David Fuller and Eoin Treacy's Comment of the Day
Category - China

    Xi Says China's Rise Unstoppable in Face of Protests, Trade War

    This article by Annie Lee, Peter Martin and James Mayger for Bloomberg may be of interest to subscribers. Here is a section:

    President Xi Jinping declared that no force could stop China’s rise, exuding confidence during a key
    anniversary as he faced unprecedented challenges from protesters in Hong Kong and Donald Trump’s trade war.

    Speaking at the start of grand parade marking 70 years since the founding of the People’s Republic, Xi called for stability in Hong Kong, unity among Chinese ethnic groups, and the “complete unification” of the country. Xi delivered the remarks at the site where late Communist Party patriarch Mao Zedong proclaimed the nation’s founding on Oct. 1, 1949.

    “Today, a socialist China is standing in the east of the world and there is no force that can shake the foundation of this great nation,” Xi told a crowd of carefully vetted guests under smoggy skies in the center of the capital. “No force can stop the Chinese people and the Chinese nation forging ahead.”
    Xi’s rallying cry came before an hours-long pageant showcasing China’s industrial and scientific achievements, including sophisticated weaponry such as DF-17 ballistic missiles believed capable of circumventing U.S. defense systems.

    The closely scripted proceedings sought to reinforce the strength of a party facing multiple threats, from the slowest economic growth in decades to violent unrest in one of Asia’s top financial hubs.

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    White House Weighs Limits on U.S. Portfolio Flows Into China

    This article by Jenny Leonard and Shawn Donnan for Bloomberg may be of interest to subscribers. Here is a section:

    The arguments for action inside the Trump team vary from simply enforcing U.S. transparency laws and creating a level of reciprocity, to raising national-security concerns with some of the Chinese companies that American pension funds are exposed to, according to people familiar with the conversations.

    Some of those companies are firms that the U.S. government has identified as bad actors or has imposed sanctions against. The argument continues that Americans would unlikely want to invest in those companies if they had the choice.

    The market capitalization of the 156 Chinese companies, including at least 11 state-owned firms, listed on the three-largest U.S. exchanges — the NASDAQ, New York Stock Exchange and NYSE American — stood at a collective $1.2 trillion as of late February, according to a report by the U.S.-China Economic and Security Review Commission.

    China earlier this month removed a $300 billion cap on overseas purchases of Chinese stocks and bonds meaning global funds no longer need to apply to purchase quotas to buy the assets. The move is designed to lure more foreign capital into Chinese markets.

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    13.5 tons of gold found in Chinese Ex Mayor's Basement

    This article from crimerussia.com may be of interest to subscribers.

    Police of the PRC searched the house of Zhang Qi, 57, the former mayor of Danzhou and found a large amount of cash, as well as 13.5 tons of gold in ingots in a secret basement of his home, reported local media.

    In addition to the mayor’s post, the official held others, such as the Secretary of the Communist Party. According to unofficial reports, in addition to the gold, cash worth 268 billion yuan was discovered.

    Luxurious real estate with a total area of ​​several thousand square meters, which the former city manager had been hiding for a long time, became the cherry on the cake for the Chinese Anti-Corruption Committee.

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    Chinese Tech Companies Turn to Financial Services

    This article by Stella Yigan Xie for the Wall Street Journal may be of interest to subscribers. Here is a section:

    Hao Jianyu, 26, who works at Google in Beijing and owns a Xiaomi phone, says he holds credit cards from China’s four biggest banks but prefers taking out loans from Xiaomi Finance to fund his daily spending. He says daily interest on what he borrows is 0.065%, an annualized rate of 23.4%. That’s higher than the interest rate on his credit cards, Mr. Hao says, but he has been able to increase his credit limit much faster with Xiaomi. The more often he uses Xiaomi’s short-term loans and repays on time, the bigger his credit line, which now exceeds the limits on his credit cards. He says his credit limit from Xiaomi has increased to 60,000 yuan from a few thousand yuan over two years.

    In a stock-exchange filing last year before Xiaomi went public, the Beijing-headquartered company said its finance business had a “highly advanced and customized credit assessment and risk management approach” that was built on its big database of users. The company said its proprietary risk-assessment model is used to preapprove individuals for certain amounts of credit. Xiaomi said in reporting its results for the second quarter of this year that revenue from its fintech business grew 63% from a year earlier to 792 million yuan ($112 million) in the three months through June.

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    Financial Services Exports

    I found this graphic from howmuch.net to be particularly interesting. The obvious point is the UK’s financial services is a major component of the global sector; second only to the USA.

    China to place government officials inside 100 private companies, including Alibaba

    Thanks to a subscriber for this article by Chloe Taylor for CNBC may be of interest to subscribers. Here is a section:

    State media reported over the weekend that the Hangzhou Municipal Government would transfer 100 representatives to “key enterprises such as Alibaba, Geely Holdings and Wahaha.”

    A full list of the 100 companies included in the initiative was not released.

    The directive, which media said was part of the Hangzhou government’s “New Manufacturing Plan,” is reportedly an attempt to boost manufacturing and bolster the local economy in the eastern province of Zhejiang.

    It is the latest strategy signalling the Chinese government’s efforts to transform the country’s economy. Its core strategy, Made in China 2025, aims to catch China up with its economic rivals in high-value industries such as robotics and aerospace.

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    China Stocks Fall, Yuan Weakens as Central Bank Holds Loan Rate

    This article from Bloomberg news may be of interest to subscribers. Here is a section:

    China’s central bank drained funds from the financial system and kept the one-year rate on medium-term loans steady on Tuesday morning, a move analysts said shows it’s sticking with its prudent approach to stimulus. That’s even after data Monday signaled the economy slowed in August, with industrial output, retail sales and fixed-asset investment rising less than anticipated.

    “Investors now realize the central bank won’t ease its monetary policy as aggressively,” Zhang Gang, a strategist with Central China Securities Co. “The market was due for a pullback after the Shanghai index climbed above 3,000-point level. Turnover failed to keep up.”

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    China's Economy Slows Again, Adding Pressure for Policy Action

    This article from Bloomberg news may be of interest to subscribers. Here is a section:

    Industrial output rose 4.4% from a year earlier in August, the lowest for a single month since 2002, while retail sales came in below expectations. Fixed-asset investment slowed to 5.5% in the first eight months, with the private sector lagging state investment for the 6th month.

    The data add support to the argument that policy makers’ efforts to brake the slowing economy aren’t sufficient as the nation grapples with structural downward pressure at home, the risk of yet-higher tariffs on exports to the U.S. and now surging oil prices. Nomura International Ltd. said this all raises the likelihood that the People’s Bank of China will cut its medium-term lending rate on Tuesday.

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    The Unlikely Chinese Cities Where House Prices Rival London

    This article from Bloomberg News may be of interest to subscribers. Here is a section:

     

    London, Seattle, Manchester and, um, Xiamen. Some of the world’s priciest housing markets aren’t where you might think. A four-year property boom in China has elevated a collection of little-known cities and turned them into real estate gold.

    While that’s been great news for speculators, it’s raising concern about whether China’s educated middle-class is quickly being priced out of these so-called second-tier cities, undermining Beijing’s goal of making them home to the millions moving from rural areas. Another risk is increasingly stretched family budgets: The average household debt-to-income ratio in China soared to a record 92% last year from just 30% a decade ago.

    “A property bubble is foaming up in many places in China,” said Chen Gong, the chief researcher at independent strategic think tank Anbound Consulting. “Prices are starting to look
    abnormal when compared to residents’ income.”

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