Tuesday , April 20 2021
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Articles by Frank Tang

China’s carbon-neutrality plans now in the hands of central bank, which will ramp up green financing and establish carbon-trading market

4 days ago

[unable to retrieve full-text content]China’s central bank is now spearheading the country’s carbon-neutrality initiative, with plans to provide low-cost capital, boost green financing and invigorate the carbon-trading market to fund the ambitious undertaking.Its involvement comes after President Xi Jinping vowed in September to make China carbon neutral by 2060.The People’s Bank of China (PBOC) will create carbon-reduction-facilitation tools to provide funding support, and it will boost green financing channels, PBOC governor Yi…

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China debt: local government spending under microscope to protect national economy from ‘systemic risk’

6 days ago

[unable to retrieve full-text content]The Chinese leadership regards the prevention of implicit local government debt risks as an “important political discipline and rule”, implying that there are plans for more forceful measures to defuse the debt bomb and lower its potential threat to the world’s second-largest economy.It is also Beijing’s answer to lingering calls for expansionary policies, particularly the launch of new projects, highlighting its intention to shift away from an investment-driven growth model.The requirement was…

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China digital currency: Shanghai, Hainan among regions added to e-yuan trials

7 days ago

[unable to retrieve full-text content]China has added six more regions to its pilot programme for the sovereign digital yuan, expanding the scope of testing as the country inches closer to launching the world’s first central bank digital currency among major economies.The financial hub of Shanghai, Hainan province in the far south, the central cities of Changsha and Xi’an, as well as the port cities of Qingdao in Shandong province and Dalian in Liaoning province have been chosen to participate in the programme, said Li Bin, head of…

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China economy: bank loans hit record high in first quarter as authorities balance growth and debt risk

8 days ago

[unable to retrieve full-text content]China’s central bank kept an accommodative policy stance in the first quarter of the year, with lending hitting a record high of 7.67 trillion yuan (US$1.17 trillion) as authorities weigh economic support and risk prevention in the world’s second largest economy.Quarterly lending was even higher than 7.1 trillion extended in the same period a year earlier, when Beijing unveiled its stimulus package to help combat the economic effects of the coronavirus pandemic, the People’s Bank of China (PBOC…

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China’s post-coronavirus consumer spending ‘not enough’ to drive growth, says prominent economist

8 days ago

[unable to retrieve full-text content]China should accelerate infrastructure investment this year as consumption is not at a high enough level to drive growth, a prominent Chinese economist said on Monday.Boosting domestic consumption, which has been hard hit by the coronavirus pandemic, is an economic priority in China’s 14th five-year plan for 2021-25 and its 2035 vision.Household spending is expected to bounce back once the pandemic is over, and China’s gross domestic product (GDP) is projected to rise about 20 per cent year on…

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China issues inflation warning as rising commodity, consumer prices threaten economic recovery

11 days ago

[unable to retrieve full-text content]Potential risks and disruptions to China’s continued economic recovery have been highlighted in a rare one line statement from leading financial officials, who warned about the potential rise of commodity prices and consumer inflation.Data released on Friday showed that prices that Chinese factories charge wholesalers for their products rose the most in almost three years in March, while consumer inflation also rose for the first time in three months. The monthly release, though, had been pre…

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China’s key small manufacturing, service businesses under pressure from rising costs despite overall economic recovery

12 days ago

[unable to retrieve full-text content]China’s small businesses, a key priority for Beijing in the post-coronavirus recovery given they employ some 200 million people, are feeling the pain of rising raw material, utility, labour and rent costs, according to a new survey. Small businesses were offered tax exemptions, inclusive loan coverage and rent cuts to help insulate them from the impact of the coronavirus, but are already under pressure from a slow recovery in revenues and cash flow constraints.And while China’s overall economy…

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China GDP: economic recovery from coronavirus ‘increasingly visible’ as IMF lifts China, global outlook

14 days ago

[unable to retrieve full-text content]China’s economic growth rate for this year has been raised by the International Monetary Fund (IMF), which believes a way out of the unprecedented coronavirus crisis is becoming “increasingly visible” around the world. The Washington-based organisation on Tuesday raised China’s economic growth estimate for 2021 to 8.4 per cent, 0.3 percentage points higher than in its January prediction, with the 2020 estimate left unchanged at 5.6 per cent. China’s economy grew by 2.3 per cent during a…

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China’s domestic tourism industry on course for ‘orderly recovery’ as Ching Ming Festival boosts travel, box office revenues

14 days ago

[unable to retrieve full-text content]A three figure percentage increase in the number of trips undertaken in China during the recent three-day weekend points towards an “orderly recovery” of the domestics tourism industry, further underlining post-coronavirus recovery in the world’s second largest economy. The Ching Ming Festival, more widely known as Tomb-Sweeping Day, took place in China on Monday, and according to data from the Ministry of Culture and Tourism, 102 million trips were recorded over the extended three-day weekend…

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China, Hong Kong begin testing digital yuan as Beijing ramps up research into cross-border use

18 days ago

[unable to retrieve full-text content]China will expand cross-border use of its sovereign digital yuan “when the time is ripe”, with technical testing already under way with Hong Kong, the country’s central bank has said.China is a world leader in the development of a central bank digital currency (CBDC), with 200 million yuan (US$30.4 million) already distributed in pilot projects across the country, including in cities like Shenzhen, Suzhou and Beijing. Although China’s sovereign digital currency, the so-called Digital Currency…

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US-China tensions could drive more firms to diversify supply chains to Southeast Asia, think tank says

19 days ago

[unable to retrieve full-text content]More multinational companies could yet reconfigure their China-centred supply chains because of manufacturing disruptions during the coronavirus pandemic, a mood of heightened protectionism and changing geopolitics, a new report said on Wednesday.That is the claim from the ASEAN+3 Macroeconomic Research Office (AMRO), a regional macroeconomic surveillance unit based in Singapore that represents the 10 members of the Association of Southeast Asian Nations (Asean), plus China, Japan and South…

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China must avoid ‘blind competition’ within high-speed railway network development to maintain ‘reasonable’ debt levels

21 days ago

[unable to retrieve full-text content]China’s high-speed railway network development plan must avoid “blind competition” from local authorities to keep debt at a “reasonable” level, the State Council has warned. The 38,000km network is already the world’s largest, but Beijing is increasingly worried about an increasing debt level, with 5.57 trillion yuan (US$850 billion) worth of liabilities already on the books of the state-owned China State Railway Group alone. “Some local governments prefer high-speed railways to ordinary-speed…

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China debt defaults prompt authorities to tighten oversight of credit rating agencies

22 days ago

[unable to retrieve full-text content]Beijing is tightening scrutiny of Chinese bonds with a fresh attempt at cracking down on regulatory arbitrages and ratings shopping, following a wave of defaults that damaged the credibility of domestic rating agencies and shook confidence in the world’s second largest debt market.In a draft regulation out for public feedback until April 12, the People’s Bank of China (PBOC) and four other financial regulators proposed credit rating agencies set up a quality appraisal system with a default…

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China seeks to boost rust-belt province as a ‘golden place’ for technology development

March 19, 2021

[unable to retrieve full-text content]Beijing is once again upping the ante on its bet that it can revitalise northeast China’s rust-belt industrial base in line with the central government’s push to promote technological self-sufficiency in its own backyard.Greater government support for the region is on the cards after Vice-Premier Liu He held meetings earlier this week with local cadres, technology experts and entrepreneurs in Liaoning province, soliciting their opinions on the region’s next stage of development.Economically,…

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American Rescue Plan: China increasingly concerned by US economic policy after Fed maintains loose stance

March 18, 2021

[unable to retrieve full-text content]Moves by the United States to maintain its loose monetary policy until at least the end of 2023 to support its economic recovery and labour market have reinforced concerns in Beijing as it tries to reduce the risk of domestic asset bubbles by gradually tapering off stimulus policies enacted last year.The US Federal Reserve on Wednesday reiterated that it would keep its benchmark interest rate near zero and continue sizeable asset purchases to pump liquidity into financial markets, in a so…

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China’s new financial court given jurisdiction to handle lawsuits involving overseas firms

March 17, 2021

[unable to retrieve full-text content]China’s top court has authorised the newly created Beijing Financial Court to hear lawsuits against overseas financial entities that have allegedly damaged the “legitimate interests” of Chinese domestic investors.The move to “increase international influence” and “improve the extraterritorial application of Chinese laws” comes at a time when many Chinese firms have been targeted by United States government sanctions, even as China’s overseas financial interests are increasing at their fastest…

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China debt: State Council says local governments must ‘tighten their belts’ and cut debt to reduce financial risks

March 16, 2021

[unable to retrieve full-text content]Beijing has ordered all levels of government across China to lower their debt levels, as leaders move to address the fiscal risks that arose last year when policymakers boosted spending and cut taxes to fight the economic fallout from the coronavirus pandemic.In its work report presented to the National People’s Congress on March 5, Beijing said it would strive for “basic stability” in the macroeconomic leverage ratio of debt to gross domestic product (GDP). But at Monday’s meeting of the State…

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American Rescue Plan: China moves to counter ‘turmoil in financial markets’ as policy divergence widens with US

March 15, 2021

[unable to retrieve full-text content]China’s central bank is stepping up liquidity support for domestic businesses and increasing its monitoring of cross-border capital flows as concerns persist over the side effects of Washington’s massive new fiscal stimulus plan.The moves by the People’s Bank of China come amid a growing divergence in the recent economic policy responses by the United States and China, with Washington boosting stimulus significantly while Beijing starts to taper off its economic-support policies enacted last…

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American Rescue Plan: China worried about economic impact of Joe Biden’s US$1.9 trillion coronavirus bailout

March 11, 2021

[unable to retrieve full-text content]The imminent implementation of US President Joe Biden’s US$1.9 trillion coronavirus rescue plan has raised the alert level in China, with government officials and advisers openly expressing fear that the massive injection of money into the global market could inflate asset bubbles, cause further financial market turmoil and lead to higher inflation.The American Rescue Plan, which includes US$1,400 direct payments for middle-class Americans, an extension of unemployment benefits, funding for…

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China’s debt-laden local governments urged not to ‘blindly expand’ post-coronavirus infrastructure projects

March 10, 2021

[unable to retrieve full-text content]China’s top legislature has urged the nation’s cash-strapped regional governments not to “blindly expand” infrastructure projects due to concern about mounting financial risks stemming from trillions of yuan worth of coronavirus stimulus last year.“Some regional governments are facing heavy debt burdens, while there were still new increases of implicit liabilities,” the financial and economic affairs committee of the National People’s Congress (NPC) said during its review of budget…

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China’s ‘two sessions’: Beijing promises level playing field but boosts support for state firms

March 10, 2021

[unable to retrieve full-text content]China has highlighted the fair treatment of all market entities in its new five-year economic plan, as it tries to reconcile development of both private and state firms and fend off criticism from foreign governments.However, Beijing’s emphasis of “better, bigger and stronger” as the guiding principle for state-owned enterprise (SOE) reform is likely to stir suspicion overseas and at home that government-backed firms could be given an even greater role in future economic development.“While…

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China’s Shenzhen sees cross-border yuan use jump to record level in 2020

March 5, 2021

[unable to retrieve full-text content]Shenzhen saw a record level of yuan-denominated cross-border payments last year, an encouraging sign for Chinese authorities trying to reduce the country’s reliance on the US dollar amid uncertain relations with the United States.Cross-border yuan payments in the southern city hit a record high of 2.5 trillion yuan (US$386 billion) last year, up 46 per cent from 2019, according to data released earlier this week by the local branch of the People’s Bank of China (PBOC).In addition, cross-border…

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China’s small businesses need ‘supportive policies’ to survive after closures tripled last year amid coronavirus

March 4, 2021

[unable to retrieve full-text content]Small business closures in China jumped last year amid the unprecedented coronavirus outbreak, raising fresh calls for Beijing to expand rather than reduce its supportive policies for the sector that is vital for the nation’s employment.A study led by Tsinghua University professor Liao Li found that the rate of small business closures in China last year almost tripled to 18.5 per cent compared to a year earlier, based on a sample of more than 50,000 companies nationwide.The education,…

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China ‘two sessions’: what you need to know about the government’s 2021 work report and why it’s important

March 4, 2021

[unable to retrieve full-text content]What is China’s annual government work report?The government work report is delivered by China’s premier, officially the head of the Chinese government, to the delegates of the National People’s Congress as part of the annual “two sessions” for their review and approval.It is a ceremonial arrangement as all government work reports in recent history have been approved by close to 100 per cent of the delegates.However, the report still offers a comprehensive view of the country’s economic and…

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China’s top banking regulator sees surge of bad loans in 2021 as effects of coronavirus bite

March 3, 2021

[unable to retrieve full-text content]When the Industrial and Commercial Bank of China (ICBC), the world’s largest bank by asset size, started to auction 657 million yuan (US$101.5 million) of its non-performing assets in six tranches on Monday, it drew strong interest from bad loan disposal firms.One of the packages received 44 bids from nine asset management companies (AMCs), including domestic firms China Orient Asset Management Company, China Great Wall Asset Management and China Cinda Asset Management, according to a statement…

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Bitcoin mining in northern Chinese province to be halted amid energy-saving push

March 1, 2021

[unable to retrieve full-text content]China’s top energy consuming province plans to suspend all new and existing bitcoin mining projects before the end of April, as Inner Mongolia faces mounting pressure to meet its energy-saving targets.Bitcoin mining requires huge amounts of computing power and uses large amounts of energy, with operations attracted to areas like Inner Mongolia, Sichuan and Xinjiang due to low electricity prices.China has pledged to halt the rise in its carbon emissions before 2030, and it has committed to…

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China forex regulator calls for greater oversight of overseas entities, but avoid ‘US-style financial hegemony’

February 24, 2021

[unable to retrieve full-text content]China should prepare itself to take regulatory action overseas to protect its financial interests, but enforcement should be targeted so it does not mimic US long-arm jurisdiction that imposes legal standards on foreign entities, says a new report by the country’s foreign exchange regulator.Instead of following the United States, China should embrace multilateral or bilateral regulatory cooperation and focus on oversight of Chinese businesses and individuals in foreign countries, the State…

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Chinese investors look south to Hong Kong as outflow rules ease

February 21, 2021

[unable to retrieve full-text content]Investors from the Chinese mainland bought US$40.1 billion in shares through the Hong Kong stock connect trading scheme last month, cashing in on government relaxation of outflows.The January total released by the State Administration of Foreign Exchange (Safe) on Friday for southbound investment – or buying of offshore stocks by mainland Chinese investors – did not include previous monthly figures but it is about one-tenth of the 2.13 trillion yuan (US$328 billion) of Hong Kong-bound…

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China urges markets to focus on rates, not liquidity, to avoid ‘misunderstanding’ of monetary policies

February 19, 2021

[unable to retrieve full-text content]China’s central bank has called for attention to be focused on policy rates rather than liquidity operations as concerns over the country’s exit from its coronavirus-driven stimulus package hang over the world’s second-largest capital market.Markets are concerned about a faster-than-expected exit from the policies used to prop up the world’s second-largest economy amid the coronavirus-induced slowdown, with China continuing to show recovery alongside a vaccination plan that is moving forward…

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