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China can ‘contain’ economic, financial risks posed by Evergrande crisis, central bank chief says

3 days ago

[unable to retrieve full-text content]People’s Bank of China (PBOC) governor Yi Gang said authorities can contain risks posed to the Chinese economy and financial system from the struggles of China Evergrande Group.The property developer’s trouble “casts a little bit of concern,” Yi said at a virtual meeting of the Group of 30 on Sunday.“Overall, we can contain the Evergrande risk.”Concerns have grown that the cash crunch at Evergrande is spilling over to other developers as President Xi Jinping maintains strict measures to cool…

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Evergrande crisis weighs on China’s credit growth as financing, lending activities cool

7 days ago

[unable to retrieve full-text content]China’s credit growth slowed in September, as weakness in the property market amid the Evergrande crisis weighed on financing and lending activities, despite the central bank’s call to stabilise credit expansion.Aggregate financing was 2.9 trillion yuan (US$449 billion), the People’s Bank of China (PBOC) said on Wednesday. That compares to 2.96 trillion yuan in August and 3.47 trillion yuan in September last year.The median estimate in a Bloomberg survey of economists was for 3.05 trillion yuan…

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Evergrande’s deepening crisis weighs heavily on major Chinese developers’ sales in September

13 days ago

[unable to retrieve full-text content]Major Chinese developers saw their sales plunge last month as China Evergrande Group sank deeper into crisis, putting more pressure on the government to limit the fallout.Combined contracted sales by the country’s top 100 real estate companies plummeted 36 per cent to 759.6 billion yuan (US$118 billion) in September from a year earlier, deepening a downward spiral emerging in July, China Real Estate Information Corp (CRIC) said in a report. More than 90 developers saw a decline in their sales…

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From iPhones to Australian wool, China’s energy crisis is starting to pinch the global economy

13 days ago

[unable to retrieve full-text content]The hit from China’s energy crunch is starting to ripple throughout the globe, hurting everyone from Toyota Motor to Australian sheep farmers and makers of cardboard boxes.Not only is the extreme electricity shortage in the world’s largest exporter set to hurt its own growth, the knock-on impact to supply chains could crimp a global economy struggling to emerge from the pandemic.The timing could not be worse, with the shipping industry already facing congested supply lines that are delaying…

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China’s migrants workers should be given local resident status, could boost spending by up to 30 per cent

14 days ago

[unable to retrieve full-text content]Providing migrant workers in Chinese cities with full access to local government services would boost their consumption by as much as 30 per cent and help China double its middle-income population, an adviser to China’s central bank said.Nearly 64 per cent of Chinese people live in towns and cities, but only a bit more than 45 per cent have an urban hukou, an official document providing full access to local public services such as schools and hospitals, Cai Fang, a member of the People’s Bank…

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China’s ‘golden week’ travel drops as zero Covid-19 approach forces consumers to stay home

14 days ago

[unable to retrieve full-text content]Travel during China’s “golden week” national holiday was down by a third on pre-coronavirus levels, with government measures to contain sporadic outbreaks prompting holidaymakers to spend closer to home.The number of trips taken on China’s roads on Wednesday was 34.1 per cent below levels seen in 2019, according to the transport ministry, and 2.2 per cent lower than last year.Trips taken on roads, rail and other transport networks have been consistently a third below pre-pandemic levels for…

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Global tax rules ‘within reach’ but ‘it’s now or never’ ahead of key OECD meeting, French finance minister says

15 days ago

[unable to retrieve full-text content]Countries must resolve disagreements in the coming days over details of new global rules to share tax revenues from the world’s biggest companies and set a minimum rate, or the talks could founder, French finance minister Bruno Le Maire said. Raising the alarm at the prospect that years of negotiations could miss a vital window of opportunity at a meeting on Friday of the 140 countries involved, the minister outlined his hopes for a compromise in a briefing with reporters on Tuesday. “A…

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China orders coal and energy funding to ease power crisis, warns against Moutai and Puer tea investment

15 days ago

[unable to retrieve full-text content]China ordered its banks to ramp up funding to coal and energy companies, another step in its efforts to ease a power crunch and ensure supplies this winter.Banks and other financial institutions should prioritise lending to qualified mines and power plants so they can increase thermal coal and electricity output, the China Banking and Insurance Regulatory Commission said in a statement Tuesday. In order to maintain price stability, bank loans and financing are strictly banned from being used to…

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China’s box office is becoming a multimillion-dollar headache for Hollywood studios as US-China relations show no improvement

19 days ago

[unable to retrieve full-text content]When Godzilla vs. Kong opened with weekend sales of nearly US$70 million in China in March, it seemed the market would be a bright spot for Hollywood studios: most theatres were open, while US film-goers were still staying home because of the coronavirus.But 2021 is turning into a disappointment for movie companies in China, which passed the US last year to become the world’s largest film market. US films have grabbed about 15 per cent of the box office, on par with pandemic-impaired sales in…

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Was China’s power crisis caused partly by an obscure mining law?

21 days ago

[unable to retrieve full-text content]China’s current energy crisis can be traced back in part to a legal amendment targeting miners that garnered little notice when it went into effect in March.Article 134 in China’s criminal law elevated penalties for a series of violations from fines to possible jail time in response to an increase in mining-related accidents.However, that law led to a new-found hesitancy among miners to boost production and intensified a supply deficit that could not come at a worse time for President Xi…

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China hidden local government debt rises to over half of GDP at US$8.2 trillion, Goldman Sachs report says

22 days ago

[unable to retrieve full-text content]China’s hidden local government debt has swollen to more than half the size of the economy, according to economists at Goldman Sachs, who said the government will need to be flexible in dealing with this as revenue is already under pressure due to a slowdown in land sales.The total debt of local government financing vehicles (LGFVs) rose to around 53 trillion yuan (US$8.2 trillion) at the end of last year from 16 trillion yuan in 2013, the economists wrote in a report.That is equal to around 52…

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US Treasury’s Yellen declines to take IMF chief’s calls over alleged manipulation of China’s business-climate rating

23 days ago

[unable to retrieve full-text content]US Treasury Secretary Janet Yellen has declined to return calls from the beleaguered head of the International Monetary Fund (IMF), Kristalina Georgieva, since a scandal broke, indicating that the Biden administration’s withholding of support for her goes beyond its public statements.Since Georgieva was accused earlier this month of improperly intervening in a World Bank report in her prior job there, she has made attempts to speak with Yellen but has failed to get through, people familiar with…

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Clothing is about to cost more at the store as China’s rising demand drives the price of cotton to nine-year high

23 days ago

[unable to retrieve full-text content]Cotton extended a rally to its highest price since January 2012 with crop concerns in top shipper US compounding a tighter supply scenario driven by strong demand.Prices are up for a fifth day in New York, after jumping 4 per cent last week on speculation demand will rise in top user China. US cotton certified stock levels continued to fall after peaking in late June, signalling good export demand, said John Robinson, an economist at Texas A&M’s AgriLife Extension in College Station.“This is a…

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China’s home-grown cross-border yuan payments system aims to expand reach by end of 2021

28 days ago

[unable to retrieve full-text content]China is quietly growing its home-grown payments system to allow cross-border transactions in yuan as trade and investment with the rest of the world grows and Beijing makes a bigger push to globalise the local currency.Cross-Border Interbank Payment System, run by CIPS and launched by the central bank in 2015 to settle international claims in yuan, will increase the number of direct taking part banks using the system to nearly 80 by the end of this year from the current 71, Xu Zaiyue, chief…

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China ‘regrets’ WTO Appellate Body cannot hear its appeal over US solar panels tariffs ruling

September 21, 2021

[unable to retrieve full-text content]China appealed a World Trade Organization (WTO) dispute ruling that rejected the nation’s claims against the United States relating to safeguard measures that the Trump administration imposed on solar panels imported from Chinese manufacturers.Earlier this month, a WTO panel said China failed to establish that Washington’s safeguards against imports of certain crystalline silicon photovoltaic cells are inconsistent with the rules of the global trade body on the measures.China notified the WTO…

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Coronavirus concerns see China halt Vietnam’s US$1 billion dragon fruit trade

September 17, 2021

[unable to retrieve full-text content]China has suspended imports of dragon fruit from Vietnam following the detection of coronavirus, temporarily halting a US$1 billion market as Beijing continues its vigorous testing of inbound food shipments for virus risk.Imports of the tropical fruit have been suspended for a week beginning on Wednesday, Vietnam’s trade ministry said on its website.Authorities in China’s Guangxi region, bordering Vietnam, informed the ministry of the halt after the coronavirus was found on packaging and…

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China-Australia relations: Beijing lobbies Canberra for help to join CPTPP regional trade pact despite spat

September 10, 2021

[unable to retrieve full-text content]China is lobbying the Australian government for its support to join a multilateral regional trade pact – despite the two nations being in a worsening geopolitical dispute that’s spilled over into economic reprisals.“China’s accession to the CPTPP would yield large economic benefits,” Beijing’s embassy in Canberra wrote in a submission to an Australian parliamentary inquiry into broadening the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).“China is committed to…

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Is China at its ‘Volcker Moment’ as real estate curbs spiral out of control? More economists are joining the chorus in saying yes

September 8, 2021

[unable to retrieve full-text content]Warnings that China’s campaign to cool its property market will go too far are multiplying.Economists at Nomura Holdings are calling the curbs China’s “Volcker Moment” that will hurt the economy. The credit squeeze in the property sector is “unnecessarily aggressive” and may weigh on industrial demand and consumption, wrote colleagues at Bank of America. A prominent Chinese economist cautioned of a potential crisis should home values drop below mortgages.Stabilising China’s housing market under…

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China’s ‘baseless’ challenge to US solar panel tariffs rejected by WTO

September 3, 2021

[unable to retrieve full-text content]A World Trade Organization (WTO) dispute panel rejected all four of China’s claims against the United States relating to safeguard measures that the Trump administration imposed on solar panels imported from Chinese manufacturers.China did not establish that Washington’s safeguards against imports of certain crystalline silicon photovoltaic cells are inconsistent with the WTO’s rules on the measures, the Geneva-based body said in a report published on Thursday.Then-president Donald Trump…

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China’s bumper harvest may cool corn-buying binge, impact progress of US trade deal

September 1, 2021

[unable to retrieve full-text content]China’s record corn-buying spree – a cornerstone of its trade deal with the United States – may be running out of steam, with risks growing that imports by the top buyer will fall short of US official estimates. The domestic harvest season is looming and China is expecting a bumper crop after farmers sharply boosted corn planting this year.This is already starting to weigh on Chinese corn prices, narrowing the gap with overseas prices and hurting the attractiveness of imports, according to…

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China’s summer movie box office heads for an early winter on the dearth of blockbusters during Communist Party’s centenary

August 31, 2021

[unable to retrieve full-text content]China is seeing one of its slowest summer holiday box office seasons in years after a Delta-driven outbreak kept audiences home, while concerns grow that a regulatory crackdown on celebrities and idols could prevent the industry from bouncing back.Ticket sales during the June-August summer holiday amounted to 6.7 billion yuan (US$1 billion) as of Tuesday morning, according to ticketing platform Maoyan Entertainment. That’s the lowest number since 2013, excluding last year, which saw much of…

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China manufacturing data under the microscope, with Asian currencies braced for more bad news

August 30, 2021

[unable to retrieve full-text content]From coronavirus risks to talk of a reduction in US stimulus, there is been no shortage of bad news for Asian currencies. An upcoming report on China’s manufacturing sector may add to the pressure.Traders are looking to Chinese factory data for clues on the global outlook after the world’s second-largest economy slowed more sharply than expected in July.The nation’s key manufacturing gauge has fallen since April and a slide into contractionary territory could spur a rise in risk-off sentiment…

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How is China’s regulatory crackdown already hurting its economy?

August 26, 2021

[unable to retrieve full-text content]China’s campaign to clamp down on industries ranging from steel to education to property has roiled financial markets and curbed the outlook for growth in the world’s second-largest economy. Beijing has signalled there is more regulation for businesses in years to come, but economists say authorities will need to carefully manage the pace and intensity of that against an economy weakening faster than expected this year following fresh virus outbreaks in the country.China will strive to complete…

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Shipping, supply chain crunch could drag into 2022 as world economy awaits Delta variant shock

August 26, 2021

[unable to retrieve full-text content]A supply chain crunch that was meant to be temporary now looks like lasting well into next year as the surging Delta variant upends factory production in Asia and disrupts shipping, posing more shocks to the world economy.Manufacturers reeling from shortages of key components and higher raw material and energy costs are being forced into bidding wars to get space on vessels, pushing freight rates to records and prompting some exporters to raise prices or simply cancel shipments altogether. “We…

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Xi Jinping urges China to achieve 2021 economic, social targets while maintaining coronavirus controls

August 26, 2021

[unable to retrieve full-text content]President Xi Jinping said China will strive to hit key economic and social development targets set for this year, even as authorities maintain an aggressive approach to containing the coronavirus.In a front-page article in the People’s Daily on Thursday, Xi said China should push for high-quality development and better coordinate policies around development and safety.He was speaking during a visit to Chengde in the northern province of Hebei this week, where he visited several projects…

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Fed’s coronavirus response under fire from China as Beijing seeks to go its own way

August 25, 2021

[unable to retrieve full-text content]As US Federal Reserve officials gear up for the Jackson Hole symposium, their response to the pandemic is being criticised as risky by counterparts in Beijing who are trying to decouple China’s monetary policy from the United States.The Communist Party’s Politburo has pledged “greater autonomy” of macroeconomic policies, signalling a willingness to add stimulus as China’s recovery loses steam even if the US Federal Reserve starts tapering bond purchases.China’s central bank, though, is far more…

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China to ensure ‘appropriate money growth’ after credit, economic slowdown

August 24, 2021

[unable to retrieve full-text content]China’s central bank chief vowed to stabilise the supply of credit and boost the amount of money supporting smaller businesses and the real economy, after both credit and economic growth slowed in July.The People’s Bank of China (PBOC) will keep monetary policy stable with a good cross-cyclical design and will support high-quality economic expansion with “appropriate money growth,” according to a statement late on Monday after a meeting with banks.The meeting analysed monetary and credit…

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What is China’s cross-cyclical economic policy strategy and how does it differ from countercyclical?

August 23, 2021

[unable to retrieve full-text content]The Chinese Communist Party has a new catchphrase to guide its economic policy, a so-called cross-cyclical approach that government advisers say means taking action sooner, in smaller steps and with a longer time frame in mind. It is a departure from countercyclical policy, which is when central banks and governments add stimulus to spur a slowing economy – like cutting interest rates or taxes and boosting infrastructure investment – and tighten when growth starts accelerating. Officials have…

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China digital currency: e-yuan will ‘reinforce’ banks’ competitive edge in payments, Moody’s says

August 19, 2021

[unable to retrieve full-text content]China’s digital yuan will help banks become more competitive in the payments sector after steadily losing out to popular technology platforms over the years, according to Moody’s Investors Service.“We expect adoption of [China’s digital yuan] to help reinforce banks’ position in the payments system because it will enhance their data collection ability and broaden their user bases,” analysts led by Zedric Cheung said in a report on Thursday.China is already a largely cashless society, thanks to…

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China population 2021: births may drop to lowest on record, Jefferies Financial Group analysis shows

August 19, 2021

[unable to retrieve full-text content]The number of babies born in China this year may drop to the lowest since at least 1950, according to Jefferies Financial Group, one of the reasons why the government is cracking down on industries like education to bring down costs and promote bigger families.An analysis of local government data showed that China’s newborns may have fallen by 17 per cent in some regions in the first half of the year compared with the same period in 2020, researchers led by Simon Powell wrote in a note…

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