Friday , October 30 2020
Home / Karen Yeung

Karen Yeung

Articles by Karen Yeung

China’s foreign exchange reserves have been remarkably stable. Puzzled economists wonder why

7 days ago

[unable to retrieve full-text content]China’s foreign exchange reserves have shown surprisingly little change in recent years despite volatile economic conditions and exchange rates among its major trading partners.China’s reserve assets held in foreign currencies, the world’s largest war chest, have been stuck between US$3.0 trillion and US$3.2 trillion since 2017 because the People’s Bank of China (PBOC) appears to have largely stopped using them in market intervention to manage the yuan’s value.“We will continue to refrain from…

Read More »

China’s US dollar debt market showing cracks from US sanctions and prospect of more

9 days ago

[unable to retrieve full-text content]As US-China tensions show no sign of abating, the threat of new Washington-imposed tariffs and sanctions on Chinese firms are starting to reveal cracks in China’s US dollar corporate bond market.Since the Trump administration started the trade war with China in 2018, the United States has imposed tariffs on US$550 billion worth of Chinese products, while China has countered with tariffs on US$185 billion worth of American goods.The Pentagon this year also designated 31 leading Chinese companies…

Read More »

China slows yuan’s rise on asset bubble concerns, signalling new battle against excessive appreciation

18 days ago

[unable to retrieve full-text content]A decision by China’s central bank at the weekend to curb a rally in the yuan’s exchange rate signals concern over a rush of hot money fuelling an asset bubble amid heightened price risks in the country’s rapidly growing property market, according to analysts.The move suggests the central bank was tweaking its policy stance on fears of excessive appreciation pressure on the yuan, following a sharp rise on Friday – the first working day following the “golden week” holiday – when it hit its…

Read More »

China not among major central banks in talks on global digital currency principles

21 days ago

[unable to retrieve full-text content]China was not included in recent talks among central bankers from developed nations on potential collaboration involving central bank digital currencies (CBDCs) that are technologically complementary and can coexist within a wider international payments ecosystem.A working group was formed by the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, Sweden’s Riksbank, the Swiss National Bank and the US Federal Reserve, along with the Bank for International…

Read More »

Why did China’s forex reserves fall by US$22 billion in September?

23 days ago

[unable to retrieve full-text content]China’s foreign exchange (forex) reserves, by far the world’s largest, unexpectedly dropped by US$22 billion in September to US$3.1426 trillion, according to data released by the State Administration of Foreign Exchange (SAFE) on Wednesday.Why does China’s drop in forex reserves matter?The monthly change in China’s forex reserves is released on the seventh day of every month and is read as a measure of capital flows. Given China’s current account surplus, a drop in reserves could mean that…

Read More »

China’s yuan surges to 17-month high on Joe Biden US presidential election hopes as Donald Trump loses ground

24 days ago

[unable to retrieve full-text content]China’s yuan trading outside the mainland surged to its highest level in 17 months on Tuesday after new polls showed challenger Joe Biden had increased his lead over US President Donald Trump in the race for the White House that is less than a month away.

On Tuesday, the offshore yuan extended its rally to 6.7136 per US dollar in thin market flow conditions, rising in tandem with improving sentiment in global financial markets, with the Australian dollar and the Singapore dollar also gaining…

Read More »

China steps up scrutiny of illegal foreign exchange flows as market opening accelerates

September 28, 2020

[unable to retrieve full-text content]China is stepping up scrutiny of illegal foreign exchange flows amid concern they could cause destabilising swings in the yuan and domestic financial markets, analysts said.The nation’s currency regulator, the State Administration of Foreign Exchange (SAFE), announced last week it would strengthen supervision and standardising procedures, as well as punish firms and individuals for illegal foreign exchange acts that threatened state or commercial secrets and personal privacy.In addition, lower…

Read More »

China’s US dollar debt defaults climb as coronavirus, US tensions hit firms’ bottom lines

September 22, 2020

[unable to retrieve full-text content]Defaults by Chinese firms on their US dollar-denominated debt have risen significantly this year as the coronavirus pandemic, a slump in oil prices and deteriorating US-China relations have hurt business and reduced their ability to repay.This environment has caused a decline in market confidence, triggering a shortage of dollar liquidity that is limiting some firms’ ability to borrow US dollars to pay back existing debt.US dollar bond defaults by Chinese firms have jumped threefold to US$12…

Read More »

US ruling on China’s alleged yuan undervaluation could stoke further rift in relations

September 18, 2020

[unable to retrieve full-text content]As the Trump administration intensifies its economic pressure on China, analysts are wondering if the yuan’s exchange rate will be dragged back into the middle of the dispute.The US is due to conclude its preliminary investigation into whether the yuan is being undervalued to give Chinese exporters an advantage on Monday.The US Department of Commerce in July launched anti-dumping and countervailing duty investigations into whether twist ties from China were being dumped and Chinese producers…

Read More »

China is only G20 country expected to see positive economic output this year, OECD says

September 16, 2020

[unable to retrieve full-text content]The rapid speed with which China tackled the coronavirus outbreak domestically allowed for the timely easing of strict confinement measures and the reopening of businesses, helping the Chinese economy rebound more quickly than originally expected, according to the latest forecast by the Organisation for Economic Cooperation and Development (OECD).While a gradual recovery of the global economy is projected to continue for the next 18 months, the pace will vary from nation to nation, with a…

Read More »

Coronavirus could push 160 million more into poverty across Asia, ADB warns

September 15, 2020

[unable to retrieve full-text content]The coronavirus pandemic and the containment measures required to combat it will push millions of people in Asia into absolute poverty and widen inequality within industries and countries in the Asia-Pacific region, according to the Asian Development Bank (ADB).Asia has seen a dramatic decline in poverty as the proportion of the region’s gross domestic product (GDP) rose to one third of the global economy from a quarter over the past 15 years.“However, because of Covid-19, economic growth…

Read More »

China signals shift to stronger yuan exchange rate policy to help develop domestic demand, analysts say

September 9, 2020

[unable to retrieve full-text content]China’s preference for a relatively weak exchange rate to help exporters and stimulate economic growth might soon be coming to an end, according to a growing number of analysts.The yuan exchange rate has experienced significant depreciation in the past five years, with the central bank allowing its value to fall around 10 per cent against the US dollar since major currency reforms were introduced in August 2015 and as the economy gradually slowed.But Chinese leaders are seemingly shifting…

Read More »

China may ditch US Treasuries as decoupling risk looms: Global Times

September 4, 2020

[unable to retrieve full-text content]China could gradually cut its holdings of US Treasury securities by about 20 per cent to US$800 billion, the state-backed Global Times reported on Friday, as Beijing continues to weigh options to insulate itself from tensions with Washington.China does not release data on the value of its US federal government bonds, but the latest figures from the US Department of the Treasury showed it held US$1.074 trillion worth at the end of June, making it America’s second largest foreign creditor after…

Read More »

As US-China decoupling threat mounts, Beijing looks to open up market for foreign services trade

September 3, 2020

[unable to retrieve full-text content]China says it is speeding up the drafting of a so-called negative list for cross-border trade in services as part of national efforts to open up key areas of the economy to foreign businesses amid mounting pressure of economic decoupling from the United States.Foreign-investment access to the domestic market is managed via such negative lists, which detail sectors and industries that are restricted or prohibited to foreign firms.The introduction of a negative list for the services trade would…

Read More »

China’s sovereign digital currency plans must be globally compatible to internationalise the yuan, analysts say

September 1, 2020

[unable to retrieve full-text content]China is set to expand the testing of its new sovereign digital currency later this year or in early 2021, but analysts say the design of its technological platform needs to be made compatible with those of other countries if the digital yuan is to play a role in international transactions.China’s sovereign digital currency testing plan comes amid a sense of urgency to promote greater use of the yuan as the threat of United States sanctions has sparked fears that Chinese financial institutions,…

Read More »

Bitcoin ads bash banks as fears mount over sanctions restricting access to US dollar payment system

August 28, 2020

[unable to retrieve full-text content]The number of bitcoin adverts appearing in major newspapers is growing as the United States steps up its efforts to impose financial sanctions on foreign government officials and companies, cutting them off from the US dollar global payment system.Most cryptocurrencies, including bitcoin, operate under a public computer network that is designed to exist outside the control of a central authority, becoming an alternative payment system to traditional banking.On Monday, a bitcoin advertisement…

Read More »

Cryptocurrencies help Chinese evade capital and currency controls in moving billions overseas

August 26, 2020

[unable to retrieve full-text content]Cryptocurrencies appear to be emerging as the latest means for Chinese citizens to move their assets overseas and evade the nation’s strict capital controls amid escalating tensions in US-China relations.The Chinese government allows its citizens to transfer the equivalent of only US$50,000 or less out of the country each year. Historically, wealthy citizens have dodged this rule through foreign investments in real estate and other assets – sometimes even using shell companies to disguise the…

Read More »

China ‘stuck’ as rigid controls on capital outflows becoming harder to peel back

August 25, 2020

[unable to retrieve full-text content]China’s onerous capital account controls were all too apparent for Oziter Mao during a recent trip to a state bank.“It was so troublesome to transfer just a few thousand yuan out of China to Australia,” complained the mainland resident, who is preparing to travel overseas. “You need to pay a three per cent ‘administrative fee’, and there are requirements for the documents.”The complaints from Mao are not uncommon for Chinese residents who want to make overseas payments. China’s foreign exchange…

Read More »

How the US uses the dollar payments system to impose sanctions on a global scale

August 25, 2020

[unable to retrieve full-text content]The pervasive nature of the US dollar payments system along with its dominance in international transactions have afforded Washington broad powers to impose economic and financial sanctions on other countries.Upping the ante against its opponents, the United States has restricted foreign governments, institutions and individuals from using US dollars in international finance so that they are unable to receive payments for exports, pay for the purchase of goods, or own US-dollar denominated…

Read More »

Chinese business leaders urge country to keep thinking global

August 16, 2020

[unable to retrieve full-text content]China should resist anti-globalisation sentiment and promote international cooperation, Chinese business leaders have said.Beijing has announced a master plan to shift the focus of its economic growth engines towards “domestic circulation”, to become more self-reliant, especially in key technologies.But Xu Weiping, chairman of Advanced Business Park, which is behind a £1.7 billion (US$2.2 billion) property development in London, said China and Britain should continue to cooperate economically…

Read More »

Chinese President Xi Jinping says Marxist political economy is the bedrock for nation’s growth

August 16, 2020

[unable to retrieve full-text content]China’s Marxist political economy will continue to adapt to the ever-changing domestic and international environment, but must remain the bedrock on which the nation builds its future, Chinese President Xi Jinping said.“The foundation of China’s political economy can only be a Marxist political economy, and not be based on other economic theories,” he said in an article published on Saturday in the political theory periodical Qiushi.Xi, who is also general secretary of the Communist Party of…

Read More »

American Express: new yuan card settlement network promotes global use of China’s currency

August 14, 2020

[unable to retrieve full-text content]American Express’ entry into China’s US$27 trillion payment market may help increase the use of the yuan across borders amid worsening US-China tensions, according to analysts.Since last week, Chinese commercial lenders Minsheng Bank, Guangfa Bank, Ping An, Shanghai Pudong Development Bank and China Merchants Bank have launched American Express cards whose bills can be paid in yuan both inside and outside China. Previously, offshore card transactions were allowed to be settled only in foreign…

Read More »

US-China trade war: amid allegations that yuan is undervalued, why are tiny twist ties so important?

July 27, 2020

[unable to retrieve full-text content]Beijing appears to be alarmed by a US probe into whether the yuan is being undervalued to give Chinese exporters an unfair advantage, which could spell big trouble for China’s US$450 billion worth of annual exports to the United States.And that big trouble could stem, in part, from a very small item: twist ties – thin bendable wires coated in paper or plastic that are widely used for tying up bags, cables and food packaging.But these tiny twist ties have become anything but trivial in the US…

Read More »

US dollar at risk of sudden collapse? Ex-IMF official warns ‘blow-up event’ could sink greenback

July 23, 2020

[unable to retrieve full-text content]With the United States expected to double down on its fiscal stimulus measures to mitigate the economic fallout from the coronavirus pandemic, and the Federal Reserve continuing its aggressive monetary policy easing, there is a rising risk of a sudden loss of confidence in the US dollar, according to a former senior executive with the International Monetary Fund (IMF).Zhu Min, who was deputy managing director of the IMF from 2011 to 2016, said the US dollar’s position as the dominant global…

Read More »

Hong Kong women’s pursuit of career goals more important than ever amid coronavirus

July 18, 2020

[unable to retrieve full-text content]As the coronavirus outbreak continues into its sixth month in Hong Kong, upending work and home lives, the pursuit of career goals has become even more challenging for women.But fulfilling work aspirations is also more important than ever because it allows women to widen their network exposure, achieve financial independence and improve their perception of self-worth, said Si-si Liu, director of the Hong Kong Federation of Women’s Centres.Moreover, achievements at work can ease the anxiety…

Read More »

Hong Kong security law: how will US sanctions affect China’s plan to turn the yuan into a widely used global currency?

July 16, 2020

[unable to retrieve full-text content]Washington’s decision to impose sanctions on Chinese individuals and financial institutions for their role in developing Hong Kong’s new national security law may threaten Beijing’s efforts to make the yuan an international currency, according to analysts.Meanwhile, some say US threats have added new urgency to Beijing’s goal of cutting its reliance on the US dollar by boosting international use of the yuan.US President Donald Trump on Tuesday signed an executive order ending Hong Kong’s…

Read More »

China’s financial market reform stokes rally in yuan to 4-month high

July 9, 2020

[unable to retrieve full-text content]The yuan’s exchange rate strengthened above the psychologically important level of 7 per US dollar on Thursday, as optimism over new policies liberalising China’s financial markets helped attract foreign capital.The benchmark Shanghai Stock Exchange has risen more than 9 per cent so far this week, putting it on a course for its best weekly performance in five years and helping drive the appreciation of the yuan.Analysts said the rally in stocks, reflecting funds flowing into China, was boosted…

Read More »

Severe backlog in Europe-bound trains at Chinese border, as coronavirus increases rail freight volume

July 6, 2020

[unable to retrieve full-text content]A Chinese rail freight operator has cut cargo services to central Europe amid a backlog of trains waiting at the Chinese border to leave the country, the 21st Century Business Herald reported on Saturday.Chengdu International Railway Service said it cut the number of its trains leaving Alashan in Xinjiang for central Europe to two from six between June 27 and 30, with the timetable for July to be adjusted depending on rail traffic conditions.The company said that its decision followed an…

Read More »

China province orders new checks on big cash transactions after bank runs

July 5, 2020

[unable to retrieve full-text content]China has launched a pilot programme in the northern province of Hebei requiring the public to apply for approval if they plan to make large cash deposits or withdrawals at commercial banks.

The regulation comes after a series of bank runs in the past year at debt-laden small lenders and as an unprecedented pandemic-related economic contraction starts to take a toll.

From July 1, residents in the province will need to provide information about the source of deposits or the purpose of…

Read More »