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Arbitrage capital declines amid further renminbi depreciation

The latest official and market data monitored by China Confidential suggests that continued depreciation of the renminbi against the US dollar – the CNY (onshore renminbi) declined 3.4% against the US dollar during the first four months of the year – has resulted in a slowdown in arbitrage capital flowing into China.

19 May 2014

Latest metrics point to controlled renminbi depreciation

The latest official and market data monitored by China Confidential suggests that the depreciation of the renminbi against the US dollar seen so far this year has had a tangible impact on fund flows and market movements across a range of metrics, but remains broadly under the central bank’s control, with little sign of uncontrolled capital flight or investor panic. Weakening economic fundamentals and continued external uncertainty will continue to pose challenges in the coming months, however.

22 April 2014

Reforms – where to from here?

The reform agenda that was set out following the third plenum is set to be implemented unevenly and according to varied timescales. Here is our take.

28 November 2013

Shanghai Free Trade Zone: important but vague

Much hope for liberalisation attends the launch of the Shanghai Free Trade Zone, but the devil may be in the lack of detail.

03 October 2013

Free-trade zone planned for Shanghai

Local commentators discuss whether plans for a new, enlarged free-trade zone in Shanghai will help the city to become a global financial centre.

13 June 2013

Renminbi carry trade riles Beijing officials

Hot money inflows have been a major driver of the renminbi’s appreciation against the US dollar since the start of the year, prompting Beijing to tighten surveillance of the key unofficial channels through which this money is flowing.

30 May 2013

China ramps up reformist momentum

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).

17 May 2013

Shadow banking worries lurk behind robust picture

Credit and liquidity conditions should remain robust in 2013, but the rising popularity of alternative sources of financing poses increasing risks 

20 December 2012

New five-year plan raises financial reform hopes

China’s new five-year plan for the financial sector pledges to push forward with the liberalisation of interest and exchange rates, as well as capital account convertibility

04 October 2012

London races to become the next offshore renminbi hub

On April 18, HSBC launched its first ever offshore renminbi (CNH) bond to be listed on the London Stock Exchange in a move designed to help boost the City’s role as the next major CNH hub after Hong Kong. The bank announced the move shortly before UK chancellor George Osborne publicly stated that the UK government intends to transform London into a western hub for trading and settling in the Chinese currency. These developments will, at the very most, give investors outside the Asia region greater exposure to CNH-denominated assets offshore. However, we believe that the immediate impact will be minimal.

19 April 2012

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