China Economic News

[BlueKelah]

Bloomberg - Embattled China Securities Regulator Grapples With Staff Exodus http://bloom.bg/1nsQSE7

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[CityFarmer]

The latest update on the China stock chief...

China chief stock regulator has offered to resign: sources
18 Jan 2016 17:59
[BEIJING] China's embattled top securities regulator has offered to resign, sources said, after perceived mismanagement wiped more than US$5 trillion off the capitalisation of the Shanghai and Shenzhen stock markets since they peaked in June 2015.
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REUTERS

Source: Business Times Breaking News

[CityFarmer]

The devaluation of RMB, has made Japan Yen a heaven, thus greatly reduces effectiveness of Abenomics...

Japan calls on China to tighten capital controls

DAVOS (Switzerland)— Japan’s Central Bank Governor asked Beijing to impose more stringent capital controls to help stem massive outflows of hot money from China and stabilise its currency, at the World Economic Forum in Davos on Saturday.

World economic leaders remain far more optimistic about the health of the global economy than turbulent financial markets have suggested in 2016 and Mr Haruhiko Kuroda’s suggestion of temporary controls to help restore confidence was not rejected by Ms Christine Lagarde, managing director of the International Monetary Fund (IMF).

Controls on capital outflows from China would come at the cost of reversing the ease of use of the yuan, but would reduce the relentless downward pressure on the Chinese currency, which has contributed to fears that China is about to seek a return to export-led growth as its domestic economy slows.
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http://www.todayonline.com/business/japa...l-controls

[CityFarmer]

A new "hero", out of China market. The success of market driven strategy, is always short-term. Will he be an exception?  

Trader who made 6,200% on China futures says go short or get out

(Jan 26): Huang Weimin, the hedge fund manager whose Chinese stock-index futures wagers returned more than 6,200% last year, has some advice for investors in 2016: Sell your shares now, before it’s too late.

The 45-year-old former worker at a state-owned company, a virtual unknown until last year, has become a star of the Chinese futures market after a slew of timely bets on the direction of share prices propelled his Yourong Fund to the top of the country’s performance rankings. He’s carried the winning streak into 2016, returning 35% through Jan. 22 after selling stock-index futures just days before the market’s worst-ever start to a year.

Huang, who opened the Yourong Fund in 2014, says China’s benchmark Shanghai Composite Index could drop another 15% in the first half as slowing economic growth and a weaker yuan fuel capital outflows. While he’s sticking with bearish futures bets to take advantage of further losses, he says the average Chinese stock investor would be better off shifting into cash.

“I’m not optimistic about this year,” said Huang, a self-taught trader who manages more than 100 million yuan ($21.8 million) in the Yourong Fund and separate client accounts that use similar strategies. “My advice is to hold cash, wait and watch.”
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http://www.theedgemarkets.com/sg/article...or-get-out

[CityFarmer]

George Soros is too powerful to ignore, even for super-power.

China's state media warns Soros on betting against yuan, HK dollar

BEIJING (Jan 26): China's state media has warned billionaire investor George Soros against betting on falls in the value of the Chinese yuan and Hong Kong dollar , amid widespread worries over the health of world's second-largest economy.
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http://www.theedgemarkets.com/sg/article...k-dollar-0

[CityFarmer]

Money speculators are exiting HK$ and RMB market, in anticipating of the future currencies devaluation. RMB will likely be valued lower, once liberalized. If HK$ peg with US$ is removed, either willingly or unwillingly, HK$ will likely be valued lower, with its economic dependency on Mainland China.

IMO, China-related SGX stocks are re-rated, based on the forward valuation on RMB/HK$ both on assets and earning powers. It is a rational reaction of Mr Market.

Hong Kong feels squeeze of slowing China and rising rates

HONG KONG — As a premier Asian financial center parked at the doorstep of one of the fastest-growing economies on the planet, Hong Kong has long lived a charmed life.

The former British colony’s Western-style legal and regulatory system made it a magnet for global investors interested in buying listed Chinese stocks on the Hong Kong Stock Exchange. Its banks, insurance companies, ports and cargo carriers have made a nice living off their powerful neighbour. An added bonus: Since 2008, low global interest rates in the post- financial crisis era have powered a property market that has kept the US$300 billion economy humming.

Yet now China’s economy is decelerating and just turned in its weakest full-year economic growth since 1990. Global investors are no longer gravitating to Hong Kong — they’re scrambling for the exits.
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http://www.todayonline.com/chinaindia/ch...sing-rates

[CityFarmer]

Chinese state media, is "declaring" war with Mr. George Soros...

China state media accuse Soros of ‘declaring war’ on yuan

BEIJING — Chinese state media stepped up a salvo of biting commentaries today (Jan 27) against Mr George Soros and other currency traders as the yuan comes under pressure, with the billionaire investor accused of “declaring war” on the unit.
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http://www.todayonline.com/chinaindia/ch...g-war-yuan

[CityFarmer]

It is a multi-trillion $ problem to solve. A long-term solution, is always on free-market driven, with state intervention with liquidity and policy control. Go against the market, is never a good idea. The key point is to ensure minimum short-term cost.

Let's brace for more volatility ahead...

China should let yuan float to avoid slump, ex-PBOC adviser says
28 Jan 2016 07:28
[NEW YORK] Yu Yongding, a former adviser to the People's Bank of China, has a bold idea to stem the yuan's slump: Let it float.

Policy makers should stop intervening in the currency market and preserve foreign reserves, Mr Yu, a former academic member of the central bank's monetary policy committee, wrote??on Wednesday in an opinion piece on Project Syndicate, a website.

In transitioning to the new regime, the PBOC should target the yuan against a basket of currencies within a band of 7.5 per cent or even 15 per cent, allowing market forces to determine the value of the exchange rate within the range, Mr Yu said.

Under such a regime,??investors might start purchasing yuan before the exchange rate reaches the limit of the trading band if they think that the currency has fallen enough to reflect economic fundamentals, he said. In the meantime, the government should implement existing capital controls??"much more strictly" to limit outflows, Mr Yu added.

"China is still running a large current-account surplus and a long-term capital-account surplus, and it has not fully liberalized its capital account," Yu wrote. "So the chances are good that the yuan would not fall too far or for too long."
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BLOOMBERG

Source: Business Times Breaking News

[CityFarmer]

Yuan liquidity remains an issue, not only during CNY period, IMO...

China floods financial system with S$74b to boost liquidity

SHANGHAI — China’s central bank said today (Jan 28) that it was funnelling 340 billion yuan (S$74 billion) into the financial system, the second injection in three days to meet surging demand for funds ahead of the Lunar New Year holiday.

On Tuesday, the People’s Bank of China (PBoC) poured 440 billion yuan into the system through regular open market operations, which Bloomberg News said was the biggest in three years.

Chinese companies typically pay salaries and bonuses before the holiday, which falls in early February this year. People also traditionally exchange cash and gifts during the period.

The PBoC last week flooded the financial system with more than 1.5 trillion yuan.
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http://www.todayonline.com/chinaindia/ch...-liquidity

[Behappyalways]

Will China’s new “supply-side” reforms help China?

http://blog.mpettis.com/2016/01/will-chi...f4df4b6d0d