Showing posts with label China Economy. Show all posts
Showing posts with label China Economy. Show all posts

Nov 19, 2020

News | Business | China Economy:: President Xi at Apec: China pledges to open up its 'super-sized' economy


Chinese President Xi Jinping speaking at a conference earlier this month.image copyrightGetty Images

Chinese president Xi Jinping has said China will open up its "super-sized" economy to import more high-quality goods and services.

China will also sign free trade pacts with more countries, he said on Thursday.

Mr Xi was speaking at the Asia-Pacific Economic Cooperation (Apec) forum, which includes the US and Russia.

It is as yet unclear if US President Donald Trump will be speaking at the event, which continues on Friday.

China and the US have been involved in a trade war since 2018 with a number of flashpoint over import taxes and Chinese technology firms operating in America.

Mr Xi also used Thursday's Apec speech to deny that China would be pulling away from other economies - known as decoupling - and warn against protectionism.

"We will not reverse course or run against the historical trend by 'decoupling' or forming a small circle to keep others out," Mr Xi said.

media captionChip wars: The US v China

Free trade

Mr Xi's comments come off the back of signing the world's largest regional free-trade agreement over the weekend, encompassing almost a third of the world's economic output.

The Regional Comprehensive Economic Partnership (RCEP), almost a decade in the making, includes China, Japan, South Korea and 12 other Asian nations.

"In today's world where economic globalisation has become an irreversible trend, no country can develop itself by keeping its doors closed," Mr Xi added.

However, China is involved in a number of trade disputes with rival economies, including Australia which it has imposed import tariffs of up to 80% on barley.

Last month, Mr Xi and other Chinese leaders laid out a blueprint for China's five-year plan and key objectives for the next 15 years.

They include a goal to turn China into a "high income" nation by 2025 and advance to a "moderately developed" nation by 2035.

Apr 14, 2020

China Economy: Hong Kong is 'highly resilient' as it fights to save the economy in the pandemic, commerce secretary says

Weizhen Tan

CNBC: Hong Kong central district
Hong Kong’s popular nightlife district, Lan Kwai Fong is mostly empty amid the Coronavirus outbreak
Uptin Saiidi | CNBC

Hong Kong is fighting a “twin battle” — fending off the coronavirus pandemic and trying to save its battered economy at the same time — but the city remains “highly resilient” despite the challenges, its commerce secretary said Tuesday.
Hong Kong’s recovery depends on global trade and will be determined by when the world gets back on its feet, Edward Yau, Hong Kong’s secretary for commerce and economic development, told CNBC on Tuesday.
The Asian financial hub’s economy has been hit hard by consecutive crises over the past year: from the U.S.-China trade war that intensified in 2018, to the months-long protests which shuttered shops and severely hit tourism last year.
Now, the city is faced with a health and economic crisis brought on by the global coronavirus pandemic that has infected more than 1,000 people in the Chinese territory, and killed at least 4, according to the latest data from Johns Hopkins University.
“Hong Kong, and in fact the global economy, are fighting a twin battle — one is the fight against the epidemic and the other is in fact fighting to save the economy. The second battle could not be (won) without winning the first one,” said Yau.
“As we all see around the world, cities are being locked down, the economy at a doldrum. It requires the whole community to come together,” he said.

‘Highly resilient’

Like other countries, Hong Kong has temporarily shut offices and schools, as well as banned foreign visitors in a bid to contain the virus spread. It also imposed a two-week closure of gyms and bars, and a capacity limit of 50% at restaurants.
Many businesses were hoping the city would return to normal again after nearly one year of social unrest, followed by months of the coronavirus outbreak which was first reported in the Chinese central city of Wuhan in late December. But the wave of cases and subsequent government regulations that followed have dealt another devastating blow for business owners.
In this pandemic, no city, no government, no country is being spared, and Hong Kong is a highly international city ... we also need to see the whole world getting back on its own feet.
Edward Yau
Hong Kong’s Secretary for Commerce & Economic Development
“We are hit by a number of factors in the last 18 to 24 months — U.S.-China trade war has given us collateral damage, the social unrest last year has caused some downturn in the economy, and with this (pandemic) ... That also says Hong Kong remains highly resilient despite all these negative factors,” Yau said.

Global recovery, intertwined sectors

While Hong Kong’s government has put in place measures to support businesses, Yau said, whether business confidence returns to the city also depends on the global recovery.
“We also need to look at the global picture. In this pandemic, no city, no government, no country is being spared, and Hong Kong is a highly international city ... we also need to see the whole world getting back on its own feet,” he said.
“Knowing Hong Kong, how we are closely knit as an international community ... any relief package will need to be across the board,” Yau said. “We cannot just focus resources on a single sector, because they’re intertwined.”
Hong Kong’s government has so far given out relief packages worth around $37 billion in total, or representing about 10% of its GDP. In February, Hong Kong’s government had announced more than $15 billion worth of measures to help a battered economy that was already reeling from the impact of those pro-democracy protests.
It’s also making sure that businesses stay afloat through this “bitterly cold winter” by having sufficient cash flow, Yau said. For instance, it has launched a loan scheme for businesses worth up to $123 billion Hong Kong dollars, he said.
CNBC’s Uptin Saiidi contributed to this report.

Mar 4, 2020

China Economy: Emergency Fed rate cut helps China with longer-term currency goals

Evelyn Cheng

RT: Coronavirus: Central Bank of China
A man wearing a mask walks past the headquarters of the People’s Bank of China, the central bank, in Beijing, China, as the country is hit by an outbreak of the new coronavirus, February 3, 2020.
Jason Lee | Reuters
BEIJING – The U.S. Federal Reserve’s emergency interest rate cut gives China’s central bank much more leeway to lower its own rates, and boost the internationalization of the yuan, analysts said.
In response to concerns about the new coronavirus’ economic impact, the Fed surprised markets during the New York trading session on Tuesday with a half percentage-point rate cut. It came two weeks before a scheduled meeting. The last time the Fed took similar emergency action was during the financial crisis in 2008.
The Fed’s loosening of monetary policy will likely accelerate similar moves by the People’s Bank of China, said Zhao Bowen, research director at Beijing-based Blue Stone Asset Management.
“The bottom line is opened more,” he said, according to a CNBC translation of his Mandarin-language remarks. But he noted increased fiscal spending is what China will really need to support economic growth. According to his calculations, GDP growth in the second and third quarter must reach at least 7.5% in order for the country to achieve its implied goal of roughly 5.5% for 2020. 
While the timing and exact scale of expected PBOC rate cuts vary, analysts pointed out the Fed’s move will keep the Chinese yuan from weakening too much, alleviating concerns about capital outflows, and even boost inflows in the near future.
That would go a long way toward helping the Chinese government along with its years-long efforts to boost use of the yuan in global financial markets. Also known as the renminbi, the Chinese yuan accounted for 1.65% of global payments by value in January, versus 40% for the U.S. dollar, according to Swift, the financial messaging service for banks.

Boost to yuan-denominated assets

The U.S. dollar index extended recent losses to touch its lowest level since early January, while the yuan reversed a recent weakening trend to strengthen by well over half a percent to near 6.93 per dollar.
(For the yuan), yesterday was a turning point,” Xu Hongcai, deputy director of the Economics Policy Commission at the China Association of Policy Science, said in a phone interview, according to a CNBC translation of his Mandarin-language remarks.
“So this shows confidence in China,” he said, adding that capital is flowing into the country.
International investors will likely also be more attracted to the relatively higher yields of Chinese yuan-denominated assets if current trends in financial markets and monetary policy persist. 
Yuan-denominated assets were never really considered safe haven, Zhao said. But with expectations that the Fed will cut rates again at its meeting later this month, Treasury yields are likely to fall further, he said, noting investors may begin to question the scale of their U.S. asset holdings.
U.S. Treasury yields fell after the Fed rate cut, with the benchmark 10-year yield hitting a record low of 0.906%. The Chinese equivalent traded near 2.71% on Tuesday. The roughly 180 basis point spread, or gap between yields, makes the yuan-denominated bonds a more attractive investment.
Given the Fed’s rate cut, which some criticize as too hasty, the internationalization of the yuan is being “pushed forward,” Zhao said.
As for stocks, the Shanghai Composite gained 0.6% on Wednesday, versus the S&P 500′s volatile 2.8% drop overnight. While the mainland Chinese A-shares market has been likened to a casino for years, the Shanghai Composite has kept its fluctuations close to the 3,000 level for much of the last several months.
Cao Yanghui, deputy director of the Nanhua Futures Research Institute, said the coronavirus’ spread in China has entered a more stable period than overseas.
“Relative to overseas markets, domestic assets have begun to have some properties of safe-haven assets,” Cao said, according to a CNBC translation of his Chinese-language statement. “If U.S. stocks continue to decline, A-shares will not necessarily follow, and may even begin an independent upward trend.”

Calls for more coordination

Shortly before the Fed made its emergency move, financial leaders from the G-7 major economies released a vague statement on working together to fight the coronavirus. The central bank of Australia had already cut rates, while the European Central Bank and other major central banks are widely expected to follow suit in the coming weeks.
“Because of this situation, the whole world needs to strengthen monetary policy coordination,” Zong Liang, chief researcher at the Bank of China said in a phone interview, according to CNBC’s translation of his Mandarin-language remarks.
That includes exchange rates, he said. Zong added that large-scale rate cuts are not needed at this time, and China would hope to direct global rates toward a stable level, with space for additional monetary policy action. 
Further cuts would take interest rates that are already at unprecedented lows or negative territory even lower. China has kept rates at a relatively higher level, while facing unique challenges in getting the local economy to truly reflect the benefits of lower rates.
For now, the situation at home is still key for each country, especially for China.
“I don’t think they have the bandwidth to think about more than stability,” said James Early, CEO of investment research firm Stansberry China.
“I think the (PBOC) sees (the Fed cut) as a negative because it signals meaningful concern from the world’s largest economy,” he said. “They couldn’t even wait two weeks. The information that was communicated was fear and the PBOC has to digest this.”
The Chinese central bank did not immediately respond to CNBC’s request for comment.
On Tuesday, China’s central bank held a meeting with other major financial regulators and institutions in the country to discuss recently announced support measures, and lowering financing costs amid the virus’ impact to the economy. It was unclear according to the official announcement if the meeting ended before the Fed announced its rate cut late that night Beijing time.

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