Analysts from Bank of America Merrill Lynch think that China will experience its “Bear Stearns moment” on Friday, when the country will probably see as its first ever bond default.
That is a bold, attention-seeking call that is also patently ridiculous. Continue reading »
When China’s premier was an up-and-comer in the provinces, he famously told US diplomats that he looked at indicators including electricity consumption and freight transport to gauge the true state of the world’s second largest economy. According to a Wikileaks cable, Li Keqiang said such figures were more reliable than the government’s own official GDP growth number.
Embarrassingly for the then premier, Wen Jiabao, the “Keqiang index” was thus christened and was subsequently used by economists to cross-check the GDP growth numbers revealed every March at the annual session of China’s parliament, the National People’s Congress. Continue reading »
A Chinese corporate bond was heading on Tuesday for default, potentially puncturing some of the optimism that has galvanised a booming $12tn corporate debt market.
Shanghai Chaori Solar Energy Science & Technology Co.,Ltd, a Chinese maker of solar cells, announced late on Tuesday that it will not be able to repay the Rmb 89.8m interest on a Rmb1bn bond issued on March 7th 2012. Continue reading »
China’s annual National People’s Congress (NPC) has started with an interesting focus on online funds.
Zhou Xiaochuan, governor of the People’s Bank of China, and two other central bank officials were cornered by Chinese journalists on the second day of the NPC after some delegates from the financial sector urged stricter supervision of the online funds. Continue reading »
So rarely does China’s official GDP growth target bear more than a passing resemblance to subsequent reality (see chart), that it might be regarded as a less than useful indicator.
This year, however, much is riding on which number – if any –Beijing announces as its GDP target for 2014 at the annual National People’s Congress (NPC), which convenes on Wednesday. There are several potential permutations, each of which may indicate very different policy intentions. Continue reading »
By Liang Xiaozhong of the China Banking Regulatory Commission
Internet Finance is a term drawing massive attention from cities to villages across China. By broad definition, internet finance – which includes Peer-to-Peer (P2P) lending and crowd funding – includes any organisation that extends their financial applications to the public over internet or any other IP network. Heated discussion surrounds the question of whether internet finance may replace conventional banking in China, unlike in many countries where it has undergone an evolution alongside conventional banking.
To see the future of this competition, we first need to understand the fundamental differences between them. Continue reading »
China’s traditional banking sector is leading a counter-attack against the runaway success of online funds launched by internet companies such as Alibaba.
The China Banking Association, with 362 member banks, says deposits made in the funds should not be regulated in the same way as deposits by financial institutions, as at present, but as regular deposits, Chinese media have reported. Continue reading »
By Shaomin Li and Seung Ho Park
China has produced a class of successful entrepreneurs whose wealth rivals the “old money” of the west. Their success has created a novel phenomenon in China: “fu-er-dai” or “2Rich,” – the second generation of the rich. While their parents earned their money through their own hard work and thus respect in society, the 2Rich have a reputation of spending lavishly and driving expensive sports cars.
While mature economies go through slow wealth transfer over multiple generations, wealthy first-generation entrepreneurs and their descendants are entirely new in fast-growing emerging economies like China. These entrepreneurs are now in their 50s and 60s and beginning to look at retirement and the question of leadership succession in their family-run businesses. Will they hand the reign over to non-family professional managers or their children? Would the 2Rich be willing and ready to continue the family tradition? Continue reading »
Just three months ago, China was in diplomatic overdrive to establish a grand plan for economic and political cooperation with central and eastern Europe (CEE) at a summit with 16 regional leaders in Bucharest.
Since then, more than $19bn in Chinese investment and loan pledges have flowed to the region, outstripping in scale any previous phase of bilateral economic engagement, according to research by Grison’s Peak, a London-based merchant bank. The $19bn plus in pledges since November accounted for the lion’s share of a total of $22.2bn in signed loan and investment deals between China and the region for all of 2013, the Grison’s Peak figures show. Continue reading »
You might not guess it from the often frosty official relations between Washington and Beijing, but Chinese are more likely to see the US – rather than China – as the world’s “ideal country”, a survey comparing the Chinese, American and British dreams has found.
But although 35 per cent of Chinese see the US as “ideal” now (compared to just 26 per cent who see China as ideal), the proportion of respondents who think the US will remain the ideal country in 10 years time falls to 14 per cent, while those thinking China will by that time be “ideal” shoots up to 42 per cent of respondents. Continue reading »
In a country of rapid growth, high-speed trains and fickle tastes, Esprit, the German fashion firm, is centering its Chinese turnaround strategy on the simple concept of speed.
Taking a leaf out Zara’s book, Esprit is trying to shorten the time needed to move fashion from the design phase to clothes shops from 9 to 11 months to 3 to 4 months. Continue reading »
Chinese brands may not yet be world beaters, but it looks as though they are making waves among stock pickers.
Research from WPP, the advertising and public relations company, shows that a group of “Top 10″ Chinese brands – ranked by what they call “brand contribution” – sharply outperformed market indices (see chart). Continue reading »
By Francis Bassolino of Alaris Consulting
“In a market that is so large, why can’t we win our share?” So runs the familiar question at many a multinational struggling to turn a hefty investment into China into a growing profit stream.
This year, as the Year of the Horse gets underway, such habitual grumbles are sharpened by recent incidents involving some high-profile corporate names. The corruption scandal at GSK, the UK pharmaceuticals company, a write-down of US$580m on a China acquisition by Caterpillar, the US machinery giant, and the retreat from the China market of Revlon Inc, the cosmetics company, have all served to reinforce questions over whether global managers should devote more resources to China. Continue reading »
China’s crackdown on prostitution may have a broader impact on the country’s economy, just like the anti-corruption campaign did last year, according to one economist.
The Ministry of Public Security has launched a national crackdown on prostitution after a high-profile raid in the southern city of Dongguan on February 9 – the so-called the “sex city” of China. State broadcaster CCTV ran two reports to expose the city’s prostitution industry and kicked off the national campaign. Continue reading »
Why did inflows of foreign direct investment to China jump by a strong 16.1 per cent to $10.8bn in January?
Such a robust performance may seem counterintuitive. The Chinese economy slowed last year. Its manufacturing competitiveness is being eroded by a welter of rising costs. Several high-profile incidents – a corruption scandal at GSK, the UK pharmaceuticals company, a $580m write-down on a China acquisition by Caterpillar, the US machinery giant, and the retreat of Revlon Inc, the cosmetics company, have all raised questions over the longevity of China’s allure.
But even so, say analysts, the country retains its attractiveness for foreign investors simply because it generates superior returns. Continue reading »