China Economic News

[Behappyalways]

This economist thinks China is headed for a 1929-style depression
http://www.marketwatch.com/story/this-ec...2016-06-30

[Behappyalways]

World faces deflation shock as China devalues yuan at accelerating pace
http://www.telegraph.co.uk/business/2016...rating-pa/

[BlueKelah]

World faces deflation shock as China devalues yuan at accelerating pace
http://www.telegraph.co.uk/business/2016...rating-pa/

yup China seems to be slowly devaluing the yuan on the side amid the brexit chaos. They have no choice but to devalue it. I base this on the impossible trinity theory.

If they want a stable exchange rate as announced last year after their failed attempt at devaluation, then they have to sacrifice free capital movement or independent monetary control.

[ https://en.wikipedia.org/wiki/Impossible_trinity

The Impossible trinity (also known as the Trilemma) is a trilemma in international economics which states that it is impossible to have all three of the following at the same time:

• A fixed foreign exchange rate
  
  
• Free capital movement (absence of capital controls)
  
  
• An independent monetary policy
  

It is both a hypothesis based on the uncovered interest rate parity condition, and a finding from empirical studies where governments that have tried to simultaneously pursue all three goals have failed.

• Option (a): A stable exchange rate and free capital flows (but not an independent monetary policy because setting a domestic interest rate that is different from the world interest rate would undermine a stable exchange rate due to appreciation or depreciation pressure on the domestic currency).
  
  
• Option (b): An independent monetary policy and free capital flows (but not a stable exchange rate).
  
  
• Option ©: A stable exchange rate and independent monetary policy (but no free capital flows, which would require the use of capital controls).
  

Currently, Eurozone members have chosen the first option (a) while most other countries have opted for the second one (b). By contrast, Harvard economist Dani Rodrik advocates the use of the third option © in his book The Globalization Paradox, emphasising that world GDP grew fastest during the Bretton Woods era when capital controls were accepted in mainstream economics. Rodrik also argues that the expansion of financial globalization and the free movement of capital flows are the reason why economic crises have become more frequent in both developing and advanced economies alike ]

[weijian]

As a soccer fan, i vividly remember that commentators commented that the only thing incredible about Hulk, is the price tag!


Chinese billions flood soccer, snaring Hulk in record deal

[LONDON] Hulk had quite the welcome to China. Shortly after his plane landed at Shanghai's Pudong International Airport, hundreds of chanting fans mobbed the Brazilian soccer star as he pushed his way through the crowd on June 29. Hulk, who recently inked a record-breaking deal with Shanghai SIPG, is just the most recent soccer star to sign up.

Long a soccer backwater, China has gone on a buying spree unprecedented in the history of the game. Chinese money, of course, has been flowing into all sorts of sectors: technology, health care, retailing, you name it. And now it's soccer, a move that follows Middle Eastern and Russian investments into the game.

http://www.businesstimes.com.sg/life-cul...ecord-deal

[BlueKelah]

Continued slowdown despite using up three years worth of "infrastructure funding" in the last few quarters and continued leveraging up.

China's second-quarter growth slows to 6.6%: AFP poll
China's growth slipped to a new seven-year low of 6.6 percent in the second quarter, according to an AFP survey, despite government efforts to spur activity in the world's second-largest economy.
The forecast for expansion in gross domestic product (GDP), based on a poll of 17 economists, represents an easing from 6.7 percent in the first three months of the year.
As the world's biggest trader in goods China is crucial to the global economy and its performance affects partners from Australia to Zambia. Investors worldwide have been worried by its slowing growth.
"Momentum remains downward, so if the government would like to maintain a 6.5 percent minimum growth rate in the next several years, more aggressive stimulus will be needed," Brian Jackson, Beijing-based economist at IHS Economics, told AFP.  


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Capital outflows continue to rise as the Yuan continues its depreciation.  Since the last big drop 2015 from 6.2 to 6.4 RMB per USD it is almost 6.7RMB per USD now.

China’s Imports From Hong Kong Have Continued to Surge: Chart

China releases trade figures Wednesday, and a steep rise in reported imports from Hong Kong has raised concerns that trade invoices are being manipulated to get capital out of the country amid fears the yuan will continue to weaken. May’s imports from Hong Kong surged a record 243 percent from a year ago, while overall imports have been falling.

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[BlueKelah]

Beijing continues to slowly but surely devalue their currency and despite trade surplus, imports and exports both downwards..


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Yuan Near Six-Year Low as Sliding Imports Add to Economy Concern

China’s yuan traded near the weakest level in almost six years as a plunge in imports signaled declining demand in an economy growing at the slowest quarterly pace since 2009.

The nation’s inbound shipments shrank more than estimated in June and exports dropped for a third month, according to data released Wednesday, while figures due Friday are projected to show a 6.6 percent expansion in April-June gross domestic product. Any disappointments could prompt analysts to bring forward forecasts for interest-rate cuts, Tim Condon, head of Asian research at ING Groep NV, wrote in a note Thursday.

The yuan was little changed at 6.6878 a dollar as of 4:48 p.m. in Shanghai, according to prices from the China Foreign Exchange Trade System. That’s about 0.2 percent away from a level it reached in November 2010. The currency traded in Hong Kong dropped 0.09 percent to 6.6962. A Bloomberg replica of the CFETS RMB Index tracked by the People’s Bank of China fell for the first time in three days to 94.4.

“All eyes are on China’s economic data for the second quarter -- if the numbers turn out to be weak, the yuan may depreciate beyond 6.7 per dollar,” said Andy Ji, a Singapore-based foreign-exchange strategist at Commonwealth Bank of Australia. “After all data are released, the yuan will be driven by the dollar again. If the greenback continues to be weak, which is likely as the Federal Reserve won’t likely raise rates before September, the Chinese currency will remain stable or even be stronger than 6.7 for a while.”

[Behappyalways]

Consumers Unlikely to Rescue China's Sputtering Economy
http://english.caixin.com/2016-07-18/100967596.html

[Behappyalways]

Has China Reached Peak Urbanization?
http://www.bloomberg.com/view/articles/2...banization

[Behappyalways]

China Steels Its Resolve, But ‘Zombies’ Abound
http://blogs.wsj.com/chinarealtime/2016/...steel0729/

[Behappyalways]

Chinese Capital Outflows May Still Be Happening — But In Disguise
http://www.bloomberg.com/news/articles/2...n-disguise