China Economic News

[Behappyalways]

China Blows Its Debt Bubble Bigger
http://www.bloombergview.com/articles/20...ble-bigger

[BlueKelah]

These Nine Charts Show the Shenzhen Stock Market Is Like No Other Market in the World

While markets in the U.S. and much of Europe were closed for a long weekend, stocks in China continued to rally.

The Shenzhen Composite Index is now up over 100 percent year to date.

Looking at a one year chart of both of China's stock markets, we can see that the rally has been slightly more manic in Shenzhen at 175 percent compared to Shanghai's 140 percent. It's worth noting that the Shenzhen rally has moved ahead of Shanghai over the past few weeks.

[CityFarmer]

The trend of payment by Yuan, is very clear...

Yuan now most-used in Asia for payments to China, Swift says

HONG KONG (May 27): The yuan has become Asia’s most-active currency for payments to China and Hong Kong, according to the Society for Worldwide Interbank Financial Telecommunications.

The Chinese currency now accounts for an average 31 percent of the region’s payments to China and Hong Kong, up from 7 percent in April 2012, Swift said in a statement issued on Wednesday.

Singapore, Taiwan and South Korea have adopted the yuan -- officially known as the renminbi -- for the majority of payments to the Greater China region, according to Michael Moon, head of Asia Pacific payments at Swift.
...
http://www.theedgemarkets.com/sg/article...swift-says

[Behappyalways]

The 'Liquidity Trap' with Chinese Characteristics
http://english.caixin.com/2015-05-29/100814649.html

[touzi]

China is changing fast and learning to play the game, a sign of that is how comfortable their leaders on the world stage and infront of the media.

This is an article on PM Li Keqiang. Some years ago I remember seeing Mr Wang Qishan on TV and was struck by how confident and relax he was on international stage.

http://news.asiaone.com/news/asia/anecdo...wit-famous

[Behappyalways]

[新闻夜班车-石家庄]图说天下 陕西“炒股村”：农民凌晨干活白天炒股
http://news.cntv.cn/2015/06/03/VIDE14332...2962.shtml

[BlueKelah]

Excellent example of when to divest and have a bigger cash position. Warning sign of bubble definitely there now. Those poor farmers will never know what hit them when the time comes..

sent from my Galaxy Tab S

[greengiraffe]

Chinese on a mission... the ongoing equity market strength is their way of turning adversities into a positive outcome for them - given that China is still not part of major global indicies, whoever is behind this big move clear knows what their strategy is working towards...

Savers should look to China
Patrick Commins
909 words
20 May 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.
Savers in the West will increasingly need to look to the East to achieve their long-term investment goals as they struggle with markets that have been "rigged for the short term" after years of unconventional monetary policy and zero interest rates.

China is on the cusp of creating a whole new class of assets that are being "genuinely created for the long-term investor" and which will allow savers to deal with "a market that is being rigged for the short term", AXA Framlington portfolio manager Mark Tinker said.

"In five years' time half of your portfolio will be in stuff that doesn't even exist right now," Mr Tinker said. "Like Chinese local government two-year bank debt, which has become a 10-year bond owned by institutional investors."

Mr Tinker pointed to the 77 consecutive months of zero official interest rates in the United States that has heavily distorted financial markets in developed markets and forced savers and long-term investors to push into riskier asset classes in an attempt to generate income and achieve return objectives.

"Western governments are trying to run this [financial] repression, and it's not good for your savings, not good for long-term investors, and it's not good for the real economy because banks are not able to lend to the real economy so they lend to financial institutions, which are gearing up and creating instability within markets.

"The negative interest rates are doing real damage to the savings industry and the unwind will leave us with lower growth and lower inflation, which is a particular issue in Europe, where unconventional monetary policy is providing no real economic stimulus aside from through a lower currency."

Mr Tinker contrasts that with the dynamism of Asian economies, and especially the world's second-biggest, where economic growth, while slowing, is transitioning to a more sustainable growth path.

Chinese policymakers are intent on building out the country's financial services infrastructure, such as superannuation and insurance industries, in order to create an environment where households no longer feel they need to maintain average savings rates of 50 per cent, the Hong-Kong based Mr Tinker said.

"As those get built out, the savings ratios come down and people can spend more of their earnings, and that's driving the shift to consumption. And as we liberalise the capital markets, the return on the savings goes up, so you need to save less."

But to make that work, Chinese individual and institutional investors will need assets in which to invest.

Policymakers have already broadened the investment universe by introducing schemes such as the Hong Kong-Shanghai Stock Connect program and by actively encouraging individuals to diversify away from property and into the sharemarket. That has sparked a 120 per cent surge in the Shanghai Stock Exchange Index over the past year, and a 40 per cent jump in Hong Kong's Hang SengChina Enterprises Index. The next "massive opportunity", Mr Tinker said, will be in an emerging class of Chinese government debt and infrastructure bonds.

China's debt pile is now a mammoth $US28 trillion, Mr Tinker said, quoting research by consultancy McKinsey that has unnerved international observers.

"Everybody is obsessed with debt as a bad thing, everybody's worried about local government debt in China, but it's a very different [proposition] if your debt is backed up by assets, which is most Chinese debt.

"I believe it's a huge opportunity to sell [that debt] as a long-term investable asset," he said.

There will be similar opportunities in coming years to buy Chinese infrastructure bonds, Mr Tinker said.

China is aiming to recycle the equivalent of "billions, if not trillions" of US dollars, not into US Treasuries as they might have once done, but into funding the building of physical infrastructure across Asia, including through its landmark "One Belt, One Road" initiative.

As part of the liberalisation of their capital markets, Chinese policymakers are also pushing towards full convertibility of the renminbi and have been lobbying for its inclusion in the International Monetary Fund's basket of reserve currencies.

IMF managing director Christine Lagarde has said the question is when, not if, the renminbi qualifies.

If the Washington-based institution endorses the yuan after the five-yearly review of the SDR basket that's due by year-end, at least $US1 trillion of global reserves will switch into Chinese assets, Bloomberg recently reported, quoting research by Standard Chartered and AXA Investment Managers.

"China wants global capital coming in to price those assets so it can create its own financial sector infrastructure, and the global capital will come from people like institutions in Australia," Mr Tinker said.

"And when [the yuan] becomes convertible, the focus of global investors on Chinese equities, and then by extension everything I have been talking about, will go up multiple times."

The new class of debt assets may take some years to appear, Mr Tinker said, which means investors for now should focus on gaining exposure to Chinese growth proxies such as the Hong Kong-listed shares, despite their strong recent rise, but that investors would be wise to get their exposure through actively managed funds.

"You can't try and time a rising, trending market," he said.

"The point is that if there is a long-term structural story, you need to participate in it."


Fairfax Media Management Pty Limited

Document AFNR000020150519eb5k0002i

[BlueKelah]

they are equally good at rigging their GDP growth numbers and now sucking the local savings out of the people by allowing a stock bubble to form. Their debt is also backed by uncompleted "ghost city" assets.

Should have been a reserve currency in IMF long ago.

Oh wait they are still a bunch of Commies.

[greengiraffe]

Don't mess around with COMRADES as they are a bunch of thinkers and strategists... even if we can't match them, at least its worth treating them with some respect so that we can swim along with them...

they are equally good at rigging their GDP growth numbers and now sucking the local savings out of the people by allowing a stock bubble to form. Their debt is also backed by uncompleted "ghost city" assets.

Should have been a reserve currency in IMF long ago.

Oh wait they are still a bunch of Commies.