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Karen Yeung



Articles by Karen Yeung

Hong Kong dollar no longer ‘safe haven’ for investors as protests cast doubt, ‘father of dollar peg’ says

3 days ago

[unable to retrieve full-text content]Hong Kong is no longer the “safe haven” financial centre it once was, according to the economist credited as the architect of the Hong Kong dollar peg.John Greenwood, who is known in financial circles as the “father of the Hong Kong dollar peg”, said the current political instability in the city would curb the amount of capital inflows even though there is no threat to the Hong Kong dollar peg system.And with the anti-government demonstrations playing on the minds of investors, he said, US…

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China-backed Asian Infrastructure Investment Bank won’t create ‘debt trap’ for borrowers, chief says

3 days ago

[unable to retrieve full-text content]Lending by the China-led Asian Infrastructure Investment Bank will not create a “debt trap” for its borrowers, the bank’s president said, rejecting concerns that Beijing could use similar institutions to advance its geopolitical agenda.Asian Infrastructure Investment Bank (AIIB) president Jin Liqun told the Asian Financial Forum in Hong Kong this week that the bank’s efforts to support infrastructure investment in Asia are made with the best of intentions.“A debt trap will not emerge in the…

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Trade war deal will not fix US-China tensions as ex-Fed chair Yellen warns of long-term global impact

5 days ago

[unable to retrieve full-text content]China and the United States will not fix long-term issues that have the potential to significantly effect the global economy by signing their phase one trade deal this week, said former US Federal Reserve chair Janet Yellen.Disputes over the subsidies offered to state-owned enterprises, competition in artificial intelligence and 5G technologies that have spillovers into national defence and security concerns are included on a long list of issues that are “quite difficult to deal with”, Yellen…

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China seen to be complying with US trade war deal by allowing market forces to dictate yuan exchange rate

9 days ago

[unable to retrieve full-text content]China’s central bank has stood back from intervention so far this year and let market forces push up the yuan’s exchange rate ahead of the anticipated signing of the phase one trade agreement with the United States next week that is expected to include a clause prohibiting currency manipulation.

The yuan started the year with a 0.26 per cent gain against the US dollar, becoming the second best performer among Asia’s 11 most traded currencies, according to Bloomberg data.

On Wednesday, the…

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China pledges ‘prudence’ in diversifying its foreign exchange reserves in 2020 as global risks rise

12 days ago

[unable to retrieve full-text content]China will “steadily and prudently” diversify its US$3.1 trillion foreign exchange reserve holdings, the government agency managing the assets pledged in its 2020 work plan, suggesting a subtle policy change in the way Beijing uses its hard currency holdings.The careful approach would “promote the diversified use … and ensure the safety, flow, and preservation and appreciation of foreign exchange reserve assets,” China’s State Administration of Foreign Exchange (SAFE) said in a statement…

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China’s richest tycoons hit by debt defaults, arrests and suicides in 2019 amid tightening regulation

14 days ago

[unable to retrieve full-text content]The year 2019 will be remembered as one of the toughest for China’s rich, with a long list of business owners falling into disgrace amid debt defaults, arrests and suicides, a development that has dampened private investment confidence and prompted comforting messages from Beijing.Following a tumultuous 2017 and 2018, which saw super tycoons like Xiao Jianhua disappear from a luxurious Hong Kong hotel, Anbang Insurance Group chairman Wu Xiaohui arrested, and the death of HNA Group chairman Wang…

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Macau’s yuan remittance limit raised to same level as Hong Kong as Beijing starts to shift financial focus

December 19, 2019

[unable to retrieve full-text content]China has increased the daily limit of yuan remittance from Macau to the same level as Hong Kong, a move that suggests Beijing is keen to spread the financial risks away from the troubled city.The policy, announced by the People’s Bank of China on Wednesday to mark the 20th anniversary of Macau’s return to Chinese rule, will raise the daily limit on yuan remittance to 80,000 yuan (US$11,400) from 50,000 yuan (US$7,100).The daily yuan remittance quota for Macau residents had been kept lower than…

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China’s fintech industry needs regulation to avoid risk build-up, central bank says

December 18, 2019

[unable to retrieve full-text content]China’s central bank has again warned that the country must avoid building up risks in the technology-driven development of its domestic financial sector, given the headwinds of a slowing economy and the continued trade war with the United States.Pan Gongsheng, deputy governor of the People’s Bank of China (PBOC), said on Tuesday that financial technology (fintech) should be regulated in accordance with the law and in line with policy initiatives intended to prevent financial risks, according…

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Hong Kong dollar peg: could the financial hub’s stable exchange rate keep Shenzhen and Macau at bay?

December 16, 2019

[unable to retrieve full-text content]This is the final instalment of a three-part series looking at the outlook for Hong Kong’s dollar peg system under the city’s current political turmoil.China will continue to value the stable US dollar peg system that underpins Hong Kong’s status as an international financial hub, despite six months of anti-government protests that have been strongly criticised by Beijing, analysts said.The Chinese leadership has widely condemned the civil unrest in Hong Kong, pledging to strengthen supervision…

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China’s pork price jumps 110 per cent, sending consumer inflation rocketing to eight-year high

December 10, 2019

[unable to retrieve full-text content]A 110.2 per cent increase in the price of pork from a year earlier led to a further rise in China’s consumer prices in November, as African swine fever continued to take a toll on the country’s pig population, data released on Tuesday showed.The consumer price index (CPI) rose to 4.5 per cent from a year earlier, up from a 3.8 per cent gain in October, the highest reading since reaching the same level in January 2012, according to the National Bureau of Statistics.China’s consumer prices have…

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Hong Kong dollar peg: why the city’s linked exchange system is an important buffer against financial crisis

December 9, 2019

[unable to retrieve full-text content]This is the first article in a three-part series looking at the outlook for Hong Kong’s dollar peg system under the city’s current political uncertainty.Hong Kong’s dollar peg has been thrust into the spotlight as a result of six months of anti-government protests that have roiled the semi-autonomous city. The protests, which were sparked by a now-withdrawn extradition bill but morphed into wider calls for democratic freedoms and an investigation of alleged police brutality, have taken a sharp…

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US dollar transfers cut back by Chinese bank as Beijing steps up scrutiny of capital outflows

December 4, 2019

[unable to retrieve full-text content]China Merchants Bank has suspended some of its US dollar remittance services as Beijing steps up its efforts to scrutinise funds flowing out of the country amid the trade war with the United States.China Merchants notified customers on Thursday last week that new transfers under the bank’s “Overseas Remittance Programme” would no longer be accepted from December 2, and the entire programme would be shut down on December 30. On Friday, in response to a large market and customer reaction, it…

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China economic recovery to be short-lived despite manufacturing rebound as analysts fail to upgrade forecasts

December 2, 2019

[unable to retrieve full-text content]China’s weakening economy is showing signs of short-term stabilisation, following two batches of positive manufacturing data and the increased likelihood of a pause in the trade war with the United States, analysts said, although they fell short of upgrading their economic growth forecasts for 2020.The private Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) for smaller private factories edged up to 51.8 in November from 51.7 in October, according to data released on Monday. This…

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China’s small factory activity expanded in November at fastest pace in nearly three years

December 2, 2019

[unable to retrieve full-text content]Manufacturing activity in China’s small factories expanded for the fourth month in a row in November to the highest level in nearly three years, a private survey released on Monday showed, providing evidence that the economy may be heading for some stabilisation in the near term after weakening for most of the year.The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) edged up to 51.8 in November from 51.7 in October. The latest reading confounded expectations for a small decline to…

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China’s yuan is 10 years from ending US dollar hegemony, says economist Jeffrey Sachs

November 28, 2019

[unable to retrieve full-text content]China’s yuan could be on an equal footing with the US dollar as a mainstream currency in as little as a decade, earlier than most people think, according to Columbia University professor Jeffrey Sachs.In the near future, institutions will move away from their dependence on the US dollar, Sachs said, with multiple currencies including the yuan and euro to be used for settling international trade, global central bank reserves and fundraising through bond issuance.“I believe that we will move from…

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China state-owned firms should play bigger role in Hong Kong shipping, says China Merchants

November 27, 2019

[unable to retrieve full-text content]China Merchants Energy Shipping, a major carrier for crude oil from the United States to China, said state-owned companies should play a more active role in Hong Kong’s shipping industry, including partnering with private firms.The international bulk cargo carrier, which is owned by state-owned China Merchants Group, said government-backed companies could compliment the business models of private firms in the financial hub and help development of the Greater Bay Area.“I think if you combine …

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China won’t give up its state-led economic model, top trade negotiator Liu He says

November 22, 2019

[unable to retrieve full-text content]China signalled on Friday that it has no plans to give up its government-led economic model or weaken the role of its state-owned enterprises (SOEs), a change the United States has stipulated as one of its key demands in the ongoing trade war negotiations.The comments came in an article by Vice-Premier Liu He – China’s top trade negotiator – published by the Communist Party mouthpiece People’s Daily.“We will promote state-owned economy reforms and structural adjustments, and invest more in…

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US-China trade war has caused major shift in global trade landscape, says Li & Fung

November 19, 2019

[unable to retrieve full-text content]Global sourcing and logistics giant Li & Fung said the ongoing US-China trade war has created a new trading landscape that has complicated global supply chains and had “huge impact” on the company.The Hong Kong-based global trading group, which supplies consumer goods to major retailers worldwide, is more than a century old and has been a big winner from China’s rise as the world’s factory.But the logistics industry is now facing an extremely complex global trade environment, especially when it…

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US trade war pushing foreign lighting companies to shift focus of China production to serve domestic market

November 18, 2019

[unable to retrieve full-text content]Foreign factories in China are increasingly turning their focus to the mainland’s huge domestic market given the considerable challenges posed by trying to relocate production out of China to avoid American tariffs.And as government support and bigger personal incomes accelerate the shift to a consumption-based economy from one led by investment, companies are rethinking their business ideas about what Chinese consumers want.It has been 27 years since Panasonic, the Japanese maker of consumer…

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China’s surging pork prices leave limited leeway for interest rate cut to support growth

November 12, 2019

[unable to retrieve full-text content]Fears of exasperating already rapidly rising consumer prices are limiting the options for Chinese policymakers to make aggressive rate cuts and implement other monetary policy easing even as the economy continues to worsen, analysts said.Surging pork prices pushed China’s consumer price index (CPI) to a nearly eight year high in October, while the headwinds for China’s economic growth are continuing to build as seen in weakening in the export, industrial and property sectors.Policy easing space…

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China’s new bank loans drop to lowest level in almost two years in October

November 11, 2019

[unable to retrieve full-text content]New loans in China fell to their lowest level in almost two years in October with manufacturers being forced to lower their prices amid slowing economic activity.Chinese banks extended 661.3 billion yuan (US$94.5 billion) in net new loans last month, well below the 800 billion yuan (US$114 billion) of loans estimated in a Bloomberg survey, and sharply down from the 1.69 trillion yuan (US$241.5 billion) in September, according to the data released by the People’s Bank of China (PBOC) on Monday…

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Hong Kong start-ups lack Shenzhen’s international focus, limiting opportunities, survey finds

November 10, 2019

[unable to retrieve full-text content]Local start-ups in Hong Kong are lagging behind their counterparts in Chinese mainland cities, including Shenzhen and Guangzhou, because of a home-market bias that minimises or ignores opportunities internationally, according to a survey by international tax and consultancy firm Deloitte.Despite Hong Kong being one of the most competitive cities in the world, 65 of the 130 Hong Kong entrepreneurs surveyed said the city’s small market size and lack of dynamic vitality were major challenges to…

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China’s yuan soars above key level against US dollar on hopes that Trump considering ditching some tariffs

November 5, 2019

[unable to retrieve full-text content]China’s yuan surged on Tuesday to its highest level against the US dollar since August amid rising optimism that US President Donald Trump would agree to roll back tariffs on Chinese imports.The phase one deal, which may be signed later this month by Trump and Chinese President Xi Jinping at a yet-to-be determined location, is widely expected to include a US pledge to scrap tariffs that are scheduled for December 15 on about US$156 billion worth of Chinese imports, including mobile phones,…

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China services sector activity slips to eight-month low in October, Caixin PMI survey shows

November 5, 2019

[unable to retrieve full-text content]Activity in China’s services sector softened slightly in October, marking its slowest expansion in eight months, a private survey showed on Tuesday, as market conditions remain subdued for mainland firms.The Caixin/Markit services purchasing managers’ index (PMI) eased to 51.1 last month, in line with economists’ forecast in a Bloomberg survey, and down slightly from September’s 51.3. The index stood at its lowest level since February, while remaining above the 50-point mark that separates…

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Ping pong allows Hang Seng’s CEO to show true personality as woman at top of leading Hong Kong bank

November 1, 2019

[unable to retrieve full-text content]Louisa Cheang Wai-wan knows all too well that self-confidence is the top trait of women in power. But for the CEO of Hang Seng Bank, being authentic plays an equally important role in holding together one of Hong Kong’s most extensive banking networks.The reason, she says, is simple: just as she needs to answer to the bank’s shareholders, she is also responsible for inspiring a staff of more than 10,000 people.“It’s really important to show your personality out there, otherwise it would be so…

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China’s small factory activity best in nearly three years, but outlook for Asia region remains fragile

November 1, 2019

[unable to retrieve full-text content]China’s small factory activity expanded at its fastest pace in nearly three years in October, a private survey showed on Friday, but outlook for the region remained uncertain amid trade war tensions with the United States.The Caixin/Markit manufacturing purchasing managers’ index (PMI) improved for a fourth straight month to 51.7 in October, its highest since reaching the same level in February 2017, and from 51.4 in September. The figure beat the expected 51.0 based on a poll compiled by…

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China’s Beijing-Shanghai high-speed rail operator is more profitable than Apple, plans stock market listing

October 27, 2019

[unable to retrieve full-text content]The company that operates the Beijing-Shanghai section of China’s high-speed railway network has submitted a formal application to float on the stock market, and in doing so revealed details of its lucrative operation.According to the filing, published by the China Securities Regulatory Commission on Friday, Beijing-Shanghai High Speed Railway, which operates the 1,300km (807 mile) line, booked a net profit of 9.5 billion yuan (US$1.3 billion) in the first nine months of the year.That…

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China industrial profits in biggest fall in four years as US tariffs bite

October 27, 2019

[unable to retrieve full-text content]Profits at China’s industrial enterprises shrank 5.3 per cent in September from a year earlier, marking the deepest fall in four years, according to data from the National Bureau of Statistics on Sunday.The fall of profits in September marked an acceleration from the drop of 2 per cent in August and was the biggest decline since August 2015, showing trouble for the world’s second biggest economy as the trade war with the US took its toll on China’s economic activity.In the first nine months,…

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Hong Kong ‘protests highlight need for new role’ for city’s in China’s Greater Bay Area plan

October 27, 2019

[unable to retrieve full-text content]Hong Kong needs to come up with a new set of sustainable policies to address the frustrations at the heart of the anti-government protests if its role in the Greater Bay Area is to grow, according to a Hong Kong academic.Wong Chung-kiu, co-founder of the Greater Bay Area Impact Forum Foundation, said one of the causes of Hong Kong’s damaged relationship with the rest of China was a “bottleneck” in Hong Kong’s social and economic development, particularly in terms of its role in the Greater Bay…

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