China Archives - Page 10 of 54

SOE Reforms in China Go the Communist Party’s Way

After much internal wrangling, China’s State Council and Communist Party Central Committee have released new guidelines for reforming state-owned enterprises (SOEs). China’s economic reform is setup to balance less formal state interference with more informal Party influence. To the delight of technocrats, the new SOE guidelines draw heavily on modern corporate governance principles that are designed to insulate business management from administrative meddling.

China Rate Cut Fuels Global Stock Surge

After soaring on Friday, global equities continue to roar this week after China’s decision to cut interest rates for the sixth time in a year. The People’s Bank of China announced a 25 bp interest rate cut, down to 4.35% for one-year durations. The purpose of the move is to help China reach its 7% growth target for 2015, after official figures showed 6.9% GDP growth in the 3rd quarter of 2015.

The Over/Under on China’s Economic Growth

The UK has rolled out the red carpet for Chinese president Xi Jinping on his five-day official visit. He gets the royal treatment, including a stay at Buckingham Palace, a ride in a state carriage along The Mall and several banquets. The trip will also include plenty of time with the British Prime Minister, David Cameron, who is keen to discuss the trade and investment that the UK hopes to secure from the visit.

China Regards Harmony as a Strategic Concept

History and politics sometimes repeat themselves. From a global perspective, it almost seems we are entering a new age of imperialism, though this time the key powers are the United States and China. However, despite appearances that recall the age of European imperialism of centuries ago, China’s foreign policy should be seen as defensive.

Is the Pessimism over China’s Slowing Growth Warranted?

It is too easy to think China’s economy is in a downward spiral, given recent headlines in the US press, from “China’s Middle-Class Dreams in Peril” to “Is China Really Collapsing?”

The world has been awash with such pessimism. In addition, fumbled reactions by China’s leaders to disasters, excessive financial speculation, and other problems raise concerns about governance. It may even raise questions of long-term stability.

China Imports Weaken

Imports into China fell for the 11th month in a row, raising concerns that Chinese growth is worsening. Imports into China fell 17.7% in local currency terms in September, acceleration from the 14.3% decrease in August. China’s trade surplus rose to 376.2 billion yuan, or about $59.5 billion, above expectations. However, China’s weak trade surplus was worsened by a 1.1% decline in exports, although that was better than the 6.1% decline seen in August.

Doubts Arise over China’s Income per Capita Trajectory

When its GDP per capita hit almost US$7500 in 2014, China entered the middle-income stage of economic development. Relatively few countries that have made middle income status in the past three or four decades have graduated to high-income status, or achieved per capita incomes over US$16,000.

Now the Chinese economic slowdown has raised questions about whether China will be able to continue its steady economic growth to avoid this middle-income trap in the coming decade.

China’s Financial Inequality Gap Widens

Rising income and wealth inequality (measured by the Gini coefficient) have marked the last three decades of China’s remarkable economic transition from a centrally planned economy to an increasingly market-oriented one. When analysing the causes of China’s inequality, researchers frequently invoke rapid trade integration, technology, human capital differences and social security systems, but very little has been said about the role of monetary policy and the banking system.

China Really Wants the Yuan in the SDR

China’s markets re-opened after the extended national holiday today. Policymakers hit the ground running with two new initiatives. China’s own reform efforts likely drive the initiatives, but they will also enhance the likelihood that the yuan is included in the SDR.

How to Move 10 Million People

According to the central Chinese government, solving rural poverty and environmental degradation problems will require resettling more than 10 million citizens by 2050. This number does not include the 7 million people that have already been resettled over the last 30 years or so.