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China’s Banking Industry and Associated Risks

Banking activity is growing rapidly in China’s $30tn banking system and even though the country faces a sluggish economy, its banking system consists of some of the largest banks of the world. The combined value of Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China is now at par with the four big US banks (JPMorgan Chase, Bank of America, Citigroup and Wells Fargo). With a considerable influence of the Chinese government in the banking network, the sector continues to develop commercially and globally.

The Pilot Free Trade Zone Should Assist China’s Transition to Slower Growth

Since September 2013, China has been operating a new form of free trade zone (FTZ) based in a small area of Shanghai, called the China (Shanghai) Pilot Free Trade Zone (SPFTZ). Only 28 square kilometres in area, the SPFTZ is a concrete first step to China’s new development model, the so-called ‘new normal’. The SPFTZ’s substantial steps towards financial liberalisation will assist China’s adjustment to growth at a relatively lower but still increasing rate.

China Still Seeing Growth in Small Businesses

After decades of the fastest economic growth in the world, China’s economy has started to slow down. This is perhaps inevitable, given an average annual growth rate of around 10% was sustained for almost thirty years following the economic reforms introduced by Deng Xiaoping in the late 1970s.

China is Still Growing at Twice the World Rate

The Chinese economy, one might think if one took most of the commentary on it seriously, is on a hiding to nowhere good. The growth rate is falling. Manufacturing is suffering over-capacity. The real estate bubble has burst, or it is about to. The opportunity for productive infrastructure investment is running out. If you are sitting in an economy like Australia, which is dropping off the edge of the Chinese-driven commodity boom over the past decade or so, there might not seem to be much cheer in the Chinese economic outlook.

The Chinese Stock Market and the Country’s Economic Growth are Diverging

As 2014 fades in the rear-view mirror, the Chinese economy exhibits two sharply conflicting trends: while economic growth continues to decelerate, the stock market is rising steadily. The capital market boom — which started mid-year and accelerated following the People’s Bank of China’s (PBoC) rate cuts in late November — might be supported by expanding liquidity (monetary policy easing) and sentiment (expectations of reform) but certainly not fundamentals (corporate profitability).

Promoting Innovation through a Chinese Government Venture Capital Fund

China’s new government fund for venture capital has real potential to significantly promote China’s domestic entrepreneurship and innovation. But if access to the new funding is too easy, the projects main objective will be jeopardised.

Checking in on China’s SOE Reforms 25 Years after They Began

As in other areas, the reform of state-owned enterprises (SOEs) in China has been a gradual process. Now, almost 25 years after SOE reforms began, the government must tackle new problems: breaking down special interests, distancing the state from the daily operation of enterprises — and associated issues of corruption — and improving the overall efficiency of the economy.

Insights into China’s Economic Reforms Come Partly from Africa

China, like much of the developed world, faces slower growth and an ageing population. Africa in contrast offers the potential of ‘catch up’ growth and a growing young pool of low-cost labour, alongside plentiful natural resources. The economic prospects of both intertwine. The path of China’s trade and investment ties with Africa offers insights into China’s ongoing economic reforms and internationalisation.

Is Shanghai’s Dropping of the Provincial GDP Growth Target the Start of a Trend?

For years, Chinese officials and foreign analysts have been obsessed with China’s GDP growth figures. There has been a widespread belief that if GDP growth dips below 8 percent, there would be massive upheaval. This widely held perception turned out to be nonsense.

China’s Financial Reforms Include Internet-Only Banking

State-owned banks have long dominated banking in China, but China wants to do things differently now. The Chinese government wants improve its financial sector by creating more confidence and responsiveness towards private customers. Lately, China has seen a lot of changes in its banking system, which could see some big changes in Chinese banking sector in 2015.