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Frank Tang

Articles by Frank Tang

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

2 days ago

[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

3 days ago

[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

3 days ago

[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

4 days ago

[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

6 days ago

[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’

11 days ago

[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

14 days ago

[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

16 days ago

[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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China unveils plan to transform manufacturing sector with internet of things

17 days ago

[unable to retrieve full-text content]Beijing is looking to sharpen the global competitiveness of “Made-in-China” products with a new plan to accelerate the use of information technology in traditional manufacturing sectors.The country will embark on a technology-driven transformation of manufacturing to offset rising production costs and consolidate its position as the world’s workshop, according to the 2021-23 action plan unveiled by the Ministry of Industry and Information Technology on Thursday.“The next three years will be a…

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China’s rust-belt province of Liaoning merges 12 local banks into one ‘first-class’ bank as bad loans mount

January 28, 2021

[unable to retrieve full-text content]The Chinese rust-belt province of Liaoning will merge a dozen local government-owned commercial banks into one large provincial institution, in the wake of an increase in bad loans caused by coronavirus-induced economic problems last year.The northeastern province reported the plan this week to the Financial Stability and Development Committee, the overarching financial supervisory agency headed by Vice-Premier Liu He, and will bring in strategic investors for the new institution, according to…

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China’s moves to curb market speculation are not ‘abrupt’ exit from coronavirus stimulus

January 27, 2021

[unable to retrieve full-text content]Unexpected moves by China’s central bank to reduce liquidity in the banking system do not represent an “abrupt” and long-lasting policy change, but are in fact an effort to protect against property and financial speculation by drawing a “red line” to guard against increasing debt.As part of its regular operations to control liquidity, the People’s Bank of China (PBOC) offered 2 billion yuan (US$309 million) in new liquidity on Tuesday, a far lower amount than expected, raising market…

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China-EU investment deal allows for arbitration to settle disputes, documents show

January 23, 2021

[unable to retrieve full-text content]The new investment agreement signed between China and the European Union allows for the use of arbitration to settle trade disputes, and introduces stricter clauses on market access and technology transfer, the full text of the deal reveals.The two sides wrapped up seven years of negotiations on the Comprehensive Agreement on Investment (CAI) in late December, but the document was not released by Brussels until Friday.The deal has been hailed as a breakthrough in the China-EU relationship,…

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China’s small businesses in ‘urgent need’ of support to protect jobs and boost domestic demand, State Council says

January 22, 2021

[unable to retrieve full-text content]Beijing moved this week to provide additional support for small businesses – one of the weak links in China’s domestic economy – as leaders attempt to balance an uneven economic recovery by shoring up employment and domestic demand.The State Council, the country’s cabinet, demanded that local governments and financial institutions help small businesses, which account for the lion’s share of employment in the country but which continue to struggle from the effects of the coronavirus pandemic and…

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China revamps trade negotiation team ahead of possible fresh talks with Biden administration

January 20, 2021

[unable to retrieve full-text content]Beijing reshuffled its trade negotiation team ahead of Joe Biden’s presidential inauguration, in the latest sign China is preparing for a possible resumption of bilateral trade talks with the United States.Despite the damage done to bilateral relations in the past four years – including the trade war, finger-pointing over the origin of coronavirus pandemic, US efforts at technological containment, and confrontations over issues such as Hong Kong’s national security law and alleged genocide in…

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Xi Jinping to discuss coronavirus-era challenges with Merkel, Suga and Modi at virtual Davos

January 19, 2021

[unable to retrieve full-text content]Chinese President Xi Jinping will join global leaders next week at a virtual meeting organised by the World Economic Forum that will focus on the economic, environmental, social and technological challenges facing the world amid the coronavirus pandemic, the Switzerland-based institution said on Monday.The event comes as the global economy continues to be haunted by the pandemic and the relationship between China and the United States requires urgent repair.“The need to reset priorities and the…

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China GDP: economy set to confirm recovery from coronavirus, but new cases cloud outlook

January 15, 2021

[unable to retrieve full-text content]China is expected to confirm on Monday that it was the world’s first major economy to overcome the damage caused by the coronavirus pandemic and post positive growth for 2020, although the world’s second largest economy still faces a bumpy road ahead.Last year’s gross domestic product (GDP) is expected to have grown by 2.1 per cent, according to a Bloomberg poll of economists, a sharp decline from a revised 6.0 per cent in 2019, and the lowest growth rate in 44 years.However, even weak growth…

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China’s credit tightening measures to put pressure on property, local government financing vehicles

January 13, 2021

[unable to retrieve full-text content]China may have started to rein in the pace of credit growth at the start of 2021 as December’s financial data fell below market expectations, and with policymakers signalling that they are leaning toward tapering off the expansionary monetary policy conducted last year.Weak financial data released by the People’s Bank of China (PBOC) on Tuesday has reinforced the belief held by many analysts that the central bank has started to gradually tighten credit.However, to ensure financial stability and…

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China’s new rules on ‘unjustified’ foreign laws bolster ability to strike back at US long-arm jurisdiction

January 13, 2021

[unable to retrieve full-text content]New rules strengthening China’s ability to strike back at “unjustified” foreign laws applied to citizens and businesses have been hailed as a necessary step to defend national interests, following a rash of sanctions from Washington on Chinese tech firms and politicians.However, analysts do not expect any cases in the immediate future as the order lacks details and is seen largely as a defensive mechanism.The rules on “counteracting unjustified extraterritorial application of foreign…

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China’s railway investment loses steam as government turns from debt-fuelled building boom

January 11, 2021

[unable to retrieve full-text content]China’s railway authority will prioritise restructuring its operations to enhance efficiency and revenue this year, rather than continuing to expand track mileage, in the latest example of Beijing moving away from debt-fuelled growth.Annual railway investment, which often reflects government enthusiasm for infrastructure investment, dropped to 781.9 billion yuan (US$120.7 billion) last year, falling below 800 billion yuan for the first time since 2013, according to data released at the annual…

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China’s forex reserves strategy to be ‘dynamically optimised’ amid uncertain external conditions

January 8, 2021

[unable to retrieve full-text content]Chinese authorities are adopting a “forward-looking” investment strategy for the country’s massive foreign-exchange reserves, with plans to “dynamically optimise” its portfolio even as the value of its reserves assets have climbed to a four-and-a-half-year high.The wording in Thursday’s statement by the State Administration of Foreign Exchange (SAFE), which manages the bulk of the country’s reserve assets, likely reflects Beijing’s rising concerns about international uncertainties – including…

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China’s fintech platforms face increased scrutiny amid broader regulatory efforts to rein in financial risks

January 7, 2021

[unable to retrieve full-text content]China’s central bank says it will prioritise financial stability this year, vowing to strengthen its regulatory muscle and to put all financial activities under government supervision, in an effort to eliminate risks.In particular, the People’s Bank of China (PBOC) said it will firmly implement the top leadership’s plans to strengthen antitrust enforcement and prevent the “disorderly expansion of capital”, which generally refers to the regulation of China’s big technology companies.“Measures…

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China moves to curb yuan rally pressure due to hot money and export concerns

January 6, 2021

[unable to retrieve full-text content]The rapid appreciation in the yuan’s exchange rate has resulted in capital inflows and given rise to concerns about its effect on exports and China’s manufacturing competitiveness, with policymakers making moves this week to curb its ascent.For now, the People’s Bank of China (PBOC), the nation’s central bank, has not intervened directly to halt or reverse the currency’s appreciation, but instead is relying on a series of measures that are meant to boost the ability of Chinese investors to buy…

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China’s state monopolies cast a big shadow over private enterprise, but will antitrust law and vows of reform help?

January 5, 2021

[unable to retrieve full-text content]Beijing’s latest measures to redistribute state capital in key sectors while enhancing the influence of state-owned enterprises (SOEs) are arousing concern in China’s private sector while also fuelling foreign suspicion about the return of state capitalism.Chinese officials, namely President Xi Jinping, have commented on the need to build bigger, better and stronger state firms.But some analysts say that may run counter to pledges of market-oriented reform in the state sector. In particular,…

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China to relax rules on cross-border yuan use, as currency hits 30-month high against US dollar

January 5, 2021

[unable to retrieve full-text content]Beijing will make it easier for traders, multinational companies and outbound investors to use the yuan in international transactions, after the Chinese currency rallied to a 30-month high against the US dollar.The new rules, which take effect February 4, will cut red tape in yuan trade settlements, simplify paperwork and streamline the ability of Chinese citizens to move money out of the country, according to a circular jointly released by the People‘s Bank of China and five other government…

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China’s Xi Jinping vows new push to revitalise rural economy in post-coronavirus world of uncertainty

December 30, 2020

[unable to retrieve full-text content]China has vowed to provide more forceful support for the agricultural sector and revitalise rural areas, saying they are the “bedrock for a new era of development” in which Beijing aims to make the economy more self-reliant and insulate it from external uncertainty.At the conclusion of the two-day Central Rural Work Conference on Tuesday, President Xi Jinping said after eliminating absolute poverty this year, the government would undertake “a historic shift” to focus on “comprehensively…

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China to develop ‘national team’ of state-owned giants, but efficiency concerns linger

December 29, 2020

[unable to retrieve full-text content]Chen Derong, the chairman of China Baowu Steel Group, broke into tears last week as he announced the company had produced a record 100 million tonnes of steel this year.It was a “dream come true,” Chen said, as the Shanghai-based mill surpassed ArcelorMittal, an Indian-Luxembourg multinational, to become the world’s largest producer and highest-earning steelmaker.While a government-led consolidation of five major Chinese mills over the past decade was instrumental in Baowu’s feat, the company’s…

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China’s P2P purge leaves millions of victims out in the cold, with losses in the billions, as concerns of social unrest swirl

December 28, 2020

[unable to retrieve full-text content]Karen Kong has not got a restful night’s sleep in the past half a year, after learning that her mother invested all of the family’s savings – more than 1 million yuan (US$153,000) – in a little known peer-to-peer (P2P) lending platform.Worries soon turned into anger and despair as the Beijing-based Jieyue United made its way onto the Chinese government’s liquidation list, and the chance of getting their money back appears to be dwindling.“No one can give us a clear timetable for the settlement,…

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China to focus on domestic consumption in 2021 as US trade war fades from priorities

December 27, 2020

[unable to retrieve full-text content]China’s commerce ministry will focus on domestic consumption next year as the trade war with the United States falls down the list of priorities.A statement about its nationwide work meeting on Saturday, the first meeting chaired by the new minister Wang Wentao, stressed the importance of the domestic market, a key element of the new dual circulation strategy.The ministry said: “We will step up domestic demand, try to drive up consumption potential, build a modern circulation system, clear…

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China takes practical approach to development over next five years

December 25, 2020

[unable to retrieve full-text content]China should take a practical approach in its 2021-2025 development plan, setting eyes on a reasonable growth rate and keeping some leeway, Premier Li Keqiang said on Thursday.While the five-year plan should consider the post-coronavirus economic recovery over the next two years and the country’s 2035 development vision, the No 2 figure of the Chinese leadership called on the use of reformist measures to tackle structural problems in the world’s second largest economy.“Development targets must…

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China extends loan help for coronavirus-hit small businesses in bid to maintain economic recovery

December 23, 2020

[unable to retrieve full-text content]China will extend two credit policy tools for its smallest businesses into next year, as it tries to consolidate its economic recovery and counter external changes.Small businesses will be allowed to further postpone their principal and interest repayments on inclusive loans past the previous deadline of the end of March, the State Council said in a statement summarising its executive meeting on Monday.Inclusive loans provide financial support for disadvantaged and low-income segments of…

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