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).
The China Confidential Rural Wealth Index surged to 54.5 in April from 52.1 in March due to a healthier outlook for rural vehicle sales as well as strong activity in land transfer and better availability of rural finance as banks and policy makers further innovate to meet demand for credit.
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).
Several officials at China’s National Development and Reform Commission (NDRC) have rebuked local governments for their trigger-happy reaction to the government’s plan to accelerate urbanisation, shedding light on the likely form that China’s new urbanisation plan will take. Their comments suggest that a new urbanisation drive may be less capital and resource intensive than many expect, with the emphasis, so far, on improving the quality of life in cities, rather than the scale and pace of new construction.
China's macroeconomic performance in April was largely flat, a trend that may persist throughout 2Q13 unless Beijing unveils new measures to stimulate the economy.
China’s export growth showed an overall sideways trend in April on both a MoM and YoY basis, according to China Confidential’s survey of 101 manufacturers, 61 trading companies and 40 shipping agents at the end of April. Our survey also showed that a practice of over-claiming exports to earn tax rebates and/or smuggle currency into China is believed to be common.
China’s vast shadow financing system has many constituent parts, each with a different risk profile and prospects. Overall, though, risk levels are rising.
Plunging steel prices in what is historically a period of peak demand for the industry has raised questions about the strength of China’s economic recovery.
Experts assess the causes and implications of weak tax revenue growth during the first quarter of the year
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.
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