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Recent targeted moves to boost base money supply suggest that China’s central bank is set on managing liquidity through direct measures aimed at specific sectors of the economy, rather than previously used market-wide injection tools such as rate cuts or RRR hikes
Concerns over financial fragility, mixed with a conservative political atmosphere ahead of the 2012 political succession is hitting the pace of financial reform.
Growing US and EU pressure on Beijing to allow the renminbi to appreciate has generated a surge of comment in China.
According to the latest Treasury International Capital (TIC) data, China was a net seller of US Treasuries in December, cutting its holdings by $34.2bn (4.3%) to $755.4bn. China’s share of total outstanding short and long-term US Treasury securities among foreign holders declined to 20.9% in December, from 23% at mid-2009. With China’s total holdings retreating to the lowest level since February 2009, Japan has regained the mantle as the largest foreign investor in US Treasury securities, with $768.8 billion in US sovereign debt in December or 21.3% of total foreign holdings of US Treasury securities.
Peering into our crystal balls for 2010, things appear bleak or complex, but there are at least some silver linings.
Growth in trade with Asia and "newly rising" economies will take centre stage for China’s trade policy in 2010 and beyond.
Recent comments by China’s central bank that the renminbi has some room for adjustment have sparked another round of debate internationally about the need for appreciation. But what do China’s economists think?
China is accelerating its moves to internationalise the renminbi currency. However, control rather than liberalisation is the animating energy behind the plan.
Is the hot money that flowed into China in Q2 ready to depart now that the US economy shows signs of recovery?
Official statistics show that Rmb 4,580bn was lent out in the first quarter of this year – that’s over 90% of all loans extended last year and almost as much as the Rmb 5,000 lending target set for 2009. So where did all the money go?
11 Sep 2014
