China Economy

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More signs of Chinese tightening

Cross-posted from Investing in Chinese Stocks. Beijing has been cracking down on the real estate sector, using any relevant law and any government power to restrict the industry. See Beijing Metes Out More Punishment for Real Estate Violations and Five Branches of Beijing Muni Govt Ramp Up Real Estate Controls. Following the latest crackdown on

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PIMCO: China gunna slow, commodities fall

From PIMCO: On 16 March, the PBOC hiked the seven-day reverse repo (repurchase) rate from 2.35% to 2.45% and raised the whole liquidity facility curve by 10 bps (including seven-day, 14-day and 28-day reverse repos and the standing and medium-term lending facilities). In its statement, the PBOC cited the Fed’s hike and improving exports as

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“Inflection point” in Chinese property?

Via Investing in Chinese Stocks. An opinion article in the Economic Observer partially attributes the latest run-up in home prices to flight from the currency. Aside from that, the article is noteworthy because it says discussion of home prices is back at peak bubble levels. Additionally, this was the second most popular article on EO

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China tightens on property again, again, again

More property tightening in China, via Bloomberg: Banks are asking Hong Kong property agents to stop accepting China-issued UnionPay cards, as mainland authorities escalate their crackdown on capital flows out of the country. Ricacorp Properties Ltd. won’t accept China-issued UnionPay cards for home purchases starting Friday after it received a verbal notice from banks, said

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Magnus: China must reform or bust

Cross-posted from George Magnus: There’s a cute expression that last did the rounds after Lehman went belly-up. As the destruction of balance sheets tore through the the financial system, the black cry rang out that  ‘there’s nothing right on the left side of the balance sheet, and nothing left on the right’. Eventually we recovered.

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Still more “urgent” mortgage tightening in China

Via Caixin the PBOC is leaning on banks: Recently, the central bank expedited the issue of “do a good job of credit policy work,” a text, which for the mortgage policy, the document clearly requires: the People’s Bank of the branches to strengthen the guidance of the commercial bank window (reporter Zhang Xin Wu Hongyu

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China’s cash crunch returns

Cross-posted from Investing in Chinese Stocks. Some institutions and traders were begging for capital after 4:30 PM on Monday, unable to meet financing obligations. One ag trader said, “Today we borrowed from morning to night, until after 5 PM, there were a lot of small institutions that failed to meet their obligations, I thought the interbank

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China tightens again

First repo rates, via Reuters: China’s central bank raised short-term interest rates on Thursday in what economists said was a bid to stave off capital outflows and keep the yuan currency stable after the Federal Reserve raised U.S. rates overnight. The increase in short-term rates was China’s third in as many months, and came a

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More signals that Chinese stimulus is past its peak

From Investing in Chinese Stocks: NBS put out a press release listing all the good things in the Chinese economy: 1-2月份国民经济运行稳中向好 Industrial production was steady in February. 2017年1-2月份规模以上工业增加值增长6.3% Fixed asset investment steady in Jan-Feb, rising 8.9 percent. 2017年1-2月份全国固定资产投资(不含农户)增长8.9% However, funding plunged. Among them, the national budget funds fell 11.3% , last year growth was 17.1%

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China housing bifurcation inverts

Or appears to, from Caijing: Real estate financing is still tightening. Recently, the refinancing of listed companies, “cannot exceed 20% of the total share capital, the interval required to exceed 18 months,” the new regulations, the financing conditions more stringent. In addition, look at the past three months time, the domestic corporate debt has not

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China’s mad steel inflation

Chinese inflation is out and boy is it odd as the PPI soars as expected, hitting 7.8%, while the CPI cratered to just 0.8% year on year: For the CPI the culprit was vegies and eggs which collapsed: Meanwhile, steel and inputs plus energy drove nearly all of the producer inflation: Such narrow inflation does

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Chinese land sales still booming

From SCMP: China’s land sales in 50 major cities surged 73 per cent in the first two months of 2017 despite a raft of measures rolled out in a bid to cool the red-hot property market. Fifty city governments received a total of 452.8 billion yuan (US$65.6 billion) from land auctions during January and February

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China trade sucks in dirt like the good ‘ol days

Chinese trade numbers for February were out late yesterday and were evidence of last year’s spectacular series of policy errors. Exports dropped -1.3% year on year while imports launched 38%:   The trade surplus collapsed to a deficit of -$9.15bn. The marvelous Chines technocrat in action! The huge swing was primarily the result of rocketing commodity imports. Iron

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Chinese top tier city house price falls accelerating?

From Ifeng: Beijing News (Reporter Wang Jing) since the last week of February Beijing commodity residential transactions quickly back up after the first week of March again into the downturn channel. According to Yahao Junyue statistics show that the first week of March (February 27 – March 5) Beijing commercial housing (excluding affordable housing and

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China aims for stability

From the AFR: China will use infrastructure spending, private sector investment and business tax cuts to keep the economy growing around 6.5 per cent “or higher” this year as Premier Li Keqiang stressed in a keynote speech that stability was the government’s “overriding” priority ahead of November’s leadership reshuffle. In his work report to the

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China sets the deck for renewed reform push

Yesterday we had Xi Jinping privileging wider reform attacking the bubble, from Caixin: Curbing wasteful socialist-era business practices and taming unruly real estate and lending sectors will take center stage at the annual meeting of China’s legislature, which starts next week, with some also looking for signs of a pickup in economic growth. The annual meeting

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China preparing pin for housing bubble?

From SCMP: Containing financial leverage and avoiding a property bubble will be the major focuses of the upcoming National People’s Congress (NPC) meeting due to start in Beijing on Sunday. Curbing risks fueled by easy credit in recent years and taming a capital market increasingly manipulated by capital tycoons, or so called “financial crocs”, are