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Frank Tang



Articles by Frank Tang

Debt at China’s state-owned firms in question after BMW partner fails to repay billion-yuan bond

2 days ago

[unable to retrieve full-text content]A bond default by a big state-owned automaker, which is also the parent company of BMW’s joint venture partner in China, serves as a fresh warning about debt risks in the country despite strong headline economic growth numbers, according to analysts.Brilliance Auto, also known as the Huachen Automotive Group, rattled China’s debt market last week by failing to repay 1 billion yuan (US$148.8 million) to its bondholders when the bond matured.What made the news particularly shocking was the fact…

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China’s digital yuan aims to halt US ‘dollarisation’, boost retail payments, ex-central bank governor says

2 days ago

[unable to retrieve full-text content]China’s sovereign digital currency is designed primarily to grow retail payments at home and prevent the dominance of the US dollar, rather than address threats raised by cryptocurrencies or stablecoins, a former central bank governor says.Zhou Xiaochuan, who led the People’s Bank of China from 2002-18, said China was working hard to establish its digital currency and electronic payment (DCEP) system, but its focus differed from the Group of 7 (G7) principals.“What they are concerned about is…

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China moves to legalise digital yuan and ban competitors with new draft law

4 days ago

[unable to retrieve full-text content]China is inching closer to the launch of its own sovereign digital currency by giving it a legal foundation in an upcoming law revision, while the central bank is also addressing problems that emerged in pilot tests for the digital yuan.The People’s Bank of China (PBOC) published a draft law on Friday that would give legal status to the Digital Currency Electronic Payment (DCEP) system, and for the first time the digital yuan has been included and defined as part of the country’s sovereign fiat…

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What will China’s next GDP target be?

6 days ago

[unable to retrieve full-text content]China’s economic growth rate should be between 5 and 6 per cent in the next few years, a number of studies published ahead of a key policy meeting have concluded.Despite the disruption caused by the Covid-19 pandemic and deteriorating relations with the United States, the country’s economy still appears to be on course to grow this year after third quarter GDP rose by 4.9 per cent, making it the best-performing economy in the world.This has helped to fuel optimism in Beijing that the country’s…

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China’s yuan exchange rate: is 6.66 a new sweet spot for the currency against the US dollar?

9 days ago

[unable to retrieve full-text content]The number 666 may be associated with the beast in the Bible, but it could be a blessing for China’s central bank.China has struggled for five years to ensure the exchange rate does not fall too far below seven yuan per US dollar, but the currency has gained about 7 per cent against the US dollar in the past six months, stoking debate among Chinese economists over whether authorities should intervene to slow the rally.Officially, the People’s Bank of China (PBOC) has quit direct intervention in…

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China’s Liu He says foreign hostility spurring nation’s push for hi-tech independence

9 days ago

[unable to retrieve full-text content]Foreign efforts to contain Chinese technology development have invigorated the country’s determination to tackle weak links in the economy and accelerate the shift towards innovation driven growth, Chinese Vice-Premier Liu He has said.Liu, the top economic adviser to President Xi Jinping and the lead negotiator in trade war talks with the United States, did not name a foreign power his address to Beijing’s Financial Street Forum on Wednesday, but attributed disruptions in Chinese supply chains…

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US-China relations not doomed for a ‘dead end’ under Biden presidency, says prominent Chinese academic

10 days ago

[unable to retrieve full-text content]Relations between China and the United States are not doomed for a “dead end”, despite escalating hostilities between the world’s two largest economies, a prominent Chinese academic has said.“I don’t believe that all of the United States is on the same page in opposing China,” Yao Yang, the dean of Peking University’s National School of Development, said at a seminar in Beijing on Tuesday.“Things may change if [Joe] Biden wins the election and we should be prepared for a Biden presidency.”The…

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US-China decoupling: is Beijing ramping up its diversification away from the US dollar?

11 days ago

[unable to retrieve full-text content]China may be speeding up the diversification of its foreign exchange reserves away from US dollar assets in response to potential American financial sanctions, but there are clear limits on how far it can go in its de-dollarisation push, according to analysts.China has long tried to undermine the US dollar’s dominant role in the international monetary system, despite the fact that the bulk of its reserves are in dollar-denominated assets.But amid fast deteriorating bilateral ties with the US,…

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China’s uneven coronavirus economic recovery stirs protest in Beijing

12 days ago

[unable to retrieve full-text content]A rare protest erupted in Beijing on Monday, with hundreds of parents taking to the streets of the capital to demand their money be returned after a private tutoring company collapsed in a sign of ongoing economic stress caused by the coronavirus pandemic.Some 200 people gathered outside the office of Youwin Education, where they briefly blocked a road in Beijing’s busy central business district and chanted “Return our money!”“All our money is earned by hard toil. How can we accept such frauds?…

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China GDP: economic growth in third quarter neared pre-coronavirus level, economists forecast

15 days ago

[unable to retrieve full-text content]Li Aifei still has concerns about her family’s financial prospects. Her husband’s income from online advertising has plunged as advertisers have cut their budgets, so the whole family is relying on her small convenience store in Mianyang, Sichuan province, to cover utility bills, kindergarten tuition and daily expenses.But Li also feels that the worst is behind them, as the coronavirus has been contained in most of China and shoppers are returning. Her daily sales revenue recently has nearly…

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What does China’s September loan data mean for the economy and the yuan?

17 days ago

[unable to retrieve full-text content]China’s central bank published its monthly money supply and bank lending data on Wednesday, showing the People’s Bank of China’s efforts to walk a delicate balance between facilitating an economic recovery and avoiding excessive stimulus.What was September’s monetary and credit data, and why does it matter?Banks in China extended 1.9 trillion yuan (US$283 billion) in new yuan loans in September, with banks having been instructed to help the “real economy” hit by coronavirus.The amount of loans…

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Qingdao coronavirus outbreak ‘won’t derail’ China’s economic recovery

18 days ago

[unable to retrieve full-text content]A coronavirus outbreak in the eastern city of Qingdao, home to one of the world’s busiest ports, “won’t derail” China’s economic recovery but does represent a stern reminder of the dangers that still lie ahead.The Qingdao government said on Tuesday afternoon that it had six confirmed cases as well as another six asymptomatic cases after testing 4.2 million people in three days after fears of an outbreak had been sparked over the weekend.“[The outbreak in Qingdao] should be contained very…

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China’s central bank urges faster digital yuan roll-out as other countries begin tests

19 days ago

[unable to retrieve full-text content]China should accelerate its efforts to launch a sovereign digital currency, elevating it as an important part of an “independent” financial infrastructure in the digital era, a top Chinese central bank official has said.The comments by Chen Yulu, deputy governor of the People’s Bank of China (PBOC), came months after the country’s top leadership introduced a new inward-facing economic strategy – dual circulation – to support future growth by relying more on domestic demand, and to better…

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China won’t follow West by easing monetary policy, says central bank chief

20 days ago

[unable to retrieve full-text content]China will not follow Western economies by undertaking a large-scale monetary loosening, but will instead look to consumer price stability and exchange rates to help the economy recover, the central bank governor has said.“Implementing a normal monetary policy, i.e. a positive interest rate and a rising yield curve, is good to provide incentives for market entities and promote sustainable development of the economy and society,” Yi Gang wrote in an article published by China Finance magazine on…

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China promotes new-energy vehicles in drive to get economy back on track

21 days ago

[unable to retrieve full-text content]China has released details of a development plan for the new-energy vehicle industry as it seeks to shore up the world’s largest car market and revitalise an economy hard hit by the coronavirus pandemic.In a statement published on Friday, the government said the focus of the plan was to unify the domestic market, improve industrial concentration and sharpen market competitiveness. That would include the construction of more charging facilities and filling stations for electricity- and hydrogen…

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China’s SOE reforms must encourage competition and provide subsidy transparency, state economist says

22 days ago

[unable to retrieve full-text content]China needs to make substantial reforms to its army of state-owned enterprises (SOEs) by introducing more competition and building a government subsidy system that is transparent and in line with international best practices, according to a prominent state economist.State firms are widely expected to play a bigger role in the “dual circulation” strategy introduced by President Xi Jinping in May, with Chinese Communist Party leaders due to meet later this month to start to flesh out the policy…

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China’s defence industry stronghold of Mianyang gets shot to reclaim former glory amid US tech war

29 days ago

[unable to retrieve full-text content]In the early 1960s, when Chairman Mao Zedong was worried about a possible war with the Soviet Union after an ugly political falling out, he responded with an extensive industrial campaign known as the Third-Front Construction to relocate China’s key institutions, research facilities and military factories farther inland.As a result, Mianyang city in the southwestern province of Sichuan became a major destination for facilities and talent, turning the once-sleepy town into China’s stronghold of…

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Will Chinese consumer spending catch up to support a broad economic recovery from coronavirus?

October 1, 2020

[unable to retrieve full-text content]Shoppers and diners have returned en masse to Chunxi Road, the busiest commercial pedestrian street in Chengdu, the capital of the southwestern Chinese province of Sichuan.Outside a hotpot restaurant, hungry patrons are turned away in the middle of the working day as the wait for a table surpasses 30 minutes. “The slots have run out,” the receptionist at Houtang repeatedly shouts at would-be walk-ins.The scene stands in sharp contrast to the situation across the country in recent months, with…

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Chinese city seeks technological breakthroughs to help nation survive restrictions imposed by United States

September 28, 2020

[unable to retrieve full-text content]Chengdu, the capital of Sichuan province, used to be known as a laid-back city full of teahouses and mahjong – a food paradise with a particular chilli flavour and plenty of cute pandas.But bustling construction in the far south urban area tells another story – the city is building itself into a national innovation centre that will help tackle technological bottlenecks hampering China’s development.Dozens of crane operators are busy working amid autumn rains as new buildings appear on the…

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China unveils ‘strategic emerging industries’ plan in fresh push to get away from US technologies

September 24, 2020

[unable to retrieve full-text content]Beijing has released an ambitious plan to boost the development of “strategic emerging industries”, from the buildout of 5G mobile networks to industrial robotics, in the latest move to counter Washington’s expanding technological embargo while elevating the national economy.In a joint circular released on Wednesday by the National Development and Reform Commission (NDRC); the Ministry of Science and Technology; the Ministry of Industry and Information Technology; and the Ministry of Finance,…

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China’s rapid yuan rise and wave of hot money inflows prompt concerns of asset bubbles and inflation

September 24, 2020

[unable to retrieve full-text content]The rapid strengthening of the yuan exchange rate in recent weeks has triggered a debate in China about whether Beijing’s recent moves to open up its domestic financial markets to more foreign investment might have resulted in an unwelcome wave of speculative “hot money” inflows that could result in imported inflation and asset bubbles.“We must stay alert to the large influx of short-term capital. It is right to maintain the opening-up, but that doesn’t mean we should let all the capital in,”…

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Beijing woos global bond investors by making it easier to get money in and out of China

September 22, 2020

[unable to retrieve full-text content]China says it will let foreign bond investors transfer money into and out of the country more freely, allowing them easier access to the onshore bond market, in Beijing’s latest move to deepen financial links with the outside world.Foreign institutional investors such as central banks, investment banks, wealth-management firms and insurance companies will be allowed to repatriate a larger amount of funds into the currency of their original investment without restrictions, according to a draft…

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China’s Trump Card: Cryptocurrency and Its Game-Changing Role in Sino-US Trade

September 22, 2020

[unable to retrieve full-text content]The US dollar will cease to be the de facto world currency as globalisation retreats, so China and the United States should work together to create a globally used cryptocurrency – a strategy that would weaken the dollar, encourage American exports and help balance trade between the two superpowers.These are the main takeaways from China’s Trump Card: Cryptocurrency and Its Game-Changing Role in Sino-US Trade, by Raymond Yeung, the chief Greater China economist at ANZ Bank. Yeung offers a novel…

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US technology embargo list gives China a blueprint for home-grown innovation over the next decade, top science official says

September 17, 2020

[unable to retrieve full-text content]China’s top science and technology official says the central government is viewing Washington’s list of embargoed or controlled technologies to China as an outline for what to focus on over the next decade, reflecting Beijing’s strategy of enhancing domestic research to cut reliance on American technologies.“The US’ technological containment list will be our mission for scientific and technological development,” Bai Chunli, president of the Chinese Academy of Sciences (CAS), said at a press…

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China urged to flex long-arm jurisdiction to protect its companies from foreign hostility

September 16, 2020

[unable to retrieve full-text content]China should learn from the United States and Europe and further develop its powers to project Chinese law to cover actions by foreign entities – so-called long-arm jurisdiction – to counter sanctions and protect its companies abroad, a well-known finance professor said on Tuesday.The comments from Liu Shuwei, director of the China enterprise research centre at the Central University of Economics and Finance, comes amid mounting tension between the US and China that has seen American…

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China’s central bank stresses its central role in new sovereign digital currency

September 15, 2020

[unable to retrieve full-text content]China is developing a sovereign digital currency with the primary goal of defending the state’s monopoly on minting money, meaning the central bank will play a central role in the issuance and circulation of a digitised yuan, a deputy governor at the People’s Bank of China (PBOC) has written.PBOC deputy governor Fan Yifei published an article in the bank’s Financial News newspaper arguing that creating money was the sole responsibility of a central bank and China’s digital currency will fall…

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China’s digital sovereign currency tests put it ahead of the global pack in push to adopt digital money

September 14, 2020

[unable to retrieve full-text content]China’s central bank is moving closer to a full roll-out of its sovereign digital currency, with tests having already been conducted in pilot cities, though the formal launch date for the nation’s new digital money remains unknown.Meanwhile, other major central banks are warming to the idea of digital currency, with the European Central Bank saying last week that it would begin exploring the pros and cons of pursuing its own. Sweden’s Riksbank has also been testing its e-krona for months.But…

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China to pump hundreds of billions of yuan into key industry projects, with ‘no need to cover up its ambitions’ 

September 11, 2020

One of the major roadblocks to the conclusion of a China-EU investment treaty has been the European demands that China cut back on subsidies for domestic industries to create a level playing field for foreign firms.AdvertisementAt the same time, the increased state involvement in industrial development adds to concerns about waste and inefficiency. China’s previous attempts to develop its domestic solar-energy and electric-vehicle industries through state planning resulted in massive overcapacity, and a few high-profile chip projects have already failed in China despite significant support from local authorities.According to a circular released by MIIT in April, the investment threshold for a project to receive cheap money from China Development Bank was set at 1 billion yuan (US$146.24

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China continues to sweet-talk foreign firms, but business groups ‘need something solid’

September 9, 2020

[unable to retrieve full-text content]Beijing has doubled down on its charm offensive to convince foreign businesses to stay in China, as the central government struggles to protect the nation’s role in global value chains amid continued threats by US President Donald Trump to cut bilateral economic ties.On Tuesday, Vice-Premier Hu Chunhua held talks with foreign business delegates, assuring them that China will reduce market barriers and create a better business environment, according to the official Xinhua news agency.“China will…

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