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This tag is associated with 33 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

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

Cadence Column: Asia, July 3, 2017


China views Hong Kong as a doorstep between the world and largely otherwise closed China. This week, investment highways opened, allowing easier offshore investments in China’s bond market. At the same time, the world gets a glimpse into Chinese dealing through Hong Kong. Like the proverbial cat chasing the laser pointer dot—who never figures out … 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

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

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

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

A massive Chinese industry is flashing warning signs that the world cannot ignore


China’s steel industry, the world’s biggest, is in crisis. The disaster is the result of a combination of factors, including a slowing Chinese economy, falling commodity prices, and an industry loaded with debt. Earlier this month, state-owned enterprise (SOE) Sinosteel defaulted on a debt-interest payment of $315 million on bond notes maturing in 2017. It’s … 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

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

China’s SWIFT alternative (CIPS) and the engineered death of the dollar


Forget all the nonsense and hoopla about the Apple Watch or the GM stock buy-back. Far and away the most important economic story of the week is one you won’t find on the front page of Bloomberg or MarketWatch. New reports indicate that China is ready to launch its SWIFT alternative, and for those who … 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

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

The Great Chinese Exodus; 64% of China’s rich plan to leave


Many Chinese are leaving for cleaner air, better schools and more opportunity. But Beijing is keeping its eye on them. Even when the emperors did their utmost to keep them at home, the Chinese ventured overseas in search of knowledge, fortune and adventure. Manchu Qing rulers thought those who left must be criminals or conspirators … 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 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

In wealthy Chinese city, debt guarantees spark default contagion


A network of loan guarantees set up to improve companies’ access to credit in one of China’s richest districts is creating new risks of default as some debts sour, another sign of how private firms are bearing the brunt of an economic slowdown. Chinese media have reported on a credit crunch developing among steel and … 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

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

China’s BYD fined for paying Chinese workers $1.50 per hour in California


BYD is a mainland Chinese company, specialising in green technologies.  Shares in the company are traded on the mainland in Shenzhen and off-shore in Hong Kong. The company is controlled by the co-founders. Berkshire Hathaway, Warren Buffett’s holding company, owned 9.56 % of the company as of June 30, 2013. The company has established a … 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

Risks to China recovery seen as factory output underwhelms


China’s factory output growth was surprisingly feeble in April and fixed-asset investment slowed, rekindling concerns that a nascent recovery is stalling and adding to pressure on policymakers to take action to stimulate the economy. However, China’s already-easy monetary policy and rising home prices complicate the options available to Beijing’s new leadership, leading some analysts to … Continue reading

A shift in Chinese strategy on North Korea?


There seems to have been a shift in Chinese-North Korean relations as the Bank of China has stopped its business with a North Korean bank: Bank of China Ltd. said it cut off dealings with North Korea’s primary foreign-exchange bank in the first publicly announced move by a Chinese state-owned company to distance itself from … Continue reading

China sends mixed messages


After last year’s leadership transition, many U.S. firms doing business in China hoped to see an expansion of trade and an easing of regulations in 2013. The sudden openness of the Chinese media and Xi Jinping’s apparent crackdown on corruption has fueled this speculation. Unfortunately, this year is shaping up to be nearly as vexing … Continue reading

China’s recent trade statistics have been artificially inflated


Until now, Beijing’s monthly import and export numbers have been considered absolutely reliable, yet there is growing evidence to suggest that in recent months they have been distorted by fabricated transactions. Especially suspect are the export figures for this September and October.  China’s exports for September soared 9.9% year-on-year.  In the following month, they jumped … Continue reading

China’s unique opportunity with foreign banks; must liberalise quickly to become top global financial hub


Economic growth in China for this year is projected to be 7.7% and while this figure is one most countries around the world are highly envious of, it’s low by Chinese standards. But that does not mean that every sector is doing worse than usual, when it comes to banking (both high-street and investments) the … Continue reading

Bo’s successor woos more foreign investors for Chongqing


Chongqing‘s party boss has told a group of visiting business leaders from Hong Kong and abroad that the municipality will be more open to foreign investment, in a bid to reassure them in the wake of Bo Xilai‘s downfall. “Chongqing will definitely further open up and be more active in terms of its economic development,” … Continue reading

Foreign investors in China get a break


China will relax controls on qualified foreign institutional investors (QFIIs) soon, following a decision to nearly triple the amount they can spend. Regulators plan to scrap the requirement that a QFII invest at least half of its funds in stocks, said two people briefed by government officials about the matter. They said waiving the rule … Continue reading

China’s top court spares woman death penalty in fraud case


China’s top court on Friday overturned a death sentence for a self-made Chinese businesswoman convicted in a multi-million dollar scheme to bilk investors, in a contentious fraud case that sparked sympathy for the self-made daughter of a peasant. Wu Ying, 31, was convicted by a lower court in 2009 for cheating investors out of 380 … Continue reading

China draft regulations target futures market fraud


China’s securities regulator issued draft regulations on Friday that aim to crack down on deceptive practices in the country’s securities futures markets through increased supervision and “name and shame”-style disclosure of chronic offenders, official media reported on Friday. The draft rules, released for public comment late on Friday afternoon, would increase regulatory supervision of investors, … Continue reading

Pushing the envelope – Inside China’s vast shadow banking sector


Wu Ying’s rise to riches was like a Horatio Alger story on steroids. A native of Zhejiang province, Wu dropped out of college to work in a beauty salon, then later opened her own salon down the street. By 2006, at the age of 25, Wu had built a conglomerate of hotels and other businesses … Continue reading

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