Long assailed for running a massive trade surplus with the US, China has come out as the big winner from a new method for calculating global trade flows. When “value added” production is factored in, China’s surplus vis-à-vis the US shrinks by 25 per cent, according to the World Trade Organisation and the Organisation for Economic Cooperation and Development.

These are important findings that Beijing will no doubt cite the next time it wants to repel foreign criticism of its export and currency policies. But the calculations also give rise to a knock-on question: could China’s surplus prove to be stickier precisely because it still has a ways to go up the value chain? Read more

China was already notorious for traffic jams but driving on its roads has just got that much more frustrating. A new rule forbids cars from “running” yellow lights and advises drivers to slow down on approaching intersections even when the light is green.

The intention behind the rule is a good one: to make roads safer. But on suffering mild whiplash today when the light turned yellow and my taxi driver slammed the brakes a few feet short of the intersection, it occurred to me that the authorities had not fully grasped the consequences of overturning a century-old worldwide traffic convention. Read more

The US still has a few days to avert the fiscal cliff, but a prominent Chinese ratings agency is not waiting around. Dagong has already served notice of what failure might mean, putting the US sovereign rating on its negative watch list.

It is tempting to dismiss the Dagong statement as a publicity stunt, its latest in a long line of downgrades and warnings directed at the US. But Dagong’s criticism is a good reflection of views that are commonly expressed in Beijing. And given that China is the biggest foreign holder of US government bonds, these views deserve a hearing. Read more

Xi JinpingMuch has been made this week of Xi Jinping’s “southern tour”. In retracing the footsteps of Deng Xiaoping, the leader who turned China to markets after Maoism, Xi’s trip to the southern province of Guangdong has been interpreted as the possible beginning of a new push for economic reform.

But Xi’s tour was about more than just the economy. He also spent three days inspecting a military base in Guangzhou, the provincial capital, and made a series of speeches calling for stronger, combat-ready fighting forces. Read more

Li Keqiang, China’s next premier, says the country must unleash urbanisation as its next big growth engine. That makes sense –China’s urbanisation rate is still just 50 per cent, well below the 80 per cent norm in developed economies.

But the government’s top-down push can play out in funny ways. If Li needs any reminder, he can look to his old stomping ground, the northeastern province of Liaoning. It is pioneering a new mode of development: start with the showcase monument, then build the city. Read more

We are nearly eight hours into the decade-long rule of Xi Jinping, so it seems a perfect time to pass definitive judgment on his record as China’s leader.

Ok, maybe it is a bit soon. But that is not stopping the punditocracy – yes, including, us here at the FT – from making predictions about what Xi and his colleagues will accomplish over the next ten years. However, the evidence available is so limited that it can be interpreted in two diametrically opposed ways. Read more

Is it China’s worst-kept secret? Or its cleverest bluff?

With less than 24 hours to go before the Chinese Communist party unveils its new leaders, a very detailed list of who they are and what jobs they will do has spread widely in political circles and on the internet in Chinese. Read more

There was a time when experts furiously debated how to define the Beijing model of government and whether its lessons could be applied to other developing countries.

Reading through an official guide to the upcoming Communist party congress (aka the once-in-a-decade leadership transition), it struck me that, at least in its management of media, China has simply stolen a page from Sir Humphrey’s playbook. That is, it has mastered the art of how to say nothing of consequence in the most bureaucratic terms possible. Read more

The New York Times just ain’t what it used to be. It’s full of sensationalism, plagiarism and out-and-out fake news. Loyal readers are losing their faith.

Or so goes the verdict from that arbiter of fine journalism: the People’s Daily, mouthpiece of the Communist Party of China. Read more

Photo: Bloomberg

Credit rating agencies from China, Russia and the US are establishing a joint venture that they say will change the assessing of risk in global finance.

Dagong, a Chinese agency that has repeatedly downgraded the US, Egan-Jones, a small US agency, and Russia’s RusRating said they were answering calls for reform of the international credit rating system by linking forces to create the Universal Credit Rating Group. Read more

The shadowy world of Chinese capital flows has receded a little further into the dark.

Tracking speculative flows into and out of China has never been an easy task but new developments in the country’s markets have made it even more complicated. In the ensuing confusion, it can look as though Chinese investors are in a state of panic, rushing to the exit with suitcases full of cash. The reality is a little bit duller.

Health warning: We are about to dive into a lot of numbers and wonkery.

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You might think that Zoomlion, a Chinese construction machinery maker, ought to focus on bricks-and-mortar projects, but it just can’t seem to resist the siren call of high finance.

First it ramped up its lending business, providing vast amounts of credit to its customers. Now it’s getting into the insurance trade. Read more

Clad in a blue plaid shirt and speaking with a rural accent, Miao Cuihua trips over her words as she demands unpaid wages, her “blood and sweat money” for toiling on a construction project.

Miao is certainly not the first migrant worker in China to complain about unpaid wages, but her act of protest has probably been seen by more of her fellow citizens than any other salary dispute in history. Read more

Didier Drogba’s football career in China could be coming to an end just two months after it started. According to local media, the former Chelsea striker has been caught in the middle of a financial dispute at Shanghai Shenhua, the club he joined in June, that might force the owners to sell him.

If true, it would be a damaging reversal not only for Shenhua but also for Chinese football more broadly. Drogba was easily the biggest foreign signing ever at any Chinese club, and it was hoped that his exceptional talent would elevate the quality of the country’s corruption-marred league and pave the way for more star arrivals. Read more

Investors and analysts are pouring over the minutiae of Chinese data for every little hint about the government’s policy stance. Are they about to crank up the stimulus? Investment approvals suggest so. Or are they holding back? Lending figures point in that direction.

But a far simpler and potentially more powerful signal has now come from Wen Jiabao, China’s premier. He has issued a rallying cry for “confidence”. Read more

Republicans in the US and Communists in China have more in common than they might suspect: both are trying to cut taxes to win over an angry public.

As with tax cuts in the US, China’s moves have also sparked a debate over how the revenue shortfall will be covered. But it is here that the similarities end. China’s latest tax cut – cancelling highway toll fees during national holidays – had a twist that even Republicans would oppose. Read more

With the constant talk about labour shortages and rising wages in China, it has become fashionable to say that the economy has reached its Lewis Turning Point - the moment in its development when a surplus pool of cheap labour shifts to deficit.

Think again. In a report this week, the IMF produced a striking new estimate. It reckons that China’s excess supply of labour, though diminishing, won’t run out until sometime between 2020 and 2025. Read more

Deng Xiaoping’s famous formulation of how China would reabsorb Hong Kong into its administrative fold was ‘one country, two systems’.

But huge protests on Sunday, the 15th anniversary of Hong Kong’s return, met with a virtual blackout in mainland Chinese media, suggesting that a new formulation might be more apt: one country, two realities. Read more

Is China’s slowdown worse than the government is letting on? That was the provocative claim in a New York Times article last week which reported that officials were manipulating data on everything from tax revenue to power production in order to present a rosier picture of the economy.

But two prominent analysts have now come to Beijing’s defence, arguing that Chinese statistics are reliable and concerns about falsification overblown. They say the truth is that the economy is slowing, not collapsing, and that the data have accurately portrayed this. Read more

First there was the Bordeaux bubble. Then came Moutai mania. What drink will next take China’s nouveau riche by storm?

Perhaps nothing more exotic than a good pint of beer. But there is one caveat – it will help to have snob appeal, according to a study published this week by market research group MintelRead more