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Economics

This tag is associated with 96 posts

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

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

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

Cadence Column: Asia, March 5, 2018


China’s changes include finances as well as politics. As the US unrelentingly inches toward absolute denuclearization of North Korea—one way or another—China delays solidarity at the UN. China has no lack of mixed messages in other areas, such as Taiwan. Stepping up military drills near Taiwan while becoming more economically friendly to Taiwanese isn’t exactly … Continue reading

The leading power in East Asia will be Japan, not China


By 2040, Japan will rise as East Asia’s leading power. This is one of our most controversial forecasts at Geopolitical Futures. Our readers know that GPF is bearish on China. And while some may disagree on that point, they usually see that the reasoning is sound. China will face serious problems in coming years… problems that will … 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

China stock market crash; biggest one-day drop since 2008


China stocks suffered their biggest one-day percentage drop in more than six and a half years, dragged down by record tumbles in financial stocks as authorities battled excessive market speculation. Regulators cracked down on margin trading, which has been blamed for fuelling a wave of speculation over the past three months. Bank stocks were hit … Continue reading

China’s boom is over, and here’s what you can do about it


The powerhouse that seemed ready to propel the global economy for decades is now stuck in a period of slowing growth. Here’s what that means for your portfolio Every so often an investment theme comes along that seems so big and compelling that you feel it can’t be ignored. This happened in the 1980s with … Continue reading

China is bailing out the world’s teetering oil producers – on terms that could cripple them


Oil-exporting nations are facing budget crises, political instability and social upheaval thanks to the cratering of crude oil prices in recent weeks. Enter China. Despite an economic slowdown of its own—which has been a factor in plunging oil prices—Beijing is stumping up billions of dollars in loans to many of these countries, in exchange for what some analysts … Continue reading

China factories kept open to give illusion of prosperity


In the shadow of a group of giant smokestacks and deserted foundries, a peeling sign welcomes visitors to the Wenxi Steel Industrial Park. But in the nearby village, the working-age men and many of the women have gone, leaving only the elderly and the very young. “If you cut down the big tree, all the … Continue reading

Could a Russia-China alliance save Russia from collapse?


As soon as the US began to adopt its policy of a pivot to Asia to encircle China, China switched to Russia’s side by joining Russian veto over Syria issue. China followed Sun Tze’s teaching in The Art of War, that subduing the enemy by diplomacy is the second best strategy. I regard it as … Continue reading

Putin’s fear of China weakens Russia’s Asia pivot


As Moscow’s relationship with the West continues to deteriorate, Russia has engaged in a concerted and very public “pivot to Asia,” the focus of which has been to deepen its relationship with China. Beyond the rhetoric, however, is there a sufficient overlap of interests between Moscow and Beijing for the two sides to actually implement a formal alliance? Russia and China do share a number of key interests, starting with energy. After nearly … Continue reading

Why China keeps throwing trillions in investments down the drain


A recent study performed by two economists affiliated with a Chinese state agency found that China’s state investments have becoming alarmingly wasteful and ineffective. There are two indisputable facts about China’s mammoth investments in its infrastructure and factories. One, they are a growth engine, accounting for roughly half of the country’s GDP increase since 2000. … Continue reading

Hong Kong: Pearl of China


Recent protests in Hong Kong caused me to reflect once more on my short stay in this Pearl of the Orient. If Hong Kong was dreading its return to mainland China in 1997 for political reasons, with the battle of Tiananmen Square less than a decade earlier still looming over its people as the threatening … Continue reading

Is this the end of China’s economic miracle?


Ma Jijiang and his once poor family are the flesh and blood of China’s modern economic miracle, living proof of how radically the country has been reshaped since the late Deng Xiaoping changed the world in 1978 by proclaiming that to get rich is glorious and launching China’s experiment with market economics. Ma grew up … Continue reading

Why China will never be Asia’s dominant power


China may be Asia’s economic powerhouse but it won’t become the region’s dominant power, according to a new report. “In examining the factors that go towards the development of Chinese national power-and its ability to use it to achieve national objectives-predictions about a Chinese superpower with the ability to dominate Asia would be premature, if … Continue reading

China’s president says risks to economy ‘not that scary’


China‘s President Xi Jinping was quoted as saying, “Some people worry that China’s economic growth will fall further, can it climb over the ridge? There are indeed risks, but it’s not so scary. Even at growth of around 7 percent, regardless of speed or volume, (we) are among the best in the world.” “Economic Slowdown … Continue reading

Three major nations absent as China launches World Bank rival in Asia


As Japan and the US will not allow China to increase its stake in the Asian Development Bank (ADB) and World Bank, China set has set up a multinational rival bank called the Asian Infrastructure Investment Bank (AIIB). 21 countries in the region, all of them except Japan, Australia, Indonesia and South Korea, attended the … Continue reading

China’s Xi goes to South America to break US dominance


Reuters today reported on Xi Jinping’s goal of pushing for the developing world’s rights. Reuters quote Chinese President Xi Jinping as saying in an interview with South American media, “China would try to better play the role of a responsible major power and promote the rights of the developing world.” However, Reuters says that there … Continue reading

China’s young military leaders are destroying China


China is on the verge of destroying a geopolitical miracle. In 1980, its economy was less than one-tenth that of the United States. In 30 years, China rose to become No. 2 in the world, without disrupting the world order. Suddenly, with little warning, three decades of careful management of its external challenges have been … Continue reading

India’s Modi calls for greater cooperation with China, as India aims to rival China economically


Indian Prime Minister Narendra Modi urged greater cooperation with China on Monday and said he planned to visit Beijing soon, underlining his administration’s promise to make a new beginning with the country’s giant neighbor. India and China have rapidly expanded commercial relations in recent years but political ties remain difficult, after a dispute over their … Continue reading

China’s exports gain steam but imports fall, signalling weaker domestic demand


China‘s exports gained steam in May thanks to firmer global demand, data showed on Sunday, but an unexpected fall in imports signaled weaker domestic demand that could continue to weigh on the world’s second-largest economy. Exports rose 7 percent in May from a year earlier, quickening from April’s 0.9 percent rise, while imports fell 1.6 … Continue reading

China PMI steadies, but doesn’t dispel growth worries


Activity in China’s factories increased marginally in April but export orders fell sharply, a government survey showed on Thursday, adding to questions about whether the world’s second-largest economy is stabilizing after its first-quarter slowdown. The data came a day after Premier Li Keqiang pledged to step up support for the trade sector, adding to measures … Continue reading

China poised to pass U.S. as world’s leading economic power this year


The U.S. is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies. The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in … Continue reading

Multinationals invest less in China because of market access barriers


Multinational firms are planning to invest less in China because of market access barriers and slowing growth in the world’s second-largest economy, a U.S. business lobby said on Tuesday. China’s economy expanded 7.4 percent year-on-year in the January-March quarter, its slowest pace in 18 months. Concerns over market access and slower growth are greater this … Continue reading

China opens door further to foreign stock investors


China has relaxed rules to allow more foreign participation in its main stock market, in the latest step towards liberalising the financial system in the world’s second-largest economy. From Thursday, foreign investors on the Shanghai stock exchange will be allowed to invest in more products and can invest up to 30 percent in a single … Continue reading

Taiwan legislature “occupied/retaken”: USA media ignores


Students have taken over Taiwan’s Legislative Yuan meeting chamber for over 106 hours. 12:00pm Friday marked the deadline the student-led mass gave to Taiwan’s dominant party, the KMT, to acknowledge and respond positively to their demands. The unarmed assortment of young Taiwanese took action in the wake of the pending Cross-Strait Service Trade Agreement (CSSTA), after a … Continue reading

Top executives refuse to work in China; slowing economy and pollution the main reasons


China‘s smog is making it harder for foreign firms to convince top executives to work in the country, the American Chamber of Commerce in Beijing said on Wednesday, offering some of the strongest evidence yet on how pollution is hurting recruitment. Some 48 percent of the 365 foreign companies that replied to the chamber’s annual … Continue reading

China’s premier warns on economic slowdown


Chinese Premier Li Keqiang warned on Thursday that the economy faces “severe challenges” in 2014 – comments that came as weak data fanned speculation the central bank would relax monetary policy to support stuttering growth. Li, speaking at a news conference on the final day of China’s yearly parliament, hinted Beijing would tolerate slower economic … Continue reading

China February exports plunge by 18%


China‘s exports unexpectedly tumbled in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world’s second-largest economy despite the Lunar New Year holidays being blamed for the slide. The sharp drop in exports follows a series of factory surveys since the start of 2014 that point to weakness … Continue reading

Is China on final approach to an economic crisis?


January’s PMI data for China’s manufacturing sector, as released by Markit Economics and HSBC, showed a marked decline in production activity. More disturbing, however, is their analysis on the individual sectors of the manufacturing economy.  According to the report, firms cut their staffing levels at the quickest pace since March 2009, and, more importantly, “average … Continue reading

Final China HSBC PMI dips to six-month low in January as new orders weaken


Business conditions for China’s manufacturers worsened in January as output and new order growth weakened, a private survey showed on Thursday, pointing to a weak start for the economy in 2014. The Markit/HSBC final manufacturing PMI for January dipped to 49.5 from December’s 50.5, the first deterioration in six months. The figure was in line … Continue reading

Is China about to plunge into financial crisis?


Is China about to have its own Bear Stearns moment? I have been thinking a lot about this after reading a smart report released today by BofA Merrill Lynch Chinese economist Bin Gao, which looks at the recent debt restructuring at the China Credit Trust Co., a major Chinese financial institution. Just a few days ago, the … Continue reading

China gets tougher on foreign companies; foreign companies leave


Life is getting tougher for foreign companies. Those that want to stay will have to adjust. According to the late Roberto Goizueta, a former boss of The Coca-Cola Company, April 15th 1981 was “one of the most important days…in the history of the world.” That date marked the opening of the first Coke bottling plant … Continue reading

Mega default on January 31 could devastate China’s banking system


On Friday, Chinese state media reported that China Credit Trust Co. warned investors that they may not be repaid when one of its wealth management products matures on January 31, the first day of the Year of the Horse. The Industrial and Commercial Bank of China sold the China Credit Trust product to its customers … Continue reading

Government reforms making Chinese society dangerous


As a Chinese person, I support the reforms taken by President Xi Jinping. He has planned to suppress corruption, which is the core of his reform. In addition, to consolidate the stand of China in the world, he is trying to make the Chinese government have strong attitudes towards other countries, especially Japan and Southeast … Continue reading

China’s free trade zone plans herald quicker FX reforms


China plans to roll out financial sector reforms in the Shanghai special economic zone in the next three months and most will be implemented in a year, suggesting authorities are accelerating the pace of dismantling capital account controls. A People’s Bank of China (PBOC) statement on Wednesday for the first time gave a timeline for … Continue reading

China’s September export growth in surprise slide


China’s export growth fizzled in September to post a surprise fall as sales to Southeast Asia tumbled, data showed, a disappointing break to a recent run of indicators that had signalled its economy gaining strength. China’s exports dropped 0.3 percent in September from a year earlier, the Customs Administration said on Saturday, sharply confounding market … Continue reading

How to get a slice of the money flowing out of China


In 2008, I wrote an article for an international business consultancy newsletter that outlined the opportunities associated with Chinese investing abroad. In the article, I wrote that since China commenced opening up in 1979, most international capital flow has been into China rather than out of it. By 2008, this capital flow had contributed to … Continue reading

History shows that Japan and China have very different futures


I’ve frequently come across the view that China is on track to become like Japan but with 10 times the population. It is a form of wishful thinking that drives a great deal of investment in China in the hope that carving out a market share will bring untold riches one day. In an example … Continue reading

China’s economic slowdown is precisely what Xi Jinping wants


“Those who live in worries and hardship survive while those who live in ease and pleasure perish,” says Chinese sage Mencius. In Reuters’ report titled Ditch the stats: China retailers don’t buy signs of recovery, it says that recent improved government data are perhaps inaccurate and do not mean that there is any success in the … Continue reading

China to open banking sector to private capital


China‘s cabinet has unveiled plans to set up more private banks to boost financial support for cash-starved smaller firms, in the latest bid to bolster the slowing economy. “We will actively develop small-sized financial institutions and open up the channel for private capital to enter the financial sector,” the cabinet said in a set of … Continue reading

Australian Treasury too rosy about China


In October 2009, a former top Treasury official at the Australian embassy in Beijing slammed the Rudd government for a “dysfunctional China policy”. Stephen Joske went further, saying “there’s no one in Treasury who can tell up from down on China, beyond what they read in the newspapers” – a serious charge given the importance … Continue reading

Will China’s economy crash?


After many years of euphoria over China’s rapid growth and the country’s apparently inevitable rise to global economic dominance, the China story has taken a serious turn for the worse. China, it now seems, is about to collapse, and along the way it may well bring the world economy down with it. Fortunately, the new … Continue reading

China risks following Japan into economic coma


After decades of emulating Japan‘s export-driven economic miracle, China appears in danger of following it into the same kind of economic coma that Japan is trying to wake up from 20 years later. China is struggling to wean itself off a habit picked up from its more advanced neighbour: relying for growth on exports and … Continue reading

Debt crisis looms in China’s Jiangsu province


The nightmare scenario for China’s leaders as they try to wean the country off a diet of easy credit and breakneck expansion is a local government buckling under the weight of its own debt. Few provinces fit that bill quite like Jiangsu, home to China’s most indebted local government. Hefty borrowings through banks, investment trusts … Continue reading

China frees up lending rates in major reform


China’s central bank removed controls on bank lending rates, effective Saturday, in a long-awaited move that signals the new leadership’s determination to carry out market-oriented reforms. The move gives commercial banks the freedom to compete for borrowers, a reform the People’s Bank of China (PBOC) said will help lower financial costs for companies. Previously, the … Continue reading

China’s economic turmoil a major concern for US companies


It’s official. China’s slowdown is starting to hurt corporate America. As the world’s second-largest economy – and still growing – China is seen as a primary source of revenue growth by the largest U.S. companies. But a country that once boasted double-digit growth is now growing at a more modest 7.5 percent rate, its credit … Continue reading

China urges local governments to speed up spending to support the economy


China urged local governments on Thursday to speed up spending this year’s budget to support economic growth but said it would keep overall policy stable and focus on pushing through reforms. Beijing is reluctant to take broad action to stem a slowdown in the economy, such as relaxing monetary conditions, but analysts said there had … Continue reading

I.M.F. warns China to hasten economic change


China’s growth has slowed significantly in recent months. But even its current pace of expansion may not be sustainable, the International Monetary Fund warned on Wednesday, unless China starts making significant and systemic economic changes — and soon. “Since the global crisis, a mix of investment, credit and fiscal stimulus has underpinned activity,” the I.M.F. … Continue reading

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