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Currency Policy

Renminbi depreciation raises concerns

Domestic commentators mull the renminbi’s recent slide in value.

27 March 2014

Qianhai SEZ faces Shanghai challenge

Local commentators debate whether a proposed special economic zone in Qianhai, close to Hong Kong, will be overshadowed by the proposed Shanghai free trade zone

19 September 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

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

Bottomed or bottoming?

It seems clear that China’s overall growth rate picked up somewhat in March compared to the Jan-Feb period (CC Apr 5, Macro View). The question is whether Jan-Feb will come to mark the GDP growth low-point for the year. Our view is that it may, but this is not assured.

19 April 2012

Plans to create a Brics development bank

Proposals to create a Brics-wide development bank has aroused a great deal of debate among Chinese commentators

05 April 2012

China considers support for eurozone

Premier Wen Jiabao said last week that China was considering “involving itself more deeply” in resolving the eurozone crisis through channels like the European Financial Stability Facility (ESFS) and the European Stability Mechanism (ESM), a $650bn permanent bailout fund that replaces the ESFS in July. But how willing is Beijing to pledge its money in this way and how confident is it that the EU can really put its house in order (thereby safeguarding Beijing’s investments)?

09 February 2012

US debt debacle

Commentators discuss the US’s recent debt conundrum and the ramifications for China.

11 August 2011

Why is China so critical over US debt problems?

The S&P downgrade rocks the steady "trade-for-credit" symbiosis that has formed the basis of the US-China commercial relationship.

11 August 2011

RRR hike to sterilise continued foreign currency inflows

We consider the central bank’s move to raise the required reserve ratio by 50 basis points to a record 21% for major banks effective May 18th primarily as a tool to sterilise inflows of foreign exchange, not as evidence of an increasingly hawkish attitude to liquidity management. The move, which is expected to freeze around Rmb 370bn from the market, has been coupled by issuance of longer-term central bank bills, as well as a small net withdrawal through open market operations.

13 May 2011

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