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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

15 days ago

[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

23 days ago

[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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Defaults in China’s US$4.1 trillion corporate bond market could hit record high this year as recovery remains fragile

August 23, 2020

[unable to retrieve full-text content]China’s fragile economic recovery is ushering in a dangerous new phase for the nation’s US$4.1 trillion corporate bond market.With the economy now strong enough for policymakers to dial back financial support but still too weak to save the most distressed borrowers, some fund managers are bracing for defaults on domestic Chinese debt to hit record highs this year. Delinquencies have already started rising after a remarkably quiet second quarter, and pressure on borrowers is set to grow as 3.65…

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Quantitative easing with Chinese characteristics? China’s July bond data hint at central bank’s rare move to buy government debt

August 13, 2020

[unable to retrieve full-text content]The People’s Bank of China may have bought government bonds from domestic banks in July, a rare move that has analysts puzzling over the monetary authority’s policy intentions amid a record amount of government debt issuance. Sovereign bonds held by “other” investors – a category that includes central banks and clearing houses -rose by 196.5 billion yuan to 1.78 trillion yuan (US$256 billion) last month, according to data released by China Central Depository & Clearing last week. The increase…

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US lighting company Alpan joins an exodus of manufacturers leaving China to get around higher tariffs from trade war

July 4, 2020

[unable to retrieve full-text content]Alpan Lighting Products, a US manufacturer of solar lamps, is shifting production from China to Indonesia, joining droves of companies looking to escape higher tariffs triggered by the trade war with the US.PT CDS Asia, a unit of Alpan, will invest US$14 million to build a factory in an industrial zone in Central Java, Indonesia’s Investment Coordinating Board said in a statement. The export-oriented facility is scheduled to begin production later this year and may employee 3,500 people, it…

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Goodbye seems to be the hardest word for Europe’s manufacturers when it comes to China’s low-cost labour force and supply chain

June 30, 2020

[unable to retrieve full-text content]European leaders talk of shortening supply chains and curbing China’s “Belt and Road” plan. But on the ground in Italy, Gimmi Baldinini says his designer footwear company is in no position to cut ties with the Chinese.“Chinese workers have a better hand with gym shoes,” said the chairman of Baldinini, founded by his family in 1910 in northern Italy, where it still has the main production hub for the top segment of his goods. To produce sports shoes, the company relies on a Chinese plant in the…

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China to step up US agriculture purchases under phase one trade war deal after Hawaii talks, sources say

June 19, 2020

[unable to retrieve full-text content]China plans to accelerate purchases of American farm goods to comply with the phase one trade deal with the United States following talks in Hawaii this week.The world’s top soybean importer intends to step up buying of everything from soybeans to corn and ethanol after purchases fell behind due to coronavirus disruptions, said two people familiar with the matter, who asked not to be named because the information is private.A separate person said the Chinese government has asked state-owned…

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China car sales rose for first time in almost a year in May, industry body says

June 9, 2020

[unable to retrieve full-text content]Car sales in China rose for the first time in almost a year last month, evidence that the world’s largest market is rebounding from the coronavirus crisis and the trade war with the United States.Retail sales of cars, SUVs and multiple-purpose vehicles increased 1.9 per cent from a year earlier to 1.64 million units in May, the China Passenger Car Association said on Monday, which was the first gain since June 2019.The government added stimulus measures such as tax rebates to attract consumers…

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China orders state traders to stop buying American farm goods, threatening phase one trade deal

June 1, 2020

[unable to retrieve full-text content]Chinese government officials told major state-run agricultural companies to pause purchases of some American farm goods including soybeans as Beijing evaluates the ongoing escalation of tensions with the US over Hong Kong, according to people familiar with the situation.State-owned traders Cofco and Sinograin were ordered to suspend purchases, according to one of the people, who asked not to be identified discussing a private matter. Chinese buyers have also cancelled an unspecified number of…

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China is exempting some foreign executives from travel ban as authorities get coronavirus outbreak under control

May 12, 2020

[unable to retrieve full-text content]China is allowing executives from some foreign companies to enter the country despite a coronavirus travel ban as it seeks to restart the economy, according to people familiar with the matter.The Ministry of Commerce told some key foreign companies they can apply for exemptions to the entry ban if they want to get executives back into China, the people said, asking not to be identified because the matter has not been made public. They would still serve a mandatory quarantine, one of the people…

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US-China trade chiefs to have call as Donald Trump and coronavirus threaten phase one deal

May 7, 2020

[unable to retrieve full-text content]Top Chinese and US trade negotiators will speak as soon as next week on progress in implementing a phase one deal after US President Donald Trump threatened to “terminate” the agreement if Beijing was not adhering to the terms.Chinese Vice-Premier Liu He will be on the call, according to people familiar with the matter. The US will be represented by US Trade Representative (USTR) Robert Lighthizer, one of the people said.The planned phone call will be the first time Liu and Lighthizer speak…

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NetEase picks banks to arrange Hong Kong secondary listing, joining Alibaba, JD.com in making a beeline for city’s stock exchange

May 5, 2020

[unable to retrieve full-text content]NetEase has picked banks for its planned second listing in Hong Kong, according to people familiar with the matter, joining other Chinese technology companies in tapping the city’s stock market for new funds.The company is working with advisers including Credit Suisse Group AG and China International Capital Corporation (CICC) on the offering, which it has confidentially filed to the stock exchange, the people said. The share sale could happen as soon as the second half of this year, one of the…

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India to lure firms fleeing China with land offering nearly double the size of Luxembourg

May 5, 2020

[unable to retrieve full-text content]India is developing a land pool nearly double the size of Luxembourg to lure businesses moving out of China, according to people with the knowledge of the matter.A total area of 461,589 hectares has been identified across the country for the purpose, the people said, asking not to be identified because they are not authorised to speak to the media. That includes 115,131 hectares of existing industrial land in states such as Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh, they said…

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Coronavirus: China injects US$7.9 billion into banking system in latest bid to shore up liquidity

April 24, 2020

[unable to retrieve full-text content]China’s central bank rolled over some of the targeted funds due on Friday while cutting interest rates on the loans, the latest in a string of measures aimed at ensuring sufficient liquidity.The People’s Bank of China (PBOC) injected 56.1 billion yuan (US$7.9 billion) into the banking system via the targeted medium-term lending facility (TMLF), just as 267.4 billion yuan of the debt comes due.The one-year funding was offered at an interest rate of 2.95 per cent, lowered from the 3.15 per cent…

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Jobs are being destroyed around the world as coronavirus pandemic pushes one economy after another into recession

April 4, 2020

[unable to retrieve full-text content]The world’s workers are reeling from the initial shock of the coronavirus recession, with job losses and welfare claims around the globe already running into the millions this week. As the International Labour Organisation warns of almost 25 million lay-offs if the virus isn’t controlled, the cuts from Austria to the US reflect the deepest peacetime recession since the 1930s as economies are frozen to beat the pandemic.“We see unemployment rates in the US and Europe getting up well up into the…

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Coronavirus could slash global GDP output by almost 5 per cent amid ‘severe financial turmoil’, ADB says

April 3, 2020

[unable to retrieve full-text content]The cost of the coronavirus pandemic could be as high as $4.1 trillion, or almost 5 per cent of global gross domestic product, depending on the disease’s spread through Europe, the United States and other major economies, the Asian Development Bank said on Friday.A shorter containment period could limit the damage to $2 trillion, or 2.3 per cent of world output, the Manila-based lender said in its Asian Development Outlook report. Developing Asia, including China, accounts for 22 per cent to 36…

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Coronavirus: China slashes bank loan rate by biggest amount in five years, joining global easing

March 30, 2020

[unable to retrieve full-text content]China’s central bank on Monday cut the interest rate it charges on loans to banks by the biggest amount since 2015 as authorities ramp up their response to the worsening economic impact from the coronavirus pandemic.The People’s Bank of China (PBOC) reduced the interest rate on 7-day reverse repurchase agreements to 2.2 per cent from 2.4 per cent, according to a statement from the bank on Monday. The PBOC said this wwould keep liquidity sufficient to help the real economy.The first cut to a…

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Coronavirus: a global consumer default wave is just getting started in China

March 29, 2020

[unable to retrieve full-text content]Like millions of people around the world, Zhang Chunzi borrowed money she thought she would be able to repay before the coronavirus changed everything.Now laid off from her job at an apparel exporter in Hangzhou, the prosperous capital of east China’s Zhejiang province, the 23-year-old is missing payments on 12,000 yuan (US$1,700) of debt on her credit card and an online lending platform operated by Ant Financial.“I’m late on all the bills and there’s no way I can pay my debt in full,” Zhang…

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Coronavirus puts global economy at risk of worst year since 2009 crisis as hopes fade, stocks plunge

February 28, 2020

[unable to retrieve full-text content]The world economy may be heading for its worst performance since the financial crisis more than a decade ago as the spread of the coronavirus increasingly dashes hopes of a swift rebound.Just weeks since most economists bet the China-led slump would quickly reverse once the virus was contained, many are rethinking that optimism as swathes of Chinese factories stay shut and workers idled. Having already cut supply chains and undermined tourism and trade, outbreaks from Europe to the Americas…

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China cuts medium term loan rate to support coronavirus-hit economy

February 17, 2020

[unable to retrieve full-text content]China provided medium-term funding to banks and cut the interest rate it charges for the money as officials sought to cushion the economy from the coronavirus outbreak.The People’s Bank of China (PBOC) offered 200 billion yuan (US$28.6 billion) of one-year medium-term loans on Monday. The rate was lowered by 10 basis points to 3.15 per cent.The central bank also added 100 billion yuan of funds with seven-day reverse repurchase agreements. Some 1 trillion yuan (US$143 billion) of reverse repos…

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US revokes WTO subsidy preferences for some developing nations, including China, India and Singapore

February 10, 2020

[unable to retrieve full-text content]The Trump administration is changing a key exemption to America’s trade-remedy laws to make it easier to penalise about two dozen so-called developing economies, including China, Hong Kong, India and Singapore.The US on Monday narrowed its internal list of developing and least-developed countries to reduce the threshold for triggering a US investigation into whether nations are harming US industries with unfairly subsidised exports, according to a US Trade Representative notice.In doing so, the…

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Coronavirus shuts down a provincial economy the size of Sweden for the third week as Hubei hunkers down

February 10, 2020

[unable to retrieve full-text content]China’s Hubei province is now in the third week of a shutdown triggered by the virus that has killed hundreds of people – and halted an industrial powerhouse the size of Sweden.Every day of closure deepens the disruption to the nation’s economy, and indeed the world. China’s largest producer of phosphorus, used in fertiliser is there, and it’s also at the heart of the country’s auto industry with local carmakers like Dongfeng Motor Group and global titans such as PSA Group and Honda Motor…

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What’s the coronavirus’ impact on the world? Economists get creative in finding data to measure the outbreak’s effects

February 10, 2020

[unable to retrieve full-text content]It’s a mad scramble for the best data: Economists are grappling with ways to gauge the real-time impact of the coronavirus on the world economy, even as the outbreak continues to confound forecasters.Store closures, flight-tracking websites, factory shutdowns and the latest numbers on infections and fatalities are just some of the high-frequency data points economists are scouring for clues on the hit to growth.“To track the impact of the virus on the global economy, we have had to look at…

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Coronavirus: Xi Jinping reassured Donald Trump trade deal goal will be met, says White House adviser Larry Kudlow

February 7, 2020

[unable to retrieve full-text content]China’s leader Xi Jinping reassured US President Donald Trump in a phone call that Beijing would meet purchase goals outlined in the recent trade deal between the countries – despite the impact of the coronavirus on the Asian nation, White House economic adviser Larry Kudlow said Friday.“Xi apparently said, may be a little slower to purchase American exports, but it will get done by the end of the year and next year,” Kudlow said in a Bloomberg Television interview on Friday.The virus outbreak…

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Production halts at China factories lead to worldwide shortages in components as coronavirus outbreak spreads

February 5, 2020

[unable to retrieve full-text content]The global car industry is facing a stress test as the coronavirus outbreak in China disrupts the supply of components from transmissions to steering systems.Parts manufacturers across China have suspended production through this week and in the case of Hubei province, the outbreak’s epicentre, factories will remain shut until Feb. 13 or later. That leaves car plants at risk both in China – the world’s largest market – and beyond: Hyundai Motor on Tuesday became the first global carmaker to…

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China’s US trade war deal is ‘is good for the world’ and‘will not impact’ imports from other countries

January 22, 2020

[unable to retrieve full-text content]Vice-Premier Han Zheng told the World Economic Forum that China’s trade deal with the United States will not hurt rival exporting nations as complaints mount from governments that were left out of the agreement.Han said that China’s commitment to buy more from the US are in line with its World Trade Organisation (WTO) obligations and will not squeeze out other imports.He also pledged to lower barriers for foreign investors as he set out the case for China’s engagement with the global economy…

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Climate change may spark ‘green swan’ disasters that trigger systemic financial crisis unless authorities take action, BIS warns

January 21, 2020

[unable to retrieve full-text content]Climate change threatens to provoke “green swan” events that could trigger a systemic financial crisis unless authorities act against such risks, according to the Bank for International Settlements.The analysis by officials at the Basel-based institution – often described as the central bank for central banks – adapts the “black swan” concept devised by Nassim Nicholas Taleb to describe adverse events outside the scope of regular expectations with wide-ranging or extreme impacts.“Green swans or…

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