China faces a huge funding gap in pushing forward an urbanisation programme that may cost over Rmb50tn by 2020, Zheng Zhijie, president of the China Development Bank (CDB), the country’s top policy lender, has said. Mr Zheng, writing in a central bank journal, also suggested a thorough reform of China’s project financing methods so as to reduce financial risks. We think the proposed reforms represent a key strand in the Xi Jinping leadership’s vision of a “new-type” of urbanisation (Update Alert, May 16).
China is ramping up momentum for a series of economic reforms to be unveiled at a key Communist Party meeting expected in October, government officials and domestic media reports say. We think the moves, which are taking place largely behind the scenes, present the strongest signal yet that President Xi Jinping’s leadership may yet emerge as a more reformist and purposeful administration than that of Hu Jintao over the last decade (CC Dec 20 2012 Macro View).
A selection of key financial data over the past fortnight.
Levels of distressed assets are rising at Chinese banks despite widespread efforts to camouflage the problem, hitting banks' profits.
Economists and analysts have been assessing the likelihood and the likely impact of capital account liberalisation by the new Chinese leadership.
Underground banks saw an increase in bad debts in April, with small manufacturers and property developers posing the greatest default risks, China Confidential’s survey of 80 underground banks nationwide has found.
China’s vast shadow financing system has many constituent parts, each with a different risk profile and prospects. Overall, though, risk levels are rising.
Our in-depth, two-part evaluation of the risks posed by China’s shadow finance system concludes that should China’s GDP growth rate subside or property market slump, a host of shadow finance excesses could spark a crisis.
China’s freight volumes slowed down during the first three weeks of April both on a MoM and YoY basis, according to a China Confidential’s survey of 207 rail, road, waterway and air logistics companies across the country.
DANWEI – In recent months, the unexplained appearance of dead ducks and pigs in rivers and ongoing debate on social media about fine particle (PM2.5) air pollution have been good news for some companies. The penetration rate of water and air purifying machines in China is still comparatively low. Both these markets are becoming very competitive with emerging Chinese competitors steadily gaining market share from more established foreign players, such as Dutch multinational Philips (NYSE:PHG) and Japan’s Sharp (TYO:6753), by developing cheaper models.
Renminbi Compass reflects key changes in the renminbi-denominated investment environment.
Providing research coverage on asset classes as diverse as chengtou bonds, dim sum bonds, real estate, trust products, underground banking, art and antiques, as well as its traditional equity fund research.
Renminbi Compass provides orientation for investors navigating the expanding universe of renminbi asset classes.