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Articles by Frank Tang

China seeks to lure new international corporate sustainability body to capital

5 days ago

[unable to retrieve full-text content]China is trying to persuade a new international agency that will set corporate rules on climate change and environmental reporting to set up its headquarters in Beijing.The effort to bring the International Sustainability Standards Board to the capital is part of China’s efforts to stop its economy becoming decoupled from the rest of the world and play a leading part in international ruling bodies.It follows its application this week to join the Comprehensive and Progressive Agreement for Trans…

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US money printing to fund deficit poses major risk for 2021, says ex-China central bank official

7 days ago

[unable to retrieve full-text content]A former Chinese central bank governor has warned there will be no free lunch following unprecedented money printing by the United States and blind faith in modern monetary theory, warning of potential side effects and labelling them as one of six major issues facing China and the world next year.The comments by Zhou Xiaochuan, who led the People’s Bank of China (PBOC) between 2002-18, come as Beijing puts up higher barriers to protect the world’s No 2 economy from damaging capital flows and…

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China unemployment: Beijing’s regulatory crackdowns pose yet another hurdle for young urban jobseekers

8 days ago

[unable to retrieve full-text content]Roughly one out of every seven young urban workers in China remains unemployed, as Beijing’s regulatory crackdowns on key industries are adding further pressure on the nation’s weak jobs sector amid more signs of a broad economic slowdown, according to the latest economic data.The official figures indicate that the surveyed jobless rate for workers aged 16 to 24 – which includes most high school and college graduates – hit 15.3 per cent in August, the National Bureau of Statistics said on…

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China’s economic buzzwords explained, from ‘common prosperity’ to ‘dual circulation’

11 days ago

[unable to retrieve full-text content]China is writing a new chapter in its development strategy, and its using a host of terms that do not appear in mainstream macroeconomic textbooks. Here are some of the buzzwords on the lips of the nation’s leaders.1. Cross-cyclical adjustmentThe term refers to policy actions across business cycles and first appeared in a July statement from the Politburo, the 25-member decision-making body headed by President Xi Jinping. It marks a shift from countercyclical policies, which are direct fiscal…

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China warns of ‘malicious’ capital outflows as financial markets brace for US tapering

17 days ago

[unable to retrieve full-text content]Chinese financial officials have warned of a “malicious” retreat of capital from the country, with hot money flows potentially on the rise as the United States prepares to scale back monetary easing, driving up the value of the dollar in the process.At Saturday’s China International Finance Annual Forum, Fang Xinghai, deputy chairman of the China Securities Regulatory Commission (CSRC), called for enhanced monitoring of cross-border money flows to maintain the stability of capital markets.“It…

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China vows ‘protection’ of small businesses, with US$46 billion worth of new loans on tap

21 days ago

[unable to retrieve full-text content]In yet another sign that its economic strategy is focused on the long game, Beijing has vowed to provide 300 billion yuan (US$46.4 billion) in new loans to the nation’s small and self-employed businesses – many of which are in desperate need of help.Rather than going all-out with loose fiscal stimulus measures, this move reinforces the central government’s “structural” and piecemeal support for specific and essential parts of China’s economy as it heads into what economists say is a likely…

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China facing demographic, inflation risks ‘Japan never faced’, Beijing urged to act to avoid ‘big surprise’

22 days ago

[unable to retrieve full-text content]Faced with new global demographic, inflation and deglobalisation challenges that even “Japan has never really faced”, China should take swift actions to counter their possible negative effects, a senior economist and author has urged.

A lack of action by Beijing will see the risks “come back to surprise us in a big way” in terms of economic growth, inflation and interest rate increases, according to Manoj Pradhan, a former managing director of Morgan Stanley and the founder of the London-based…

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Data security law: China orders state firms to migrate to government cloud services

27 days ago

[unable to retrieve full-text content]With just days to go until the national data security law comes into effect, China’s state assets watchdog has ordered its firms to accelerate data migration from cloud services by tech giants like Alibaba and Tencent to the government’s own infrastructure.Data security is high on the government’s agenda and the move is expected to send turbulence through the country’s cloud service market, now dominated by private players.In a notice posted online on Friday, the State-owned Assets Supervision…

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Bye-bye, US bonds? China’s sovereign wealth fund trims overseas equities, bonds amid ‘stresses and challenges’

27 days ago

[unable to retrieve full-text content]China’s US$1.2 trillion sovereign wealth fund cut its holding of overseas equities and bonds last year while raising the proportion of alternative assets and cash, in light of the fast-changing external environment, according to its annual report released on Friday afternoon.Peng Chun, chairman of the China Investment Corporation (CIC), also explicitly expressed the need to develop “new modalities for outbound investments” by leveraging its geographical advantages – hinting that it may increase…

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China fighting ‘uphill’ battle to revitalise northeast rust-belt in latest bid to transform former industrial heartland

29 days ago

[unable to retrieve full-text content]China has conceded it faces an “uphill” battle to revitalise its northeast rust-belt, but Beijing underlined its desire to boost the economic transformation of the former powerhouse by sending Premier Li Keqiang, three vice-premiers and the head of the country’s state-owned enterprises watchdog to a meeting in Beijing this week.Comprising the provinces of Liaoning, Jilin and Heilongjiang, the region of 99 million people – bordering North Korea, Russia and Mongolia – has significantly lagged…

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Can Harry Potter give Universal Studios the edge in China up against coronavirus, rising patriotism?

August 23, 2021

[unable to retrieve full-text content]“I’m too old for this, but young generations will certainly like it,” said 57-year-old Peng as an empty roller coaster car passed nearby on another test run ahead of the opening of China’s latest theme park.A few years earlier, Peng had been relocated to a nearby neighbourhood as compensation after his farmhouse was demolished to make way for the construction of Universal Studios Beijing – the fifth resort of its kind after Hollywood, Orlando, Japan and Singapore.As Peng admits, he is not the…

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China population: new book stirs debate about nation’s demographic crisis, and the folly of ‘neglecting’ it

August 20, 2021

[unable to retrieve full-text content]China’s biggest economic challenges are a result of population change and authorities must look for long-term solutions to the structural problem, two senior Chinese officials said after making a rare translation of a Western book on demographics and macroeconomic development.Vice-finance minister Liao Min and Miao Yanliang, chief economist at the State Administration of Foreign Exchange’s investment centre, spent months translating The Great Demographic Reversal: Ageing Societies, Waning…

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China post-coronavirus recovery must be ‘effective and sustainable’, with an eye on quality long-term risks

August 18, 2021

[unable to retrieve full-text content]China’s fiscal policy is at a turning point and Beijing must shift focus to long-term development, such as enhancing human capital to boost international competitiveness, rather than prioritising short-term growth, the country’s top think tank said on Wednesday.The Chinese Academy of Social Sciences (CASS) said in its “blue book” report on the economy that authorities should give more weight to medium and long-term goals, while steering clear of the old playbook of investing in infrastructure…

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China pushes ahead with reform of credit rating sector in campaign to cut financial risk

August 12, 2021

[unable to retrieve full-text content]China continues to take on its domestic credit rating sector, with the nation’s central bank removing rating requirements for the issuance of debt financing tools by non-financial firms.The move gives firms that issue debt financing instruments more choice to use external ratings and promotes reform in the credit rating industry, the People’s Bank of China (PBOC) said in a statement on Wednesday.It follows the introduction of new regulations last week by five central government bodies,…

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China, US share inflation risks that will not go away soon, their former top finance officials agree

August 10, 2021

[unable to retrieve full-text content]Beijing has an opportunity to cooperate with Washington on infrastructure and green investments in the post-coronavirus era, but both superpowers are currently preoccupied with tackling global inflation caused by government monetary and fiscal stimulus policies, a panel discussion between two former finance ministers has heard.During his online exchange with former US Treasury secretary Lawrence Summers, former Chinese finance minister Lou Jiwei expressed a desire for Beijing to work with…

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China supply chains: Hubei takes lead in appointing bank executives to boost financial support for key industries

August 4, 2021

[unable to retrieve full-text content]There’s a plan in motion, orchestrated by China’s central bank, to tighten up and improve supply chains across key industries in response to Beijing’s call to maintain economic stability ahead of a slowdown that may be inevitable in the coming months.Executives at the Wuhan branch of the People’s Bank of China in the central province of Hubei – China’s eighth-largest provincial economy – recently kicked off the efforts to improve industrial chains plagued by the coronavirus pandemic and trade…

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China vows to crack down on high-risk banks as economy’s post-coronavirus rebound slows

August 3, 2021

[unable to retrieve full-text content]Chinese regulators say they will “spare no effort” as part of a clamp down on high-risk financial institutions, including using targeted anti-corruption investigations, amid a flush of liquidity generated by coronavirus-related stimulus and increased fiscal spending.The move to tighten oversight of lending institutions follows an undertaking last Friday by the 25-member Politburo – the Communist Party’s top decision-making body – to maintain the “continuity, stability and sustainability of…

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China’s provincial GDPs show widening gap between coastal and inland regions, as second-half economic concerns loom

July 23, 2021

[unable to retrieve full-text content]The disparities in provincial growth across China widened further during the past six months, with the economies in coastal regions surging ahead on the back of increased exports while northern and inland provinces continued lagging behind due to their dependency on slowing government investments, according to a Post analysis of new half-year provincial economic data.The results contrast starkly with Beijing’s attempts to balance regional development while cultivating self-sufficient…

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Asean nations left ‘exposed’ by global minimum corporate tax seen forging closer ties with China

July 23, 2021

[unable to retrieve full-text content]The global minimum corporate tax – agreed upon by Group of 20 finance ministers this month – is set to re-chart the course of international investment flows, creating new uncertainties for Southeast Asian nations that have been striving to lure foreign capital and financial expertise.Final agreement on the 15 per cent minimum-tax plan, originally agreed to by Group of 7 (G7) developed economies in early June, is not expected until October. It could also be years before it takes effect. But its…

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China’s yuan internationalisation strategy needs ‘persistent, strong foreign demand’

July 21, 2021

[unable to retrieve full-text content]China should focus on increasing the soft power of the yuan as part of its internationalisation strategy, rather than looking solely at the liberalisation of its restrictions on the capital account, according to a senior government adviser.Renmin University vice-president Liu Yuanchun said China should look to drive demand for yuan-denominated assets to support internationalisation.“The strategic adjustment is not to turn to the capital account, nor make it fully open,” he told a closed-door…

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China’s slowing economic growth and potential headwinds may suggest fiscal loosening is imminent

July 20, 2021

[unable to retrieve full-text content]China’s slowing investment approvals and lower-than-expected pace of government spending have fuelled debate over whether the country should be ramping up fiscal spending, particularly as economic growth looks to wane in the coming years.In the first six months of this year, China’s fiscal expenditure rose 4.5 per cent from a year earlier to 12.2 trillion yuan (US$1.88 trillion), accounting for 49 per cent of the annual budgeted total. In comparison, revenue, which rose 21.5 per cent, already…

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China digital currency: overseas visitors free to use e-yuan at 2022 Winter Olympics in Beijing

July 16, 2021

[unable to retrieve full-text content]Overseas visitors will be granted access to China’s digital currency without the need to open a local bank account during trials at the 2022 Winter Olympics in Beijing, according to a central bank white paper.The People’s Bank of China (PBOC) has yet to confirm a timetable for the full roll-out of the so-called Digital Currency Electronic Payment (DCEP), but confirmed on Friday that 34.5 billion yuan (US$5.3 billion) had already been spent through 70.8 million transactions as part of ongoing…

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China’s commodities traders in Beijing’s crosshairs after driving up prices and putting economic recovery at risk

July 15, 2021

[unable to retrieve full-text content]A newly formed special task force is on the hunt in China for unscrupulous traders who have been driving up the prices of commodities through speculative reselling, which hurts manufacturers and risks slowing the nation’s economic recovery.The action was touched on in a statement released on Wednesday following a regular meeting of the State Council, China’s cabinet, chaired by Premier Li Keqiang.“Our audits have found clues concerning violations of rules or laws, such as reselling commodities…

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China’s slowing economy needs fiscal spending to aid post-coronavirus recovery, hit growth target

July 13, 2021

[unable to retrieve full-text content]China should increase fiscal spending to further support its post-coronavirus recovery and help reach its economic growth target for the year, particularly after the central bank sent a signal that it expects slowing conditions ahead when it signalled last week that it would cut the reserve requirement ratio last week, analysts said.Calls for further monetary and fiscal policy stimulus have risen, with China’s headline growth set to slow after an explosive rebound from the lows of a coronavirus…

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US-China relations: Joe Biden’s embrace of post-pandemic ‘industrial polices’ shows ‘bust of Washington Consensus’

July 8, 2021

[unable to retrieve full-text content]The Biden administration’s US$1.9 trillion coronavirus relief package and other interventionist fiscal measures are a pivot towards China’s economic model and signal a bust of Washington’s long-advocated neoliberal ideology, according to a new report by Renmin University of China.By signing off on the Covid-19 relief package and other initiatives, such as the now-reduced and split US$1.2 trillion infrastructure plan, US President Joe Biden has given de facto endorsement to China’s state-led…

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Chinese central bank pledges it will not change course over financial risk management

July 3, 2021

[unable to retrieve full-text content]China’s central bank has pledged there will be no turnaround in the country’s prudent monetary stance and tight financial supervision.A statement from the People’s Bank of China on Friday indicated that it would continue to target financial risk despite the size of the country’s shadow banking sector being squeezed to an eight-year low in proportion to gross domestic product.It said regulators had been ordered to offer more policy tools to tackle the financing needs of small businesses,…

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Hong Kong backs US-led global effort to ‘combat tax evasion’, with mainland China also on board

July 2, 2021

[unable to retrieve full-text content]Both Hong Kong and mainland China have backed the United States-led initiative to implement a global minimum tax rate, with the city’s financial secretary supporting efforts by the international community to “combat tax evasion”.Mainland China, as well as its special administrative regions of Hong Kong and Macau, are among the 130 economies that have signed on to the “Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy”, which proposes…

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China population: workforce to drop by 35 million over next five years as demographic pressure grows

July 1, 2021

[unable to retrieve full-text content]China’s workforce will drop by 35 million over the next five years, according to the government, adding pressure on the state pension system and forcing Beijing to adopt new measures to meet the demographic challenge.Experts have long warned Beijing must take action against a declining labour force and rapidly ageing society, which is expected to weigh on the country’s economic progress in the years ahead.China’s working age population – or those aged between 16 and 59 – fell by 40 million in…

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China’s economy to ride out containment efforts by an increasingly anxious US, former official says

June 24, 2021

[unable to retrieve full-text content]China is steadily on course for economic expansion and is set to avoid the middle-income trap in coming years, despite the containment efforts by an increasingly anxious Washington, a former Chinese official said on Thursday.According to former vice finance minister Zhu Guangyao, the world’s second largest economy has factored such external challenges into its dual circulation strategy, in which the country will rely more on domestic consumption, technology and innovation for growth.Zhu, who…

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China’s Hainan boosts supervision of free-trade port to prevent island becoming ‘tax haven’

June 21, 2021

[unable to retrieve full-text content]Hainan is tightening supervision of its business environment to ensure the tropical island does not become a tax haven, after Beijing outlined plans to turn it into a free-trade port that might one day rival Hong Kong and Singapore.China’s central government unveiled a blueprint to transform the 35,000 sq km island by establishing it as a duty-free shopping hub, relaxing visa requirements and loosening restrictions on capital flows and data by 2035.To attract talent and financing, the island…

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