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Zhou Xin

Articles by Zhou Xin

China’s zero tolerance for coronavirus cases is unfair for some but justified for many

20 hours ago

[unable to retrieve full-text content]China has developed a standard raft of measures to curb local coronavirus outbreaks. Along with mass testing, community lockdowns and strict contract tracing, holding local officials accountable for new infections has become routine, as evidenced by the latest outbreaks in Liaoning and Anhui provinces.But for local Chinese officials to receive verbal warnings, demotions or other disciplinary measures for failing to ensure zero infections under their watch is harsh and even a bit unfair, since…

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Xi Jinping’s grand economic strategy was born out of China’s new perception of the world

8 days ago

[unable to retrieve full-text content]A man’s behaviour is often shaped by his perceptions of the world around him. He may feel relaxed in a safe and comfortable environment, but turn alert and defensive in a hostile one. A country’s chosen strategies and decisions, to some extent, are also a reflection of policymakers’ impression of the world.China’s inward-looking economic strategy, known as dual circulation, emerged as China’s reading of the world changed. According to the transcript of a speech by President Xi Jinping in…

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Why the socialist element of China’s market economy is important

22 days ago

[unable to retrieve full-text content]China’s “socialist market economy”, which mixes public ownership and state guidance with aspects of the market, has propelled the nation from an economic backwater into the global engine of growth in about four decades.But it is also an idea with inherent contradictions. In orthodox economic terms, being socialist requires that Beijing dominate the means of production, which can include land, machines, raw materials, capital and data. That contradicts the key pillar of a modern market economy:…

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For Huarong, China’s biggest bad bank, it’s bailout or bust

28 days ago

[unable to retrieve full-text content]China’s biggest bad bank, which was created in 1999 to take bad assets from the country’s biggest bank, has degenerated into a really bad bank after 22 years, and it may need to rescued by offloading its bad assets to another bad bank.Lai Xiaomin, the former chairman of the bank in question – China Huarong Asset Management – was swiftly executed earlier this year after he was found to have taken 1.8 billion yuan (US$276 million) worth of bribes – a record in China’s finance history. The bank’s…

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China population: census results to confirm a worrying demographic picture

April 12, 2021

[unable to retrieve full-text content]The results from China’s once-a-decade census are set to confirm the worrying picture of a rapidly ageing society, shrinking labour force and an insufficient number of newborns. For analysts who are trying to gauge China’s economic and social development potential over the coming years or even decades, the population data is vital. The figures are expected to be released later this month. In fact, the data will provide key metrics pertaining to some of the biggest questions surrounding China’s…

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Joe Biden’s infrastructure plan will not be a boon to China-US relationship

April 5, 2021

[unable to retrieve full-text content]Chinese government officials and researchers have argued for years that China could work with the United States on infrastructure, helping to improve America’s roads, bridges, railways and subways.The rationale is simple. The US needs to upgrade its infrastructure while Chinese firms are particularly good at such work. If the US were to hire Chinese firms to do some of the job, it will not only help to boost the flows of trade, people and money but also build up goodwill and trust. On the…

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‘Carbon neutrality’, ‘emission peak’ becoming buzzwords shows China is taking its 2060 climate change goal seriously

March 29, 2021

[unable to retrieve full-text content]The whole Chinese state system has been mobilised towards self-imposed milestones in reducing carbon emissions, with “carbon neutrality” and “emission peak” becoming catchphrases, defying doubts that its pledge is a trick to win short-term goodwill from the Biden administration. President Xi Jinping told a meeting earlier this month that China’s efforts to achieve carbon neutrality would bring a “far-reaching and deep systemic social and economic transformation” and it matters for the “external…

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Why the Chinese government’s warning on property speculation has so few listeners

March 22, 2021

[unable to retrieve full-text content]What investments would you have made in 2011? For residents in Chinese cities, the answer was “buy a flat”. Apart from bitcoin and Kweichow Moutai stock, few assets have gained as much in the past decade as property in China.In Shenzhen, for instance, the average residential property price has surged to nearly 90,000 yuan (US$13, 815) per square metre from less than 20,000 yuan a decade ago.It’s ironic given 2011 was also the year Beijing became “serious” about cooling property prices. It…

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China’s economic grand plan falls short on how to enrich people and enlarge middle-income group

March 15, 2021

[unable to retrieve full-text content]Beijing’s grand plan for the next five years and its vision for 2035 have two big assumptions. One is that China is experiencing an unstoppable rise against the West, and the other is that China’s 1.4 billion consumers will create a domestic market big enough to guarantee the country’s continued growth.To turn the second assumption into a reality, China needs to tilt its national income distribution in favour of the people. The 14th five-year plan and the 2035 Vision paint a rosy picture for…

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China learns lesson from Hong Kong’s housing policy, with Beijing keen to avoid same damage to society

March 9, 2021

[unable to retrieve full-text content]The land auction and property development system in China is a direct descendant of Hong Kong’s. The system, in which the government sells land to developers so they can build homes, has supported rapid urbanisation and improved the living conditions for hundreds of millions of urban Chinese.But Beijing is also rapidly realising the social costs of the system, including its chronic damage to entrepreneurship, a yawning wealth gap that depresses the ambitions of younger generations, and the…

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China’s ban on Taiwanese pineapples leads cross-strait trade into troubled waters

March 1, 2021

[unable to retrieve full-text content]Beijing’s decision to ban pineapple imports from Taiwan has started a new war of words across the Taiwan Strait, a development that could have huge implications.Chinese customs cited a technicality for the restriction: bugs were spotted in the tropical fruit. But Taipei immediately framed the ban as a calculated political move by Beijing to wage economic war against Taiwan, particularly the southern part of the island that generally supports the ruling Democratic Progressive Party.Whatever the…

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China signals real financial opening up, but will it follow through?

February 22, 2021

[unable to retrieve full-text content]A Chinese foreign exchange official said on Friday that Beijing will “study” a plan to allow all mainland residents to invest in offshore securities and insurance policies up to an annual limit of US$50,000.It is hard to overestimate the plan’s significance over the long run, if it goes ahead.For decades, China has barred its people from freely investing in offshore financial assets. Every Chinese citizen is given a nominal annual quota of US$50,000 to change yuan into foreign currencies for…

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Hong Kong tech stock boom may be prelude for China outbound investment wave

February 15, 2021

[unable to retrieve full-text content]It’s time for mainland China money to make a bigger splash in the world, starting with Hong Kong, after restraints put on Chinese foreign investment in the last half-decade.China’s situation in 2021 is similar to what it was a decade earlier in many ways. As in the aftermath of the global financial crisis of 2008, the Federal Reserve is flooding the economy and markets with liquidity. China has again become a hot destination for funds seeking higher returns thanks to its early recovery from an…

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US-China relations: threat of financial war fading as investors eye returns from likes of Kuaishou, Agora

February 8, 2021

[unable to retrieve full-text content]The threat of a financial war between the United States and China is fading.A series of events in the past few days showed have shown that financial decoupling between the world’s two largest economies is unlikely to happen.In addition, the fact that China-based companies last year raised the largest amount of capital in the US market since 2014, combined with the Biden administration’s decision to postpone a ban by former president Donald Trump on Americans investing in companies with…

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China’s quick execution of former top banker shows Beijing is dead serious about quelling corruption

February 1, 2021

[unable to retrieve full-text content]Last week’s execution of a former top banker at one of China’s largest state-controlled asset management firms set a record – never before had a senior Chinese financial official been put to death in such a swift manner.Lai Xiaomin, former chairman of China Huarong Asset Management, was sentenced to death on January 5 by the Tianjin No 2 Intermediate People’s Court, convicted of accepting US$277 million worth of bribes. The Tianjin High Court rejected his appeal on January 21. And on Friday,…

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China’s state-led growth model to intensify in 2021 as ambitious provinces lay out growth targets

January 25, 2021

[unable to retrieve full-text content]A review of China’s provincial people’s congresses over the last couple of days has been like watching a competition of spending ambitions.Each sees the respective governors outline their economic and social development plans for the year ahead to be endorsed by the local parliamentary session.Guangdong is the most conservative among a dozen or so provinces and municipalities that have published their goals. The province, with an economic size on par with Canada, is aiming for only “a minimum…

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China’s economic boom is a great story, but for many it still reads like Les Misérables

January 18, 2021

[unable to retrieve full-text content]For those following China’s economic and social developments, a common impression is that there are always two seemingly conflicting stories unfolding in the world’s second-largest economy.The first story is about a booming China. The country has never been so prosperous and powerful, and it is only a matter of time before China replaces the United States as the world’s top economy. In the latest set of macroeconomic data for 2020, the figures make China the envy of other major economies – a 2…

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China’s food security is again on Beijing’s agenda, with the nation’s bitter history of hunger and famine in mind

January 11, 2021

[unable to retrieve full-text content]It was in 1995 that Beijing first tasked every provincial governor with the difficult job of ensuring sufficient grain plantations and output in their provinces – an accountability system known as “provincial governors looking after the rice bag”.The Chinese government, under then-premier Li Peng, imposed the task upon provincial governors because Beijing saw great dangers posed by a grain-supply shortage amid runaway food-price inflation. China’s official consumer price index shot up 21.7 per…

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Revitalising China’s rural regions is Xi Jinping’s next priority

January 4, 2021

[unable to retrieve full-text content]China’s Central Rural Work Conference, an annual gathering for the nation’s leaders to discuss agriculture and areas where many of the country’s poorest residents live, has sent a consistent message over the last quarter century: Beijing values the importance of its vast countryside and the more than half a billion people who live there.It is more than just paying lip service. In a span of about a generation, China has improved infrastructure – from roads to electricity – in the countryside;…

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China’s coronavirus success boosts confidence that its system is the best answer to the country’s challenges

December 28, 2020

[unable to retrieve full-text content]The year 2020 started off with huge challenges for China, but it is ending as a year of victory for Beijing and the ruling Communist Party.It is a remarkable turnaround for the Chinese leadership from the night of Dr Li Wenliang’s death in early February – the moment when the legitimacy of the party and its way of governing was in doubt – to the day in December when the Politburo proudly their “extremely extraordinary” success in handling the coronavirus outbreak domestically.It offered Beijing…

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Punishing Australia through trade also comes at a price for China

December 21, 2020

[unable to retrieve full-text content]China’s decision to punish Australia through trade is the result of both feelings and calculations. Beijing is angry at Canberra and is implementing a plan to inflict pain – making a case to the world that those who dare to offend China will pay the price.But Beijing’s approach of selectively picking battles is costly for China, as well.China has cited anti-dumping probes and strict quarantines as legitimate reasons to restrict Australian imports, but few people are blind to the bigger picture…

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What is behind China’s clamp down on Big Tech, and how far will it go?

December 20, 2020

[unable to retrieve full-text content]Beijing’s determination to tame China’s big tech firms is set to have a profound impact on the country’s economic trajectory in coming years.Questions remain about how far the government will go to clip the wings of the internet giants. But to get close to an answer, it’s worth investigating the reasons behind Beijing’s fresh scrutiny.Only a few years ago, Beijing was touting its “four new inventions” – high-speed rail, cashless payment, online shopping and shared bikes – as modern-day…

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Xi Jinping’s new economic focus on China’s demand reform borrows ideas from Marx more than Keynes

December 14, 2020

[unable to retrieve full-text content]The Politburo of China’s Communist Party coined a new term, “demand-side reform”, at its latest meeting, intending to complement Beijing’s ongoing “supply-side reform” to better balance the national economy, as the official line goes.It is clear that Beijing is not totally happy with the demand side. But the primary concern about demand revolves more around its structure than its size. If Beijing was worried about insufficient demand, it could just take a page from the Keynesian playbook by …

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China targets monopolies in warning to keep big capital in check in 2021

December 11, 2020

[unable to retrieve full-text content]In a veiled jab at China’s sprawling big capital firms, China’s Politburo said on Friday that the country should do more to tackle monopolies and prevent “disordered expansion of capital”, according to a report by state news agency Xinhua.Along with efforts to improve oversight and regulation, the country will implement a broad strategy of keeping economic growth “within a reasonable range” for 2021 – the year the ruling Communist Party celebrates its centenary – while expanding domestic demand…

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China’s handling of Australia row highlights what may be an increasingly hard line in diplomatic affairs

December 7, 2020

[unable to retrieve full-text content]A speech by vice-minister of foreign affairs Le Yucheng at a Beijing forum over the weekend looks to be one of the most important references in gauging the guiding principle of future Chinese diplomacy.Le addressed a key talking point regarding China’s international relations – its “wolf warrior” style of diplomacy. To many analysts and experts, including scholars within China, Beijing’s diplomatic apparatus is sometimes too confrontational to be constructive – there must be more sophisticated…

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China reveals new generation of top-level government appointees, including an ex-copy machine salesman and fighter jet designer

December 6, 2020

[unable to retrieve full-text content]A new generation of Chinese cadres in their late 50s have assumed ministerial and provincial positions, including top roles at the commerce and agriculture ministries, as Beijing reshuffles government rankings after finalising its 2035 development vision.The latest round of changes, including replacing officials who have reached the mandatory retirement age of 65, comes as US President-elect Joe Biden forms his own administration – offering fresh faces, and potentially a fresh start, in both…

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China’s grass-roots party members must fall in line to maintain economic stability, President Xi’s top aide says

December 4, 2020

[unable to retrieve full-text content]A top aide to President Xi Jinping says the Chinese Communist Party’s centralised command of the nation’s economic and social development must be improved in an era of turbulence and uncertainty.Ding Xuexiang, director of the General Office of the Central Committee, wrote in an article published in People’s Daily last week that China is in need of a strong leadership core to deal with an increasingly unstable world.“The more severe and complex the situation is, the more conflicts, risks and…

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China’s bond defaults may lead to poor places becoming poorer and rich places richer

November 30, 2020

[unable to retrieve full-text content]One consequence from recent defaults in China’s bond market is that there is likely to be an acceleration of money flowing from the country’s poor provinces into a handful of already affluent areas such as the Pearl River Delta and the Yangtze River Delta.If the monetary displacement is large enough, it could result in regional polarisation in the world’s second-biggest economy, with the rich areas becoming richer and the poor places poorer – a situation that would have far-reaching…

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China’s former central bank chief urges revamp of modern central banking

November 27, 2020

[unable to retrieve full-text content]A former long-standing governor of China’s central bank has backed reforms to the way inflation is defined and measured to reflect new social and economic realities, a proposal that may lead to a wholesale retooling of modern central banking that has been serving the global growth since the early 1990s.Zhou Xiaochuan, who was the head of People’s Bank of China (PBOC) for over 15 years until 2018, believes the popular practice of targeting inflation, which has been adopted by the United States,…

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