China’s economic growth likely moderated a tad in the second quarter, economists say, though uncertainties at home and abroad are casting a shadow on the outlook for the world’s second largest economy.
The economy likely expanded 6.6% from a year earlier in the second quarter of 2016, a mite slower than the 6.7% on-year growth in the previous quarter, according to a median forecast of 15 economists polled by The Wall Street Journal. Growth has been moderating for the past three quarters in a row and has been gliding downward since 2011.
China’s policymakers are facing a series of challenges, from reducing industrial overcapacity to dealing with defaults on debt, and rising risks from capital outflows and a weakening currency, economists of Mizuho Securities Asia said in a note.
If Beijing carries through with plans to reduce excess capacity and consolidate “zombie” enterprises–state firms that live off credit but struggle to make profits–”economic growth will inevitably suffer in the short term,” they said.
On top of those challenges, heavy rainfall that flooded southern parts of the country in recent weeks is likely to impact inflation and industrial and agricultural output.
China’s government is due to release a slew of indicators in the coming week. Beyond the growth rate, other measures of the economy’s condition are also expected to show a slight weakening, according to the survey.
Value-added industrial output likely rose 5.9% in June from a year ago, slowing from 6.0% on-year growth in May. Investment in fixed assets outside rural households, a long-time growth engine, likely rose 9.3% in the first half of the year, slowing from the 9.6% increaseover the first five months of the year. Retail-sales growth is also expected to decelerate, to 9.9% in June from May’s 10.0%.
The heavy rains along the Yangtze and Pearl river deltas–key hubs of industrial and agricultural products–could disrupt production and drive up inflation, economists of the Australia and New Zealand Banking Group said.
Food prices, which had risen over the winter and remained elevated following the Chinese New Year, have retreated, easing inflation in June. The consumer-price index likely rose 1.8% from a year earlier, slowing from a 2.0% year-over-year growth in May, the same survey showed. June’s slower consumer inflation could be temporary as floods will likely push up vegetable prices over the next few months, ANZ economists said.
China’s producer price index, a gauge of factory-gate prices, likely dropped 2.5% from a year earlier in June, improving from a 2.8% year-over-year decline in May.
The country’s trade of goods with the rest of world also faces more headwinds than before. External demand likely remain tepid amid persistent global uncertainties, especially following recent market turmoil touched off by Britain’s vote to leave the European Union, economists said.
China’s outbound shipments likely dropped 5.0% year-over-year in June, extending May’s decline of 4.1%, according to the survey. Imports are expected to have fallen 6.4% from a year ago, compared with a 0.4% year-over-year decrease in May. That would bring China’s trade surplus to $45.65 billion in June, smaller than May’s surplus of nearly $50 billion.
The government and the economy received some surprise relief this week when foreign exchange reserves, after falling in May, showed an unexpected increase for June: a rise of $13.43 billion from the previous month for a total of $3.205 trillion.
Despite that, the size of the nation’s net capital outflow remains large, said economists of Citigroup Global Markets Inc. They estimate net capital outflows reached between $281.7 billion and $286.6 billion in the first half, and for the full year could hit $573.2 billion.
– By Liyan Qi
Beijing, July 15, 2016 (AFP)
China's economy expanded more than expected in the second quarter of the year, data showed Friday, fuelling hopes growth may be stabilising, but analysts warned private investment still needed to pick up.
The world's second biggest economy grew 6.7 percent year on year in April-June, slightly quicker than forecast in an AFP survey and the same as the previous three months.
The result is also in line with the government's 6.5-7.0 target for the full year and will provide some much-needed relief as China -- and key driver of the global economy -- suffers its worst rates of growth for 25 years.
"The national economy has achieved moderate but steady and sound development," National Bureau of Statistics spokesman Sheng Laiyun said, adding he was confident that the annual growth target could be achieved.
Markets were unmoved by the figures, with Shanghai's composite index ending the morning slightly lower.
However, economists analysts said the growth was driven by state investment in infrastructure and a real-estate rebound, suggesting it may be hard to maintain in the longer-term.
"China is on track of achieving this year's growth target," said Haibin Zhu, JP Morgan China chief economist. But he added that while industrial production was "very strong", private investment was weak.
After decades of breakneck growth policymakers are now trying to retool the economy, embracing weaker growth as a trade-off for structural reforms to wean the country off cheap exports and massive government spending in favour of domestic consumption.
But the transition has proved challenging.
Fixed asset investment, a gauge of infrastructure spending, rose nine percent in the first half of the year, amid a record credit binge in the first quarter aimed at stimulating China's slowing economy.
- Investment concern -
And investment by private businesses grew by less than three percent in the first half of the year, the data showed.
Sheng blamed the slowdown in private investment on overcapacity in traditional industries, barriers for private firms to enter some sectors, and limited access to loans.
Tom Rafferty of the Economist Intelligence Unit said "levels of state investment we have seen are not sustainable if the authorities are at all serious about curbing debt risks".
The "greatest concern" is the slide in investment by private firms, he added, in a sign that businesses are worried about the wider economy and Beijing is "failing to deliver on promised market reforms".
Factory production and consumer spending grew slightly, and industrial output rose over six percent on year in June, a slight increase on the previous month, although retail sales rose far more than expected.
The data come days after another downbeat reading on trade, which showed the fall in imports and exports accelerated in June.
Klaus Baader, Hong Kong-based chief economist for Asia Pacific of Societe Generale, told AFP: "I think it has been engineered by significant reacceleration in credit growth. He added that the growth figure was "a little bit disappointing", given the scale of lending expansion.
Official Chinese figures are viewed with widespread scepticism, and just days ago the government altered its growth calculation method for the second time in less than a year.
Friday's figures "should be taken with a grain of salt" because of the political pressures on officials to meet the growth target, research firm Capital Economics said in a note.
wf-bfc/tjh/dan
<org idsrc="isin" value="FR0000130809">SOCIETE GENERALE</org>
<org idsrc="isin" value="US46625H1005">J.P. MORGAN CHASE & CO</org>
China International Capital Corp lowered the forecast for Chna’s real GDP growth in 2016 from 6.9 percent to 6.7 percent. The downward adjustment was “largely driven by the softer-than-expected global demand recovery," CICC said in a research note.
Consumption demand is expected to be largely stable, government investment may continue to register stronger growth than that of the private sector, and export demand may remain weak in the latter half of this year due to political uncertainties in Europe and the United States, the CICC said.
CICC maintained its consumer inflation forecast at 1.9 percent for 2016, with the consumer price index trending down in the next few months before picking up moderately toward the end of the year.
“We maintain our forecast of no more interest rate cuts in 2016, and we reduce our reserve requirement ratio cut forecast from four more cuts to one more cut over the rest of the year," it said.
GDP grew by 6.7 percent year on year in the first quarter of this year, down from 6.8 percent in the final quarter of 2015. The CICC's forecast for 2017 growth was lowered from the previous 6.8 percent to 6.7 percent.—Xinhua
BEIJING -- Chinese authorities are scurrying to curb bubbles in the commodity market and other segments of the economy, as liquidity swells and investors find themselves in over their heads.
Seeing few places to turn with all that cash floating around, many individuals are looking to maximize their investment gains through risky financial products. Not a few are getting caught in scams. The People's Bank of China, the country's central bank, got an earful about this in mid-May, when some 50 investors claiming to be fraud victims held a demonstration in front of its headquarters. They demanded that the authorities investigate and help them get their money back.
Such demonstrations are rare in central Beijing, where security is tight. Plain-clothes police officers, wearing sunglasses, soon moved in to disperse the crowd, resulting in scuffles.
The protesters came from various parts of the country. They said they had purchased so-called wealth management products -- high-interest instruments aimed at retail investors -- from a company called Fanya via banks and the internet. Now, they said, they cannot retrieve their money. Some claimed to have lost between 400,000 yuan ($60,720) and 500,000 yuan.
Fanya, which promoted itself as the operator of a rare-metal exchange, promised annual returns of 12-14%. But the exchange apparently stopped payouts on the investment products in July 2015. The suspicion is that it was running a scam akin to a Ponzi scheme.
Some 200,000 people have allegedly been affected, according to Chinese media reports, with total losses coming to some 43 billion yuan.
The Fanya case is just the tip of the iceberg. A growing number of Chinese individuals are falling victim to fraud on the internet.
Peer-to-peer lending and other online financial services are proliferating rapidly. One private-sector survey found that P2P lending surged 140% on the year in May, to 148 billion yuan.
There are around 4,000 lending brokerage websites in China, about 40% of which have been implicated in fraud, embezzlement or other misdeeds.
A scam involving Ezubao, one of China's highest-profile P2P lending sites, came to light in December 2015. Ezubao was found to have defrauded some 900,000 investors of more than 50 billion yuan.
ISSAKU HARADA, Nikkei staff writer
Loans galore
The liquidity glut has worsened as banks have continued to boost lending despite the slowdown in gross domestic product growth.
According to estimates by Nikkei, China's nongovernment debt -- that held by companies and households -- totaled 159 trillion yuan at the end of 2015. The ratio of such debt to GDP stood at 236%, up as many as 100 percentage points from the end of 2008 and higher than the comparable figure in Japan during the bubble period of the late 1980s.
In the first quarter of 2016, new bank loans to Chinese companies and households amounted to about 6.6 trillion yuan, a record for the January-March term.
Amid the excess liquidity, China saw a bubble emerge in its commodity futures market this past spring. Trading values on the Shanghai and Dalian exchanges both hit fresh record highs in March, with investors betting on higher crude oil prices.
In June 2015, the total trading value of the Shenzhen and Shanghai stock markets was 270% higher than that of China's three biggest commodity exchanges -- those in Shanghai and Dalian, along with one in Zhengzhou. But this past April, the total trading value of the three commodity exchanges was 80% higher than that of the two stock exchanges.
In May, the commodity exchanges saw trading value tumble 30% on the month, as authorities moved to contain the bubble by raising margins.
Similarly, when property prices spiked in Beijing and Shanghai earlier this year, local authorities curbed the rise by pulling regulatory levers on housing loans.
This is what it has come to for China's rulers: playing whack-a-mole against various market bubbles.
"Authoritative" warning
In the midst of all this, the People's Daily newspaper -- a Communist Party mouthpiece -- on May 9 published a front-page interview on the economy with an unnamed "authoritative figure."
The interviewee is widely believed to have been someone close to President Xi Jinping -- perhaps someone like Liu He, Xi's top economic adviser and director of the party's Office of the Central Leading Group for Financial and Economic Affairs. At any rate, the individual repeatedly warned of excess debt and a possible financial crisis.
"Risks are rising in the foreign-exchange market, stocks, bonds, real estate and bank credit because of high leverage," the interviewee stressed, noting that if it is not controlled, the leverage "will lead to systemic financial crisis and negative growth."
Internationally, many have the impression that China's authorities are confident in their ability to control the bubbles. Comments like that suggest the country's economic bureaucrats may not be quite so sure of themselves.
China's National Bureau of Statistics says that retail sales grew 10 percent in May from a year earlier. That's down 0.1 percentage point from the previous month, and the weakest growth since April last year. Sluggish sales of apparel and home electronics pushed the figures lower.
Industrial output rose 6 percent year-on-year in May, unchanged from the previous month. Government-backed investment boosted output in the railway and aviation sectors. But growth in corporate capital investment continued to decline.
Analysts say China's economy will remain heavily dependent on government spending. They say corporate restructuring is taking a toll on domestic demand. Consumers are worried about jobs and are tightening their purse strings.
China's imports decreased at their slowest pace in more than a year-and-a-half in May, official data showed Wednesday, in a possible sign domestic demand in the world's second-largest economy may be recovering.
The country is a key driver of world growth and its demand for commodities has enormous implications for resource-rich nations from Australia to Nigeria.
China's imports have been shrinking since late 2014 as the country's once blistering expansion lost steam, slowed down by manufacturing overcapacity, a slowing property market and mounting debt.
But the year-on-year drop of 0.4 percent in May imports marked the slowest rate of decline since October 2014, when they grew 4.6 percent, customs data showed.
The results were also well ahead of the Bloomberg News median forecast of a 6.8 percent decrease based on a poll of economists.
"Recovering commodity prices and relatively resilient domestic demand are driving a recovery in import growth," Julian Evans-Pritchard, an analyst with research firm Capital Economics, said in a note.
The value for May imports stood at $131.1 billion, according to the Chinese customs office.
The improvement in imports is likely to last for the remainder of this year and "return to positive territory before long" partly because "the continued feed-through from earlier policy easing helps to prop up domestic demand", said Evans-Pritchard.
However, exports fell 4.1 percent last month from a year ago to $181.1 billion, following a 1.8 percent decline in April and leaving a trade surplus of just under $50 billion, the figures showed.
The key export sector has shown year-on-year declines for eight of the past 10 months as the country's economic growth has fallen to its slowest level in a quarter of a century.
- Supply glut -
Steel and aluminium exports continued to rise by volume in May, as the international community takes Beijing to task over concerns that it is flooding the market with the commodities.
China's steel exports increased 20 percent last year to 112 million tonnes, a record high, and in May rose 2.4 percent year-on-year to 9.4 million tonnes, official data showed.
China shipped 420,000 tonnes of aluminium last month, up 2.4 percent on year, according to the customs.
The increases come as countries around the world blame China for a supply glut that has left industry in Europe and elsewhere in turmoil.
As part of its promised reforms, the government has listed reducing overcapacity and excess inventory and cutting down borrowing as top priorities, with the country's ailing steel industry a key target.
But foreign governments say they have seen little movement towards implementing its promises to tackle the problem.
The issue was a major sticking point at a key annual meeting between the US and China this week, where American treasury secretary Jack Lew said Chinese steel and aluminium production has had a "distorting and damaging effect on global markets", an accusation angrily denied by his Chinese counterpart.
Washington has punished Beijing with harsh tariffs, most recently in March, when it slapped a 300 percent rate on the cold rolled steel used to make auto parts.
The EU, the second-biggest steel producer, has launched a dumping probe into Chinese steel, with angry manufacturers urging it to mirror the US's tough tariffs.
Meskipun demikian, indikator lain menunjukkan perlambatan ekonomi di negara dengan pertumbuhan ekonomi terbesar kedua di dunia ini mulai pulih.
Seperti dikutip dari Reuters, Jumat (15/4/2016), pertumbuhan ekonomi China di kuartal I itu lebih rendah dibandingkan posisi kuartal IV-2015 sebesar 6,8%
Ekonomi China tumbuh 6,9% pada tahun 2015, dan merupakan tingkat paling rendah dalam 25 tahun terakhir.
Para analis memperkirakan ekonomi China masih akan lesu di tahun ini. Diperkiraan ekonomi negeri tirai bambu akan tumbuh 6,5% bahkan setelah pemerintah melonggarkan kebijakan fiskal dan memotong suku bunganya lagi.
Namun, masih ada data-data yang mengisyaratkan ekonomi China mulai membaik berkat efek kebijakan pemerintah setempat.
Pertumbuhan investasi aset tetap China tumbuh cepat menjadi 10,7% year on year pada periode Januari hingga Maret, mengalahkan ekspektasi pasar 10,3%.
Pertumbuhan produk industri melaju hingga 6,8%, melampaui predkis analis yang memperkirakan naik 5,9% secara tahunan setelah kenaikan 5,4% pada Januari hingga Februari.
Arus keluar modal merupakan fokus utama pada akhir tahun 2015 yang juga tampaknya telah mengalami penurunan dalam beberapa bulan terakhir seiring dengan kenaikan dolar.
Beijing, April 15, 2016 (AFP)
China's economy grew 6.7 percent in the three months of 2016, its slowest quarterly expansion in seven years, the government said Friday, but indicators for March improved.
The figure released by the National Bureau of Statistics (NBS) matched the median forecast of economists polled by AFP before the release, and was within the government's target of 6.5-7.0 percent for the year.
And in a positive signal for the world's second largest economy, a key driver of global growth, industrial output rose 6.8 percent in March, the NBS said, accelerating from the previous month and beating expectations.
The economy saw "sound development" in the first quarter, NBS spokesman Sheng Laiyun said, adding that the figures showed "positive changes on major indicators".
But he cautioned: "We must be aware that we are in a critical stage of transformation and upgrading as well as replacing old drivers of growth with new ones."
As well as industrial output, which measures production at the country's factories, workshops and mines, figures for retail sales and fixed asset investment also came in ahead of expectations in a Bloomberg News poll.
Retail sales, a key indicator of consumer spending, increased 10.5 percent year-on-year in March, the NBS said, while fixed asset investment, a measure of mainly government spending on infrastructure, expanded 10.7 percent in the first quarter compared to the same period in 2015.
China's leaders are looking to manage a difficult transition away from the investment- and export-led model of the past to an economy more driven by consumer demand, but the change is proving bumpy and global markets have fretted over the outlook.
Services accounted for 56.9 percent of the economy in the first quarter, the NBS spokesman said, two percent more than last year and nearly 20 percent more than secondary industry, which includes mining, manufacturing and construction.
But while the growth rate was "better than expected" and the economy showed "a turn to stabilisation", Sheng warned that "we can't be over optimistic" given uncertainties in the world economy.
"Difficulties on structural adjustment persist and downward pressure on the economy cannot be ignored," he added.
- 'Upward revisions' -
Louis Kuijs of Oxford Economics said Friday's figures showed "a milder deceleration than many had feared", which was leading to "upward revisions" in growth forecasts.
But the outlook for most expansion drivers was "still subdued" he said, so "the government will need to continue to rely on stimulus, notably infrastructure investment" in order to hit its "overly ambitious" growth targets.
ANZ economists said the data suggested a "stabilisation of the 'old economy'", but added that they were "cautious on the composition of growth", particularly the amount derived from financial services.
They predicted that the central bank will keep interest rates low "in light of increasing cases of credit defaults" but would be less aggressive with monetary easing as property bubbles have "started to be of a concern to policymakers".
They were "still sceptical" about how effective monetary policy was at boosting the real economy, they added.
The figures came on the back of other positive signs for China's economy, which maintained steady inflation of 2.3 percent in March and showed its first month-on-month rise in producer prices in two and a half years.
Exports surged 11.5 percent on-year in March, beating expectations and snapping an eight-month streak of declines, while the Purchasing Managers' Index (PMI) rebounded to 50.2 for the month, a sign of expanding activity in the sector.
blOOmberg: China’s economy stabilized last quarter as the property sector rebounded, markets steadied, and loose monetary policy helped spur an improvement in factory conditions.
Gross domestic product rose 6.7 percent in the first quarter from a year earlier, the statistics authority announced Friday, meeting the median projection of economists Bloomberg surveyed and in line with the government growth target of 6.5 percent to 7 percent for the full year. Industrial output, fixed-asset investment and retail sales all picked up in March.
Signs of stabilization in the world’s second-biggest economy and bets on a subdued pace of U.S. monetary tightening have helped spur rallies in oil, metals and global equities in recent weeks. Whether China continues to recover, or resumes its slide toward slower growth, may depend on how much oomph is left from prior easing and if more is on the way.
"We continue to expect a cyclical improvement as past stimulus measures are still filtering through to the economy," Morgan Stanley economist Sun Junwei wrote in a report ahead of the release.
Industrial output expanded 6.8 percent in March from a year earlier, compared to the median forecast of 5.9 percent and 5.4 percent in the first two months of the year.
Retail sales rose 10.5 percent from a year earlier in March, compared to an estimate of 10.4 percent.
Fixed-asset investment jumped 10.7 percent in the first three months from a year earlier, compared to the forecast of 10.4 percent and 10.2 percent in the first two months.
China has been making the transition away from heavy industries to a services-led and consumption-driven economy, creating new winners in startups and media and losers in fading industries like coal and steel. The government is seeking to reduce overcapacity at heavy industrial plants without derailing the economy or slashing too many jobs.
chinadaily: We need better cooperation among the three main global currencies: the dollar, euro and yuan, says former prime minister of France Dominique de Villepin in an exclusive interview with China Daily website.
The interview was done through “ Launching of Dagong Global Infrastructure Credit Rating Methodology & Infrastructure Investment and Financing Forum” which is jointly held in Beijing by Dagong Group, an emerging international credit rating agency and Global Infrastructure Basel (GIB) Foundation.
Could you share your view on the infrastructure credit rating methodology to be launched this time?
I think that it’s a very innovative approach that Dagong has initiated with this new methodology. For the first time, we’re going to have new tools allowing us to appreciate the quality of the different investment in infrastructures, the quality of financial project and the quality of companies. It will allow to guide capital flows towards the best projects. This is something very new and adapted to the challenges. Many infrastructure projects will be implemented all along the One Belt One Road in Asia, South East Asia, Central Asia and Caucasus in the coming years. For the first time, the new rating methodology promoted by Dagong in a more comprehensive way with the help of new technologies will give access to relevant and multidimensional criteria to evaluate precisely all different risks.
Among all the issues to be discussed in this year’s G20 Summit in Hangzhou, which topic do you care most about?
The most important issue is to build new tools in order to ensure the financial stability. This requires to innovate and to create new instruments. That’s why I really believe we need a new financial system.
First, a better cooperation has become necessary between the three main world currencies: the dollar, the euro and the yuan. I do believe that we need a G3 as a new institutional way to improve cooperation among the three main economic regimes. This G3 will be a strong cooperative architecture organized at governments and Central Banks levels to respond to major crisis situation and to coordinate monetary policies.
Second we need a new tool to assess risk, and that’s why I think we need a more balanced credit rating system. As a matter of fact, the existing system dominated by the US Big Three is not only unfair, but inefficient as we witnessed during the 2008 crisis. Because of its development, Asia needs its own credit rating system to support a more stable financial order.The question is: how can we create new capacities and express innovative ideas that help us to address the challenges of the global economy. The world economy is in a new situation, the growth is slowing down all around Eurasia, in Europe, in China, in Russia. That’s why we have to search for new engines for growth. Of course One Belt and One Road is giving us a very strong perspective, opening towards stability and prosperity. But for that, it is crucial to make it a shared project. The AIIB is an emblematic example of this approach, with 57 members and its concrete work to foster infrastructure development in Asia. We have to be innovative, creative, if we want to address the current situation of world economy.
The request came in a July 27 email from a People's Bank of China official with a subject line: "Your urgent assistance is greatly appreciated!"
In a message to a senior Fed staffer, the PBOC's New York-based chief representative for the Americas, Song Xiangyan, pointed to the day's 8.5 percent drop in Chinese stocks and said "my Governor would like to draw from your good experience."
It is not known whether the PBOC had contacted the Fed to deal with previous incidents of market turmoil. The Chinese central bank and the Fed had no comment when reached by Reuters.
In a Reuters analysis last year, Fed insiders, former Fed employees and economists said that there was no official hotline between the PBOC and the Fed and that the Chinese were often reluctant to engage at international meetings.
The Chinese market crash triggered steep declines across global financial markets and within a few hours the Fed sent China's central bank a trove of publicly-available documents detailing the U.S. central bank's actions in 1987.
Fed policymakers started a two-day policy meeting the next day and took note of China’s stock sell-off, according the meeting’s minutes. Several said a Chinese economic slowdown could weigh on America.
Financial market contagion from China was one of the reasons cited by the Fed in September when it put off a rate hike that many analysts had expected, a sign of how important China has become both as an industrial powerhouse and as a financial market.
NO SECRETS
The messages, which Reuters obtained through an Freedom of Information Act request, show how alarmed Beijing has become over the deepening financial turmoil and offer a rare insight into one of the least understood major central banks.
The exchanges also show that while the two central banks have a collegial relationship, they might not share secrets even during a crisis.
"Could you please inform us ASAP about the major measures you took at the time," Song asked the director of the Fed's International Finance Division, Steven Kamin in the July 27 email.
The message registered in Kamin's account just after 11 a.m. in Washington. Kamin quickly replied from his Blackberry: "We'll try to get you something soon."
What followed five hours later was a 259-word summary of how the Fed worked to calm markets and prevent a recession after the S&P 500 stock index tumbled 20 percent on Oct. 19, 1987.
Kamin also sent notes to guide PBOC officials through the many dozens of pages of Fed transcripts, statements and reports that were attached to the email.
All of the attached documents had long been available on the Fed's website and it is unclear if they played a role in shaping Beijing's actions.
Kamin's documents detail how the Fed began issuing statements the day after the market crash, known as Black Monday, pledging to supply markets with plenty of cash so they could function.
By the time Song wrote to Kamin, China had spent a month fighting a stock market slide and many of the actions taken by the PBOC and other Chinese authorities shared the contours of the Fed's 1987 game plan.
DESPERATE MEASURES
The July 27 plunge in the Shanghai Composite Index was the biggest one-day fall since 2007 and by then the market had lost nearly a third of its value over six weeks.
China's central bank had already cut interest rates on June 27 in similar fashion to the Fed's swift move to ease short-term rates in 1987.
Song told Kamin the PBOC was particularly interested in the details of the Fed's use of repurchase agreements to temporarily inject cash into the U.S. banking system in 1987.
The PBOC had increased cash injections in June and ramped up repurchase agreements in August as stocks continued to slide. The PBOC also eased policy on Aug. 11 by allowing a 2 percent devaluation in the yuan currency. (Graphic: here)
As Song and Kamin exchanged messages on July 27 and 28, other Chinese authorities were busy trying to contain the crash.
China's securities regulator said on July 27 it was prepared to buy shares to stabilize the stock market and that authorities would deal severely with anyone making "malicious" bets that stocks would fall.
In 1987, the Fed contacted banks directly and encouraged them to meet "legitimate funding needs" of their customers, according to Kamin's email to Song.
In addition to its pledges and cajoling, the U.S. central bank in 1987 eased collateral restrictions on Wall Street and tried to calm markets by intervening in trading earlier than normal. The U.S. economy continued to grow, eventually entering recession in 1990.
The central bank in Beijing does not have as free a hand to conduct policy as does the Fed, which answers to the U.S. Congress but operates independently from the administration.
The PBOC governor Zhou Xiaochuan implements policies ultimately decided by political leaders in Beijing and lacks the authority to lead debate or shed light on decision-making.
China's vice finance minister told Reuters last year Chinese supervisors needed to learn from countries like the United States.
Premier Li Keqiang said last month China's regulators did not respond sufficiently but China had fended off systemic risks.
U.S. central bankers say their relative transparency helps their effectiveness and legitimacy, but open records laws also make Fed officials cautious about their communications, much of which must be made public when requested. Fed Vice Chairman Stanley Fischer has said transparency makes it harder for policymakers to have informal discussions.
Kamin pointed out in his email that everything he was sending was publicly available.
"I hope this is helpful," he said.
(Reporting by Jason Lange in Washington; Additional reporting by Kevin Yao in Beijing; Editing by Tomasz Janowski)
Hal tersebut, karena posisi kedua negara tersebut sebagai rantai pasokan di wilayah regional untuk barang-barang elektronik. Selain itu, menurunnya permintaan dan harga untuk komoditas juga akan menjadi salah satu kekhawatiran yang menjadi dampak dari ekonomi China.
ICAEW Regional Director untuk Asia Tenggara, Mark Billington FCA mengatakan, dengan tantangan yang besar, pemerintah Malaysia berisiko mengalami penurunan rating.
Hal tersebut di tengarai oleh penurunan harga minyak dunia dan kerentanan mata uang ringgit pada pengeluaran modal akan mempersempit gerak pemerintahan dalam membuat kebijakan untuk meningkatkan pertumbuhan ekonominya.
"Malaysia terjebak di dalam sebuah “kutukan sumber daya alam” dimana sektor komoditas mengalami ledakan peningkatan dan mempunyai nilai tukar yang tinggi," paparnya dalam pernyataan resmi, Selasa (15/3).
Hal ini ternyata membuat lemahnya daya saing dan kurangnya investasi di sektor non-komoditas. Oleh karenanya, Malaysia akan lebih terpapar pada dampak negatif dari penurunan harga hingga penurunan nilai komoditas.
Mark melanjutkan, pertumbuhan di Filipina diprediksi akan tetap kuat. Menurut survei ICAEW menunjukan bahwa bisnis yang sehat dan kepercayaan pelanggan disertai dengan kebijakan fiskal yang cukup longgar ternyata mendukung pertumbuhan ekonomi di Filipina.
Di sisi lain, negara ASEAN lainnya, seperti Singapura, akan tertolong oleh sektor jasa yang akang menderek mesin pertumbuhan Singapura. Sebab, ekspor barang non-minyak di singapura dan sektor manufaktur akan terus meningkat di tahun-tahun mendatang. Investasi pemerintahan yang bertambah kuat dan pengeluaran rumah tangga pemerintah akan terus mendukung kegiatan sektor jasa.
"Namun, sektor jasa yang berhubungan dengan minyak dan eksportir akan berlanjut rentan di dalam perdagangan regional di Singapura," tutup Mark.
SHANGHAI kontan. Bursa saham China menutup pekan ini dengan penurunan mingguan seiring intervensi yang diduga dilakukan pemerintah gagal menghidupkan kembali kepercayaan investor di pasar saham dengan kinerja terburuk di dunia.
Indeks Shanghai Composite naik 0,2 % pada hari Jumat (11/2), memangkas pelemahan pekan ini menjadi 2,2 %. Investor menunggu data pekan ini yang diproyeksikan akan menunjukkan tidak ada jeda perlambatan dalam produksi industri dan investasi aset tetap.
Yuan menguat di perdagangan daratan setelah bank sentral menaikkan suku bunga acuannya setiap hari sejak November. Hang Seng Index China Enterprises naik untuk pertama kalinya dalam empat hari.
Perdagangan di pasar saham terbesar kedua di dunia ini telah jatuh ke level terendah sejak 2014 seiring para pedagang marjin melepas posisi bullish dalam menghadapi dugaan pembelian oleh dana yang diarahkan negara.
Indeks acuan China telah kehilangan 21 % tahun ini, yang paling buruk di antara 93 indeks acuan global yang dilacak oleh Bloomberg, seiring memburuknya data ekonomi dan campur tangan pemerintah mencegah investor.
TOKYO -- The Chinese economy's woes are rippling toward Japan and the rest of the world, triggering a wave of bankruptcies among companies dependent on the Asian giant.
From April 2015 to February 2016, Japan saw 80 bankruptcies caused by such factors as China's slowing economy and higher production costs, with liabilities totaling more than 230 billion yen ($2.01 billion), according to Tokyo Shoko Research. The number of cases jumped 70% compared with a year earlier. Total liabilities rose by roughly a factor of 10 to account for about 13% of the total among all Japanese corporations that went bankrupt in the period as opposed to just over 1% in all of fiscal 2014.
There were 10 China-related bankruptcies in February alone, with net liabilities of about 3 billion yen.
China has reported that gross domestic product expanded 6.9% in 2015 -- the slowest in 25 years. Growth in industrial output and capital investment has also sagged. Many see the deceleration continuing on excess production capacity and other structural factors. Resource-based companies and parts makers counting on robust Chinese demand now face headwinds.
Until fiscal 2014, China-related bankruptcies were seen primarily among apparel makers and other smaller businesses and caused mainly by rising wages and other costs, according to Tokyo Shoko Research. The trend is now spreading to larger enterprises.
Declining Chinese demand dealt a big blow to Daiichi Chuo Kisen, a maritime shipper focused on transporting such resources as iron ore. The company filed for civil rehabilitation proceedings in September 2015 with about 120 billion yen in liabilities.
Mid-tier trading house Emori Group Holdings filed for rehabilitation in April 2015 with total liabilities of about 70 billion yen. Emori had begun trading metals and minerals in addition to mainstay chemical products and had relied on China for roughly 70% of its sales. But it fell into trouble after failing to collect receivables from a distressed trading partner there.
The smaller the company, the harder it tends to get hit. Teramachi, which built components used in the Hayabusa2 asteroid probe, went bankrupt in January. It made capital investments on hopes of greater demand related to construction machinery in China, but the orders did not materialize.
Companies abroad are also feeling the heat. Thailand's Sahaviriya Steel Industries applied last October to begin its rehabilitation after cheap Chinese products flooded the global market. Many Chinese steelmakers are trying to make up for sluggish demand at home by boosting exports.
Australia's Queensland Nickel went bankrupt this January on a drop in construction-material demand in China, the world's largest market for the metal.
No comments:
Post a Comment