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China’s digital currency won’t topple US dollar ‘so easily’, senior Bank of Japan official says

2 days ago

[unable to retrieve full-text content]A senior Bank of Japan (BOJ) official downplayed the potential for China’s digital yuan to threaten the US dollar’s position as the world’s main reserve currency.“The dollar’s status as the key global currency won’t change so easily,” said Kazushige Kamiyama, head of the BOJ’s payment systems department and the person in charge of looking into a virtual Japanese currency. “In fact, the dollar’s advantage may strengthen further if the US goes with digitalisation.”A report earlier this week…

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Macau to ‘study feasibility’ of digital currency in potential threat to casinos in world’s biggest gambling hub

3 days ago

[unable to retrieve full-text content]Macau has moved a step closer to the potential introduction of a digital currency as it seeks to better combat money laundering and tax evasion in the world’s biggest gambling hub.The government plans to amend laws to regulate the issuance of a virtual legal tender, Chief Executive Ho Iat-seng told lawmakers on Tuesday. The government will work with China’s central bank to “study the feasibility of issuing a digital currency,” he said.Although no formal plans have been announced on whether or…

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US-China relations: Treasury Secretary Janet Yellen plans to spare China from currency manipulator label

5 days ago

[unable to retrieve full-text content]US Treasury Secretary Janet Yellen will decline to name China as a currency manipulator in her first semi-annual foreign exchange report, according to people familiar with the matter, a move that allows the United States to sidestep a fresh clash with Beijing.The report, which is not yet finalised, is due on Thursday, although it is unclear when the department will release it. During the Trump era, the US Treasury Department was accused of politicising the report after it abruptly designated…

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China digital currency: Biden administration steps up scrutiny of e-yuan over potential threat to US dollar dominance

6 days ago

[unable to retrieve full-text content]The Biden administration is stepping up scrutiny of China’s plans for a digital yuan, with some officials concerned the move could kick off a long-term bid to topple the US dollar as the world’s dominant reserve currency, according to people familiar with the matter.Now that China’s digital currency efforts are gathering momentum, officials at the US Treasury, State Department, Pentagon and National Security Council are bolstering their efforts to understand the potential implications, the…

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China debt: global funds end two-year buying spree of Chinese government debt, cutting holdings by US$2.5 billion

9 days ago

[unable to retrieve full-text content]Global funds trimmed holdings of China’s government debt for the first time in two years in March, as their yield premium over US Treasuries narrowed and authorities announced plans for more debt sales.Foreign investors held 2.04 trillion yuan (US$312 billion) of Chinese government bonds as of the end of last month, data from ChinaBond show. That is 16.5 billion yuan (US$2.5 billion) lower than the record amount held in February, according to calculations by Bloomberg. The last time overseas…

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American Rescue Plan: China’s exports set for US$60 billion boost from ‘rampant US demand’

24 days ago

[unable to retrieve full-text content]David Ni is expecting a great year for his Chinese car-wheels business, thanks to the US$1.9 trillion boost President Joe Biden just gave to the US economy.Americans flush with US$1,400 stimulus cheques mean “demand in the US is rampant,” said Ni, whose Jiangsu Siborui Import and Export, headquartered in Nanjing, buys high-end aluminium alloy car wheels from Chinese producers and sells them to retailers in the United States. “Citizens get cash and they jump into shopping,” he said, predicting…

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China debt: ‘under pressure’ local governments racked up US$2.3 trillion in hidden debt last year

25 days ago

[unable to retrieve full-text content]China’s local governments had 14.8 trillion yuan (US$2.3 trillion) of hidden debt last year, and the figure could climb even further this year, according to a government-linked think tank.Local governments were under pressure to increase infrastructure investments and shore up growth through the coronavirus pandemic, leading to a 6 per cent rise in off-budget borrowing from a recent low of 13.9 billion yuan (US$2.1 trillion) in the third quarter of 2019, according to Liu Lei, a senior…

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American Rescue Plan: China faces foreign outflows threat, with instability fuelled by US $1.9 trillion coronavirus relief

25 days ago

[unable to retrieve full-text content]China faces the threat of foreign outflows from the second half of the year as rising borrowing costs in the United States drives investors out of emerging markets, according to a former adviser to China’s central bank.The potential for a reversal in capital inflows and a possible wave of bond defaults are two of the biggest risks facing the economy this year, Li Daokui, a former member of the People’s Bank of China’s monetary policy committee, said in an interview. The instability is being…

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China GDP: economic growth could exceed ‘above 6 per cent’ target, Premier Li Keqiang says

26 days ago

[unable to retrieve full-text content]China’s economic growth this year could exceed a target of “above 6 per cent,” with the government seeking stable expansion and job creation, Premier Li Keqiang said Monday in a meeting with foreign business executives.“We need to seek a balance between growth, income, and employment, and we cannot pursue economic growth based on high energy consumption and heavy pollution,” Li said, according to a statement from the State Council. China needs growth in employment and income, and will have to…

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China debt: government bonds defy global turbulence as US Treasuries lose ‘safe haven role’

March 12, 2021

[unable to retrieve full-text content]An upstart contender to US Treasuries has emerged in the wake of last month’s vicious debt rout. Chinese government bonds have defied the turbulence rocking peers from Australia to Europe, offering a port in the global reflation storm.JPMorgan Asset Management and Brandywine Global Investment Management LLC are among those who now see them mimicking the resilience that has afforded US government debt the status of the world’s safest asset in times of crisis.The nation’s 10-year yield has been…

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US-China decoupling: halving investment in China could cost American GDP up to US$500 billion, report says

February 18, 2021

[unable to retrieve full-text content]American companies would lose hundreds of billions of US dollars if they slashed investment in China or the nations increased tariffs, the US Chamber of Commerce said in a report highlighting the cost of a full decoupling of the world’s largest economies.American gross domestic product (GDP) would see a one-time loss of as much as US$500 billion should US companies reduce foreign direct investment in China by half, the Washington-based business lobbying group said in a report on Wednesday…

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China-New Zealand relations: Wellington seeks clarification after seafood imports suspended

February 10, 2021

[unable to retrieve full-text content]New Zealand said it is urgently seeking clarification from Chinese authorities after Beijing suspended imports from two of its seafood factories.Shipments from a Sanford facility that processes mussels and a Sealord Group fish processing plant have been suspended due to “issues around the interpretation of the World Health Organization’s (WHO) Covid guidance, and food safety management,” New Zealand’s Ministry for Primary Industries said on Wednesday.The move followed live video audits by…

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China-Australia relations: some stranded Australian coal cargoes set to be unload

February 8, 2021

[unable to retrieve full-text content]China is set to allow some stranded Australian coal cargoes to unload, although it is unclear if the deliveries will be cleared by customs, according to a person familiar with the situation.The measure does not mean China is loosening its ban on Australian coal imports, said the person, who asked not to be identified because the information is private.Some ships may be allowed to change crews and the move may be viewed as a humanitarian gesture intended to show goodwill to countries including…

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China-Australia relations: imports of some stranded Australian coal could soon be allowed

January 15, 2021

[unable to retrieve full-text content]China is considering accepting some stranded Australian coal cargoes, an effort that would help ease a logjam of vessels that have stacked up off its coast for months.The shipments that could be cleared are those that arrived before a ban on Australian coal went into effect, said a person familiar with the situation, who asked not to be identified as the discussions are private.The deliberations are at an initial stage and any decision would need the approval of more senior Chinese leaders, the…

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China makes debt rating agency pay for default, in a precedent for legal and financial service firms to be responsible for their work

January 4, 2021

[unable to retrieve full-text content]A Chinese court ruled that a local ratings firm should help compensate some creditors for a construction firm’s 1.4 billion yuan (US$216 million) bond defaults three years ago, a first in the country as Beijing raises pressure on agencies to improve their due diligence.Dagong Global Credit Rating is responsible for repaying up to 10 per cent of at least 494 million yuan of combined debt claims to more than 400 individual bondholders of Wuyang Construction Group, according to a ruling by…

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China averts liquidity squeeze by pumping US$92 billion of funding into banks over five weeks to spare the havoc on bonds

December 31, 2020

[unable to retrieve full-text content]China’s central bank has pumped enough cash into the banking system to convince government bond investors that the worst is finally over.Over the past month, the People’s Bank of China has had to work especially hard to rein in borrowing costs after a surge in credit defaults damped commercial lenders’ enthusiasm to make loans. The central bank injected a net US$84 billion in one-year funding and US$8 billion of short-term cash into the financial system in the final five weeks of 2020 alone.The…

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As much as US$500 million of Australian coal sits on ships off China’s coast as spat between nations shows no sign of easing

November 24, 2020

[unable to retrieve full-text content]More than US$500 million worth of Australian coal is on ships anchored off Chinese ports, as a diplomatic spat between the two countries cuts into trade, idles a portion of the world’s dry bulk carriers and threatens to spiral into a humanitarian crisis.More than 50 vessels have been waiting a month or longer to offload coal from Australia, according to separate analyses of shipping data conducted by Bloomberg and data intelligence firm Kpler. There’s about 5.7 million tons of coal and…

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Trump’s WeChat, TikTok bans will go through, White House aide says

November 22, 2020

[unable to retrieve full-text content]US national security adviser Robert O’Brien said he expected President Donald Trump’s attempts to ban the WeChat and TikTok apps to “ultimately” succeed.Moves by the Trump administration to restrict the Chinese-owned social-media platforms in the United States for what it said were national security reasons have been put on hold as a result of court injunctions. WeChat and TikTok users have argued that the bans were motivated by election year politics rather than genuine security concerns.“We…

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China-Australia relations: wine piling up keeping Sydney exporter awake at night ahead of peak season

November 18, 2020

[unable to retrieve full-text content]Australian wine exporters should be preparing for their peak selling season, the months preceding Christmas and Lunar New Year celebrations in China. They are instead watching stockpiles of product mount in warehouses as its biggest market clamps down on shipments from the country.Already on edge after China announced two trade probes into the country’s wine industry earlier this year, people familiar with the situation said this month Beijing had also ordered traders to stop purchasing at…

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China-Australia relations: dispute leaves 400 seafarers stranded with US$200 million of Australian coal held up

November 13, 2020

[unable to retrieve full-text content]An estimated 400 seafarers and roughly 2 million tons of coal are stuck on ships off the northeast coast of China, as a spiralling diplomatic row with Australia threatens to turn into a humanitarian crisis.At least 21 bulk carriers are anchored off the Port of Jingtang, unable to offload their Australian coal cargo that could be worth around US$200 million, depending on its quality. Fifteen of the ships have been waiting since June, according to an analysis of shipping data conducted by…

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China’s central banker remind the global markets that the yuan’s challenge to the US dollar is still very much on

November 6, 2020

[unable to retrieve full-text content]Investors wondering how China plans to evolve its financial markets in the coming years need look no further than the commentary from the weekend’s Bund Summit in Shanghai for guidance.People’s Bank of China governor Yi Gang said that promoting broader use of the yuan will continue alongside the opening of markets. “The regulator’s main job is to reduce restrictions on the cross-border use of the currency, and let it take its own course,” he said.Those comments were echoed by Zhu Jun, director…

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China-Australia cattle trade continues despite tensions

October 20, 2020

[unable to retrieve full-text content]China’s allowed 3,600 cattle to enter from Australia last week, a sign that heightened tensions between the two countries have not hindered all areas of trade.Beijing has unleashed a raft of actions against Australian exports following Canberra’s push for an independent inquiry into the origins of the coronavirus outbreak.Australia’s cotton industry last week feared it may become the latest casualty of worsening ties after barley was hit by tariffs and wine was subjected to anti-subsidy and…

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China moves to shield its own advanced tech in fight with US by expanding arsenal of export restrictions

October 16, 2020

[unable to retrieve full-text content]China is set to pass a new law that would restrict sensitive exports vital to national security, expanding its toolkit of policy options as competition grows with the US over access to technologies that will drive the modern economy.China’s top legislative body, the National People’s Congress Standing Committee, is expected to adopt the measure in a session that concludes on Saturday. The Export Control Law primarily aims to protect China’s national security by regulating the export of…

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China is building mega refineries with capacity to process more crude oil than the UK’s combined, just as fuel demand stalls

October 7, 2020

[unable to retrieve full-text content]China is investing tens of billions of dollars in new mega-refineries even as its fuel demand is expected to peak within five years, raising the risk it will flood the region with cheap exports.At least four projects with about 1.4 million barrels a day of crude-processing capacity, more than all the refineries in the UK combined, are under construction. That’s after the country already added 1 million barrels since the start of 2019. All that capacity will add more petroleum products and…

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China’s currency takes on the sheen of safe haven asset against volatility, ending third quarter with its biggest gains in 12 years

October 2, 2020

[unable to retrieve full-text content]The Chinese yuan is drawing attention as a haven from volatility after its best quarter in 12 years.The onshore renminbi gained 3.8 per cent in the three-month period ending September 30, the most since early 2008, while its offshore counterpart advanced more than 4 per cent.That was more than Group-of-10 currencies including traditional refuges like the Swiss franc and Japanese yen, a remarkable turnaround considering the yuan’s devaluation just five years ago triggered a broad market rout…

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China allows currency traders to push the renminbi toward its best quarter since 1981 against the US dollar as economy picks up pace

September 16, 2020

[unable to retrieve full-text content]China’s policymakers are in no rush to rein in a rapid advance in the yuan, as traders push the currency toward its largest quarterly rally on record.The yuan has strengthened 4.4 per cent since the end of June to 6.7620 per dollar, set for the biggest ever quarterly gain in Bloomberg data going back to 1981. The currency is the best performer in Asia in the third quarter, with the buying momentum close to the strongest since January.The yuan is being supported by a slump in the dollar, while…

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China car sales rebound accelerated in August as coronavirus pressures eased

September 8, 2020

[unable to retrieve full-text content]China’s car sales increased for a second straight month in August, raising optimism that a two-year slump in the world’s biggest market is nearing an end.Retail sales of sedans, SUVs, minivans and multipurpose vehicles increased 8.8 per cent last month from a year earlier to 1.73 million units, the China Passenger Car Association said on Tuesday. That followed a 7.9 per cent gain in July.Showrooms and shopping centres have reopened as the coronavirus pandemic eases in China, a boon for everyone…

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China Construction Bank posts worst earnings in more than a decade on bad loan surge

August 30, 2020

[unable to retrieve full-text content]China Construction Bank, the world’s second-largest lender by assets, reported its worst earnings in more than a decade as a cascade of loans to businesses across China are going bad.Net income fell 11 per cent to 137.6 billion yuan (US$20 billion) in the six months through June from 154.2 billion yuan a year earlier, the Beijing-based lender said in an exchange filing on Sunday. Loan loss provisions jumped 49 per cent.China’s US$45 trillion banking system has been put on the front-line of…

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Brush up on Mandarin, as China’s banks are hiring tens of thousands of graduates in latest rescue mission to prop up jobs

August 25, 2020

[unable to retrieve full-text content]China’s mega banks are ramping up their recruitment of fresh graduates as a record number enter the labour market, joining other state-owned firms in boosting employment even as lenders deal with plunging earnings and ballooning bad debt.The four biggest state banks, led by Industrial & Commercial Bank of China, this month kicked off their autumn campus hiring, instead of in November as in previous years. China Construction Bank plans to add 16,000 graduates this year, up from 13,000 last year…

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China’s banks must innovate to help small businesses weather ‘complex and severe’ economic environment

August 24, 2020

[unable to retrieve full-text content]People’s Bank of China governor Yi Gang has urged banks to support smaller companies through innovations in financial services and products to help nurse them through the “complex and severe” economic situation facing the country.Yi told a seminar in the eastern city of Hefei on Friday that banks should adapt financial services and products, increase investment in fintech research and technology and integrate on-site and online financial services, according to a statement posted on the central…

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