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Finance & Economy

This category contains 281 posts

Hong Kong Stock Exchange just proposed a $37 billion deal to buy the London Stock Exchange


Hong Kong Stock Exchange says it’s proposing to buy the London Stock Exchange Group for $36.6 billion. The Hong Kong exchange, or HKEX, announced the plan on its website Wednesday morning, the result of what it said was “early engagement” with the London Stock Exchange. A tie-up would create an exchange giant with a combined … Continue reading

A lot is at stake for China’s economy as Hong Kong protests drag on


Concerns over Hong Kong’s political and economic future are growing as pro-democracy protests drag on and turn increasingly violent, and China makes clear that forceful intervention is possible. An intervention by Chinese troops could seriously damage Hong Kong’s standing as a stable international financial centre and a gateway for global capital flowing into the world’s … Continue reading

Trump’s trade war has led to a historically weak Chinese currency


Global currencies have been pushed front-and-center as trade tensions between the US and China have escalated. Of particular interest to many watchers is the relative strength of the dollar versus the Chinese yuan, which sits at multiyear lows. On Friday, the yuan posted its largest monthly loss in 25 years after sliding 3.8% versus the … Continue reading

India, The Philippines and Indonesia will overtake China as top drivers of global economy


India and the Philippines will be the top drivers of global economic growth over the next decade, beating China. That’s according to an Oxford Economics study published earlier this year, which ranks the top ten emerging market economies to dominate the global economy over the next ten years. In terms of economic growth, that is. … Continue reading

Hong Kong firms face a choice: Good relations with China, or a dent to their international reputation


The crisis in Hong Kong continues unabated and some of the world’s largest businesses need to make an important decision: maintain a positive relationship with mainland China or uphold their reputation in the territories and in other parts of the world. In Hong Kong, business is the territory’s lifeblood. Hong Kong came third in the … Continue reading

A quick look at Dalio’s warning of US T-Bond weaponization by China


World’s largest hedge fund manager, Ray Dalio of Bridgewater, said “he wouldn’t rule out China using its Treasury holdings to gain an upper hand against the U.S, in the trade war — a view that contrasts with many other observers …” reported by CNBC on Aug 16. In the wake of China’s USD1.11 trillion of … Continue reading

China joins Russia and allies experimenting blockchain tech to dethrone USD


“China, Iran, Venezuela are developing crypto in effort to dethrone US”, reported by Yahoo Finance on July 11, quoting a report published by the Foundation for Defense of Democracies (FDD). Cryptocurrency is a medium of exchange in digital form, and more importantly, it operates outside the conventional central and commercial banking systems which are now … Continue reading

China is close to a financial crisis


China haters have been waiting for a financial crisis out of China since at least the early 2000s. Each and every time, the People’s Bank of China’s plunge protection team or the central planners in Beijing would throw buckets of ice water on their heads. This time might be different. This time they are dealing … Continue reading

US-China ‘trade’ war, if not ended soon, may spill over to ‘finance’


“On the international monetary front, the key problem was the acute dollar shortage in post-war Europe … In the effort to reconstruct a viable Western Europe, the United States conceded degrees of protection and discrimination in trade that were incompatible with its original blueprint …” Ian Clark, a Fellow of the British Academy and a … Continue reading

Businesses struggle as cracks appear in China’s economy


Cracks are opening in China’s mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs. The world’s second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months. While gross domestic product grew at 6.6 per cent in … Continue reading

The myth about Chinese monetary policy


Government policies always generate conflicts of interests within society, monetary policy is no exception. Foreign policies, to some extent, are the reflection and extension of domestic governance. Domestic monetary policy, no matter how elusive and insignificant to some people, provides the currency for Chinese government’s outreaching tentacles around the world. On October 7, 2018, the … Continue reading

Drink beer to understand the China Model


Cheers! ‘France 24’ reported on Nov 5 that “… Heineken seals $3 bn deal with China’s top brewer …… Under the deal the Dutch brewer said it will take a 40 percent stake in the holding company that controls China Resources Beer, merge its current operations in China into the firm and license to it … Continue reading

Looking at the US-China Trade War from a Micro-Perspective: The Aluminum Imports


On July 6, U.S. initiated $34 billion worth of tariffs on imports from China, officially marking the largest trade war since the Great Depression. Among the imported goods levied, including auto parts, jet engine parts and other machinery, aluminum and other metals have long been the targets of U.S. tariffs. But this time, aluminum has … Continue reading

Trump to win more trophies from China in the 2018 trade war


US Treasury Secretary Steven Mnuchin is said to be visiting China beginning from May 3 Thursday. It means the trade war negotiation is about to enter into the direct bargaining stage and, if done smoothly, a deal would be finalized very quickly. Trump’s victory appears to be too easy and more fruitful than anticipated. The … Continue reading

Trump will win the US-China trade war easily


Beijing will accept a new US-China trade deal which is dictated by Trump. The American oilseeds for producing cooking oil, navigational instruments for building cargo vessels (dry bulk or container ships), intermediate producer goods for manufacturing … (see the picture shown above) are at this moment irreplaceable items that China needs to import from the … Continue reading

Duterte in between China and Quad


“Australia, the United States, India and Japan are talking about establishing a joint regional infrastructure scheme as an alternative to China’s multibillion-dollar Belt and Road Initiative in an attempt to counter Beijing’s spreading influence …” reported by Reuters on Feb 19, 2018. These four countries are commonly referred to as the “Quad”, the driving force … Continue reading

The ‘Power Audit’ of EU-China


In Dec 2017, the European Council on Foreign Relations published a Power Audit report on China’s influence, named as “China at the gates”. It is a very long essay with lots of details. In the summary, it says “China practises ‘pick and choose’ in its relations with the European Union, focusing on its direct interests, … Continue reading

Why China’s stock market is so boring


In September 2008, Warren Buffett’s Berkshire Hathaway acquired 10% stake in BYD, a pioneer in electric vehicle technology and production in China, for around US$232 million (around HK$1.8 billion or HK$8 per share). This morning, it is $79, slightly down from the record high of HK$83 a few days ago. BYD’s share price followed the … Continue reading

Could Hong Kong, after a merger with Shenzhen, help China’s One Belt One Road thrive?


According to the International Monetary Fund (IMF) June 2016 research report “Neoliberalism: Oversold?” which was described as “a political bombshell … that caused a near-panic among advocates of free market policies” by the Foreign Policy analyst Rick Rowden [Note 1] , what ‘capital account liberalisation’ brings to developing countries is “the pervasiveness of booms and … Continue reading

Manila-Beijing relations to determine ASEAN growth


As the two possible ‘Joint Development Areas’ — “off Triton Island in the Paracels” and “Reed Bank off Philippine Palawan” [Note 1] — have almost been out of the minds of both the analysts and general public of the Philippines, a failure to revive the Manila–Beijing relation after the May 9 presidential election would jeopardize … Continue reading

China to ban foreign companies from online media business


The ruling Chinese Communist Party has announced new regulations that will ban foreign companies from publishing online media, games and other “creative” content within China’s borders from next month. The “Regulations for the management of online publishing services” also ban foreign-invested joint ventures from engaging in online content provision, according to a copy of the … Continue reading

The truth behind China’s exchange rate delusion


The current bout of anxiety is a symptom of the fact that China’s transition from an export-led growth strategy is proceeding far less smoothly than hoped China’s management of its exchange rate peg continues to rattle global financial markets. Uncertainty about renminbi devaluation is fuelling fears that deflationary forces will sweep through emerging markets and … Continue reading

The currency dictatorship and China’s action plan


The last time a country decided to dump the dollar in the oil business, the US destroyed it. Now India, the world’s third largest economy, and Iran have agreed to settle their outstanding oil dues in rupees. What’s more, the two countries may conduct all future trade in their national currencies. This follows an agreement … Continue reading

Ghost cities show China crisis, but is the Chinese furniture market still interesting?


Yujiapu is one of the most impressive ghost cities in China. An almost empty agglomerate of half-finished buildings and skyscrapers modelled on Manhattan’s skyline. Many say it’s one of the most scary landmark of China’s failed ambitions: a ghost city that was once supposed to become a world financial centre. Many others say it’s an … Continue reading

China threatens sanctions against U.S. companies


China’s recent threat to impose sanctions on U.S. defence companies that sell arms to Taiwan should come as no surprise to American officials or corporate executives: Washington has been issuing sanctions of these sorts for years. It was only a matter of time before U.S. competitors started copying its tactics. Regardless of whether China follows … Continue reading

China halts stock trading after 7% rout triggers circuit breaker


The worst-ever start to a year for Chinese shares triggered a trading halt in more than $7 trillion of equities, futures and options, putting the nation’s new market circuit breakers to the test on their first day. Trading was halted at about 1:34 p.m. local time on Monday after the CSI 300 Index dropped 7 … Continue reading

Cool War: United States and China in the future of the global competition


Are we on the edge of a new Cold War era? Or, alternatively, every power struggle mindset has to be considered a lost legacy of the XX century and we’re headed to a new era of global cooperation? These are the big questions opening Cool War by Noah Feldman, a must read essay on the … Continue reading

Understanding the two Chinas


Our view that China may be heading for a mild cyclical upswing next year needs to be set against the background of the broader economy, which is changing rapidly. We think that it makes sense to view the economy as consisting of two parts: old and new. In its latest Five-Year Plan—full details of which … Continue reading

China has a $1.2 trillion Ponzi finance problem


Chinese borrowers are taking on record amounts of debt to repay interest on their existing obligations, raising the risk of defaults and adding pressure on policy makers to keep financing costs low. The amount of loans, bonds and shadow finance arranged to cover interest payments will probably rise 5 percent this year to a record … Continue reading

Can China’s consumers save the world economy?


Long the place that makes stuff and doesn’t consume much, China is set to redress the balance. And thus, some say, rescue the troubled global economy. But it’s a stretch to think that Beijing’s plan — shifting the export-driven country from emphasizing manufacturing and infrastructure to relying on public consumption – will spread sweet prosperity … Continue reading

The one thing holding back China’s yuan


While China may be the world’s second largest economy, the future of the yuan playing a bigger role in international markets is clouded by politics. Earlier this fall, the IMF postponed a scheduled update of the designated basket of reserve currencies, a basket that is used by member countries for Special Drawing Rights (SDR). Though … Continue reading

China’s economy is worse than you think


The unreliability of Chinese official economic data has become almost a cliche. A few years before he became China’s premier, Li Keqiang said that the country’s numbers were “man-made” and “for reference only.” If the top economic policy maker of a country says that the numbers aren’t reliable … well, you believe him But how unreliable? … Continue reading

What could really disrupt China’s economy?


In an earlier post, I explained why I’m still bullish on China’s economy. But as the events of the past few months have shown, the risks of economic disruption are real. Here are several potential risks that could throw China’s economy off track. While the likelihood of all of them occurring is low, they are … Continue reading

10 things the Communist Party wants you to believe about China’s next five-year plan


The Chinese newspaper that serves as the ruling Communist Party’s mouthpiece has outlined 10 objectives that are expected to lead to breakthroughs on the mainland in the next five years. The targets were revealed on thePeople’s Daily’s Weibo account as the party’s fifth plenum, which will review the nation’s next five-year plan for 2016-20, gets … Continue reading

Doing a business event in the Gobi Desert


It is something in China, about which very little is known in Europe – the business meeting, which builds relationships impossible to break. Often, though, it is also impossible to form, and must be made in a different way, which I will try to explain here. I had the pleasure to get to know Kuba Zwoliński, … Continue reading

Nerves on edge as Chinese authorities probe market mayhem


The head of hedge fund manager Man Group Plc’s (EMG.L) China business has been taken into custody to help authorities in a probe into recent market volatility, Bloomberg reported on Monday, while separately a local financial reporter confessed on national TV to having spread false information that caused “panic and disorder”. Both are likely to … Continue reading

China’s meltdown shows the country is out of control


The world’s second-largest economy may be able to stem a financial crisis, but don’t count on it to stimulate the world’s economy. Global stock markets have rebounded after the shock of Black Monday, but worries over the Chinese economy are not over, in fact they are just beginning. The People’s Bank of China’s move on … Continue reading

China wants great power without great responsibility


Forty-three years after Richard Nixon made his famous visit to China, that country has seemingly decided to take a page from the former U.S. president’s Treasury Department. As China lowers the value of the yuan, the country’s economic policy makers are mimicking the blasé attitude of Nixon-era Treasury chief John Connally, who dismissed international complaints … Continue reading

China’s massive economic advantage over the world is about to disappear


We have finally arrived at a point in history that economists have been dreading for years: The moment when the total number of Chinese workers goes into decline for the first time in decades. Since way before the 1990s, China has had one huge economic advantage over the rest of the world: Year after year, … Continue reading

Chinese SOE chairman says China has won the stock market war against western financial giants


The following is based on a translation of an article in Chinese media: China’s official mouthpiece the Global Times published an article by Lin Zuoming, Chairman of the Board of Directors of China’s State-owned giant Aviation Industry Corporation of China (AVIC), on the recent disturbance in China’s stock market. The head of any large state-owned … Continue reading

International investors are pulling out of China in favour of India because of China’s interference in stock market


The tumult in China’s stock markets has turned into a blessing for Indian shareholders. International investors are pulling out of China, fuelling record outflows through the Shanghai-Hong Kong exchange link, amid a $2.8 trillion plunge in mainland equity values since June 12. They’ve ploughed $705 million into India over the same period, sparking a world-beating … Continue reading

The danger from China’s coming recession


China is going to have a recession. Not necessarily this year or next year, but it will. That’s just how economies work. How the Chinese government deals with its first capitalist recession is the great, dangerous unknown in world politics and economics. The frantic efforts China made to stop the recent stock market fall do … Continue reading

India to beat China again as fastest-growing economy in 2016 says IMF


India will be the world’s fastest growing economy for the second consecutive year in 2016 at 7.5 per cent, IMF today said, even as it lowered its current year global economy growth forecast to 3.3 per cent. In its World Economic Outlook Update released here, IMF retained India’s growth projection for current year at 7.5 … Continue reading

China not fit for global leadership


Australia’s top public servant has dismissed any prospect of China leading the world, saying the economic giant is neither willing nor able to solve global problems. Michael Thawley, secretary of the Department of Prime Minister and Cabinet, said China had shown itself to be more interested in challenging the existing order than building a better one. … Continue reading

Western companies are being forced to figure China out all over again as sales plummet


Foreign companies have long known that China’s economic slowdown—now upon us—could hit their earnings hard. They just didn’t expect they’d be hit by changing consumer buying habits and a rise in Chinese competitors at the same time. Suddenly, foreign brands are finding it a lot harder to convince consumers in the world’s most populous country … Continue reading

The Iran scam worsens: the North Korea – China connection


It is likely that the P5+1 nuke “deal” with Iran will be approved soon. Military and other nuke sites which Iran has not “disclosed” will not be inspected. Nor will Iran’s nuke ties with North Korea — which P5+1 member China seems to be helping, Iran’s massive support for terrorism and abysmal human rights record be considered because they are also deemed … Continue reading

3 helpful tips for dealing with vexing Chinese negotiating tactics


As a film producer and consultant who works extensively in China, I am often confronted with the vexing challenge of making deals with savvy Chinese negotiators. I have found the advice offered by Steven Dickinson, an attorney with the Seattle-based law firm Harris Moure, to be extremely helpful in confronting the business negotiating tactics that … Continue reading

China’s new silk road could change global economics forever


Beginning with the marvellous tales of Marco Polo’s travels across Eurasia to China, the Silk Road has never ceased to entrance the world. Now, the ancient cities of Samarkand, Baku, Tashkent, and Bukhara are once again firing the world’s imagination. China is building the world’s greatest economic development and construction project ever undertaken: The New … Continue reading

Outdated mindset is blocking China’s new ideas, say analysts


A leading mainland Chinese inventor-entrepreneur says he may not have surrendered his professorship at an elite university if government policy at the time had allowed him to set up his company while still staying in his post. “If there had been an option, I would have definitely considered it,” Zhong Faping – one of the best-known … Continue reading

This is how China is trying to save its economy


China has had 35 years of hypergrowth, but now it’s over. It’s going to have to settle for really, really good growth instead. But that’s still going to be hard now that fewer Chinese are working-age, fewer people are moving to the cities and, most of all, now that China has a debt bubble it’s … Continue reading

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