Saturday , July 11 2020
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Amanda Lee

Articles by Amanda Lee

China cracks down on ‘themed towns’ in a bid to stop local governments wasting coronavirus stimulus funds

9 days ago

[unable to retrieve full-text content]Local Chinese governments will no longer be able to build the extravagant and controversial “themed towns” that popped up around the country after Beijing’s post-global financial crisis infrastructure splurge, the country’s state planner has announced.Instead, the government is demanding a return to “rationality” after a number of high profile failures added to concerns over regional economies wasting central government stimulus funds.The National Development and Reform Commission (NDRC) said…

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Hong Kong’s role in funding Chinese tech firms could be cemented by US-China rivalry, analysts say

11 days ago

[unable to retrieve full-text content]The rivalry between China and the United States, including Washington’s increased scrutiny over Chinese companies, could cement Hong Kong’s role as the primary location to raise money for mainland technology firms, analysts said.Escalating tensions between Beijing and Washington over the Hong Kong national security law have raised questions over the future of the city as an international financial hub.But with US-listed firms fearful of losing access to American capital markets, the likes of…

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China county government censured over illicit tax collection in sign of local fiscal woes

12 days ago

[unable to retrieve full-text content]A county government in Hebei province has been found to have illicitly collected business fees and taxes following a central government investigation, highlighting the mounting financial pressure facing regional economies because of the coronavirus pandemic.Jing county carried out “unrealistic taxation tasks”, collected taxes in advance and forced businesses to donate in the name of poverty alleviation, the General Office of the State Council said on Sunday.The county government “blindly” set a…

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Shadow banking back in vogue in China as assets grow for the first time since 2017

17 days ago

[unable to retrieve full-text content]Informal lending by Chinese banks, so-called shadow banking, is back in vogue after two and half years of regulatory clampdown as Beijing pledges faster credit growth to rescue its coronavirus-hit economy, according to a new report.Overall shadow banking assets in China rose for the first time since 2017, a report published by American business and financial services company Moody’s on Wednesday showed.The report detailed how shadow banking assets in the world’s second largest economy grew 100…

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China’s banking system begins to crack at its grass roots as two bank runs take place within a week

18 days ago

[unable to retrieve full-text content]China’s US$40 trillion banking system is seeing growing signs of trouble at its grass roots with bank runs happening at two small local lenders last week, a sign that a mountain of debt and an unprecedented economic contraction has started to take a toll.Local governments and police in both Baoding city in Hebei province and Yangquan, a coal mine town in Shanxi province, last week pleaded with customers not to withdraw cash from local banks despite various unsubstantiated rumours.On Saturday,…

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India-China border dispute: tensions likely to increase scrutiny of Chinese investment, analysts say

22 days ago

[unable to retrieve full-text content]Restrictions on Chinese trade and investment in India are expected to increase following a deadly clash between troops along their shared border on Monday, analysts said.Local trade groups and officials in India are urging boycotts of Chinese-made products and new reviews of Chinese investment following the major escalation of a weeks-long standoff between the two countries in the western Himalayas.However, the size of Chinese trade and investment in the country is still relatively small, so…

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China out to offset coronavirus impact with construction boom, but sustainability in doubt

23 days ago

[unable to retrieve full-text content]Questions have been raised as to whether China can sustain the strong construction activity drive intended to aid its economic recovery after seemingly turning to tried and tested infrastructure and property construction to bolster growth and jobs.China’s industrial production data for May showed all categories of fixed asset investment picked up, with Beijing counting on investment in infrastructure and property to make up for weakness in the manufacturing sector and help the overall economy…

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China and US can still cooperate as competitors, Beijing’s former top trade negotiator says

26 days ago

[unable to retrieve full-text content]Despite growing tensions, China and the United States must find a way to cooperate because their economies are too intertwined to decouple, according to a former top Chinese trade negotiator.“At a time when the [coronavirus] pandemic is still threatening global cooperation, I think it’s even more important to uphold and carry forward a spirit of cooperation,” Long Yongtu, head of the Chinese team that negotiated the country’s 2001 entry into the World Trade Organisation, told a seminar in the…

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Coronavirus: China stimulus policies not enough to boost job growth, steady economy, experts warn

June 9, 2020

[unable to retrieve full-text content]China needs to do more to steady employment this year given the damage caused by the coronavirus pandemic and calls from some trade partners to decouple from the world’s second largest economy, a panel of government advisers and academics said on Tuesday.Beijing wants to keep the urban surveyed unemployment rate steady at about 6 per cent in 2020, while creating 9 million new jobs. But David Li Daokui, a professor at Tsinghua University and former adviser to China’s central bank, said the…

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China to bypass provinces with direct payments to cash-strapped local governments, but revenue problems remain

June 3, 2020

[unable to retrieve full-text content]China is planning to channel much of its stimulus funding directly to cash-strapped city and county governments to help revive the economy, a move that highlights the long-standing tax and spending problems between Beijing and local governments.Beijing will create a special central transfer mechanism to direct 2 trillion yuan (US$281.2 billion) – 1 trillion yuan from the central government budget and 1 trillion yuan in special off-budget treasury bonds – to local governments to provide them…

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China facing soybean dilemma as it tries to balance phase one trade deal with self-reliance

May 27, 2020

[unable to retrieve full-text content]China’s demand for soybeans is expected to rebound in 2020 but the question remains where the supply will come from as it attempts to move away from over reliance on imports but also meet its commitments under the phase one trade deal with the United States.There are growing concerns regarding China’s food security as the relationship with the US becomes volatile, and since the beginning of the trade war, China has been reinforcing self-reliance on its industries including manufacturing and…

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China’s private firms demand tighter oversight of local governments as virus causes spike in late payments

May 20, 2020

[unable to retrieve full-text content]China should establish a system to monitor the finances of cash-strapped local governments that fail to pay private businesses on time, fed up company executives say, a problem that is growing worse as the coronavirus ravages the economy.Governments with low creditworthiness scores could be punished, and jurisdictions banned from starting new projects, according to the proposals.Tax cuts to support growth and higher spending to combat the coronavirus pandemic have caused a spike in delayed…

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China sets out stall ahead of NPC with pledges for market-oriented, local government finance reforms

May 19, 2020

[unable to retrieve full-text content]China has renewed its pledge to undertake market-oriented reforms of its economy and to better regulate local government finances ahead of what is expected to be lively debate at the meeting of the National People’s Congress this week on proper government policies to respond to the rising challenges in the domestic and foreign environments.The publication of the list of reform promises by the ruling Communist Party and the State Council, the government’s cabinet, came at a time when the world’s…

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China debt: how big is it, who owns it and what is next?

May 19, 2020

[unable to retrieve full-text content]What is the nature of China’s debt? Broadly speaking, China’s debt can be divided into domestic debt and foreign debt.China’s domestic debt, denominated in yuan, consists of three components: corporate, household and government debt. Corporate debt includes borrowings by private sector and state-owned companies, while China’s public debt is a combination of national and local government debt. Household debt, meanwhile, is the combined debt of all people in a household, including consumer debt…

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Coronavirus: China doesn’t need big economic stimulus, advisers and former officials say

May 17, 2020

[unable to retrieve full-text content]China does not need to launch a large economic stimulus effort to address the damage being done by the coronavirus pandemic, a group of government advisers and former officials said at the weekend.In particular, they said, there was no need to copy the quantitative easing policy employed by a number of major central banks around the world.Beijing is expected to announce details of additional economic support measures at the annual meeting of the National People’s Congress this week.However,…

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Coronavirus: China to revive special ‘off-budget bonds’ as pandemic stokes debt dilemma

May 8, 2020

[unable to retrieve full-text content]The Chinese government has found itself in a tough spot. After years of trying to clamp down on the nation’s high level of debt, it is now being forced to watch it balloon again to rescue its coronavirus-stricken economy.But to make sure the extra borrowing does not become a feature of government finances, Beijing is using an accounting sleight of hand to keep a new bond issue “off budget” – and not a part of deficit spending.Still, Beijing must be careful, analysts said, as the additional debt…

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Coronavirus: China should raise US$700 billion from special bonds to kick-start economy, top adviser says

May 3, 2020

[unable to retrieve full-text content]China should look to raise up to 5 trillion yuan (US$700.5 billion) from the sale of special bonds to stimulate the economy after the “unprecedented impact” of the coronavirus pandemic, a top government adviser said.The funds created by the debt sale – which would be in addition to already budgeted spending – were necessary to drive investment and restore consumer confidence, both of which had been ravaged by the health crisis, Liu Shangxi, president of the Chinese Academy of Fiscal Sciences,…

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Coronavirus: US farm sales to China hit by bumper soybean crop from Brazil, supply chain disruptions

April 24, 2020

[unable to retrieve full-text content]The coronavirus pandemic and strong foreign competition are obstructing a US push to increase sales of farm products to China, even as Washington banks on Beijing buying more of its agricultural goods as part of the phase one trade deal signed in January.While analysts say the pandemic has not affected soybean shipments from the United States, cheaper beans from Brazil have made them less competitive. The South American country is also benefiting from its largest harvest on record.US pork…

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Coronavirus: China reopens hundreds of cinemas as virus outbreak slows, but is anybody going?

March 25, 2020

[unable to retrieve full-text content]Cinemas in many Chinese cities began reopening last week after a weeks-long shutdown due to the coronavirus outbreak, but dismal box office takings highlighted just how far the consumer economy has to go before returning to normal.A total of 495 cinemas, or 4.4 per cent of China’s total, had opened by Tuesday, but they attracted only 1,003 cinema-goers – an average of about two people per cinema per day – according to statistics from Maoyan Entertainment, a firm monitoring nationwide box…

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Coronavirus: emergency G20 summit to contrast gung-ho US economic package with China’s softer approach

March 25, 2020

[unable to retrieve full-text content]World leaders from the Group of 20 major economies, including Chinese President Xi Jinping, will convene an emergency virtual summit on Thursday to discuss the global response to the coronavirus pandemic and the economic damage it is causing.The summit will take place against a backdrop of an oil price war between two members, Saudi Arabia and Russia, and rising tensions between two others, the United States and China, over the origin of the virus, which has infected nearly 400,000 people…

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Coronavirus: China’s southern manufacturing hub facing supply shortage as global fears grow

March 18, 2020

[unable to retrieve full-text content]Almost a third of companies in China’s southern manufacturing hub are facing a supply shortage as the coronavirus takes it toll around the world, a survey of companies showed.The survey by the American Chamber of Commerce in South China also showed that 15 per cent of the 237 companies which took part in the survey conducted from March 9 to 14 said they had already run out of some supplies.Just over half said their manufacturing ability had been “slightly” impaired by supply chain disruption,…

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Coronavirus: China’s central bank will use ‘variety of measures’ to cut loan costs for firms

March 15, 2020

[unable to retrieve full-text content]China’s central bank on Sunday said it would use “a variety of measures” to bring down the cost of borrowing for companies that have been hit hard by the coronavirus outbreak.“The People’s Bank of China (PBOC) will continue to take a variety of measures to promote a decline in loan interest rates, and to support the resumption of production and economic development,” Sun Guofeng, head of the PBOC’s monetary policy department, said at a press briefing in Beijing.Those measures included using…

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Coronavirus: China airlines post record revenue loss in February as passenger volumes plunge

March 12, 2020

[unable to retrieve full-text content]Chinese airlines posted a record loss of 20.96 billion yuan (US$3 billion) in February after tens of thousands of flights in and out of the country were cancelled because of the coronavirus outbreak, the Civil Aviation Administration of China (CAAC) said on Thursday.Passenger traffic plunged by 84.5 per cent to 8.34 million people while cargo volumes slumped 21 per cent to 297,000 tonnes last month compared to the same time last year, data from the aviation regulator showed.February was…

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China forges ahead with airport construction binge, despite signs of slowing air traffic growth

March 9, 2020

[unable to retrieve full-text content]China is pressing ahead with plans to build an average of 14 airports every year over the next 15 years, despite passenger and cargo growth showing signs of slowing after a period of rapid expansion.Already equipped with some of the world’s largest airports, the Civil Aviation Administration of China (CAAC) wants to add another 215 to reach a target of 450 by 2035, helping to turn China’s aviation industry into a strategic part of its trillion-dollar economy.In the short-term, the airport…

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Coronavirus sends China’s aviation industry into free fall, damaging hopes of becoming global hub

March 5, 2020

[unable to retrieve full-text content]This is part of a five-part series looking at how the coronavirus epidemic affects China’s relationships with the rest of the world. Part three focuses on how the virus is causing China to lose ground in its quest to become a global aviation power.China’s aim to become an international aviation hub is taking a beating, as fears of a global coronavirus pandemic continue to intensify.The coronavirus, which causes the disease officially known as Covid-19, started in the Central Chinese city of…

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Chinese frog breeders call for help as wildlife trade ban shuts down business

March 1, 2020

[unable to retrieve full-text content]Frog breeders in southern China have appealed directly to authorities to allow them to keep rearing the animals despite a national ban on the wildlife trade triggered by a deadly coronavirus epidemic.The appeal was made in two petitions posted online – one by a group from Jiangmen in Guangdong province and the other by breeders in Hainan province.“The government’s forestry department has banned trading of all wild animals, including our 10,000 tonnes of domesticated Thai tiger frogs. Where do…

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China likely to introduce new measures to bolster coronavirus-hit economy, analysts say

March 1, 2020

[unable to retrieve full-text content]Beijing is expected to launch new policies to support economic growth, observers say, after figures showed the coronavirus outbreak hammered activity in the nation’s manufacturing and services sectors in February.Analysts have cut their forecasts for China’s first-quarter gross domestic product (GDP) growth from a consensus of about 4 per cent to a contraction of up to 6 per cent following the publication of the data on Saturday.But most said the government would continue to shy away from…

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China’s cabinet makers lose US anti-dumping case as trade tensions remain despite phase one deal

February 27, 2020

[unable to retrieve full-text content]Chinese producers and exporters of wooden cabinets and vanities will have to pay additional duties on imports to the United States after losing an anti-dumping case lodged by their American competitors in a sign of ongoing trade tensions despite the signing of the phase one trade deal in January.The US Department of Commerce said it had determined that Chinese firms had sold wooden cabinets and vanities at “less than fair value in the United States at rates ranging from 4.37 per cent to 262.18…

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Coronavirus: China’s airlines offer domestic flights for as little as US$4 as industry struggles amid outbreak

February 26, 2020

[unable to retrieve full-text content]A one-way air ticket from the coastal economic hub of Shanghai to the inland municipality of Chongqing, a journey of over 1,400km (870 miles), now costs less than a cup of coffee, with Chinese airlines slashing prices in a bid to boost weak domestic demand amid the coronavirus outbreak.The cancellation of around 10,000 flights a day, or around two thirds of the total number of flights scheduled every day in February, has placed huge financial pressure on airlines and airports.The Civil Aviation…

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China to refund US trade war tariffs on some medical devices amid coronavirus outbreak

February 21, 2020

[unable to retrieve full-text content]China said on Friday it would refund tariffs already paid on a list of 55 US-made products including medical devices, engine components and timber products.The list of products includes some medical devices that are essential for the diagnosis of coronavirus, which causes the disease officially known as Covid-19, and which has already infected more than 75,000 people and killed more than 2,000 in China. These products include magnetic resonance imaging (MRI) parts and X-rays tubes, a key…

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