal which was signed in January last year, with China seen to be running far behind in its promises in the Trump…

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‘China is ready’ to make RCEP trade deal tariff cuts

November 7, 2021

[unable to retrieve full-text content]China is on track to cut tariffs when an Asia-Pacific trade deal comes into force at the start of next year, according to the Ministry of Commerce.The ministry said on Saturday that the Regional Comprehensive Economic Partnership (RCEP) agreement would boost confidence in economic growth among the pact’s members in the aftermath of the coronavirus pandemic.“[The deal will send] strong signals against unilateralism and trade protectionism, support free trade, and safeguard the multilateral…

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China trade: export growth above expectations in October but ‘Covid-19 cases and chip shortages loom’

November 7, 2021

[unable to retrieve full-text content]Trade growth in China has proved resilient, with exports rising more than expected in October, according to data released on Sunday.But downside risks were rising amid a resurgence in Covid-19 cases and computer chip shortages, analysts said.China’s exports grew by 27.1 per cent in October from a year earlier to US$300.2 billion – compared with the 28.1 per cent growth seen in September. The result was above the median result of a survey of analysts conducted by Bloomberg, which had forecast 22…

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Shanghai, Guangdong debt pilot programmes aim to reduce China’s hidden local government liabilities

November 5, 2021

[unable to retrieve full-text content]Two of China’s wealthiest regions have set up pilot programmes aimed at eliminating so-called hidden local government debt, but questions have been raised over how much can be done amid rising risks that Beijing may be forced to step in and bail out authorities.Last month, the financial city of Shanghai and the southern manufacturing powerhouse province of Guangdong signalled local governments are keen to tackle their mounting debt by launching trials to clean up off-budget lending.Debt issued…

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Is China’s local government debt a concern and what role do LGFVs play in infrastructure spending?

November 2, 2021

[unable to retrieve full-text content]Local government debt in China is broken down into two parts, namely explicit and implicit debt.Explicit debt is local governments’ on-budget liabilities that are recognised by the central government, while implicit debt includes off-budget borrowing that is not recognised by the central government. Implicit debt also includes borrowing by local government financial vehicles (LGFVs).What are LGFVs?Bonds sold by local government financing vehicles, or LGFVs, are one of the ways provincial…

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China’s small manufacturers see taxes deferred as Beijing vows ‘timely and targeted’ economic adjustments

October 28, 2021

[unable to retrieve full-text content]China’s struggling small and medium-sized manufacturers will see their taxes deferred for three months from November to help them cope with the high price of raw materials and surging production costs, the State Council said on Wednesday.The smallest manufacturers – those with annual sales revenue less than 20 million yuan (US$3.13 million) – will have all of their taxes deferred for the period, while 50 per cent of taxes will be deferred for manufacturers that pull in 20 million yuan to 400…

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China’s tariffs on Australian wine have South African exporters raising a glass to burgeoning market presence

October 22, 2021

[unable to retrieve full-text content]For wine importers like He Lei, the presence of South African wine in China could not have been more different this year compared with last year.“I feel that South African wine brands are starting to work hard [in China] … just when there’s an exodus of Australian wine because of the trade tariffs,” said He, who runs a wine-importing business from Guangzhou. “Overall, I’d say the reception has been very good. Many of our clients are impressed with the taste and the quality.“However, the price…

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China’s power crisis: Beijing draws up plans to increase coal output, lower energy prices as temperatures plunge

October 20, 2021

[unable to retrieve full-text content]Beijing has stepped up its control over the nation’s power market amid a crunch, pledging to intervene in the coal market, investigate pricing mechanisms and crack down on the speculative fuel trade as China tackles the ongoing problem that is threatening energy security and economic growth.A flurry of statements late on Tuesday and earlier comments by Chinese Vice-Premier Han Zheng highlighted the urgency, with the power crunch already having impacted the economy and raised concerns ahead of…

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China’s power crisis: why is it happening, how bad is it, and what if it continues into the freezing winter months?

October 10, 2021

[unable to retrieve full-text content]Why is China in the midst of a critical power crunch?China experiences power shortages from time to time, and these are often the result of a conflict between market-oriented coal prices and government-controlled electricity rates.On January 1, 2020, the central government implemented a new mechanism for controlling the price of electricity across the country, intended to prevent wild price fluctuations. A notice by China’s economic planner, the National Development and Reform Commission (NDRC)…

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China power crisis: Guangdong raising electricity prices for industrial users by 25 per cent in peak hours

September 30, 2021

[unable to retrieve full-text content]As a power crisis continues to pummel China, its southern manufacturing hub of Guangdong province is raising electricity prices as much as 25 per cent during peak-demand hours, starting Friday.The price hike, however, applies only to industrial users, rather than households, according to Tao Feida, deputy general manager at the customer service centre of China Southern Power Grid, who spoke with state broadcaster CCTV on Thursday.Peak hours are from 11am-noon and 3pm-5pm – a total of three…

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China’s WTO deputy chief says African nations ‘risk’ missing chance to reshape trade rules

September 27, 2021

[unable to retrieve full-text content]More African nations should consider joining the World Trade Organization (WTO) or risk missing the opportunity to influence global trade rules, said China’s Zhang Xiangchen, a deputy director general at the organisation.Zhang, who was appointed as a deputy to WTO director general Ngozi Okonjo-Iweala in May, said the share of African countries in global trade has declined over the years.“It’s risky for developing countries to stay outside the stiff competition in reshaping international trade…

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China debt concerns mounting as Beijing shifts attention to hidden local government financing

September 20, 2021

[unable to retrieve full-text content]Concerns are mounting over how local governments in China will pay back so-called hidden debts raised through self-issued bonds, especially as Beijing is increasing controls to prevent a meltdown in its largely state-dominated financial system.After years of poor infrastructure returns, Beijing has flagged concerns over local government financing vehicles (LGFVs), which are typically entities set up by authorities to fund infrastructure projects.US rating agency Moody’s Investors Service said…

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Mainland China bans Taiwan wax and sugar apple imports as cross-strait relations continue to worsen

September 19, 2021

[unable to retrieve full-text content]Mainland China has banned imports of sugar apples and wax apples from Taiwan from Monday, citing biosafety fears over plant pests.It follows a similar measure earlier this year to ban imports of pineapples from Taiwan amid ongoing cross-strait tensions.The General Administration of Customs in China said in a notice that Planococcus minor, a bug that feeds on a wide variety of agricultural crops and plants, has been found on sugar and wax apples from Taiwan “on multiple occasions” this year…

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What will form the ‘foundation’ as China moves towards overtaking the US to become the world’s biggest economy?

September 5, 2021

[unable to retrieve full-text content]Described as the “foundation” that will determine China’s “strength and its future position in the world”, manufacturing is once again taking over as the main engine of economic growth that could help challenge the United States as the world’s biggest economy.Amid rising competition with both developed and developing countries, China is renewing its effort to reboot its manufacturing sector, while moving away from its old playbook of relying on property and infrastructure spending to grow its…

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China to step up aviation self-reliance by 2025 amid US tensions, Shanghai to manufacture key engine parts

September 4, 2021

[unable to retrieve full-text content]Efforts by China to make its aviation industry more self-reliant will increase in the next five years, with plans in place to manufacture key parts for commercial engines in Shanghai by 2025.China has also already started to produce a new wide-bodied passenger jet with Russia – the CR929 – amid growing restrictions from the aviation industry in the United States, according to a development plan released by the Shanghai government this week.Shanghai is already home to the Commercial Aircraft…

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China’s coronavirus strategy deals blow to aviation sector, but could be shot in the arm for home-grown planes

August 28, 2021

[unable to retrieve full-text content]With China intent on sticking with its zero-tolerance coronavirus strategy, the recovery of its domestic aviation industry remains uncertain.Analysts have said loss-making airlines may be forced to push back the deliveries of new foreign-made planes, meaning China will have to boost production of domestically made aircraft to manage growing costs.“The outlook for [domestic air travel] is another cautious year, especially with the emergence of highly infectious new Covid variants causing more…

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China debt: Guangdong, Shenzhen eye foreign capital boost via offshore bond sales in Hong Kong and Macau

August 25, 2021

[unable to retrieve full-text content]In a bid to tap into foreign investments and boost the local economy, China’s southern tech hub and mass-manufacturing powerhouse are planning to issue offshore bonds in Hong Kong and Macau – marking the first direct offshore debt sales by local-level authorities in the country.The Shenzhen Finance Bureau plans to sell up to 5 billion yuan (US$772 million) worth of bonds via Hong Kong. Meanwhile, provincial finance authorities for Guangdong say an unspecified amount of bonds will be sold via…

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China’s economy at an ‘inflection point’ as Xi Jinping embarks on sweeping regulatory crack down

August 22, 2021

[unable to retrieve full-text content]The regulatory storm sweeping across China’s economy has raised concerns about the scale of government intervention in local markets, while some analysts question whether the changes are enough to boost innovation and ensure “quality growth” amid an increasingly challenging external environment.In recent weeks, Beijing has unleashed a flurry of new regulations for internet-oriented tech companies, private education firms and overseas listings, disrupting global markets and triggering huge…

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