NEWS

January 21, 2019

China economy slows further, matching its lowest ever quarterly growth

The Chinese economy slowed further in the fourth quarter, matching its lowest recorded reading, last reached during the global financial crisis in 2009. The fourth quarter growth rate of 6.4 per cent, year on year, matched that of the first quarter of 2009, according to data released Monday by the National Bureau of Statistics. That was the lowest growth rate since the Chinese government began publishing quarterly growth rates at the beginning of 1992. The 2009 reading occurred at the...
January 20, 2019

Chinese pro-market economist Wu Jinglian warns of ‘state capitalism’ dangers

An influential Chinese pro-market economist has warned of the dangers of “state capitalism”, joining a chorus of liberals who say state intrusion is eroding confidence in the country’s economic future. Wu Jinglian, who turns 89 this month, made the remarks in a video message delivered at a seminar in Beijing last week, hosted by liberal private think tank the Hongfan Institute of Legal and Economic Studies. He said pursuing state control of the economy could easily lead to...
January 20, 2019

China’s tech hub Shenzhen misses growth target but leapfrogs Hong Kong into Asia’s top 5, mayor says

Shenzhen failed to meet its economic growth target last year due to worse than expected results in key technology sectors but its mayor remains confident it did enough to overtake Hong Kong and join the ranks of the five biggest city economies in Asia for the first time in its history. The south China boom town has been steadily making ground on Hong Kong in recent years, but its nominal gross domestic product in 2017 fell about US$3.4 billion short of a place among the giants of Tokyo, Seoul,...
January 20, 2019

China set to report 2018 saw slowest economic growth for 28 years

China is expected to report on Monday that economic growth cooled to its slowest in 28 years in 2018 amid weakening domestic demand and bruising US tariffs, adding pressure on Beijing to roll out more support measures. Growing signs of weakness in China, which has generated nearly a third of global growth in the past decade, are stoking worries about risks to the world economy and are weighing on profits for firms ranging from Apple to big carmakers. Policymakers in Beijing have pledged more...
January 20, 2019

China set to report slowest economic growth for 28 years

China is expected to report on Monday that economic growth cooled to its slowest in 28 years in 2018 amid weakening domestic demand and bruising US tariffs, adding pressure on Beijing to roll out more support measures. Growing signs of weakness in China, which has generated nearly a third of global growth in the past decade, are stoking worries about risks to the world economy and are weighing on profits for firms ranging from Apple to big carmakers. Policymakers in Beijing have pledged...
January 20, 2019

US-China trade deal ‘could well happen’, Donald Trump says, but there may be a catch

US President Donald Trump said that positive progress has been made towards a trade deal with China amid media reports that US negotiators are insisting Beijing agrees to regular check-ups on its reforms and shorter timelines for rectifying the trade imbalance. Following vice-ministerial level talks in Beijing earlier this month, Trump said on Saturday that a deal “could very well happen” after a “very extraordinary number of meetings”, though he denied reports that US...
January 20, 2019

China wants consumers to drive economic growth, but they are already being squeezed

Yu Mingang had a good job helping Chinese manufacturers prepare to sell shares to the public until the cooling economy derailed those plans. As demand for auditing services sank, the 25-year-old accountant in the eastern city of Hangzhou was laid off in December. Yu tightened his belt: No more trips to the cinema or eating out. He put off buying a computer. “I pay rent out of my savings,” he said. The downturn is squeezing urban workers and entrepreneurs the ruling Communist Party...
January 20, 2019

Is China wise to bank on consumer spending to drive economic growth?

China has a grand plan to rebalance its economy by reducing its dependence on state-led investment and exports in favour of increased consumer spending. But after disappointing retail sales figures in recent months and a sharp rise in household debt, questions are being asked about the feasibility of Beijing’s ambitions. According to the National Bureau of Statistics, in the first 11 months of 2018, retail sales – a measure of consumer spending that also includes government...
January 19, 2019

China pharma must swallow that jagged little pill called R&D as government slashes profit margins of generic drugs

China’s pharmaceutical industry – shaken by drastic price cuts from Beijing’s recent pilot roll-out of state hospital bulk purchase open bidding – will need to go through painful restructuring and raise big sums to fund innovation, according to executives. As Beijing’s pilot reform spreads nationwide to cut prices of drugs and improve their efficacy and safety, companies are under mounting pressure to invest in innovative drugs development and reduce reliance on...
January 19, 2019

China, Fukushima and inflatable poop: how Taiwan got frozen out of Asia’s biggest trade deal

Taiwan will be looking on enviously as trade officials meet in Tokyo this weekend to discuss expanding one of the world’s largest free trade agreements (FTA). The eleven members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will be meeting for the first time since it came into force at the end of last year. And while many potential new entrants – including Colombia, South Korea, Indonesia and Thailand – are high on the agenda, Taiwan...
January 18, 2019

China’s top banker names US Fed policy and Brexit as biggest risks to global growth

The trade war was not mentioned by China’s central bank governor on Friday when he gave his picks for the biggest risks to the global economy this year. Instead, Yi Gang, speaking at the second China-Germany High Level Financial Dialogue in Beijing, nominated the US Federal Reserve’s policy trajectory and Britain’s plan to leave the European Union. Yi also predicted a slowdown in the global economy in 2019, with widening differences in regional growth performance. “There...
January 18, 2019

Jobs in China’s export-import industries wither in the heat of Washington’s trade war with Beijing

Demand for labour at China’s importers, exporters, and related manufacturers fell by 40 per cent in the last quarter of 2018 from a year earlier, showing the trade war with the US has taken its toll, a survey released on Friday revealed. The China Institute for Employment Research (CIER) at the Renmin University of China in Beijing found jobs in export-oriented regions, including Dongguan in the Pearl River Delta and Suzhou in the Yangtze River Delta, were hit hard. However, the...
January 18, 2019

China revises down 2017 economic growth rate to 6.8 per cent ahead of announcing 2018 GDP figures

China’s economic growth rate for 2017 has been revised down to 6.8 per cent from 6.9 per cent as part of annual data revisions, the National Bureau of Statistics (NBS) announced on Friday. The estimated size of the economy at the end of 2017 was down by 636.7 billion yuan (US$93.9 billion), or 0.8 per cent, to 82.08 trillion yuan based on the final verification of economic figures, the bureau said. It typically releases the final reading of each year’s GDP figure in the second...
January 18, 2019

In China industrial heartland city of Chongqing, a painful economic transition is on full display

As night begins to fall, crowds gather near the top of Hongya Cave, a group of stilted buildings overlooking the Yangtze and Jialing rivers, both of which pass through the city of Chongqing in the west of China. They take jammed lifts down to the ground floor and walk across the street, holding up their mobile phones to capture the architecture, glittering at night, before posting on the popular short video mobile app, TikTok. TikTok helped turn the mountainous city of 30 million residents into...
January 17, 2019

China’s state-owned companies enjoy record profits, even as private sector flounders

Revenues and profits at China’s state-owned enterprises hit historic highs last year, even as the country’s private firms fought for their survival amid the slowest period for economic growth in a decade. Last year, firms owned by the central government booked revenues of 29.1 trillion yuan (about US$4.3 trillion), up 10.1 per cent from 2017, while net profits reached 1.2 trillion yuan, a rise of 15.7 per cent from the previous year, according to figures released by the State-owned...
January 17, 2019

China Premier Li Keqiang invites harsh words on economy from private sector top brass

Chinese premier Li Keqiang has asked economists and entrepreneurs to critique his government work report, which is expected to lay out the government’s economic policies for 2019. Li invited some of China’s most celebrated figures in business and economics to give him feedback that “may hurt the ear or stab the heart”, at a time when China’s economy continues to face serious headwinds. Those present included Alibaba chairman Jack Ma Yun, China First Heavy...
January 17, 2019

Chinese Premier Li Keqiang invites harsh words on economy from private sector top brass

Chinese Premier Li Keqiang has asked economists and entrepreneurs to critique his government work report, which is expected to lay out the government’s economic policies for 2019. Li invited some of China’s most celebrated figures in business and economics to give him feedback that “may hurt the ear or stab the heart”, at a time when China’s economy continues to face serious headwinds. Those present included Alibaba chairman Jack Ma Yun, China First Heavy...
January 17, 2019

China pushes for bonds to be included in global indices even as some foreign investors seek delay

Beijing is pushing hard for the inclusion of yuan-denominated bonds that are traded in onshore markets in major global bond indices, in an effort to encourage needed capital inflows. But some foreign investors are pushing back on an early inclusion, claiming they have not yet created the necessary infrastructure to handle the investments that would result. The Chinese government is urging bond indices to move forward anyway, arguing that lack of preparations by a few investors should not deny...
January 17, 2019

Shenzhen’s new bankruptcy court could track assets transferred to Hong Kong

China has created a special bankruptcy court in Shenzhen to handle “cross-border” cases, but experts have said it will not extend the mainland’s judicial reach into Hong Kong. However, the Shenzhen Bankruptcy Court will help officials in Guangdong trace the assets of bankrupt businesses in the mainland which have been transferred to Hong Kong, according to those familiar with the sector. Closer economic ties between the mainland and Hong Kong fostered in recent years have led...
January 17, 2019

China quietly cuts borrowing costs while keeping rates on hold

The People’s Bank of China (PBOC) has been quietly guiding interbank borrowing costs down without actually cutting official interest rates, with the latest move a record one-day injection of cash into the market. The central bank pumped a net 560 billion yuan (US$83 billion) into the financial system on Wednesday, the biggest open market operation on record. While that action was mostly aimed at addressing a funding shortage ahead of Lunar New Year, it also speaks to a policy priority for...