China struggling to balance growth imperative with structural reform
China’s economy is embarking on a new and critical phase of development as the country attempts to navigate its way beyond growth for growth’s sake to create an economy that serves the needs of its people.
Premier Li Keqiang’s much-heralded policies to shift the economy onto a more sustainable growth path are broadly appropriate on paper, but economic and political realities mean he will struggle to implement them. Li’s approach has been dubbed Likonomics because of its similarities to Abenomics, the economic policies of Shinzo Abe, his counterpart in neighbouring Japan. Like Abenomics it has three arrows that together aim to correct the economic ills of the country. But any similarities end there. While Abenomics aims to end deflation and kickstart Japan’s stagnant economy, Likonomics is the polar opposite: subordinating the holy grail of rapid GDP growth to pressing structural reforms. Leer más
Canadian Province Issues Offshore Yuan Denominated Bonds
British Columbia officials says plan was to sell 500 million yuan worth, but oversubscribing pushed the amount raised up five times
(Beijing) – Canada’s western province of British Columbia said on November 5 it had completed the issuance of one-year offshore yuan-denominated bonds and raised 2.5 billion yuan. Leer más
Xi urges deepening reform innovation-driven development
CHANGSHA – Chinese President Xi Jinping, in an inspection tour to central China, has called for deepening of the reform and opening-up drive and implementation of innovation-driven development strategy, so as to achieve the economic and social development targets this year.
Xi, who is also general secretary of the Communist Party of China Central Committee, took the inspection tour to central China’s Hunan Province from November 3 to November 5. Leer más
China PBOC Sounds Inflation Alarm Says CPI To Rise In Q4
BEIJING (MNI) – The People’s Bank of China sounded an inflation warning Tuesday, saying that consumer prices are likely to rise further in the fourth quarter and that this will anchor inflation expectations.
The bank’s third quarter monetary policy report delivered another raft of hawkish commentary from the authorities following a speech from Premier Li Keqiang which effectively ruled out adding any more cash to the system because “there is too much money in the pool.” Leer más
Chinese Premier Warns over Money Printing as Deficit Enlarges
Short-term stimulus to prop up economic growth by enlarging fiscal deficits and money supply is not sustainable, Li said.
Chinese Premier Li Keqiang has recently warned that printing more money is likely to push up inflation in the world’s second largest economy as the government’s deficit accumulates fast. Leer más
Agricultural Bank of China economist warns economic reform hinges on politics
by Sid Verma
Xiang Songzuo, chief economist of state-owned ABC, says China’s next raft of reforms – from retooling state-owned enterprises to tackling local government debt burdens and environmental challenges – will involve a disruptive shift in the political system. Leer más
China ‘bad bank’ plan perplexes market amid secret debt workouts
The Chinese government says it wants to transform its asset management companies – established to take on growing bad debts in the banking system – into commercially driven enterprises. In reality, a lack of transparency on portfolio loans means analysts are none the wiser as to the scale of the problem and the resolution process for legacy loans.
Investors looking for information on the level of credit impairment in the Chinese banking system are unlikely to learn much from the next round of non-performing loan (NPL) workouts. After reporting Rmb539.5 billion ($87.8 billion) of NPL in the commercial bank sector at the end of the second half – the seventh consecutive quarter of increased NPL balances – the Chinese government is revitalizing its asset management companies (AMCs), or bad banks, with an infusion of private capital to acquire and work out the nation’s stock of problem loans. One of them, China Cinda Asset Management, has raised capital from foreign investors including western investment banks, ahead of a $3 billion IPO planned for this December, while China Huarong Asset Management is also said to be courting a $1.5 billion investment from global investors including European and US investment banks. Leer más
China and Europe make up after averting trade war
China and the European Union sought to mend ties after narrowly avoiding a trade war this year, but the EU’s trade chief told Beijing to stop handing out state subsidies that Brussels says are illegal.
Europe is China’s most important trading partner and for the EU, China is second only to the United States, but the bilateral relationship has been bedevilled by a series of damaging trade rows ranging from steel and wine to solar panels. Leer más
Duty exemptions for Shanghai FTZ imported equipment
Manufacturing and production service businesses in the newly launched Shanghai Free Trade Zone (FTZ) will get their imported equipment duty-free, China’s finance, customs and taxation regulators announced on Thursday.
The exemption will be applied to such enterprises’ imports of machines, equipment and other necessary goods for manufacturing, according to a new tax policy released by the Ministry of Finance, the General Administration of Customs and the State Administration of Taxation. Leer más
Four new IPOs and forex problems
There have been several Chinese companies filing for IPOs in the US recently. 500.com is an online sports lottery company.58.com is China’s copy of Craigslist. Sungy Mobile is mobile internet, mostly games. Q unar Cayman Islands is similar to Kayak. Leer más